Tax Cuts: The B.S. and the Facts

[Mr. Big Dog 10,747]

i'd think that higher taxes allows for more government spending, but that assumes that the higher taxes are used for government spending to boost the economy (and there's a surplus, not debt). although some may tout raising taxes to pay off the debt, consumer spending is low and raising taxes will drive that even lower.

in short, right now ain't the time for higher taxes.

Nice post, Charles! ...but what you are arguing against isn't accurate. The Middle Class will get a moderate tax cut and for those making over 250g's a year, their tax rates will return to the rates they were under Clinton. Nothing more, nothing less.

so it's said. however, the threat of higher taxes makes even the middle class watch their spending. need i remind you of:

"In Germany, they came first for the Communists, And I didn’t speak up because I wasn’t a Communist;

And then they came for the trade unionists, And I didn’t speak up because I wasn’t a trade unionist;

And then they came for the Jews, And I didn’t speak up because I wasn’t a Jew;

And then . . . they came for me . . . And by that time there was no one left to speak up."

Oh Chuck, the Hitler card again? Take a deep breath man - this isn't going to be the Fourth Reich.

[Ban Hammer 13,352]

i'd think that higher taxes allows for more government spending, but that assumes that the higher taxes are used for government spending to boost the economy (and there's a surplus, not debt). although some may tout raising taxes to pay off the debt, consumer spending is low and raising taxes will drive that even lower.

in short, right now ain't the time for higher taxes.

Nice post, Charles! ...but what you are arguing against isn't accurate. The Middle Class will get a moderate tax cut and for those making over 250g's a year, their tax rates will return to the rates they were under Clinton. Nothing more, nothing less.

so it's said. however, the threat of higher taxes makes even the middle class watch their spending. need i remind you of:

"In Germany, they came first for the Communists, And I didn’t speak up because I wasn’t a Communist;

And then they came for the trade unionists, And I didn’t speak up because I wasn’t a trade unionist;

And then they came for the Jews, And I didn’t speak up because I wasn’t a Jew;

And then . . . they came for me . . . And by that time there was no one left to speak up."

Oh Chuck, the Hitler card again? Take a deep breath man - this isn't going to be the Fourth Reich.

[Mr. Big Dog 10,747]

i'd think that higher taxes allows for more government spending, but that assumes that the higher taxes are used for government spending to boost the economy (and there's a surplus, not debt). although some may tout raising taxes to pay off the debt, consumer spending is low and raising taxes will drive that even lower.

in short, right now ain't the time for higher taxes.

Nice post, Charles! ...but what you are arguing against isn't accurate. The Middle Class will get a moderate tax cut and for those making over 250g's a year, their tax rates will return to the rates they were under Clinton. Nothing more, nothing less.

so it's said. however, the threat of higher taxes makes even the middle class watch their spending. need i remind you of:

"In Germany, they came first for the Communists, And I didn’t speak up because I wasn’t a Communist;

And then they came for the trade unionists, And I didn’t speak up because I wasn’t a trade unionist;

And then they came for the Jews, And I didn’t speak up because I wasn’t a Jew;

And then . . . they came for me . . . And by that time there was no one left to speak up."

Oh Chuck, the Hitler card again? Take a deep breath man - this isn't going to be the Fourth Reich.

Drama much, my friend?

[I'm Gone 60]

http://www.newsweek.com/id/167696/output/print

As The Rich Get Poorer

Making the rich poorer doesn't make everyone else richer

Robert J. Samuelson

Nov 5, 2008

For years, we've debated rising economic inequality. On one side, liberals denounce it as unjust. Redistribute wealth to the poor and middle class, they say. On the other, conservatives minimize its importance. What matters most is overall economic growth, they retort. Well, the conjunction of the presidential campaign and the financial crisis is giving the debate a curious twist. Liberals have triumphed politically; soaking the rich has become more acceptable. But conservatives may have won the intellectual argument; making the rich poorer doesn't make everyone else richer.

If Barack Obama and John McCain agreed on anything, it was this: Greed is bad. They competed in denunciations of reckless investment bankers and avaricious CEOs. Obama proposed raising taxes on higher incomes (couples making more than $250,000); though McCain didn't, he suggested that much recent wealth accumulation was ill-gotten. Unintentionally, perhaps, he buttressed the moral case for more redistribution. Let's tap the gold mine of the rich.

Unfortunately, the mine has less gold. All the financial turmoil has left the wealthychowever they are defined—much less wealthy. Stock ownership is highly concentrated. In 2001, the richest 1 percent owned 34 percent of stocks and mutual funds, estimates economist Edward N. Wolff of New York University. Let's see. Since the market's high in October 2007, stocks are down (through Oct. 31) 38 percent, or $7.5 trillion, reports Wilshire Associates.

That will mean lower capital gains taxes, because capital gains—profits on the sale of stocks and other assets—will plunge. In recent years, capital gains taxes have been running at $100 billion or more. That amount could drop sharply, even if the top rate on capital gains were raised from 15 percent to its pre-2003 level, 20 percent.

Thousands of well-paid investment bankers, traders, portfolio managers and securities analysts are losing their jobs. Though Wall Street bonuses will continue, their total is likely to decrease. Gains in executive compensation may be similarly squeezed. Profits are down; the political climate is hostile. In 2005, the richest 1 percent of Americans had 18 percent of total income and paid 28 percent of all federal taxes, according to the Congressional Budget Office. Their income won't grow much. Even if higher tax rates increase government revenue, the effect will be less than before.

Judged only by economic inequality, the financial crisis is a godsend. It will probably narrow the gap—though still vast—between the rich and everybody else. But what good will that do? Economic inequality also declined in the Great Depression. The country wasn't better off. By and large, the poor aren't poor because the rich are rich. They're usually poor for their own reasons: family breakdown, low skills, destructive personal habits and plain bad luck.

The presumption implicit in the criticism of growing economic inequality is that society's income is a given and, if the rich have less, others will have more. Up to a point, that's true. The government already redistributes much income, often for the good. During the boom years, companies might have been less lavish with top executives and slightly more generous to other workers or shareholders. Some new fortunes stem from self-dealing and financial razzle-dazzle, not the creation of real economic value. It's just deserts that some of this wealth has evaporated.

But the redistributionist argument is at best a half-truth. The larger truth is that much of the income of the rich and well-to-do comes from what they do. If they stop doing it, then the income and wealth vanish. No one gets it. It can't be redistributed because it doesn't exist. Everyone's poorer.

This isn't just theory. Last week, New York Gov. David Paterson pleaded with Congress to provide emergency aid to states. Heavily dependent on Wall Street for taxes, he testified, New York faces a $12.5 billion budget deficit next year and expects joblessness to rise by 160,000. Wall Street bonuses will drop by 43 percent and capital gains income by 35 percent, he estimated. People in New York would be better off if the securities industry were still booming, even if there were more economic inequality.

Americans legitimately resent Wall Street types who profited from dubious investment strategies that aggravated today's crisis. And government properly redistributes income to reduce hardship and poverty. But that's different from attempting to deduce and engineer some optimal distribution of income. Government can't do that and shouldn't try. Scapegoating and punishing all of the rich won't do us any good if the resulting taxes dull investment and risk-taking, discouraging economic growth that benefits everyone.

[one...two...tree 2,762]

What does this have to do with the argument he made in the OP?

I'm questioning the author's credibility.

Isn't that what you liberals do when someone posts a Fox News article?

Are you saying that partiality lacks credibility?

[mawilson 2,133]

What does this have to do with the argument he made in the OP?

I'm questioning the author's credibility.

Isn't that what you liberals do when someone posts a Fox News article?

Are you saying that partiality lacks credibility?

Yes.

[one...two...tree 2,762]

What does this have to do with the argument he made in the OP?

I'm questioning the author's credibility.

Isn't that what you liberals do when someone posts a Fox News article?

Are you saying that partiality lacks credibility?

Yes.

There have been many great writers who wrote openly wrote with partiality, who were nevertheless credible. Read the editorial page of a newspaper and it's most often a political argument with partiality. I think you're confusing neutrality when reporting the news with someone like this author giving his political opinion - two different notions.

[IAMX 3,055]

Lower taxes and balance the budget.

[mawilson 2,133]

What does this have to do with the argument he made in the OP?

I'm questioning the author's credibility.

Isn't that what you liberals do when someone posts a Fox News article?

Are you saying that partiality lacks credibility?

Yes.

There have been many great writers who wrote openly wrote with partiality, who were nevertheless credible. Read the editorial page of a newspaper and it's most often a political argument with partiality. I think you're confusing neutrality when reporting the news with someone like this author giving his political opinion - two different notions.

Not when you start with a flawed premise that you assume to be true because of your political bias.

Assuming the moon is made of cheese (or that high taxes are good for the economy, in this case)

is not a good first step as a basis for the discovery of truth.

Note how he starts with the conclusion (which he calls "the realities") and then looks for historical

data to support that conclusion.

[NickD 203]

Inflation has to be entered into this equation, 40 years ago I received a dollar that I kept. If I spent it back then would have purchased five loafs of bread or four gallons of gas, today, only a small down payment on one loaf of bread and about a quart of gas.

Who controls inflation? Government says we do by spending our money, creating demands, and even buying a more expensive cut of meat. Managed to save a couple of bucks, if I buried that in the back yard, certainly not circulating that money, but at the current rate of inflation, losing buying power like crazy. I feel the government is causing inflation by spending more money than what they are taking in. For example, since 1985, the average price of a new car or home has tripled in price, health care by over 550%. So burying money in the backyard does not protect it's value, the government is still taking a huge hunk of it.

Leaving it in CD's is a little better, but has been years where the rate of inflation exceeded the current interest rate, so you are still losing value plus you have to pay taxes on that interest you earned, so you are getting screwed double.

For income tax to work, money has to be in circulation, every time the buck changes hands the IRS takes a chunk of it, so by lowering tax rates, more money is in circulation, so they get more of it. Provided that buck stays in this country! Once it leaves this country, the IRS is screwed out of it. But who controls what countries we can deal with? Not you or me, it's the government and who is responsible for the trade deficit? The government, tell you to spend that small rebate check only on goods made in the USA, what stores are they shopping at?

Investing in real estate is not a good idea anymore, rate of property taxes far exceeds the increase in value, and if you sell it, cannot include inflation rate in your capital gains, so you end up in a big hole.

The dollar use to be backed up with gold, under Nixon, that has all changed, and getting worse. Living in debt is even worse, got in my CC bill the other day for $2,000.00, but said I only had to send in a 15 buck payment. With 18.9 % interest that payment would increase my balance by 17 bucks, would be going further in the hole each month. How do they figure that?

Inflation is the killer, plus taxes on it as well, that has got to be considered into the equation.

[Ban Hammer 13,352]

i'd think that higher taxes allows for more government spending, but that assumes that the higher taxes are used for government spending to boost the economy (and there's a surplus, not debt). although some may tout raising taxes to pay off the debt, consumer spending is low and raising taxes will drive that even lower.

in short, right now ain't the time for higher taxes.

Nice post, Charles! ...but what you are arguing against isn't accurate. The Middle Class will get a moderate tax cut and for those making over 250g's a year, their tax rates will return to the rates they were under Clinton. Nothing more, nothing less.

so it's said. however, the threat of higher taxes makes even the middle class watch their spending. need i remind you of:

"In Germany, they came first for the Communists, And I didn’t speak up because I wasn’t a Communist;

And then they came for the trade unionists, And I didn’t speak up because I wasn’t a trade unionist;

And then they came for the Jews, And I didn’t speak up because I wasn’t a Jew;

And then . . . they came for me . . . And by that time there was no one left to speak up."

Oh Chuck, the Hitler card again? Take a deep breath man - this isn't going to be the Fourth Reich.

Drama much, my friend?

[dalegg 143]

So, what do we make of this?

Obama Considers Delaying Tax Increase

"U.S. President-elect Barack Obama is considering delaying his proposal to repeal the Bush tax cuts for the wealthiest Americans in light of the economic downturn, two aides said on Sunday.

Bill Daley, an adviser to Obama and commerce secretary under former President Bill Clinton, said on NBC’s “Meet the Press” that it “looks more likely than not” that President Obama will delay any tax increase until after 2010, when the Bush cuts for those making more than $250,000 are due to expire.

Mr. Daley was reacting to a report in Sunday’s New York Times that said Mr. Obama was considering putting off the tax increases to give his ambitious economic stimulus proposals a chance to work, quoting several people familiar with the discussions. On Saturday, Mr. Obama announced that he had instructed his advisers to prepare a two-year stimulus package with the goal of saving or creating 2.5 million jobs."

So, is Obama saying that higher taxes even for the rich counter a plan to stimulate the economy?

[one...two...tree 2,762]

So, what do we make of this?

Obama Considers Delaying Tax Increase

"U.S. President-elect Barack Obama is considering delaying his proposal to repeal the Bush tax cuts for the wealthiest Americans in light of the economic downturn, two aides said on Sunday.

Bill Daley, an adviser to Obama and commerce secretary under former President Bill Clinton, said on NBC's "Meet the Press" that it "looks more likely than not" that President Obama will delay any tax increase until after 2010, when the Bush cuts for those making more than $250,000 are due to expire.

Mr. Daley was reacting to a report in Sunday's New York Times that said Mr. Obama was considering putting off the tax increases to give his ambitious economic stimulus proposals a chance to work, quoting several people familiar with the discussions. On Saturday, Mr. Obama announced that he had instructed his advisers to prepare a two-year stimulus package with the goal of saving or creating 2.5 million jobs."

So, is Obama saying that higher taxes even for the rich counter a plan to stimulate the economy?

I don't know. I'd be interested to hear his explanation of why it would be best to wait for the Bush tax cuts to expire. I still believe that history and statistics show that our economy has been strongest when our tax policy was progressive.

[dalegg 143]

So, what do we make of this?

Obama Considers Delaying Tax Increase

"U.S. President-elect Barack Obama is considering delaying his proposal to repeal the Bush tax cuts for the wealthiest Americans in light of the economic downturn, two aides said on Sunday.

Bill Daley, an adviser to Obama and commerce secretary under former President Bill Clinton, said on NBC's "Meet the Press" that it "looks more likely than not" that President Obama will delay any tax increase until after 2010, when the Bush cuts for those making more than $250,000 are due to expire.

Mr. Daley was reacting to a report in Sunday's New York Times that said Mr. Obama was considering putting off the tax increases to give his ambitious economic stimulus proposals a chance to work, quoting several people familiar with the discussions. On Saturday, Mr. Obama announced that he had instructed his advisers to prepare a two-year stimulus package with the goal of saving or creating 2.5 million jobs."

So, is Obama saying that higher taxes even for the rich counter a plan to stimulate the economy?

I don't know. I'd be interested to hear his explanation of why it would be best to wait for the Bush tax cuts to expire. I still believe that history and statistics show that our economy has been strongest when our tax policy was progressive.

Next thing you know he's gonna come out and say that raising companies' expenses by increasing the minimum wage and forcing universal healthcare taxes on them might result in more layoffs.

[one...two...tree 2,762]

So, what do we make of this?

Obama Considers Delaying Tax Increase

"U.S. President-elect Barack Obama is considering delaying his proposal to repeal the Bush tax cuts for the wealthiest Americans in light of the economic downturn, two aides said on Sunday.

Bill Daley, an adviser to Obama and commerce secretary under former President Bill Clinton, said on NBC's "Meet the Press" that it "looks more likely than not" that President Obama will delay any tax increase until after 2010, when the Bush cuts for those making more than $250,000 are due to expire.

Mr. Daley was reacting to a report in Sunday's New York Times that said Mr. Obama was considering putting off the tax increases to give his ambitious economic stimulus proposals a chance to work, quoting several people familiar with the discussions. On Saturday, Mr. Obama announced that he had instructed his advisers to prepare a two-year stimulus package with the goal of saving or creating 2.5 million jobs."

So, is Obama saying that higher taxes even for the rich counter a plan to stimulate the economy?

I don't know. I'd be interested to hear his explanation of why it would be best to wait for the Bush tax cuts to expire. I still believe that history and statistics show that our economy has been strongest when our tax policy was progressive.

Next thing you know he's gonna come out and say that raising companies' expenses by increasing the minimum wage and forcing universal healthcare taxes on them might result in more layoffs.

How do figure that? Whatever employers are currently paying to provide healthcare for their employees would no longer exist if we switch to a single payer system.

Also, all the evidence has shown that when minimum wage increases, so does consumer spending. As long as our economy is consumer driven - the more money in people's pockets, the stronger the economy.