Letting Bush Tax Cuts Die Would Kill Recovery: Analysts

[mawilson 2,133]

I guess what I'm trying to say is that businesses should also look to cultivating the consumer base instead of looking at short term profits.

That would require a degree of cooperation that is at odds with the profit-seeking

nature of business.

What you're essentially saying is that I should pay my workers more so that they

can consume more (of mine as well as other companies') products. Since I can

only control my own product, I'd rather sell it to someone other than my own

workers who would pay for it with the money that was mine to begin with.

[Usui Takumi 1,562]

That would require a degree of cooperation that is at odds with the profit-seeking

nature of business.

What you're essentially saying is that I should pay my workers more so that they

can consume more (of mine as well as other companies') products. Since I can

only control my own product, I'd rather sell it to someone other than my own

workers who would pay for it with the money that was mine to begin with.

Its the weakness of capitalism.

[NVC FAN :( 18]

I dont think anyone could ever say they landed a good job from a POOR PERSON. give them the tax breaks!

[Mr. Big Dog 10,747]

[quote name=NVC FAN ' timestamp='1280457639' post='4098400]I dont think anyone could ever say they landed a good job from a POOR PERSON. give them the tax breaks!

You're a good servant!

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

Even Libertarian Alan Greenspan is calling on Congress to let the Bush Tax Cuts on the wealthy to expire. A Libertarian of all people.

WOODRUFF: You embraced the tax cuts of former President Bush, George W. Bush, in 2001, with the caveat that this hinged on keeping the deficit under control. In retrospect, do you wish that you would have spoken out any louder as it became clear that that deficit was growing?

GREENSPAN: Well, I thought I did. In fact, there are all sorts of hearings. I remember conversations between Barney Frank and myself, where he was saying, in a sense that, do I understand you essentially saying that effectively unless the second tranche of the tax cut -- which was then occurring in the context of deficits -- was adjusted by pay-go -- meaning financed -- that you would not support it. And the answer was I would not support it. And I did not support it.

The trouble is, there is a very selective reading of history out there. I mean, I find it unfortunate, but there are a lot of things that happened which I discussed in great detail and it sort of is -- my main concern myself is the fact that we ought to go back and look at the records.

You know, for example, the Federal Reserve has been accused of being lacking in regulation of subprime mortgages. That is actually not accurate. We did everything that Congress requested us to do, because we had very little discretion in the regulatory area. So the Fed is being tarred as being lax in the subprime area, where in effect we were doing everything that Congress was asking us to do.

WOODRUFF: On those tax cuts, they are due to expire at the end of this year. Should they be extended? What should Congress do?

GREENSPAN: I should say they should follow the law and let them lapse.

WOODRUFF: Meaning what happens?

GREENSPAN: Taxes go up. The problem is, unless we start to come to grips with this long-term outlook, we are going to have major problems. I think we misunderstand the momentum of this deficit going forward.

This argument of stimulus versus non-stimulus, in my judgment, is not a critical issue, in one sense. We are going to be doing very well if we can keep the deficit to where we are now projecting it. The notion that we are somehow going to bring it in far more sharply is just utterly, politically unrealistic.

So it is not a question, do you have more stimulus now or do you have basically a significant contraction in the deficit? We are going to have continued expansion in government spending and increasing debt, because there is no evidence that we are closing the debt -- the gap between receipts and expenditures yet. And it is going to be very tough to go up against the momentum that is currently going on.

WOODRUFF: So to those interests who say but wait a minute, if you let these taxes go my taxes go up, it is going to depress growth?

GREENSPAN: Yes, it probably will, but I think we have no choice in doing that, because we have to recognize there are no solutions which are optimum. These are choices between bad and worse.

http://www.bloomberg...ranscript-.html

[Dan J 277]

[quote name=NVC FAN ' timestamp='1280457639' post='4098400]

I dont think anyone could ever say they landed a good job from a POOR PERSON. give them the tax breaks!

The idea that cutting taxes for the rich will create more jobs for everyone else is pretty poor. It might create a few jobs, but dollar for dollar its incredibly inefficient.

You cut taxes for the rich, there is no incentive for them to use the extra money they saved to go out and create jobs. They will probably invest it, but there are a lot of investments that make a lot of money, but generate no jobs.

Even now, there are a lot of big companies and wealthy people with a lot of money saved up, and could create thousands of jobs if they wanted to. But not very many of them have the balls to take risks and innovate. So most of that cash sits idle while they blame the government for not being friendly to businesses. The government has done its part to get us out of the recession, now its time for private companies to do theirs.

[Mr. Big Dog 10,747]

The idea that cutting taxes for the rich will create more jobs for everyone else is pretty poor.

There's no actual evidence to back up the claim that tax cuts create jobs. It's a myth. Almost like a religious belief despite all the evidence to the contrary. If tax cuts created jobs, the economy shouldn't have had the worst record on job creation following the 2001 and 2003 tax cuts - some of the largest in history. Job creation during the Bush administration, however, was an average of only 375K / year - 3.0 million total. During the Clinton administration, on the other hand, almost 3 million jobs were created annually for a total of just over 23 million over the course of his presidency.

[Dan J 277]

There's no actual evidence to back up the claim that tax cuts create jobs. It's a myth. Almost like a religious belief despite all the evidence to the contrary. If tax cuts created jobs, the economy shouldn't have had the worst record on job creation following the 2001 and 2003 tax cuts - some of the largest in history. Job creation during the Bush administration, however, was an average of only 375K / year - 3.0 million total. During the Clinton administration, on the other hand, almost 3 million jobs were created annually for a total of just over 23 million over the course of his presidency.

Right, Employers need a reason to create jobs and tax cuts are not one of them. A lot of money that didn't go into taxes during the Bush administration went into other investments like real estate. We all know what happened there.

[Mr. Big Dog 10,747]

Right, Employers need a reason to create jobs and tax cuts are not one of them. A lot of money that didn't go into taxes during the Bush administration went into other investments like real estate. We all know what happened there.

Nobody seems to have noticed that job creation during the Reagan administration didn't really start until mid 1983 - some 2.5 years into his entering office and about 2 years following his massive tax cut but also about a year following his 1982 tax hikes. Yes, that's right. The Gipper actually raised taxes while the economy was only beginning to come out of recession and it didn't choke the recovery as the right now claims the expiring Bush tax cuts would.

In terms of recovery and job creation, the Obama administration is actually about a year ahead of the Reagan administration despite having been handed a recession far more severe than what the Gipper inherited.

But hey, why let facts get in the way of hysteria?

[mawilson 2,133]

I don't know about "choking recovery", but a tax increase like this one can certainly push

some struggling small businesses over the edge. While we can argue whether or not a tax cut

would create new jobs, one thing is certain - a tax increase has NEVER resulted in increased

economic growth. It is an iron rule of economics that if you tax something, you will have

less of it.

[Mr. Big Dog 10,747]

I don't know about "choking recovery", but a tax increase like this one can certainly push some struggling small businesses over the edge. While we can argue whether or not a tax cut would create new jobs, one thing is certain - a tax increase has NEVER resulted in increased economic growth. It is an iron rule of economics that if you tax something, you will have less of it.

Good. So tax insane incomes if that means we'd have less of them - the economy was doing much better when that was the case. Blowing executive compensation to levels hundredfold of that of rank and file hasn't helped the economy overall. So tax that and decrease it. We'll all do better again.

[mawilson 2,133]

Good. So tax insane incomes if that means we'd have less of them - the economy was doing much better when that was the case. Blowing executive compensation to levels hundredfold of that of rank and file hasn't helped the economy overall. So tax that and decrease it. We'll all do better again.

LLCs (and other "flow-through" entities, such as S corporations and partnerships) do not pay taxes,

only their members (or shareholders/partners) do. They pay *individual* taxes on the net income

of these entities. If you excessively tax their personal income (and for an LLC, all income is

"personal"), it will most definitely affect their business.

[Usui Takumi 1,562]

I don't know about "choking recovery", but a tax increase like this one can certainly push

some struggling small businesses over the edge. While we can argue whether or not a tax cut

would create new jobs, one thing is certain - a tax increase has NEVER resulted in increased

economic growth. It is an iron rule of economics that if you tax something, you will have

less of it.

It did once, but I will admit that was another era.

[Mr. Big Dog 10,747]

LLCs (and other "flow-through" entities, such as S corporations and partnerships) do not pay taxes, only their members (or shareholders/partners) do. They pay *individual* taxes on the net income of these entities. If you excessively tax their personal income (and for an LLC, all income is "personal"), it will most definitely affect their business.

Sure, it'll provide an incentive to re-invest revenues - i.e. expand - rather than taking them out as income. That'd be good thing.

[mawilson 2,133]

Sure, it'll provide an incentive to re-invest revenues - i.e. expand - rather than taking them out as income. That'd be good thing.

That would make sense if the tax increase was temporary; unfortunately in light of all the

budgetary issues that the US is facing right now, we are all very likely going to be paying

far higher taxes down the road.