US gov has become Too Big to Fail!

[Vi-Jay 218]

Nor do you see how tax increases - such as the huge increases signed off by Reagan in 1983 and 1984 or those signed off by Clinton in 1993 - hurt employment. In fact, when you look at that chart of yours, you will notice that the large decrease in unemployment rates under Reagan starts in 1983 and under Clinton in 1993. In both cases, tax increases were passed just before the unemployment rate went down. Damn!

Is this what you are referring too?

The bills didn't raise more revenue by hiking individual income tax rates though. Instead they did it largely through making it tougher to evade taxes, and through "base broadening" -- that is, reducing various federal tax breaks and closing tax loopholes.

For instance, more asset sales became taxable and tax-advantaged contributions and benefits under pension plans were further limited.

"What people forget about Ronald Reagan was that he very much converted to base broadening as a means of reducing deficits and as a means of tax reform," said Eugene Steuerle, an Institute Fellow at the Urban Institute who had helped lay the groundwork for tax reform in 1986 and served as a deputy assistant Treasury secretary during Reagan's second term.

There were other notable tax increases under Reagan.

In 1983, for example, he signed off on Social Security reform legislation that, among other things, accelerated an increase in the payroll tax rate, required that higher-income beneficiaries pay income tax on part of their benefits, and required the self-employed to pay the full payroll tax rate, rather than just the portion normally paid by employees.

Edited June 5, 2011 by Vi-Jay

[Mr. Big Dog 10,747]

OK. Please source that.

and, Let me ask you.., Do you think a tax hike now will hurt or help, job growth?

You can look up some basic facts, yes?

Largest Reagan Tax Hikes

Tax Equity and Fiscal Responsibility Act of 1982 (this was a bigger tax increase than Clinton's 1993 hike)

Social Security Amendments of 1983

Largest Clinton Tax Hike

Omnibus Budget Reconciliation Act of 1993

As for the effect of a tax hike on the economy - I'd say that aside from having a federal budget that would be in significantly better shape, there would not be any tremendous effect on the economy or job growth had the President and Congress acted responsibly and let the Bush tax cuts expire as enacted by the GOP and signed by Bush. They should have done nothing and let the law as passed by the GOP stand.

Edited June 5, 2011 by Mr. Big Dog

[Mr. Big Dog 10,747]

Is this what you are referring too?

The bills didn't raise more revenue by hiking individual income tax rates though. Instead they did it largely through making it tougher to evade taxes, and through "base broadening" -- that is, reducing various federal tax breaks and closing tax loopholes.

For instance, more asset sales became taxable and tax-advantaged contributions and benefits under pension plans were further limited.

"What people forget about Ronald Reagan was that he very much converted to base broadening as a means of reducing deficits and as a means of tax reform," said Eugene Steuerle, an Institute Fellow at the Urban Institute who had helped lay the groundwork for tax reform in 1986 and served as a deputy assistant Treasury secretary during Reagan's second term.

There were other notable tax increases under Reagan.

In 1983, for example, he signed off on Social Security reform legislation that, among other things, accelerated an increase in the payroll tax rate, required that higher-income beneficiaries pay income tax on part of their benefits, and required the self-employed to pay the full payroll tax rate, rather than just the portion normally paid by employees.

Yes. The 1982 tax hike was larger than the tax hike signed 11 years later by Bill Clinton. Both in terms of adjusted dollars raised (35BN vs. 32BN) and certainly relative to GDP (0.8% vs. 0.5%). And yet, jobs were created at a faster clip and the economy experienced more robust growth following either of these tax hikes than they were following the tax cuts of 1981, 2001, 2003 or 2009.

Edited June 5, 2011 by Mr. Big Dog

[Ban Hammer 13,345]

Your math is amazing. What's presented here is the projection for 2020 with or without the tax cut package and AMT adjustments. The difference in the deficit is $700BN in a single year. Over the course of a decade, that would be $7 trillion. There's a reason why the CBO put a $4 trillion price tag on the extension of the Bush era tax cuts. That's what it adds to the debt over a decade.

i'm using your own chart for that figure of .2 trillion....

see the top numbers? total spending on the left: 5.3 trillion. on the right, 5.5 trillion.

[I AM NOT THAT GUY 5,715]

What's presented here is the projection for 2020

i'm using your own chart for that figure of .2 trillion....

see the top numbers? total spending on the left: 5.3 trillion. on the right, 5.5 trillion.

It's all right. He doesn't know what he is looking at either.

Edited June 5, 2011 by Some Old Guy

[Mr. Big Dog 10,747]

i'm using your own chart for that figure of .2 trillion....

see the top numbers? total spending on the left: 5.3 trillion. on the right, 5.5 trillion.

It's not that hard. We're talking about the tax cut packages. Part of it is booked as "tax spending" (0.2TN) and part as lost revenue (0.5TN). Together, the AMT indexing and the 01/03 tax cut packages cause 0.7TN worth a deficit in 2020 (the difference between the 0.6TN and the 1.3TN) if extended. That can't be if tax cuts pay for themselves.

It's all right. He doesn't know what he is looking at either.

You don't know how to read an easy chart. That's your problem, not mine.

[Vi-Jay 218]

Largest Reagan Tax Hikes

Tax Equity and Fiscal Responsibility Act of 1982 (this was a bigger tax increase than Clinton's 1993 hike)

Social Security Amendments of 1983

Largest Clinton Tax Hike

Omnibus Budget Reconciliation Act of 1993

Reagan Specifics;

Repealed scheduled increases in accelerated depreciation deductions

Tightened safe harbor leasing rules

Required taxpayers to reduce basis by 50% of investment tax credit

Instituted 10% withholding on dividends and interest paid to individuals

Tightened completed contract accounting rules

Increased FUTA wage base and tax rate

Reagan did not raise rates.

Clinton did.

Clinton Specifics;

It created 36 percent and 39.6 income tax rates for individuals in the top 1.2% of the wage earners.[2]

It created a 35 percent income tax rate for corporations.

The cap on Medicare taxes was repealed.

Transportation fuels taxes were raised by 4.3 cents per gallon.

The taxable portion of Social Security benefits was raised.

The phase-out of the personal exemption and limit on itemized deductions were permanently extended.

Part IV Section 14131: Expansion of the Earned Income Tax Credit and added inflation adjustments

___________________________________________________

That's not an apple to apple comparison.

Clinton benefited from an economic boom. Both real and ficticious. (There were a lot of econ-fiction writers in the 90's) When Clinton left, he left a recession on W's doorstep and the disaster seeds (planted) for today's financial crisis. (I don't blame him entirely for it. He was just like all presidents, a "lead character" in the play) Just a .

The question is.., What "boom" can support a tax hike today?

Edited June 5, 2011 by Vi-Jay

[Mr. Big Dog 10,747]

Reagan did not raise rates.

Had you looked down just a tad further in your source, you would have ran across this little gem:

In 2003, former Reagan adviser Bruce Bartlett wrote in National Review that "TEFRA raised taxes by $37.5 billion per year", elaborating, "according to a recent Treasury Department study, TEFRA alone raised taxes by almost 1 percent of the gross domestic product, making it the largest peacetime tax increase in American history."

[Vi-Jay 218]

Had you looked down just a tad further in your source, you would have ran across this little gem:

In 2003, former Reagan adviser Bruce Bartlett wrote in National Review that "TEFRA raised taxes by $37.5 billion per year", elaborating, "according to a recent Treasury Department study, TEFRA alone raised taxes by almost 1 percent of the gross domestic product, making it the largest peacetime tax increase in American history."

I know it resulted in a tax increase. Why play semantics?

Let me clarify.., I'm addressing income tax rates for individuals and corporations.

I ask again.., is now the right time to raise personal / corporate taxes rates?

The answer is and I think you are smart enough to know that.

[Mr. Big Dog 10,747]

Let me clarify.., I'm addressing income tax rates for individuals and corporations.

I don't care what you're addressing. The fact is that tax rates mean nothing if the tax code is loaded with loopholes and tax give-aways resulting in effective tax rates that have no resemblance to the marginal tax rates. When corporations pay taxes at rates that are less than half their marginal income tax rates, then what point is there to debate marginal tax rates? They don't pay @ marginal tax rates as it is.

[Vi-Jay 218]

I don't care what you're addressing. The fact is that tax rates mean nothing if the tax code is loaded with loopholes and tax give-aways resulting in effective tax rates that have no resemblance to the marginal tax rates. When corporations pay taxes at rates that are less than half their marginal income tax rates, then what point is there to debate marginal tax rates? They don't pay @ marginal tax rates as it is.

OK.., Now that you got that out of your system we both feel better.

Will you answer the question?

Is now the right time to raise personal/ corporate income tax rates?

[Mr. Big Dog 10,747]

OK.., Now that you got that out of your system we both feel better.

Will you answer the question?

Is now the right time to raise personal/ corporate income tax rates?

Doesn't matter. Measured on federal receipts, corporations pay historic low taxes today. Back in the 1950's, corporate income taxes were about 5%-6% of GDP. They have since fallen to about 2% of GDP. Individual income taxes, on the other hand, have not seen any such decline quite consistently hovering around 8% of GDP. Overall, the tax burden today is at it's lowest level since 1950. If it's true that low taxes generate jobs, then tell me: Where are those jobs?

The fact of the matter is that you can lower tax rates all you want and you won't create a single job because of it. The first decade of the 21st century was the worst in terms of job creation despite historic low tax rates. At the onset of the second decade with tax burden even lower, there still are no jobs. Lower tax rates don't create jobs. They never have and they never will.