Give the rich their tax cut

[Sluggo]

All this talk of tax cuts has reached the point of silliness. It has become obvious that some people need a simple economics lesson.

All of the tax cuts go to wealthy seems to be a huge sticking point. My question is, why do you have a problem with that?

What do you think wealthy people are going to do with the money they save? Bear in mind that when the wealthiest people get a tax cut, they aren?t getting an extra few hundred dollars in their pocket, they are getting tens of thousands of dollars in savings. I really don?t think that the wealthy are digging a hole in the back yard and putting that money there. Where is the money going? The money that isn?t buried in the backyard, is being funneled back into the economy. How does that benefit you? Well, the wealthy may buy products or services with that money, therefore raising another persons income, giving the other person more money in income which has to be taxed. The product that sold also has to be shipped, giving a truck driver a few more bucks, and results in him buying some fuel, the government collecting taxes on said fuel, and the guy who pumps the fuel a job. And never forget that the government gets their share in the form of sales tax. OK you say, what if he just sticks it in the bank?.huh?what happens then. Well the bank has more money available on hand to lend out, maybe to YOUR boss, so your boss can expand his business, and give you a promotion and a raise. Well, what if he just invests it in the stock market, hoping to make a killing?..huh?what happens then? Well someone has to sell him the stocks, a broker making a commission, the money is invested in a company, maybe a start-up company giving jobs and expanding operations. Or just a blue chip stock, which results in more money for research and development on new products, which in turn need to be sold?see above. Now if the wealthy get no tax savings, none of the above happens, all that money just goes into the US Treasury, and is distributed as the government sees fit.


Now lets look at it a different way. What about the pittance you may receive as a tax cut. Lets say for the sake of argument that you get $1000 a year tax savings. That is after taxes money, so really you are getting about $1200. Lets say $100 a month. Now lets say your boss walks up to you tomorrow and says, I like you I want to give you a $100 a month cash bonus, just for being you. You being the suspicious type eye the boss, and say, that sounds great. You begin to think about Fred in the corner office, you know he makes a lot more than you, you wonder what his bonus might be. You march down to the bosses office and demand to know Fred?s bonus amount. The boss says Fred?s bonus is $500 a month, but that in no way effects your bonus of $100 a month. You being the good fair type tell the boss?. that sucks, you don?t even want your bonus, because you know for a fact that Fred does not need an extra $500 a month, all Fred will do is waste his money on a new boat or something, and you would prefer that your bonus and Fred?s bonus both be directed to paying off the companies loans.

I say give us all a tax cut, I will take mine, if you dont want yours mail it to me.

 

[Pacfanweb]

What Sluggo said. Roger that.

 

[Moonbeam]

Your idea isn't bad, but I think it shows too much liberal thinking. By the logic you present, you can easily see how your idea would be improved by limiting the largess even further. Why bother to benefit the wealthy. Give it to the super wealthy, or just Bill Gates. He or they could go on a super spending spree that would lift the entire world.

 

[Ornery]

By the same token, we could make this country even better for the "have nots" by taxing the hell out of the rich. Right now they're taxed at 35% and I'm at 25%. I could drop my tax burden down to 1% by increasing theirs to 90%. They'll still have more money than me, so what do they have to complain about? And we can do it too, because we have the votes and they don't! :Q

 

[iamwiz82]

i cannot believe this is even a discussion. The rich paid the taxes, they should get them back!!!! I am by no means rich, Kettering makes sure of that, but i still feelk fair is fair.

You people want your money, but you dont want to give the rich their cut. dumb, just dumb

 

[shifrbv]

I think it should be looked at by what does it take to live a basic life in this country (own a basic, decent home, a basic car, pay bills, have food, have decent savings). Right now, in my area (the midwest) I would say about $75K. Anyone making over that amount has excess and it should be redistributed so that every family could live as close to that line as possible. If only this could be done, society would truly be a utopia and I think people would be happier, in general.

 

[Double Trouble]

shifrbv, man I really hope you are one of VERY FEW people who think this way. Do you realize what you describe is the same utopia saught by Carl Marx and Chairman Mao and every socialist/communist out there?? The same system that has been shown time and time again to inevitably fail because it fails to reward motivation, intelligence and hard work??

 

[yakko]

shifrbv,

What a load of feces. You think it should be right to steal from people who make the effort to better their lives. If you started making more than 75 k a year you will be giving every extra penny away to those around you who don't that much right? If you hit the lottery you would give away most of it without any hesitation right?

 

[SmiZ]

tagej:

Exactly, what incentive is there for me to work if I'm going to be given enough to sustain regardless of what I do? Why go to college? Why learn to read? Why get out of bed in the morning? You're gonna get enough to live in a house and be fed anyway, so why try?

Socialism breeds apathy.

apathy = naughty

 

[vi edit]

I hear ya tagej. What's the point of me getting an engineering degree and busting my brain everyday to make a nice living if some guy jockeying videos at Blockbuster gets my "excess" income to maintain the standard of living that I earned for myself?

That's not a reward for being successful, that's a punishment!

 

[Luchini]

Sluggo, there is a term for what you just described it's called "trickle down economics." Some of your arguments are flawed. The assumptions you are making, like for example "the rich putting money into the bank", implying the wealthy don't have proper spending multipliers or confidence to put that tax money back into the economy. That's a fair assumption, especially in a recessionary environment. But the problem here is that banks don't lend based on how much money they have in their coffers, they lend based on reserve requirements and risk. If my boss is a bad risk or if a low income individual is a bad risk he is not going to get the loan anyway. What you are arguing, Supply side theory, or "Reaganomics" is based on the laffer curve. The laffer curve, in its simplest form states that if you raised tax rates beyond a certain point, then people would work less and tax revenue would fall. Tax cuts worked in New Zealand in the 1930's because people were taxed upwards of 70%, marginally. What occured there was job creation, more people going to work, and increased economic spending. However, it's been proven that the laffer curve can only work in situations with extremely high tax rates. What happens when you cut marginal rates to like 30%, from something upwards of 40%...well that would be just a windfall, and the rich would work LESS. Is this fair? Why not just give tax breaks to the poor? Isn't that a more direct way of arguing what you are saying? The idea of "trickle up" economics is in many ways what Clinton's policies are based on such as the earned income tax credit. Say what you want about the man but our economy performed quite well in this environment. Improving the positon of your worse off individual can make everybody in society better off (Rawlsian social welfare function) Trickle down economics is flawed, it has been shown to lead to lower rates of economic growth, inequality, and public revenue (take the reagan years as an example)

 

[Moonbeam]

Another aspect of this is that we do not live in a vacuum. All the go-getters who are motivated only by money are, in one respect, parasites that feed off the general cheese, and one not of their making. They can prosper because of the economic opportunity they were born into. Doubtless, one could find millions of Chinese, with equal or greater aptitude and drive, growing rice. It would be so fun to be able to put all the people driven by money and money only on a big island somewhere and watch them die trying to parasitize each other. What this is all about is self image. This society worships money, because it knows nothing of real value. Those that worship money and have it get to feel as though they are the best. They need to feel the best to cover the fact that they really feel worthless, empty of real life. "There are a million paths in life and they all lead nowhere. Choose a path that has a heart."

 

[SpongeBob]

shifrbv, man I really hope you are one of VERY FEW people who think this way. Do you realize what you describe is the same utopia saught by Carl Marx and Chairman Mao and every socialist/communist out there?? The same system that has been shown time and time again to inevitably fail because it fails to reward motivation, intelligence and hard work??

I think the reason it fails is because some people/politicians are inately greedy and corrupt. It is a good political theory, too bad it is impractical in today's society.

 

[poop]

Trickle-down economics are garbage. It is simply a rationalization to give hte rich more money.

Explain this: Why does giving the rich a tax cut inject more money into the government than giving everyone a tax break? If the dollar value is the same, the the same money is being injected to the economy. Except instead of waiting for the rich to spend the money for the poor to benefit, everyone benefits from the start.

Sure, the rich create the jobs, but job creation has little to do with a tax break. Just because joe richman gets a %10 cut doesn't mean he will create jobs with it. He will invest it. Perhaps some in his company, but mostly in trust funds, mutual funds, and stock. Thus, the money helps those who only already have money. A bank recieving investment money will not then invest in the poor. Banks mostly invest in the middle class (via morgages, loans, etc). A poor person cannot touch this money the rich guy invested. Only those who already have cash will see any return.

Reaganomics=load of crap.

Moonbeam: Who says accumulation of wealth is not a good path to take? Sounds good to me

 

[pamchenko]

moonbeam, do you know anyone that genuinely worships money? I know of ppl that may value money to much...or set economic status as too high a priority...
money is important to me because it helps me obtain possessions/lifestyle that I am accustomed to. Remember, one's lifestyle is very important. Wars have been fought over ways of life. anyways moonbeam, I thk that your reply tries to villanize those with money and lump them all into one "evil-sect."
Though I am in the upper middle class, I appreciate what I was born into and try my best to help those who aren't as fortunate.

 

[Zach]

As opposed to letting the poor get a tax cut, and funnel their money into the economy. And, rich people do (statistically) maintain savings more often, so poor people will spend all their money and "bury" none!

 

[Raspewtin]

<< money that isn?t buried in the backyard, is being funneled back into the economy >>




the rich could easily funnel the money into foreign economies, especially if our economy slows down dramatically. after all, don't all of us seek the best risk/return ratio for us we can get, anywhere the opportunity arises? Also they aren't going to use the money to buy a washing machine or television with the refund (since they have enuf cash already), thus consumer confidence probably won't be affected. Greenspan himself said the big part of the slowdown is decreased production (as evident in the steady downturn in manufacturing in the Midwest in the last 5 months, and manufacturing was NOT hit 1991). Thus a wealthy tax break probably won't lead to increase production and reversal of this economic downturn. IMO, the money never trickles down that effectively. I agree with Bush Sr who said, it's &quot;voodoo economics&quot;

 

[Jmman]

Class envy rears its ugly head...I think some of you need to take the class warfare quiz.....link

 

[Moonbeam]

pamchenko, What I am saying is that the persuit of status through money is a rush that substitutes for real life. The illusion is usually permanent, but sometimes fails. For such a one, faced for the first time with his inner emptiness, there can be depression and worse. My message, read properly, is not that life is empty, but that real fulfillment lies in an other direction. If there is anything implying guilt here, my suspicion is that it's maybe something you feel because you've already begun to suspect.

 

[Ornery]

Class Warfare Quiz

1. The wealthiest 5 percent of Americans now capture more of the nation?s total income than any time in
this century.
True ___________ False ___________

• False. In 1993, the wealthiest 5 per cent of Americans collected 19 per cent of the nation?s total
  income. In 1930, the top 5 per cent collected 30 per cent. In fact every year from 1913 ( the earliest
  year for which data are available) through 1941, the richest 5 per cent had a larger share of total income
  than they do today.

2. A family living at the poverty level in the United States has a higher income than the median family
income in how many countries?
a) 0 b) 50 c) 100 d) 150 e) 200

• d) 150 countries. The U.S. poverty level for a one person household in 1994 was $7,750. This was a
  higher level than the per capita income in all Third World nations and even in many non-poor
  countries, including Greece, Saudi Arabia, Brazil, South Africa, and Venezuela.

3. What share of total national income is captured by the richest 1 per cent of Americans?
a) Less than 5% of total b) 10% of total c) 15% of total d) 25% of total

• c) 15 per cent of the total. The richest 1 per cent of households earn roughly one-seventh of the total
  income.

4. What is the share of total federal income taxes paid by the richest 1 percent of Americans?
a) Less than 1% b) 2% c) 5% d) 10% e) More than 25%

• e) More than 25 per cent. It?s a popular myth that the rich don?t pay their fair share of taxes. They
  earn 15 per cent of the income and pay 30 per cent of the income taxes.

5. What percent of American households on welfare own color-television sets?
a) 10% b) 20% c) 50% d) More than 90%

• d) 92 per cent of welfare house-holds in the U.S. own color televisions; 98 per cent own a
  refrigerator; 68 per cent own a telephone.

6. Americans with incomes below the median (the bottom 50 per cent) pay what share of federal income
taxes?
a) More than 80% b) 50% c) 20% d) 5%

• d) 5 per cent. The bottom half of income earners bear just 5.2 per cent of the federal income-tax
  burden, according to the latest IRS statistics. In 1980 the poorest half paid 7.5 per cent of the taxes.

7. Of all the tax filers with capital-gains income in 1994, the percentage with incomes of $50,000 or less
was:
a) Less than 5% b) 10% c) 20% d) More than 50%

• d) More than 50 per cent. About 56 per cent of the tax returns with capital gains in 1993 were for
  Americans with incomes less than $50,000.

8. Which of the following nations has the highest capital-gains tax?
a) Canada b) France c) Germany d) Japan e) United States

• e) United States. The capital-gains tax rate is 28 per cent in the U.S., versus 20 per cent in Canada, 16
  per cent in France, 0 in Germany, and 20 per cent in Japan.

9. What percentage of American workers were victims of corporate lay-offs last year?
a) 20% b) 10% c) 3% d) 1%

• c) Lay off victims may get headlines, but they are still relatively rare. Only 3 of 100 workers are
  laid off from their jobs in 1995, according to the U.S. Bureau of labor statistics.

10. The percentage of agriculture subsidies that go to farmers with annual sales of more than $100,000 in
1994 was:
a) 20% b) 40% c) 60% d) 80%

• c) 60 per cent. It is a myth that federal farm subsidies provide a safety net to family farms. The bulk of
  the subsidies are provided to large agribusinesses.

11. In the eight years after the Reagan tax cuts (1981-1989), the average real income of low-income
households (bottom 20 per cent):
a) Fell by more than 25% b) Fell by 5% c) Remained unchanged d) Grew by more than 5%

• d) Grew by more than 5 per cent. It is a popular myth that in the 1980?s the poor got poorer. The
  lowest fifth in income saw their real incomes rise by 6 per cent from 1981 to 1989. In the 1970?s and
  1990?s, when income-tax rates were rising, the poor suffered a real loss in income.

12. The average senior citizen today will receive how much more in lifetime Social Security and Medicare
benefits than the amount (plus interest) that he and his employers paid in?
a) He gets back only what he and his employers put in b) $50,000 more
b) $100,000 more d) $250,000 more e) $500,000 more

• d) $250,000 more. Social Security and Medicare should not be called entitlements because seniors
  currently receive far more than they are entitled to.

13. If the Federal Government confiscated every penny earned each year by every millionaire in the United
States, this would raise enough money to run the Federal Government for:
a) 60 years b) 6 years c) 6 months d) 6 weeks e) 6 days

• d) Six weeks. Soaking the rich won?t balance the budget. Millionaires earn less than 4 per cent of all taxable earnings in the United States. In 1992 there were just 55,000 millionaires in the U.S. - 0.05 per
  cent of all tax filers.

14. If the Federal Government confiscated the net earnings of all the fortune 500 companies, this would
raise enough money to operated the Federal Government for:
a) One full year b) Half a year c) Two months d) One month

• c) Two months. In 1995 the total profits of the fortune 500 companies were $244 billion, which would
  provide enough revenue to operate the government for 58 days.

15. Of the richest 400 Americans, what percentage inherited their fortune?
a) 75% b) 50% c) 20% d) 10%

• c) 20 per cent. Only 82 of the Forbes 400 wealthiest inherited their money. Most rich Americans have
  not won the lottery of life; they earned the money they have.

16. America?s very first income tax in 1913 had a top rate of:
a) 50% b) 20% c) 10% d) Less than 10%

• d) Less than 10 per cent. The first income tax in 1913 had a top rate of 7 per cent. A proposed
  safeguard to the Sixteenth Amendment to prohibit income tax rates from rising was defeated on the
  grounds that no one would ever propose a tax rate that high.

17. From 1980 to 1990, a period when income-tax rates fell from 70 per cent to 28 per cent, total federal
tax receipts:
a) Fell by 10% b) Grew by 10% c) Grew by 20% d) Grew by 50% e) Grew by 100%

• e) Grew by 100 per cent. In 1980 federal tax revenues were $517 billion. By 1990, after two income-tax-rate reductions, federal revenues (in current dollars) had climbed to $1,031 billion.

18. Which was the most expensive war in American history?
a) The Civil War b) WWI c) WWII d) The War on Poverty

• d) The War on Poverty. In 1995 dollars, WWII cost $3.5 trillion; WWI cost $500 billion; and the
  Civil War cost about $100 billion. The War on Poverty has already cost well over $5 trillion in total
  benefits since 1965. The War on Poverty has cost more than all the military wars fought by the United
  States dating back to the Revolutionary War - combined.

19. This year the Federal Government is expected to spend $1.65 trillion. Adjusted for inflation, this is the
cumulative total of federal spending over what period?
a) 1789-1850 b) 1789-1900 c) 1789-1940 d) 1789-1990

• c) 1789-1940. Adjusted for inflation, the Federal Government now spends more money in a month
  ($125 billion) than it did cumulatively in its first fifty years.

20. What percentage of total federal revenues comes from the inheritance tax?
a) 1% b) 5% c) 10% d) 20%

• a) 1 per cent. 1n 1995 the estate and gift tax brought in $14.8 billion, or 1.25 per cent of the $1.4
  trillion in federal revenues. Thanks to careful estate planning, most wealthy families have paid virtually
  no inheritance tax on their families fortunes. A study by economist Richard Wagner of George Mason
  University finds that the Federal Government would collect more revenues if it abolished the Federal
  inheritance tax altogether.

 

[pamchenko]

moonbeam, i thk you're overdramatizing things...you're rewording the cliche &quot;money doesn't buy happiness&quot;...for many...it does...but I'll tell you there are more rich happy ppl than poor happy people. Having money allows one to avoid possible conflicts...that's why poor ppl are more likely to get divorced...
as for guilt? I dunno if you could characterize it as that...I see it as me being nice? is that possible I could do something not out of obligation (guilt), but out of generosity? Ppl in my position can choose whether or not to share the wealth. I for one choose to.

 

[Moonbeam]

pamchinko, I do not mean that you give out of a sense of guilt, only that if you feel I'm trying to make you feel guilty, that may be that you feel some kind of guilt, not that I intend for you to. It may be too that I sound overdramatic only because my point of view is under-represented.

 

[Philosopher]

The system that helped pull us out of the great depression was capitalism, with socialism superimposed over it. Millions of poor unemployed workers were given jobs in public works projects, building power plants, dams and many other things. At the beginning of the depression, (Hoover?) attempted to use the idea of trickle down economics to restart the economy. It didn't work at all. When Roosevelt took office, he use a direct approach to helping the poor, like the public works projects. The ultimate public works project, and the one that pulled us out of the Depression, was WWII. The Government subsidized industrial factories for the war effort, and unemployment was ended.

The point is...when money and jobs were given directly to the poor, it helped our economy. When rich people and businesses were given money, it did nothing.