Prove me wrong about tax cuts for the rich.

[JMapleton]

Address and dispute my points when you post, don't just post.

I lean towards the right of the political spectrum, but I think tax cuts for the wealthy are ridiculous.

It has nothing to do with morality or hatred for the rich. My opinion is that is better to give tax cuts to lower and middle class people to boast the economy than it is to give it to the rich.

My points.

About the wealthy.

1. Most wealthy people who own businesses, who make over $250k, are not filing their taxes as sole proprietorships, they're incorporated and they are paying corporate income tax rates, not personal income tax rates. So saying lowering the personal income tax rates creates jobs is ridiculous. It does not effect their businesses.

2. Giving the wealthy more money will not increase their personal spending. Most wealthy people already live below their means and already own all the things they want or need. If you gave a millionaire $1,000 , do you think they'll spend it? I think not.

About the middle class and poor.

3. Most middle class and lower income people always need something. Frig is broke. Car is broke. Washer and dryer old and running slow. Give $1,000 someone who makes $30,000 and do you think they'll spend it? I think so.

4. Jobs are not created by businesses have too much money laying around. A company will not hire because they were given a tax cut. A company hires because there is an increase in demand for their products. You cannot create that increase in demand UNTIL you put more money into the hands of people who need things, like the lower and middle class.

Giving the wealthy, who supposedly own businesses, breaks on their personal tax rates is like going through the economic cycle backwards. You're giving money to people, who you think will hire more employees WITHOUT seeing any increase in demand for their products, hoping they will all collectively hire more workers, which will in turn increase consumer goods spending, which sustain the newly created jobs. Make sense? No it doesn't.

My idea: Make the first $50,000 in income tax free for everyone, get rid of the Bush tax cuts to pay for it.

Prove me wrong and address my points specifically.

 

[Craig234]

It's good to see a reasonable post on the topic from 'the right'.

My issue with the post would just to add arguments - for example, it doesn't include a lot of problems that come from an excessive concentration of wealth, as well.

It's pretty dire when the concentration increases - it's a step back towards the 'bad old days', towards the 'third world' model.

Worse, it's a step towards an authoritarian culture globally, IMO, as a result.

In history, the rich as a class - there are individual exceptions - have never been too worried about the authoritarian culture when they benefit, it becomes accepted.

You could also include some specifics, like a dollar for the rich generating 30-some cents in economic activity, and for those with less $1.60-$2.00 activity.

And jobs are not created by giving the rich money, they're created by demand.

There are quite a few other points as well as to the benefits of the policy you are advocating.

And this only gets harder to fix the more things go to concentrated wealth, to where the public will be less able to do anything, with government weakened.

 

[JMapleton]

My issue with the post would just to add arguments - for example, it doesn't include a lot of problems that come from an excessive concentration of wealth, as well.

I agree with that as well.

I'm a unashamed and relentless capitalist. But we are going to lose capitalism completely if the GOP continues to advocate these economically illiterate policies. The average citizen is going to rise up and vote someone into office that makes Obama look like Ron Paul.

"Trickle down" economics and this other "tax cuts for the rich" nonsense is going to destroy us all.

Trickle Up Economics is what I say and free markets. I grew up working class, I know what it's like to have broken crap in your house and needing money to buy new stuff. Give the money to people who will spend it.

 

[cubby1223]

If you increase the payouts to everyone who is poor or middle class, inflation will kick in raising prices of goods and services negating the benefits.

Increase the salaries of the working class, then the price tag of their products must go up.

Government gives the poor direct cash and you create an incentive to be poor and unproductive. The hosts on mainstream talk radio here were talking about this a few weeks ago, and I forget the exact numbers, but it basically went like - with all the government assistance going to "the poor", at the end of each year the person who works a minimum wage job has more money in his pocket than a person working for twice the minimum wage! That shouldn't be right, but it is. Someone who strives to be a Wal*Mart cashier for life should not be rewarded.



If I were King, I'd simultaneously raise taxes on "the rich" and reduce benefits to "the poor". It irritates so many who truly work hard and get to watch a second culture in this country sit on their fat asses waiting for their link card to be refilled each month.

 

[boomerang]

Address and dispute my points when you post, don't just post.

I lean towards the right of the political spectrum, but I think tax cuts for the wealthy are ridiculous.

It has nothing to do with morality or hatred for the rich. My opinion is that is better to give tax cuts to lower and middle class people to boast the economy than it is to give it to the rich.

My points.

About the wealthy.

1. Most wealthy people who own businesses, who make over $250k, are not filing their taxes as sole proprietorships, they're incorporated and they are paying corporate income tax rates, not personal income tax rates. So saying lowering the personal income tax rates creates jobs is ridiculous. It does not effect their businesses.

2. Giving the wealthy more money will not increase their personal spending. Most wealthy people already live below their means and already own all the things they want or need. If you gave a millionaire $1,000 , do you think they'll spend it? I think not.

About the middle class and poor.

3. Most middle class and lower income people always need something. Frig is broke. Car is broke. Washer and dryer old and running slow. Give $1,000 someone who makes $30,000 and do you think they'll spend it? I think so.

4. Jobs are not created by businesses have too much money laying around. A company will not hire because they were given a tax cut. A company hires because there is an increase in demand for their products. You cannot create that increase in demand UNTIL you put more money into the hands of people who need things, like the lower and middle class.

Giving the wealthy, who supposedly own businesses, breaks on their personal tax rates is like going through the economic cycle backwards. You're giving money to people, who you think will hire more employees WITHOUT seeing any increase in demand for their products, hoping they will all collectively hire more workers, which will in turn increase consumer goods spending, which sustain the newly created jobs. Make sense? No it doesn't.

My idea: Make the first $50,000 in income tax free for everyone, get rid of the Bush tax cuts to pay for it.

Prove me wrong and address my points specifically.

Prove you worng? How about you prove your points first? Most if not all are not based in any facts, but are based on "feelings". Then you've taken those incorrect assumptions and built a number of false arguments around them.

One example and I'm out of here. Your assumption that businesses only hire when there is an increased demand for their products is dead wrong. Think real hard and see if you can come up with at least one other reason they'd hire. Bonus points if you can tie it in with the benefits a tax break would provide for that business.

The burden of proof is on you.

 

[Double Trouble]

Address and dispute my points when you post, don't just post.

I lean towards the right of the political spectrum, but I think tax cuts for the wealthy are ridiculous.

It has nothing to do with morality or hatred for the rich. My opinion is that is better to give tax cuts to lower and middle class people to boast the economy than it is to give it to the rich.

You can't give "tax cuts" to the poor. Roughly 50% of the country does not pay anything in federal income taxes (payroll taxes, local taxes, state taxes, sales tax etc are different matters). You can't cut taxation that's currently at 0, unless you want to use the tax code as a welfare system. That's already being done with certain tax credits etc by the way.

About the wealthy.

1. Most wealthy people who own businesses, who make over $250k, are not filing their taxes as sole proprietorships, they're incorporated and they are paying corporate income tax rates, not personal income tax rates. So saying lowering the personal income tax rates creates jobs is ridiculous. It does not effect their businesses.

2. Giving the wealthy more money will not increase their personal spending. Most wealthy people already live below their means and already own all the things they want or need. If you gave a millionaire $1,000 , do you think they'll spend it? I think not.

Your argument basically boils down to "cutting taxes for the wealthy is not the most effective way to boost economic activity". I'd agree with that, but that isn't the sole reason behind the tax cuts. Last time I checked the tax code was not intended primarily as a tool to boost the economy. So, if someone says "hey, we need to stimulate the economy, what shall we do?", then I'd agree that lowering tax rates on the wealthy is not the most effective tool to do it.

About the middle class and poor.

3. Most middle class and lower income people always need something. Frig is broke. Car is broke. Washer and dryer old and running slow. Give $1,000 someone who makes $30,000 and do you think they'll spend it? I think so.

That's the same point you made earlier, and yes, giving money to the lower and middle classes is more likely to generate more economic activity. I don't think there's much disagreement about that.

4. Jobs are not created by businesses have too much money laying around. A company will not hire because they were given a tax cut. A company hires because there is an increase in demand for their products. You cannot create that increase in demand UNTIL you put more money into the hands of people who need things, like the lower and middle class.

I disagree with that one, at least to a degree. True, companies are not going to hire if the demand isn't there. However, for many companies, the demand is there to justify hiring more people to do the work, but the company is tightening it's belt and holding the line on adding more people. They are making workers work harder, doing more with less. Given incentives -- and probably more importantly -- more clarity on the future tax / regulatory environment, companies will hire again.

Giving the wealthy, who supposedly own businesses, breaks on their personal tax rates is like going through the economic cycle backwards. You're giving money to people, who you think will hire more employees WITHOUT seeing any increase in demand for their products, hoping they will all collectively hire more workers, which will in turn increase consumer goods spending, which sustain the newly created jobs. Make sense? No it doesn't.

Back to the same point: you're arguing that tax cuts for the wealthy are not the best tool in the arsenal to stimulate the economy. I don't think very many would disagree with that notion. However, we're talking about two different things.

First, the tax code / tax system itself. I'd say it needs to be overhauled and we need to do some fundamental analysis of how taxes are paid etc to streamline the entire tax code.

The second issue (to your points) is stimulating the economy. That's an entirely different discussion. Tax cuts for the wealthy would help but are not going to be the most effective tool for stimulus. There's also a simple issue of fairness: if you cut taxes for everyone, why should someone who's working hard to earn more not also get a break? Are you just making a judgment that wealthy people somehow are less deserving to hang on to the money they've earned than someone else?

My idea: Make the first $50,000 in income tax free for everyone, get rid of the Bush tax cuts to pay for it.

Someone who has a little time can go look this up, but I don't think the average family of 4 making $30k to $40k is paying a whole lot in federal taxes anyway, so there's not much to cut there. You're really going to have to tackle the $40k to $150k brackets and up to get into real dollars. There's also the issue of essentially robbing those who produce to hand the money over to those who don't. People who need help should get it, but taking money from those who produce to those who don't is a fundamentally flawed idea so you have to be very careful about using tax code to effect socially "just" outcomes.

Having discussions about tax policy etc could be very productive, but it always gets drowned out into class warfare/socialist/evil rich/lazy poor blah blah discussion which is pointless.

 

[dmcowen674]

Prove me wrong about tax cuts for the rich

Rich Republican = mo money mo money, mine all mine

Poor Democrat = Tax Tax Tax

 

[Caveman]

Just wanted to say I could be the OP... Every word that was said I agreed with. Tax cuts for the "rich" are silly.

Most of the folks I know who make $250k and up are small business owners who are able to write of normal life as a "business expense" and do so for a tax shelter - shelters that are only available to them because of their lifestyle.

Wasn't there recently a group of folks begging the gov't not to extend their tax breaks?

I'm a "pull yourself up by your own bootstraps" kind of guy, but some of the tax breaks/cuts for the "wealthy" make no sense.

 

[Mursilis]

You can't give "tax cuts" to the poor. Roughly 50% of the country does not pay anything in federal income taxes (payroll taxes, local taxes, state taxes, sales tax etc are different matters). You can't cut taxation that's currently at 0, unless you want to use the tax code as a welfare system. That's already being done with certain tax credits etc by the way.

Seriously, this. There are so many credits, deductions, etc., that the "poor" are barely paying anything in federal income taxes. I earn above the median, and my effective rate is something like 6% or so, and that's not with any fancy accounting. I'm taking the standard mortgage interest and dependent deductions most families have access to. I can't imagine my taxes getting much lower, and if I'm above the median, that means most people are propably paying even less in federal income taxes.

 

[IBMer]

50 percent of the country not paying taxes is a right wing talking point as unproven as trickle down economics, yet they still use it day in and day out.

From when I only made 7.50 an hour as a teenager to making more than 5 times that now I have ALWAYS paid taxes.

 

[KB]

50 percent of the country not paying taxes is a right wing talking point as unproven as trickle down economics, yet they still use it day in and day out.

From when I only made 7.50 an hour as a teenager to making more than 5 times that now I have ALWAYS paid taxes.

The figure is more like 47%. The 47% get enough credits/deductions to owe no federal and income tax. You are right that no one gets away from paying any tax. You still have to pay sales and payroll taxes no matter your income.

http://www.nytimes.com/2010/04/14/business/economy/14leonhardt.html

 

[Siddhartha]

Anyone who voted GOP or did not vote in the last federal election voted for extending the Bush era tax cuts.

 

[Exterous]

50 percent of the country not paying taxes is a right wing talking point as unproven as trickle down economics, yet they still use it day in and day out.

From when I only made 7.50 an hour as a teenager to making more than 5 times that now I have ALWAYS paid taxes.

I believe the distinction was made that they are referring to Federal Income tax which does not include payroll, state, local etc

 

[IBMer]

I mean Federal Income Tax, its an unproven number that has constantly been used as a talking point.

 

[IndyColtsFan]

I lean right as well, and I generally agree with what the OP said. Even ignoring tax cuts/increases for a moment, my biggest issue with the way the "rich" are taxed has to do with how capital gains are taxed. IIRC (and someone will correct me if I am wrong), because of the way capital gains are handled, the rich effectively pay a tax rate of 16% or 17%. That isn't fair when people like me are paying a far higher percentage, and I am definitely not rich.

We also need to cut spending drastically, but that is another discussion. Unfortunately for us, I believe that taxes are going to have to be raised on everyone at some point and spending will need to be cut drastically in order to eliminate our deficit and eventually, our national debt.

 

[her209]

I lean right as well, and I generally agree with what the OP said. Even ignoring tax cuts/increases for a moment, my biggest issue with the way the "rich" are taxed has to do with how capital gains are taxed. IIRC (and someone will correct me if I am wrong), because of the way capital gains are handled, the rich effectively pay a tax rate of 16% or 17%. That isn't fair when people like me are paying a far higher percentage, and I am definitely not rich.

We also need to cut spending drastically, but that is another discussion.

Long term capital gains are maxed at 15%. Capital gains also aren't subject to FICA taxes.

 

[IndyColtsFan]

Long term capital gains are maxed at 15%. Capital gains also aren't subject to FICA taxes.

Thanks for the clarification. That's just not right in my opinion.

 

[piasabird]

So do you hate all people who make more money than you? How can you live with yourself. It is not a tax cut for anyone to continue the existing tax rates! Dont drink the coolaid. If the rich have a tax rate, then the more money they make the more tax they pay. What is the problem?

I could agree with the concept of getting rid of the SS Cap and having one rate for everyone no matter how much money they make. That would be equal treatment under the law.

 

[PokerGuy]

I mean Federal Income Tax, its an unproven number that has constantly been used as a talking point.

No, nothing unproven about it. The brookings institute is among the various firms that have done analysis on the issue, here's the article: http://www.taxpolicycenter.org/publications/url.cfm?ID=1001289

So (just about) half the country pays no federal income taxes. They pay other taxes and fees, but not federal income tax.

 

[IndyColtsFan]

So do you hate all people who make more money than you? How can you live with yourself. It is not a tax cut for anyone to continue the existing tax rates! Dont drink the coolaid. If the rich have a tax rate, then the more money they make the more tax they pay. What is the problem?

I don't know if you're addressing me or the OP, but I'll assume it was me and answer. I don't hate the rich or anyone and I am a conservative. What I want is what is FAIR. You guys can't sit around and say "Half of Americans pay no income taxes!!" and get in a tizzy about that, and then turn around and ignore that much of the "rich" portion of the population whose income is effectively derived from capital gains likely pay a smaller tax rate than you do. That is the problem I see. If my wife and I are paying 30%, for example, why should someone who is making millions per year pay an effective rate of 15%?

 

[PokerGuy]

This is just the usual "sock it to the rich!" tripe. Nobody has presented ANY logical reason why someone who earns more than some arbitrary figure (250 thousand, 1 million, 5 million) is less deserving of a tax cut than someone making less than that figure. Just because someone earns more doesn't mean we need to steal more of their money and give it to people who do nothing to earn it.

 

[piasabird]

Lets explain how the stock market works. First you have to make money or borrow it from a bank and pay interest on it. Then after you pay taxes on that money you have to take on the risk when you invest it. Then if you cash out before one year is up you have to pay income taxes on your profit because it is considered short-term income. You also have to pay a fee for selling and buying stock up front. Only if you take a risk with your money and you keep it invested for 12 full months do you get the benefit of counting it as capital gains. It is even worse if you use margin or a loan for your investments because you have to pay some interest, and if the value drops you can be forced to either deposit cash to cover the loss or be forced to sell the stock at a loss.

Making money in the stock market is not as easy as you think.

 

[Phokus]

This is just the usual "sock it to the rich!" tripe. Nobody has presented ANY logical reason why someone who earns more than some arbitrary figure (250 thousand, 1 million, 5 million) is less deserving of a tax cut than someone making less than that figure. Just because someone earns more doesn't mean we need to steal more of their money and give it to people who do nothing to earn it.

1. Because an extra dollar to the rich has very little marginal utility compared to the poor and middle class

2.

The top 400 households paid 16.6 percent of their income in federal individual income taxes in 2007, down from 30 percent in 1995. This decline works out to a tax cut of $46 million per filer in 2007, or a total of $18 billion in tax cuts for these households per year.
To make it into the top 400, a household needed an adjusted gross income of at least $35 million in 1992 (in 2007 dollars) and $139 million in 2007.
The decline in effective tax rates at the very top is due in large part to the capital gains tax cuts enacted in 1997 and 2003. The top marginal tax rate on capital gains is now 15 percent, less than half the top tax rate on wages and salaries. The top 400 taxpayers derived two-thirds of their income from capital gains and qualified dividends in 2007.

http://www.cbpp.org/cms/index.cfm?fa=view&id=3090

 

[PokerGuy]

I don't know if you're addressing me or the OP, but I'll assume it was me and answer. I don't hate the rich or anyone and I am a conservative. What I want is what is FAIR. You guys can't sit around and say "Half of Americans pay no income taxes!!" and get in a tizzy about that, and then turn around and ignore that much of the "rich" portion of the population whose income is effectively derived from capital gains likely pay a smaller tax rate than you do. That is the problem I see. If my wife and I are paying 30%, for example, why should someone who is making millions per year pay an effective rate of 15%?

That person making millions per year in capital gains could also just as likely lose millions in capital losses. Capital gain is what someone gets for putting their money at risk. It's a potential reward for risk taken, not just some magical manna from the skies for someone. There is also an opportunity cost for someone who chooses to invest into something that produces capital gains/losses. The reason it's taxed at a lower rate is that it benefits society to have that capital invested.

 

[IndyColtsFan]

Making money in the stock market is not as easy as you think.

I don't care how "hard" it is. If that is your primary/sole source of income and you're raking in millions from it, you can pay the same effective rate as I do at a minimum.

Do you think billionaires are sitting on eTrade all night, sweating bullets as their investments tank or cheering as they go up? Of course not. They hire highly qualified people to manage this stuff for them.