Prove me wrong about tax cuts for the rich.

[hal2kilo]

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.



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.


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.


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.



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?



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.

I know what your technical argument is goint to about this. But I don't give a frig.

Silly poor people pay no social security taxes, or local taxes huh. Which happens to be a significant portion of their income, leaving very little disposable income.

But, bleat on, and defend the people who need no help what so ever.

 

[Acanthus]

If you think that taxing the rich would decrease the amount of loans to small businesses you're ridiculous.

Most rich people do not hold large amounts of cash, firstly. Cash is a foolish investment.

Secondly, the Fed's loose money policy is what has loosed the credit system.

And I'd rather have money in the hands of average people than it in the bank's coffers and no one else having any money to buy anything.

You're comment is just ridiculous and not thought out. I think you know you're wrong but you just like to argue.

The loans will be there, that's a fact, no matter what the tax rate on the rich is.

Actually the rich put their money in treasuries and commodities when market is shaky. Which is akin to but not the same as holding hoards of cash.

Look at the price of Oil, Silver, Gold, Plat, NG, Uranium, Palladium, etc over the last 3 years.

 

[Double Trouble]

I know what your technical argument is goint to about this. But I don't give a frig.

Silly poor people pay no social security taxes, or local taxes huh. Which happens to be a significant portion of their income, leaving very little disposable income.

But, bleat on, and defend the people who need no help what so ever.

My post specifically mentioned ss, local etc taxes, I'm completely aware of how taxes work. I appreciate different opinions being presented, but perhaps you could try and add some substance to your posts at some point?

 

[Bird222]

A couple of points:

First, I don't give a flying fuck about all the 'class warfare' talk. We are in a BIG mess and all I care about is getting out of it. If the numbers indicate that giving breaks to the middle/lower classes is gonna help get us out of this faster so be it. The rich are just gonna have to suck it up and delay buying that yacht until times get better.

Second, if I owned a business and I got a tax break I just can't see me hiring new workers just for the hell of it. I am only going to hire them if I believe that what they can produce is gonna get me more money than the cost of hiring them. If demand is low, I just don't see me hiring someone new if I can't sell product. Again my focus is getting us out of the shitter. Once we get stuff back to normal we can start discussing what is fair or not and all the other bullshit.

 

[JMapleton]

Actually the rich put their money in treasuries and commodities when market is shaky. Which is akin to but not the same as holding hoards of cash.

Look at the price of Oil, Silver, Gold, Plat, NG, Uranium, Palladium, etc over the last 3 years.

Which is why oil is $90 a barrel? So we should give the rich more money to drive up the costs of goods and raw materials?

 

[Craig234]

We tried to tell you guys...

... to vote for a *Republican*. Hardly the thing he was saying, that we need more liberal.

 

[JSt0rm]

you neocons and your 20 year old arguments. lol.

 

[Acanthus]

Which is why oil is $90 a barrel? So we should give the rich more money to drive up the costs of goods and raw materials?

Absolutely not. I was just correcting some misinformation.

 

[The-Noid]

Actually the rich put their money in treasuries and commodities when market is shaky. Which is akin to but not the same as holding hoards of cash.

Look at the price of Oil, Silver, Gold, Plat, NG, Uranium, Palladium, etc over the last 3 years.

I would disagree with the rich moving money to Silver and Gold that's a different kind of animal. You can look at NTRS reports of what they are advising (and they have discretion on what most of their clients buy) and see where a lot of the private wealth is going.

I agree 100% that tax cuts for the rich drive asset prices not real economic output though.

 

[BudAshes]

So you think there is some kind of economic berlin wall surrounding this country which allows you to smash these people over the head with whatever you want under the false impression there isnt anywhere better to go? Now that is funny.

Well tell me where they are going then? India?

 

[Fern]

Originally Posted by Fern
If there are no loans available to the consumer, they cannot express their demand by additional spending. There are no funds available to them.

So, to the extent we have people (including small businesses) that would like to spend but cannot obtain loans to fund it, that lack of loans actually suppresses demand. I believe we have this problem now to some extent, particularly for small businesses.

If you think that taxing the rich would decrease the amount of loans to small businesses you're ridiculous.

Most rich people do not hold large amounts of cash, firstly. Cash is a foolish investment.

Secondly, the Fed's loose money policy is what has loosed the credit system.

And I'd rather have money in the hands of average people than it in the bank's coffers and no one else having any money to buy anything.

You're comment is just ridiculous and not thought out. I think you know you're wrong but you just like to argue.

The loans will be there, that's a fact, no matter what the tax rate on the rich is.

My remarks, and I think this is quite clear, were in response to your remark:

CONSUMER SPENDING creates the demand for loans. The availability of loans DOES NOT create consumer spending.

How or why you now try to conflate this with increased taxes on the rich is inexplicable.

Fern

 

[Fern]

Actually its not ancillary at all to the discussion at hand. Lets not overstate your position as well since we can NOT all agree that this specific tax issue will have an adverse long term negative effect. You can obfuscate all you want but raising rates 3 percent on people making over 250K is not a slam dunk to ruin the economy. If you want to parrot away with the bogus uncertainty mantra fine....

The point is tax increases in general, which even now the Obama admin is claiming may cause a double dip recession.

I.e., tax increases may adversely affect the economy.

for the kids who frequent P&N who may have been in diapers during the 90s....FYI the economy was pretty good back then and MUCH better than it was during the last decade....

Not sure why you are bringing up the 90's, but comparisons to that period are fatally flawed IMO.

That period was dominated by the rise of Wintel (Windows and Intel) and all the economic benefits that it brought. Ever since then we've been looking for another 'wintel' type development to drive economic growth.

We also had the so-called peace dividend and things in international areana were relatively calm.

Can you at least say that the Bush era tax cuts had little effect on the middle class and in job creation?

Well, I really can't. I don't think anyone else can definitively say either, it would just be a guess.

We all know that the economy during the Bush years was primarily driven by consumer demand. Does allowing people to keep, and spend, more of their own money contribute to this? Yes, particularly given the lack of saving during this period. But we also had a lot of easy access to credit to fuel consumer demand.

Fern

 

[werepossum]

The point is tax increases in general, which even now the Obama admin is claiming may cause a double dip recession.

I.e., tax increases may adversely affect the economy.



Not sure why you are bringing up the 90's, but comparisons to that period are fatally flawed IMO.

That period was dominated by the rise of Wintel (Windows and Intel) and all the economic benefits that it brought. Ever since then we've been looking for another 'wintel' type development to drive economic growth.

We also had the so-called peace dividend and things in international areana were relatively calm.



Well, I really can't. I don't think anyone else can definitively say either, it would just be a guess.

We all know that the economy during the Bush years was primarily driven by consumer demand. Does allowing people to keep, and spend, more of their own money contribute to this? Yes, particularly given the lack of saving during this period. But we also had a lot of easy access to credit to fuel consumer demand.

Fern

Good points all. Personally I think raising anyone's taxes with unemployment at 10% is foolish, and philosophically I think everyone should pay the same rate (including payroll taxes up to full salary.) And I'm increasingly in agreement that capital gains should be considered (and taxed) as any other income. But - we're in a serious hole and digging at an ever-faster rate. Even the Pubbies propose nothing more than digging at an ever-so-slightly lower rate. So I'd say a reasonable solution would be to match Congress' discipline with tax cuts at the highest rates. If Congress manages to cut federal expenditures 3%, the highest bracket goes up 3%. Cut 10%, add 10% to the highest bracket and 5% to the next bracket. Cut 15%, add 15% to the highest bracket, 10% to the second bracket, and 5% to the third bracket. And it has to be REAL cuts in spending; none of the usual bullshite figuring 3% inflation and 4% raises and 13% more people need the service so we'll spend only 10% more and call it a draconian 10% cut.

Lawmakers: Show us that you can control spending and we'll all take a little pain. But asking us to pay more money when you're spending it faster than we are even capable of paying is useless. Right now Congress borrows roughly half of everything it spends. We'd probably have to at least quadruple tax rates to double the take, which would effectively kill our economy.

 

[dali71]

"The tax on capital gains directly affects investment decisions, the mobility and flow of risk capital... the ease or difficulty experienced by new ventures in obtaining capital, and thereby the strength and potential for growth in the economy." - John F. Kennedy

 

[manimal]

The point is tax increases in general, which even now the Obama admin is claiming may cause a double dip recession.

I.e., tax increases may adversely affect the economy.



Not sure why you are bringing up the 90's, but comparisons to that period are fatally flawed IMO.

That period was dominated by the rise of Wintel (Windows and Intel) and all the economic benefits that it brought. Ever since then we've been looking for another 'wintel' type development to drive economic growth.

We also had the so-called peace dividend and things in international arena were relatively calm.



Well, I really can't. I don't think anyone else can definitively say either, it would just be a guess.

We all know that the economy during the Bush years was primarily driven by consumer demand. Does allowing people to keep, and spend, more of their own money contribute to this? Yes, particularly given the lack of saving during this period. But we also had a lot of easy access to credit to fuel consumer demand.

Fern

Ok first your comment on the Obama Admin saying the higher tax rates would cause a double dip is out of context and actually refers to the middle class portions of it. They have numerously stated the effects would be minimal on the overall economy when it comes to the top rates.


Secondly your reasoning is flawed as well when it comes to the 90s....by your same logic I can say Google, facebook and apple are huge successes and their innovation brought much success to the middle class in the last decade....oh wait.....the last decade sucked.....

Lastly when it comes to your last statement about people keeping their money its disingenuous at best to state that those earning well above 250K will spend the money they get back via this tax cut in any measurably successful way since it has not worked for the last decade....


How much money has Obama spent in office on stimulus and so called bailouts?

Ok how much of that was the tax cuts in the stimulus...
Ok how much of that was payed back by the banks and the auto industry?

Ok see how that number is smaller than what the upper bracket rate will cost over the next decade?


Anyone that says the word uncertainty in response to this thread gets put into the same room as spidey for a hour...

 

[xj0hnx]

We all know that the economy during the Bush years was primarily driven by consumer demand. Does allowing people to keep, and spend, more of their own money contribute to this? Yes, particularly given the lack of saving during this period. But we also had a lot of easy access to credit to fuel consumer demand.

Fern

Interesting the the progressive argument is that the people need the money to spend, yet when they had it to spend they spent themselves into a bottomless pit of debt.

 

[manimal]

Interesting the the progressive argument is that the people need the money to spend, yet when they had it to spend they spent themselves into a bottomless pit of debt.

nice generalization. that would be like me saying "there are only two things in Texas...steers and queers"


I would never say that and have known many straight people and many different kinds of animals like birds and fish from taxes....


Now if I ONLY spent town in the panhandle I may be able to draw such conclusions....would it be explainable? Yes...would it be accurate?




not so much...

now back to your previously scheduled farce...

 

[xj0hnx]

nice generalization.

Maybe, but there is a HUGE chuck of "the people" that seem to have no responsibility, and would spend themselves into oblivion if they could.

 

[manimal]

Maybe, but there is a HUGE chuck of "the people" that seem to have no responsibility, and would spend themselves into oblivion if they could.

you do realize that you are also lumping in tea partiers and republicans into your generalization?



Kinda like "we the people" who are all for super huge armies and invading countries that dont live by our standards in the name of security and advocate for more tax cuts while doing it?


how about the people who scream for smaller government but refuse to even look at SS ?


see where I'm going with this..

 

[xj0hnx]

you do realize that you are also lumping in tea partiers and republicans into your generalization?

And?

 

[manimal]

And?

http://www.testprepreview.com/modules/reading1.htm

 

[xj0hnx]

http://www.testprepreview.com/modules/reading1.htm

Make some sense?

 

[brencat]

"The tax on capital gains directly affects investment decisions, the mobility and flow of risk capital... the ease or difficulty experienced by new ventures in obtaining capital, and thereby the strength and potential for growth in the economy." - John F. Kennedy

I agree generally with this statement. I don't recall what cap gains tax rate was during Kennedy's time (and too lazy to google it right now) but I'm pretty certain it wasn't a low of 15%. Heck, it was 28% prior to 2003.

If we are going to address the real concentration of wealth where it counts...namely among the top 0.03%, then we have to look at phasing out the cap gains preferential rate for these top earners. I would be in favor of retaining a 15-20% rate for incomes up to $3 mil. Beyond that, start phasing it out until it rises to 28% or even ordinary rates for incomes above $10 million.

That is the only way to ensure the "investor class" that gets paid in stock, highly paid CEOs, and the trust fund babies start paying a reasonable effective rate of tax. I'm a conservative by the way, but neither party is addressing this issue and frankly it's starting to piss me off.

Don't fvcking talk to me about $250-thousandares to $1 mil cash salaried people having to subsidize the expiration of the Bush tax cuts while the top 0.03% continue to get off scott-free.

 

[MooseNSquirrel]

If that's true, then why should repealing them have any effect on the economy?

Sorry error of omission. I meant tax cuts above certain income classes.

Obviously any lower income tax breaks roll right back into the economy.

 

[The-Noid]

I agree generally with this statement. I don't recall what cap gains tax rate was during Kennedy's time (and too lazy to google it right now) but I'm pretty certain it wasn't a low of 15%. Heck, it was 28% prior to 2003.

If we are going to address the real concentration of wealth where it counts...namely among the top 0.03%, then we have to look at phasing out the cap gains preferential rate for these top earners. I would be in favor of retaining a 15-20% rate for incomes up to $3 mil. Beyond that, start phasing it out until it rises to 28% or even ordinary rates for incomes above $10 million.

That is the only way to ensure the "investor class" that gets paid in stock, highly paid CEOs, and the trust fund babies start paying a reasonable effective rate of tax. I'm a conservative by the way, but neither party is addressing this issue and frankly it's starting to piss me off.

Don't fvcking talk to me about $250-thousandares to $1 mil cash salaried people having to subsidize the expiration of the Bush tax cuts while the top 0.03% continue to get off scott-free.

But holding ISO qualified stop options for long-term capital gains isn't my income. (sarcasm). The whole ESO/ISO among people who set their own salaries and timing of those salaries is ridiculous.

Stock options are, wait for it, COMPENSATION. If a corporation can write something off as compensation, you better be taking it as compensation, instead of holding it for cap gains. It is a ridiculous system. Same as s-corp and LLC owners taking dividends to avoid medicare. There are so many breaks in the tax system right now it is ridiculous.

Every year my wife does our taxes and another CPA checks them and I am shocked at how low our effective tax rate is. Even blowing through the AMT top (we get our deductions back) there is a shocking amount of deductions on top of deductions we are taking as a business.

Talking with a lot of people, there are those that understand the fiscal problems of the country and are willing to pay more, but as usual government knows better than the people of what they really want.