Tax Cuts

[ciba]

Much like the moronic Bush tax cut put into effect in 2001 to make $$$ for his rich conservative buddies

This was a quote from another thread. I see one fundamental flaw in it. It presupposes that tax dollars belong to the government and cutting taxes is the government doing a citizen a favor.

I think of tax cuts as allowing a citizen to keep what he rightfully earned.

 

[halik]

it depends on the economic climate

sometimes you can increase the tax revenue by cuting taxes (ie Regan in 80s), because it will spurr up the economy and bring the underground transactions to taxation. This is not a universal thing though - if the consumer confidence level is down, giving tax rebates is not as efficent as spending it for goverment programs (people will save the money rather than spend it).

<-econ major

 

[Bowfinger]

Tax cuts are fine as long as they result in a balanced budget. The Bush tax "cut" wasn't a cut at all. It was a loan that must be repaid. He borrowed from our future to the disproportionate benefit of his wealthy supporters. We will have to pay back his irresponsible largess ... with interest.

 

[kage69]

Tax cuts are fine as long as they result in a balanced budget. The Bush tax "cut" wasn't a cut at all. It was a loan that must be repaid. He borrowed from our future to the disproportionate benefit of his wealthy supporters. We will have to pay back his irresponsible largess ... with interest.

...and in a time of war no less. It seems his understanding of economics rivals his understanding of basic English.

 

[xxxxxJohnGaltxxxxx]

Originally posted by: ciba

Much like the moronic Bush tax cut put into effect in 2001 to make $$$ for his rich conservative buddies

This was a quote from another thread. I see one fundamental flaw in it. It presupposes that tax dollars belong to the government and cutting taxes is the government doing a citizen a favor.

I think of tax cuts as allowing a citizen to keep what he rightfully earned.

God bless you, sir.

 

[imported_Cheeseburger]

I have more money in my pocket so now I can go out and spend more money on junk and the gov't can make more money on sales tax.

Plus I can keep more money in the bank which lets the banks create more money to lend out (go take some econ classes for that one) which helps out everyone and generates revenue as well.

 

[biostud]

Originally posted by: ciba

Much like the moronic Bush tax cut put into effect in 2001 to make $$$ for his rich conservative buddies

This was a quote from another thread. I see one fundamental flaw in it. It presupposes that tax dollars belong to the government and cutting taxes is the government doing a citizen a favor.

I think of tax cuts as allowing a citizen to keep what he rightfully earned.

I think you forget that we all need al well functioning public sector to make Money. Without police, education and democracy our society wouldn't be as rich as it is. To keep these things working we'll need to pay some money.

 

[irwincur]

This is not a universal thing though - if the consumer confidence level is down, gixing tax rebates is not as efficent as spending it for goverment programs (people will save the money rather than spend it).

BullS---. Learn economics, the government is not nearly as efficient at spending as people and businesses are. For every dollar spent at the government level (or kept) there is almost a 50% loss rate. I highly doubt 50% of the people would ever choose to save 100% of their tax rebates. Furthermore, businesses are even better then people, as they both spend money, and allow it to be recycled in the private sector many times over.


Now, your second flaw. Consumer confidence plays no role in this. Additionally a tax rate has never failed to increase economic output, and in the long run total tax reciepts. It is a simple policy, an influx of money increases available capital. This in turn increases production - even slightly, it is usually enough to jump start a slow economy. Since the first official tax cut of JFK's, the results have been clear.



On the flip side, increasing taxes creates the illusion that the government has more money. Problem is that this money is simply front loaded and the long term loss of income (production slowdowns, and job losses) costs a lot more than the initial boost. Tax raises are born out of flawed economic theory. It is simply an I want it now approach, never mind the long term expense.

 

[KB]

<sarcasm>I think taxes are good for everyone else, except me. I shouldn't have to pay them but everyone else should.</sarcasm>

Without taxes we have no education, no roads, no police, no order, no jobs. Frankly, the government is the biggest waster of money, but it would be impossible to have a military and police force running on donations. Taxes are needed and tax cuts for the wealthy are irresponsible.

"cutting taxes is the government doing a citizen a favor"

Cutting taxes don't do the citizen a favor, they do the government a disservice. Because of tax cuts many people lost their jobs because many social programs weren't funded.

Trickle-down economics never works. It is the poor among us who are going to spend their tax cuts, not the wealthy. The wealthy will just invest them and make themselves richer, leaving everyone else out of the loop. I recieved some of Bush's tax cuts and didn't need them. I just put it in my retirement account and no one will see any result of it until I retire. My girlfreind didn't get a tax cut and has racked up more credit card debt for herself.

 

[StageLeft]

Tax cuts are generally good, because it will give more freedom of choice on where those dollars go and allow them to be more efficiently created and used. As money finds its way into government it often is spent frivolously, and lowers the aggressive growth of the economy.

 

[J Heartless Slick]

Someone has to pay for the Defense budget and the wars the US is fighting.

 

[daveshel]

He was trying to buy our loyalty after stealing the election.

 

[Bowfinger]

Originally posted by: irwincur

This is not a universal thing though - if the consumer confidence level is down, gixing tax rebates is not as efficent as spending it for goverment programs (people will save the money rather than spend it).

BullS---. Learn economics, the government is not nearly as efficient at spending as people and businesses are. For every dollar spent at the government level (or kept) there is almost a 50% loss rate. I highly doubt 50% of the people would ever choose to save 100% of their tax rebates. Furthermore, businesses are even better then people, as they both spend money, and allow it to be recycled in the private sector many times over.

BS yourself. Back your silly version of Econ with a few facts, or at least with sound logic. The government doesn't horde money. It spends every dollar it gets ... and then some. Taxes are returned to the economy as government spending. Tax cuts for the uber-wealthy are often not returned to the economy. They already spend as much as they care to. That is the fundamental fallacy of trickle-down economics.

Now, your second flaw. Consumer confidence plays no role in this. Additionally a tax rate has never failed to increase economic output, and in the long run total tax reciepts. It is a simple policy, an influx of money increases available capital. This in turn increases production - even slightly, it is usually enough to jump start a slow economy. Since the first official tax cut of JFK's, the results have been clear.

More spin, claiming an unsupported causal effect. Economic output and tax receipts have increased more or less steadily for decades, regardless of current tax rates. Cut taxes, output goes up. Increase taxes, output goes up. Leave taxes alone, output goes up. Aside from short-term blips, our economy keeps growing -- period.

On the flip side, increasing taxes creates the illusion that the government has more money. Problem is that this money is simply front loaded and the long term loss of income (production slowdowns, and job losses) costs a lot more than the initial boost. Tax raises are born out of flawed economic theory. It is simply an I want it now approach, never mind the long term expense.

An Econ disinformation trifecta! Once again, please provide facts that establish a causal relationship between tax increases and "production slowdowns and job losses". That is more unsupported rhetoric, repeated endlessly until some begin to accept it as fact.

 

[ciba]

Without police, education

I'm not a total anti-tax nut. I'm am rather for appropriate taxes. Here are two prime examples of where the federal government shouldn't be involved. States, counties and cities should fund their local police and education to a level of their choosing. Every dollar spent on a police department has an impact on crime. How many dollars should be spent is something the locals should decide.

 

[irwincur]

BS yourself. Back your silly version of Econ with a few facts, or at least with sound logic. The government doesn't horde money. It spends every dollar it gets ... and then some. Taxes are returned to the economy as government spending. Tax cuts for the uber-wealthy are often not returned to the economy. They already spend as much as they care to. That is the fundamental fallacy of trickle-down economics.

The government is the least perfect spender. And no, not all the money makes it back, a good portion becomes tied up in the beaurocracy for a long time. The only way it comes back is through payroll and contracts. But considering that the government never operates at budget, there is also a lot tied up in low interest loans and bonds.

Personal spending is much, much more efficient. This is a common known factor in economics. Even people that horde money and save it are spending it. When you save money it is not locked away. The bank takes it and spends it or invests it - investing is actually just another name for loaning. Whatever the case, every dollar that reaches a persons pocket whether spent or saved is actually spent.

More spin, claiming an unsupported causal effect. Economic output and tax receipts have increased more or less steadily for decades, regardless of current tax rates. Cut taxes, output goes up. Increase taxes, output goes up. Leave taxes alone, output goes up. Aside from short-term blips, our economy keeps growing -- period.

The cause of this growth has for the most part been due to technological advancements. In a way you are right cuts and raises are not the most significant factor. However, in times of need they can propel us that extra inch, or hold us back. These are two very deep economic arguments and I don't have the time. The fact is that tax cuts have never failed to spur economic growth and tax reciepts.

An Econ disinformation trifecta! Once again, please provide facts that establish a causal relationship between tax increases and "production slowdowns and job losses". That is more unsupported rhetoric, repeated endlessly until some begin to accept it as fact.

1. Economy slow
2. Tax rasied
3. People have less money, government more
4. Government spends at amazing 50% efficiency
5. Production decreases as demand decrease, less free capital in free markets means lower demand for goods.
6. As production drops, improvements and employment drop.
7. Government subsidizes unemployed with benefits - a type of tax cut.
8. This subsidy does nothing for the root of the problem - low production.
9. Businesses close, total tax reciepts drop.
10. Government subsidizes business (buyout). Free markets evaporate.

Look at Europe. High taxes (sometimes near 90% effective). High unemployment (8 -12% average), High personal subsidies. Very low economic growth. Government subsidized business monopolies. Social welfare is the majority of spending - almost all spending rotates directly back into government coffers not to free market. etc... There is a reason 1/3 of European nations are on the brink of total bankruptcy. It is a vicious cycle. The only way to raise more money is to tax, eventually there is nothing left to tax.

BS yourself. Back your silly version of Econ with a few facts, or at least with sound logic.

How does a Bachelor's in Economics sound to you.

 

[TheBDB]

Originally posted by: ciba

Much like the moronic Bush tax cut put into effect in 2001 to make $$$ for his rich conservative buddies

This was a quote from another thread. I see one fundamental flaw in it. It presupposes that tax dollars belong to the government and cutting taxes is the government doing a citizen a favor.

I think of tax cuts as allowing a citizen to keep what he rightfully earned.

I have no problem with people keeping more of their money as long as they fully pay for the services they receive. Right now we are getting government without paying for it (deficit), but eventually we will have to. I just don't want to dig the hole any deeper.

 

[irwincur]

Actually deficits are good debt, the are cheap in terms of debt. You have to think of all spending in terms of interest rates. They are not idea, but they are not nearly as harmful as people believe. Plus with 4% economic growth, tax reciept increases should knock the deficit out in no time.

 

[TheBDB]

Originally posted by: irwincur
Actually deficits are good debt, the are cheap in terms of debt. You have to think of all spending in terms of interest rates. They are not idea, but they are not nearly as harmful as people believe. Plus with 4% economic growth, tax reciept increases should knock the deficit out in no time.

Not according to the estimates I've heard.

 

[naddicott]

How does a Bachelor's in Economics sound to you.

Sounds like it's worth less than the paper its printed on to me given your unsupported assertions.

From a proffesional economist writing in the NYT, who I give more credence to than a random BA's opinion: (link - but it's not free to view anymore)

Supply-side economics was a political doctrine from Day 1; it emerged in the pages of political magazines, not professional economics journals.
...
It is not that the professionals refuse to consider supply-side ideas; rather, they have looked at them and found them wanting. A conspicuous example came earlier this year when the Congressional Budget Office tried to evaluate the growth effects of the Bush administration's proposed tax cuts. The budget office's new head, Douglas Holtz-Eakin, is a conservative economist who was handpicked for his job by the administration. But his conclusion was that unless the revenue losses from the proposed tax cuts were offset by spending cuts, the resulting deficits would be a drag on growth, quite likely to outweigh any supply-side effects.
...
Irving Kristol, in his role as co-editor of The Public Interest, was arguably the single most important proponent of supply-side economics. But years later, he suggested that he himself wasn't all that persuaded by the doctrine: ''I was not certain of its economic merits but quickly saw its political possibilities.'' Writing in 1995, he explained that his real aim was to shrink the government and that tax cuts were a means to that end: ''The task, as I saw it, was to create a new majority, which evidently would mean a conservative majority, which came to mean, in turn, a Republican majority -- so political effectiveness was the priority, not the accounting deficiencies of government.''

In effect, what Kristol said in 1995 was that he and his associates set out to deceive the American public. They sold tax cuts on the pretense that they would be painless, when they themselves believed that it would be necessary to slash public spending in order to make room for those cuts.
...
The test of tax cuts as a spur to economic growth is whether they produced more than an ordinary business cycle recovery. Once the economy was back to full employment, was it bigger than you would otherwise have expected? And there Reagan fails the test: between 1979, when the big slump began, and 1989, when the economy finally achieved more or less full employment again, the growth rate was 3 percent, the same as the growth rate between the two previous business cycle peaks in 1973 and 1979. Or to put it another way, by the late 1980's the U.S. economy was about where you would have expected it to be, given the trend in the 1970's. Nothing in the data suggests a supply-side revolution.
...
For Clinton did exactly the opposite of what supply-side economics said you should do: he raised the marginal rate on high-income taxpayers. In 1989, the top 1 percent of families paid, on average, only 28.9 percent of their income in federal taxes; by 1995, that share was up to 36.1 percent.

Conservatives confidently awaited a disaster -- but it failed to materialize. In fact, the economy grew at a reasonable pace through Clinton's first term, while the deficit and the unemployment rate went steadily down. And then the news got even better: unemployment fell to its lowest level in decades without causing inflation, while productivity growth accelerated to rates not seen since the 1960's. And the budget deficit turned into an impressive surplus.
...
Let's be clear: very few economists think that Clinton's policies were primarily responsible for that miracle. For the most part, the Clinton-era surge probably reflected the maturing of information technology: businesses finally figured out how to make effective use of computers, and the resulting surge in productivity drove the economy forward. But the fact that America's best growth in a generation took place after the government did exactly the opposite of what tax-cutters advocate was a body blow to their doctrine.

They tried to make the best of the situation. The good economy of the late 1990's, ardent tax-cutters insisted, was caused by the 1981 tax cut. Early in 2000, Lawrence Kudlow and Stephen Moore, prominent supply-siders, published an article titled ''It's the Reagan Economy, Stupid.''

But anyone who thought about the lags involved found this implausible -- indeed, hilarious. If the tax-cut movement attributed the booming economy of 1999 to a tax cut Reagan pushed through 18 years earlier, why didn't they attribute the economic boom of 1983 and 1984 -- Reagan's ''morning in America'' -- to whatever Lyndon Johnson was doing in 1965 and 1966?
...
Even in the short run, the right question to ask isn't whether the tax cuts were better than nothing; they probably were. The right question is whether some other economic-stimulus plan could have achieved better results at a lower budget cost. And it is hard to deny that, on a jobs-per-dollar basis, the Bush tax cuts have been extremely ineffective. According to the Congressional Budget Office, half of this year's $400 billion budget deficit is due to Bush tax cuts. Now $200 billion is a lot of money; it is equivalent to the salaries of four million average workers. Even the administration doesn't claim its policies have created four million jobs. Surely some other policy -- aid to state and local governments, tax breaks for the poor and middle class rather than the rich, maybe even W.P.A.-style public works -- would have been more successful at getting the country back to work.
-----------------------------

Generic government spending may not be equally effective at short term economic stimulus as tax cuts, dollar for dollar, but the evidence that they outperform government spending directed at economic stimulus (job training, federal research grants, etc. - a fairer comparison) is lacking.

Even if you do manage to start arguing the details of the topic rather than hiding behind a 4 year degree from an unnamed institution, stop trying to assert that "economics" (that wonderfully scientific science
:roll: ) has conclusive evidence one way or another on the efficacy of tax cuts. Take for instance the 85% of Yale econ professors who opposed Bush's tax cuts. (Guess Bush wasn't paying attention in class...)

 

[RobCur]

Originally posted by: daveshel
He was trying to buy our loyalty after stealing the election.

It's no wonder the country and the world as well has been in turmoil ever since
:thumbsdown:
from 92-1999 life was good, the most prosperous time period
from 2000 to now = the great depression, life for everyone sucks more then ever.
Even bill gate would make a much better president, his IQ is at least thrice as high!
BUSH= 80
GATE= 240 :shocked:
CLINTON= 225
GORE= 205

 

[biostud]

The only thing that really needs a cut is the military expenses, and use the money for better education healthcare and crime prevention.

 

[MrGrim257]

All the Bush tax cuts have already been paid for by increased government revenue.

 

[MrGrim257]

Originally posted by: RobCur

Originally posted by: daveshel
He was trying to buy our loyalty after stealing the election.

It's no wonder the country and the world as well has been in turmoil ever since
:thumbsdown:
from 92-1999 life was good, the most prosperous time period
from 2000 to now = the great depression, life for everyone sucks more then ever.
Even bill gate would make a much better president, his IQ is at least thrice as high!
BUSH= 80
GATE= 240 :shocked:
CLINTON= 225
GORE= 205

Calling 2000 to now the great depression is honestly the stupidest thing I have ever heard.

 

[Orsorum]

Taxes are a necessary evil, one that should be avoided, and one that should seldom be imposed on any man.

 

[halik]

Originally posted by: irwincur

BS yourself. Back your silly version of Econ with a few facts, or at least with sound logic. The government doesn't horde money. It spends every dollar it gets ... and then some. Taxes are returned to the economy as government spending. Tax cuts for the uber-wealthy are often not returned to the economy. They already spend as much as they care to. That is the fundamental fallacy of trickle-down economics.

The government is the least perfect spender. And no, not all the money makes it back, a good portion becomes tied up in the beaurocracy for a long time. The only way it comes back is through payroll and contracts. But considering that the government never operates at budget, there is also a lot tied up in low interest loans and bonds.

Personal spending is much, much more efficient. This is a common known factor in economics. Even people that horde money and save it are spending it. When you save money it is not locked away. The bank takes it and spends it or invests it - investing is actually just another name for loaning. Whatever the case, every dollar that reaches a persons pocket whether spent or saved is actually spent.

More spin, claiming an unsupported causal effect. Economic output and tax receipts have increased more or less steadily for decades, regardless of current tax rates. Cut taxes, output goes up. Increase taxes, output goes up. Leave taxes alone, output goes up. Aside from short-term blips, our economy keeps growing -- period.

The cause of this growth has for the most part been due to technological advancements. In a way you are right cuts and raises are not the most significant factor. However, in times of need they can propel us that extra inch, or hold us back. These are two very deep economic arguments and I don't have the time. The fact is that tax cuts have never failed to spur economic growth and tax reciepts.

An Econ disinformation trifecta! Once again, please provide facts that establish a causal relationship between tax increases and "production slowdowns and job losses". That is more unsupported rhetoric, repeated endlessly until some begin to accept it as fact.

1. Economy slow
2. Tax rasied
3. People have less money, government more
4. Government spends at amazing 50% efficiency
5. Production decreases as demand decrease, less free capital in free markets means lower demand for goods.
6. As production drops, improvements and employment drop.
7. Government subsidizes unemployed with benefits - a type of tax cut.
8. This subsidy does nothing for the root of the problem - low production.
9. Businesses close, total tax reciepts drop.
10. Government subsidizes business (buyout). Free markets evaporate.

Look at Europe. High taxes (sometimes near 90% effective). High unemployment (8 -12% average), High personal subsidies. Very low economic growth. Government subsidized business monopolies. Social welfare is the majority of spending - almost all spending rotates directly back into government coffers not to free market. etc... There is a reason 1/3 of European nations are on the brink of total bankruptcy. It is a vicious cycle. The only way to raise more money is to tax, eventually there is nothing left to tax.

BS yourself. Back your silly version of Econ with a few facts, or at least with sound logic.

How does a Bachelor's in Economics sound to you.

In terms of overall GDP, goverment is 100% efficent. Your examples are flawed - first off the only static money in the gov't would the federal reserves. The rest of the budget circulates through the market, including loans. There are people on the receiving ends of ALL the spending, so it will raise the GDP. Personal savings don't go towards the GDP, and though the saved money is loaned back out, you're introducing more inefficencies.

Also no one is arguing that tax rebaes won't increase the output, the problem lies in the efficency. Also the 50% inefficency is BS with no factual background. Where exactly would the 50% of the money sit?