News Are the Bush Tax Cuts Still Beneficial to the Economy?

[airborne18]

IvanS: On Greenspan, did you read the sourced NYT article?



To say "Greenspan disagrees" in response to a claim by others that tax increases will depress growth is a drive-by, superficial look at Greenspan's views leading to a misleading conclusion. Greenspan clearly does agree with that specific argument per the actual interview that kicked off the latest 'Greenspan said' series of news articles:
http://www.bloomberg.com/news/2010-07-16/greenspan-says-congress-should-let-bush-era-tax-cuts-expire-transcript-.html

The 'worse' for Greenspan, as is clear in the interview, is to continue with deficits on this scale. So as an economist does Greenspan favour tax increases over spending cuts? NO. He simply believes the required spending cuts are politically unfeasible:
Well he may be right (see e.g. France w/ a million people on the streets protesting a a 2 year increase in retirement age), but then we don't need to go to an economist to tell us what's politically feasible.

I don't see where the tax cuts are helping the economy. The problem is revenue and jobs. Construction will not improve until the real estate market improves, which is when we have employment.

The tax cuts are not propping up each little boom in the housing market, it is the fed massively propping up mbs.

Meanwhile local governments are even hurting from the deadbeats who owe property tax. And the revenue picture just gets worst the higher in government you look.

Consumer spending means nothing when there are no jobs and the housing market is in shambles ( still ). They should just let it hit bottom so we can actually start to recover.

 

[airborne18]

This is as incorrectly predicted by classical Phillips, which has been known to be wrong for ~40 years. Classical theory:

One? Hardly. Reality:
[PLAIN]http://econ161.berkeley.edu/multimedia/animated_gifs/PCurve.GIF[/QUOTE]

I have a few charts to eventually post, but I am in the middle of midterms and a project for my daughter.

Interesting mshep.

 

[talk2glenn]

The housing bubble was created by a credit bubble, that in turn was the result of too little regulation.

This is demonstrably and theoretically false. The credit bubble followed the housing bubble, not the other way around. Consumers respond to rising prices in the short-run by borrowing against future earnings to subsidize current consumption, on the assumption that rising prices will devalue their future debts. This fuels an expansion in the credit markets. This is rational behavior, but note the order: prices go up, and debt follows.

The question, then, is why the dramatic rise in housing prices. Again, the suggestion that it was a case of "too little regulation" is apparently absurd. Financial services is the most heavily regulated industry in the country. The vast majority of the home loan market was government sponsored before 2008, and has now been outright nationalized. Federal lending rules required banks to issue a certain portion of new loans to classically high risk borrowers.

Housing has long been a government favored industry. Through combinations of subsidies and warrants, the federal government created a high risk mortgage market that, in the history of private property, never before existed, and still largely doesn't exist outside the US. We can observe the same trend happening in the student loan market and tuition prices, again due to government intervention, as an aside.

Clearly, the housing bubble (but not all bubbles, to be sure) was a failure of policy, not the market.

 

[talk2glenn]

This is as incorrectly predicted by classical Phillips, which has been known to be wrong for ~40 years. Classical theory:

One? Hardly. Reality:
[PLAIN]http://econ161.berkeley.edu/multimedia/animated_gifs/PCurve.GIF[/QUOTE]

The Phillips curve isn't "wrong" - it is, as you yourself showed, an extremely accurate predictor of price behavior over consumption behavior, everything else being equal. If anything, its guilty of simplicity, but simplicity is useful for providing introductory explanations. The models get more complicated as you dig deeper.

What you're referring to in the second graph is an example of everything else being deliberately made inequal. Given the predictions made by the models, policy makers intervene in the markets to push things in directions considered more desirable.

Policy makers have long recognized the dichotomy between unemployment and inflation. Specifically, at the monetary policy level, lower unemployment must be "bought", and it is paid for with higher inflation. This is the Phillips curve.

However, the curve itself is not static. It moves, in response to market expectations. Movement to the left reduces the employment cost (the same rate of unemployment corresponds to a lower rate of inflation), and movement to the right raises the cost.

The period exception I was referring to was the so-called "stagflation", and it was a unique, one-time event (so far, at least) in recorded economic history, which is why it changed so much of the existing theory.

 

[mheslep]

The Phillips curve isn't "wrong" - it is, as you yourself showed, an extremely accurate predictor of price behavior over consumption behavior, everything else being equal.

That flys in the face of the data reference. Classical Phillips accurately predicts very little correctly _as the data clearly shows_.

If anything, its guilty of simplicity, but simplicity is useful for providing introductory explanations.

That's a direct contradiction of your first sentence.

What you're referring to in the second graph is an example of everything else being deliberately made inequal.

The 2nd graph is simply inflation and employment data over time, showing unemployment and inflation over time.

Given the predictions made by the models, policy makers intervene in the markets to push things in directions considered more desirable.

Policy makers have long recognized the dichotomy between unemployment and inflation.

Source? I think you meant to say dependency and/or connection, not dichotomy, and the 'policy makers' don't 'recognize' inflation as a means of driving unemployment any more.

The period exception I was referring to was the so-called "stagflation", and it was a unique, one-time event (so far, at least) in recorded economic history, which is why it changed so much of the existing theory.

The stagflation of the mid 70's which simply the most striking counter Phillips example. But also shown above are several periods where inflation increased but so did unemployment, or the converse was true (decreasing inflation and unemployment), both of which are contrary to classical Phillips. Look, I've provided respectable economic references and you are directly contradicting them with assertion. Let's see some references.

 

[talk2glenn]

That flys in the face of the data reference. Classical Phillips accurately predicts very little correctly _as the data clearly shows_. That's a direct contradiction of your first sentence.

No curve will capture every possible data point. They are always estimates. The estimate is useful to the extent that it captures the trends in the data.

The 2nd graph is simply inflation and employment data over time, showing unemployment and inflation over time.

The black line was actual data. The red line was estimated positions for the Phillips curves. Note that they move. The data set doesn't invalidate the principle; it demonstrates that rapid changes in macroeconomic conditions can affect the curves positioning.

Source? I think you meant to say dependency and/or connection, not dichotomy, and the 'policy makers' don't 'recognize' inflation as a means of driving unemployment any more

Of course they do. This is one of the most elementary rules of monetary policymaking - short term changes in unemployment away from equilibrium will result in higher inflation, and vice versa.

http://en.wikipedia.org/wiki/Phillips_curve#The_Phillips_curve_today

However, this long-run "neutrality" of monetary policy does allow for short run fluctuations and the ability of the monetary authority to temporarily decrease unemployment by increasing permanent inflation, and vice versa.

The stagflation of the mid 70's which simply the most striking counter Phillips example. But also shown above are several periods where inflation increased but so did unemployment, or the converse was true (decreasing inflation and unemployment), both of which are contrary to classical Phillips. Look, I've provided respectable economic references and you are directly contradicting them with assertion. Let's see some references.

The stagflation of the 70's is not a counter-example to the Phillips curve. It is generally believed today that the market "priced in" expectations about future high inflation and high unemployment. This moved the Phillips curve up and to the right. The result was higher permanent inflation rates for the same level of employment.

Today, the Phillips curve is modified from its original form to "price in" expectations about inflation and employment rates. When those expectations change, the curve changes. The original curve responded only to actual employment and inflation rate changes.

 

[Al68]

The housing bubble was created by a credit bubble, that in turn was the result of too little regulation. There is nothing tenuous about that or that deregulation was a core principle of Reaganomics. The lesson from this disaster is that free markets are self regulating, but we can't afford to live with the corrections.

You mean the housing and credit bubbles caused by government via Fannie Mae and Freddie Mac? Not only did that have nothing whatsoever to do with a free market, Fannie and Freddie were creating artificial demand for toxic mortgages, insisting on buying them, and was the end buyer of 80% of all home mortgages in the U.S.

Too little regulation? Government was the primary player. Free market? The private banks that declined to participate in Fannie and Freddie's scheme and instead stuck to free market mortgage standards did just fine. They may have lost out on a little extra profit, but while the banks that sold to Fannie and Freddie were in trouble begging for a bailout, the ones that didn't (like mine) were and are still financially healthy.

Did you even have a straight face when you typed the words "free market" in your post?

 

[OmCheeto]

Consumer spending means nothing when there are no jobs and the housing market is in shambles ( still ). They should just let it hit bottom so we can actually start to recover.

Consumer spending does mean something.

No jobs?
Here's a graph I put together https://www.physicsforums.com/showthread.php?p=2925631#post2925631":

Government vs Private employment in the months of September from 2000 through 2010, in millions.
Show me the point on the graph where there are no jobs...

The housing market went through a correction.
There was a bubble, and it popped.
There is no shambles.
There are those that played the game and lost and are going to whine about it for awhile, and there are those that didn't play the game and are going home tonight to a comfortable house, and are going to have some leftover chicken before they go to bed because they are somewhat hypoglycemic and need to be up early in the morning.



Hit bottom?

Insert cute metaphorical proverb...

 

[Al68]

I only wish that were specified in the forum rules.

It is.

Guidelines on Langauge and Attitude:
Foul or hostile language will not be tolerated on Physics Forums. This includes profanity, obscenity, or obvious indecent language; direct personal attacks or insults; snide remarks or phrases that appear to be an attempt to "put down" another member; and other indirect attacks on a member's character or motives.

I see what you're saying now, but my ad hominem attack was on the motives of people who have that position in general, primarily national politicians, not Ivan specifically.

It seems that PF moderators do not interpret that rule to prohibit general ad hominem attacks, as evidenced by their routine use. Many lengthy posts are composed entirely of them. Maybe a moderator could clarify?

 

[Gokul43201]

Again, the suggestion that it was a case of "too little regulation" is apparently absurd. Financial services is the most heavily regulated industry in the country.

Do you believe the derivatives market was also over-regulated? And would you say it played little/no role in the financial collapse?

 

[airborne18]

Consumer spending does mean something.

No jobs?
Here's a graph I put together https://www.physicsforums.com/showthread.php?p=2925631#post2925631":

Government vs Private employment in the months of September from 2000 through 2010, in millions.
Show me the point on the graph where there are no jobs...

The housing market went through a correction.
There was a bubble, and it popped.
There is no shambles.
There are those that played the game and lost and are going to whine about it for awhile, and there are those that didn't play the game and are going home tonight to a comfortable house, and are going to have some leftover chicken before they go to bed because they are somewhat hypoglycemic and need to be up early in the morning.



Hit bottom?

Insert cute metaphorical proverb...

So what is the point of this graph? This graph does not provide any information, and it is not scaled properly. You actually do a disservice to your point with it. There should be job growth during booms, which we did have, and this graph does not reflect it very well.

But the obvious issue is that you do not account for the population or workforce.

And the foreclosure rate does not indicate that this correction is past, so we are going through a correction.

 

[CAC1001]

Do you believe the derivatives market was also over-regulated? And would you say it played little/no role in the financial collapse?

I am by no means any expert on the financial crisis, but I have noticed that one could fill an entire shelf with books on the subject and still wouldn't have a full understanding of the subject.

But from what I have been able to glean, the financial crisis was/is a very complex thing whose causes began long ago, and which was caused by a great many different variables. Arguments such as, "The free-market caused it!" or "The government caused it!" or the Democrats' favorite line: "Bush did it," I think are over-simplifying what is a very complex topic.

One thing I've noticed with the hard Left is they will emphasize how complex our economic problems are right now, and that there are no simple solutions to them. However, when it comes to the cause of this very complex problem, their default answer is "Bush did it" or "Reagan did it" or "the free market did it." No acknowledgment that just as there are no simple solutions, the cause itself cannot be boiled down into a simple soundbite answer either.

IMO, I think both ends of the spectrum are correct to a degree. In some areas, there did seem to be too little government. In other areas, too much government.

For example, you had the Community Reinvestment Act and Fannie Mae and Freddie Mac, which certainly played a role in the crisis. However, you also had, as pointed out in the quote above (I believe), a fairly unregulated derivatives market.

There was the element of greedy mortgage lenders, greedy mortgage borrowers, and also the Federal Reserve itself messed up as well it seems with too easy a monetary policy.

The rating agencies also failed spectacularly, giving AAA ratings to the securities that were really junk, thus investors and institutions all bought them.

There was a complete misunderstanding of risk analysis which makes one wonder if regulation would have even worked. I mean Wall Street itself didn't realize the risk it was taking on. If Wall Street itself couldn't recognize the risk, how could underpaid government regulators? And with the recent porn scandal of the SEC, we could probably say the SEC failed to a degree as well. Wired magazine ran an article a few years back in which they point out that a 2002 Senate study showed that the SEC is only able to review about 40% of the information it gets from the regulations. Enron hadn't been reviewed in ten years, according to the article. If that's the case, then how would more regulation have helped?

Everyone thought the system had advanced enough to spread risk out to an enormous degree, and allocate capital very accurately (and to a degree this was true, as the risk was spread amongst the national mortgage market, which had never collapsed before).

A big problem was that while spreading the risk amongst the national mortgage market, they were using mortgages that were ultimately junk. They were not creating securities made up of sound mortgages from around the nation, which really would have been secure (as a few mortgages here and there could fail, and a bubble in real-estate could form in certain areas here and there occassionally, but securities made up of mortgages from around the nation should be secure); instead, they were using mortgages that were far more junk than sound, but they didn't realize it.

Due to bad monetary policy and bad government policy, a housing bubble developed, and then when it burst, all things went haywire.

To blame this crisis solely on "excessive government" or "too little regulation" is oversimplifying the issue.

For example, look at the 2000 legislation signed by Bill Clinton, the Financial Services Modernization Act, that removed the decades-long barrier between investment banks and commercial banks. Some say removing this barrier helped cause the crisis. Others point out that Europe never had such a barrier and they didn't have such a crisis, and also that without it, it would have been illegal for institutions like Bank of America when it bought Merill-Lynch and Countrywide Financial.

Some big questions I have noticed about fixing the financial system are these:

1) Regulation: As shown above, if the SEC can't keep track of information from current regulations, how will more regulations help?

One thing I have read is that the securities created these days by the financial industry are so complex and sophisticated, that by the time regulators wrap their heads around one security, a multitude of new ones have been created. Some say we should then stop this ultra-speedy innovation with a law or something. Opponents say this would severely hamstring our financial industry and economy overall, as constant innovation is required in the financial industry. OTOH, do we continue to let such innovation occur until the next crisis?

2) Big financial institutions: Some say we should break them up, so they are not too big to fail anymore. Opponents say that this would make them too small to service the needs of American corporations and businesses however, and make American businesses dependent on foreign financial firms.

So what is the answer then? Break them up? Regulate them heavily? If we subject them to heavy regulation as a result of being too big to fail, they will bring in armies of lobbyists to make sure the regulations are written to benefit them, and hurt the smaller banks and financial institutions. How do we prevent that?

Is there a way to break them up where they are no longer too big to fail, but still large enough to service the needs of American business?

 

[OmCheeto]

So what is the point of this graph?

You said there were no jobs:

Consumer spending means nothing when there are no jobs...

The graph indicates that there are jobs. That's its only point.

This graph does not provide any information,

It provides me with the information that roughly 1 in 3 Americans has been employed over the last 10 years.

and it is not scaled properly.

Would you like me to render it in a log scale? It would be even flatter.

You actually do a disservice to your point with it. There should be job growth during booms, which we did have, and this graph does not reflect it very well.

That's why I made the second graph. But as I pointed out, although it visually went up and down quite a bit more, the numbers didn't impress me much. You can see it at the other https://www.physicsforums.com/showthread.php?p=2925631#post2925631". I'll try not to re-post my tired old boring graphs.

And the only disservice I think I've done was to include the Rove cartoon. It was a bit of a cheap shot. But when I read your comment "let it hit bottom", I happened to look up at the TV, and there was Karl Rove. Somehow I made some peculiar connection, as in, "how low can you get".

It probably doesn't make any sense.

 

[airborne18]

You said there were no jobs:

The graph indicates that there are jobs. That's its only point.

It provides me with the information that roughly 1 in 3 Americans has been employed over the last 10 years.

Would you like me to render it in a log scale? It would be even flatter.

That's why I made the second graph. But as I pointed out, although it visually went up and down quite a bit more, the numbers didn't impress me much. You can see it at the other https://www.physicsforums.com/showthread.php?p=2925631#post2925631". I'll try not to re-post my tired old boring graphs.

And the only disservice I think I've done was to include the Rove cartoon. It was a bit of a cheap shot. But when I read your comment "let it hit bottom", I happened to look up at the TV, and there was Karl Rove. Somehow I made some peculiar connection, as in, "how low can you get".

It probably doesn't make any sense.

You other graph I actually like. This one just is not very useful. But I don't follow employment numbers that way. Though Okay my wife has a job, and you do so yeah there are jobs.


I didn't even look at the rove cartoon.


And no consumer spending is does not matter. Durable goods orders do, but consumer spending is meaningless to our economy. Consumer spending has impacted China in a large way. But not ours.

Contrary to the talking head economists on TV, consumer spending will not dig us out of any recession. Years ago when we actually manufactured things it could, but not anymore.

 

[DrClapeyron]

The extremely wealthy people in the US will find a way to beat the taxes, i.e. tax loop hole. You'll find people like Gates and Buffet putting their money into charitable trust. In the name of hospitality and humanity they will find a way to avoid taxes. Why not increase certain capital gains taxes on such trusts and lower income taxes? The wealthy do not make their money through income, they make it through capital gains.

 

[mheslep]

...The wealthy do not make their money through income, they make it through capital gains.

You mean wages, not income.

 

[RonE]

As a US citizen, I have yet to see someone adequately explain WHY I should be taxed even more.

In the last two years my taxes will have increased 21%. My income, due to the economy, has not increased a dime. My bills, the necessities, phone, cable modems needed for work, water, electric, fuel have also increased.

Allowing these "cuts" to expire advocates I pay even more taxes. Businesses and the wealthy, in the end historically will not pay any tax increase anyone tries to pawn off as a corporate tax. They pass it on in the form of fired workers, less benefits, higher prices for goods and services but in the end... the business owners and chair people will not take a hit on their income/earnings/wages, whatever.

Each time the minimum wages goes up... the price of goods and services go up. It is simple math. You do not need complex charts, graphs, arguments, debates, whatever to explain it.

If you require a person or a corporation to pay more (for whatever reason) the price of goods and services must go up or the collected profits will go down. These "tax cuts" are not tax cuts they are a tax increase. Currently my tax rate is "x." The the law that has these rates in place is allowed to expire taxes will go up, which... is a tax hike or increase.

It always interests me the number of people who advocate that I pay more and more taxes are (and this is a very wide brush here but this is from my personal experiences, blogs, forums, and information I see out there/read/watch/listen to) the ones that will not pay the brunt of it. Funny how that works.

One of Nancy Pelosi's favorite tag lines is "The evil rich." They don't pay their fair share. She is a huge or was a huge advocate of not extending the "tax cuts" for the wealthy.

How many of you in 2007 were worth 40 million? That is what she was worth at that time. How many of you thinks she is poorer this year?

Now, how many of you believe that she will "pay her fair share?" The good thing about this law that will probably expire is that we will see next to immediate effects of it. In 2012 when the 2011 taxes are filed. I half suspect that they will try their level best to formulate some law that will nail those evil rich to the wall and try and capture their voting base back. The true believers of social injustice and the wealthy not paying enough. And yet still... not one person has given me a single reason that would want me to pay more taxes and make life even more of a struggle. Not one.

BTW, did you know you can donate to reduce the deficit?

How much do you think Pelosi, Frank, Geithner, Obama, Liberman (sp), Bush, Cheney, etc, so on and so forth... have donated to that cause? Not one.

https://pay.gov/paygov/

If you truly believe that I should pay more taxes by letting the tax cuts expire. Go there and donate the same amount my federal incomes taxes will increase next year, which is projected to be an additional 6,000 +/- 500.00

 

[Gokul43201]

In the last two years my taxes will have increased 21%. My income, due to the economy, has not increased a dime.

That's unexpected. Were there some changes in the tax code that came into effect two years ago, or is this due to a move (from anywhere to Massachusetts, for example) or some other significant change in finances?

 

[RonE]

That's unexpected. Were there some changes in the tax code that came into effect two years ago, or is this due to a move (from anywhere to Massachusetts, for example) or some other significant change in finances?

No, I've lived in the same state for close to 18 years. Most of it is due to the tax code changes coming on line. A few dollars are lost with local tax increases...

Point is though, with the increases previously, the cost of living increases water, phone, electricity, these tax laws set to expire at the end of the year will hit hard. Now add on top of what will expire all the "new" taxes like the ones that come along with the HCRA... there is absolutely no good reason to allow these tax "cuts" to expire and force me to pay even more. Comes a point where you cut your losses and shore up what you have. Keep in mind, they have also had meetings already to shore up Union Pensions with trying to figure out how to seize private 401k's. So not just my taxes but my savings is at risk too. Still. No one has explained why I should pay more. Not one good reason.

from

http://www.cagw.org/reports/pig-book/2010/

$29,992,000 by Senate Appropriations Committee Ranking Member Thad Cochran (R-Miss.) for 27 projects, including: $4,000,000 for the Jamie Whitten Delta States Research Center, Stoneville; $1,500,000 for Berryman Institute, Jack Berryman Institute, Utah and Mississippi Agriculture and Forestry Experiment Station; $1,002,000 for Mississippi Valley State University, curriculum development; $939,000 for the Agricultural Wildlife Conservation Center; and $231,000 for e-commerce research, because no one knows how to go online.

$15,614,000 by Senate appropriator Robert Byrd (D-W.Va.) for 12 projects, including: $2,000,000 for the Appalachian Fruit Laboratory, Kearneysville; $1,500,000 for the Dunloup Creek Watershed project; $500,000 for agriculture waste utilization research; and $400,000 for a computer vision engineer in Kearneysville.

$12,500,000 by Senate Agriculture Appropriations Subcommittee Ranking Member Sam Brownback (R-Kan.) for 13 projects, including: $2,750,000 for polymer research; $1,000,000 for wheat genetic research; $1,000,000 for a phosphorous reduction cooperative agreement through the Kansas Livestock Foundation; and $250,000 for workforce development and out-migration through the Kansas Farm Bureau Foundation (KFBF). In addition to the appropriation, KFBF has also applied for a $7 million stimulus grant for rural broadband deployment. To add insult to injury, the Kansas Farm Bureau, which is conveniently located at the same address as the foundation, had a fund balance of $98 million at the end of 2007.

$12,423,000 by Senate Agriculture Subcommittee Chairman Herb Kohl (D-Wis.) for 11 projects, including: $4,000,000 for the Dairy Forage Agricultural Research Center, Prairie du Sac; $2,500,000 for the Dairy Forage Research Center, Marshfield; $950,000 for nutrition enhancement research; and $400,000 for the Institute for Sustainable Agriculture. One of the institute’s projects is promoting “Slow Food.” As an answer to fast food, “Slow Food” has been, according to the institute’s website, “expanding over the past decade from dealing with issues of quality in cooking to include environmental and sustainable agriculture, social justice, and food sovereignty, among others.” It is not clear how Americans can eat social justice.

Just the tip of the iceberg so to speak. All this waste and pork... and I should pay more? Why?

 

[mheslep]

No, I've lived in the same state for close to 18 years. Most of it is due to the tax code changes coming on line. A few dollars are lost with local tax increases...

Welcome to PF RonE. Could you be more specific? So you mean federal income taxes have already increased? Or what?

 

[RonE]

The tax brackets across the board increased in 2008 and 2009 and 2010. Just the standard in your face income tax. This does not include all the other taxes that went up they take out of my check. On top of that... looking at my current phone bill...the federal excise, federal uni and federal subscriber line taxes all went up... again. Is it much dollar wise on those three? No about a total of 7.00 for all three monthly. But, when you add that the income, the federal taxes on everything else, cable (cable modem can't work without it), SSI, Medicare, etc so on and so forth... All taxes increased these last two years. At least the ones I have to pay, which I imagine most people do who live an average life the under 250,000.00 crowd.

But still... the point really is, why? Why should I pay more taxes when the feral government wastes, hands out, and refuses to stop spending? Why should I pay more and more taxes cutting my ability to provide for my family when more and more are not paying any.

All this stimulus money, bailing out corporations, and pork galore... and I am to pay more? Why?

BTW... just the FIT, the difference between what I made two years ago to one I just got recently. Just in this tax alone... 10.2% increase. I pulled my check stub from the last two years. There is a 3.00 difference for the same month two year ago. (This is due to the fact I dropped dental coverage.)

 

[OmCheeto]

Just the tip of the iceberg so to speak. All this waste and pork... and I should pay more? Why?

Then don't. Just move to Somalia and don't pay any taxes.

If it was true, what they say about taxes, then the best opportunities would be in the places with the least taxes... like Somalia. But it's not true, is it? Is it? It's not true. The best opportunities to create great wealth, in this country — and in the world — are in high-tax places.

Every industrialized democracy... every single one... is a high-tax, high-regulation, high-government society. And that is because these two things are inextricably intertwined. I am not here because I am a do-gooder. I don't want to pay more tax for fun. I want to pay more tax because it will create more prosperity for you and me.

http://www.nwprogressive.org/weblog/2010/10/debate-over-i-1098-at-uw-tacoma-lives.html"

 

[turbo]

If it was true, what they say about taxes, then the best opportunities would be in the places with the least taxes... like Somalia. But it's not true, is it? Is it? It's not true. The best opportunities to create great wealth, in this country — and in the world — are in high-tax places.

Something frequently lost on the rabidly anti-tax crowd. For instance, if the top marginal income tax rate is low, a business-owner can and will take profits in the form of income. If the marginal rate is higher, and he doesn't want to pay more taxes, he doesn't take the profits as income and instead plows them back into the business, building its value. That has a far better influence on job creation than simple profit-taking.

 

[lisab]

One of Nancy Pelosi's favorite tag lines is "The evil rich."

Do you have a link showing Speaker Pelosi has ever used that term?

I googled:

"the evil rich" pelosi

and just got a bunch of right-wing blogs .

 

[Gokul43201]

The tax brackets across the board increased in 2008 and 2009 and 2010. Just the standard in your face income tax.

Did your state raise their tax rates? I don't see anything in the Fed Income Tax brackets - only the tiny adjustments for inflation. For instance, see the tables below for single filers:

I can't think of any recent changes to the Federal Tax code since ... 2003 maybe? And I can't recall any legislation that raised income taxes in over a decade now. If anything, you should have seen tax credits from ARRA and rebates from the Bush Stimulus Act.

 

[OmCheeto]

Do you have a link showing Speaker Pelosi has ever used that term?

I googled:

"the evil rich" pelosi

and just got a bunch of right-wing blogs .

Yah, I couldn't find a reference either.

And everyone knows that it's the poor that are evil.

When was the last time a rich person came onto your back porch and stole 2 ladders and your deep cycle battery?

My porch light is no longer solar powered.

But thank god crackheads are too ignorant to know a $250 solar panel is worth more than the $5 he got for the 7 year old, almost dead anyways battery core. A pity we can't tax stupid.

Add to that a 40+ year old 5 1/2 hp outboard motor that I just discovered missing...
Oh well, at least my back yard is getting cleaned up.
Thank you! Crackheads!

 

[CRGreathouse]

But thank god crackheads are too ignorant to know a $250 solar panel is worth more than the $5 he got for the 7 year old, almost dead anyways battery core. A pity we can't tax stupid.

It's called the lottery.

 

[CRGreathouse]

Do you have a link showing Speaker Pelosi has ever used that term?

I haven't heard it, myself. A search for
"evil rich" site:pelosi.house.gov
came up empty, and likewise with
"evil rich" site:speaker.gov/newsroom/speeches

I encourage anyone doing similar searches to omit the article as I have done.

 

[CRGreathouse]

For instance, if the top marginal income tax rate is low, a business-owner can and will take profits in the form of income. If the marginal rate is higher, and he doesn't want to pay more taxes, he doesn't take the profits as income and instead plows them back into the business, building its value.

That's possible. It's also possible that, facing high taxes, business owners close up shop rather than pay the taxes. This happened to my brother's employer, a small business then employing about a half-dozen or dozen workers. (No worries, my brother got a different job.)

 

[Ivan Seeking]

That's possible. It's also possible that, facing high taxes, business owners close up shop rather than pay the taxes. This happened to my brother's employer, a small business then employing about a half-dozen or dozen workers. (No worries, my brother got a different job.)

Given that his competition bears the same tax burden, obviously your brother's employer had other problems. The market should adjust for any increased cost of production or services.

It often strikes me that the right seems to have no faith in the market.