News Should the Bush tax cuts be extended?

[Amp1]

I voted for the second choice. Tax cuts should be permanent for the 98% making below $250,000/y.

It's nice to think that the top 1% or 2% haven't much to worry about but the problem is that there is more stress involved - IMO - staying ahead of the other 98% of our population isn't easy. You have to influence individuals, as well as, governmental policies (local, state, and federal). To accomplish this PACs are needed, since the middle and lower classes (income wise) haven't the resources to nudge, bribe, or payout for this manipulation. It is left to those fortunate few who have said ability. I don't think most wealthy individuals deliberately aid in maintaining an uneven field however I think that it is a function of greed that this situation continues.

I think that corporate entities because they have a quasi-autonomous personality need to be regulated, and controlled by people who have human beings and society as their priority. So that the many disparities that exist in a (or our) society can be dealt with fairly.

This is an if, but if I was in the top 3% of income earners a 40% tax rate wouldn't bother me because I grew up having to do more with less. I.e., Giving up $100,000 from a salary of $200,000+ leaving about 90,000 to 100,000 for me would not hurt me if I don't try to maintain a high level lifestyle. And I would still be living better than I had for a majority of my life.

 

[mheslep]

It may be politically difficult to cut federal spending, but sooner or later a cut will happen, this is unavoidable. Taxes can not come close to covering the current spending load, nor should they even if it were possible. Several states managed the political will to cut their budgets recently; Mississippi by some 10%. And I mean cut, as in reduced, not an increase which was reduced from some hoped for target. Hopefully spending cuts won't occur here as they did in Greece, with the riots in the streets protesting an increase in government retirement/pension age from 50 to 52 for hair dressers.

 

[nismaratwork]

It may be politically difficult to cut federal spending, but sooner or later a cut will happen, this is unavoidable. Taxes can not come close to covering the current spending load, nor should they even if it were possible. Several states managed the political will to cut their budgets recently; Mississippi by some 10%. And I mean cut, as in reduced, not an increase which was reduced from some hoped for target. Hopefully spending cuts won't occur here as they did in Greece, with the riots in the streets protesting an increase in government retirement/pension age from 50 to 52 for hair dressers.

Lets be honest now, the system in Greece was ridiculous in the extreme, and the USA doesn't have anything like that level of social welfare or early retirement.

 

[mheslep]

Dunno. If "we borrowed money from the Chinese to give the rich tax cuts" we also borrowed money from the Chinese to give everyone else tax cuts and it is Obama's intent to continue that. Seems disingenuous to cherry-pick like that, ignoring probably 90% of the "borrowing from the Chinese".

I go further and point out (https://www.physicsforums.com/showpost.php?p=2868414&postcount=17", to pay social security benefits at a retirement age 20-30 years below the life span for which those benefits were originally created, to pay $60B for a government auto company, ...". The sum total of this type of spending far exceeds the few tens of billions per year lost to revenue from the Bush tax cuts.

 

[mheslep]

For comparison:
Greek debt per capita: ~$50k (http://en.wikipedia.org/wiki/Economy_of_Greece" / 11M)
US debt per capita: ~$45k ($13.4T [federal only] / 300M)

Now absolute debt comparisons with the US are usually waived off because the US GDP per capita is relatively large. However, GDP can shrink come bad fortune and/or bad policy; the debt will not.

Regarding extreme public pensions, I'd like to see the Greek who can top this guy:

Rizzo [city manager for a town of 37,000] is set to receive a pension of about $600,000 a year, which would make him the highest-paid pensioner in the California Public Employees' Retirement fund. That amount is calculated from a salary of nearly $800,000.

-all legal.
http://www.latimes.com/news/local/la-me-rizzo-pension-20100904,0,3689592.story

For examples of more widespread US social welfare liabilities, see http://www.econbrowser.com/archives/2010/03/speaking_of_lia.html" which reports a $7.2T liability beyond collected revenue predictions.

 

[loseyourname]

No structure of marginal tax brackets should be seen as permanent or unchangeable. Otherwise, the available tools of fiscal policy are basically rendered impotent to react appropriately to the business cycle. We should probably set reasonable caps (for instance, no activity should ever be taxed at a combined local-state-federal rate of 40% or greater), but the rates and brackets themselves should change every year.

As for the specific impact of moving the rate for income over $250,000 from 36% to 39%, it should theoretically have a short-term stimulative effect since the government will spend the money, whereas the private income-earners are saving it, but that will also hurt investment. If "investment" just means stockpiling gold, that could actually be a good thing, but only if the rate goes down again immediately when private investment in productive assets starts to recover, which probably won't happen.

Of course, normally the point of raising marginal rates is to retire debt at the peak of a recovery, and if that's all they're going to do, it's pointless, because we're still closer to the bottom than the top, it would remove any theoretical stimulative effect, and rates are too low right now to justify retiring debt in the absence of a budget surplus. Plus, the more rational way to generate a surplus is organically at the peak of the business cycle when receipts increase even at existing rates and demand for social services hits a low, not to do it at the trough of a cycle by raising rates in the face of otherwise falling receipts.

The larger problem is that we crippled our ability to respond with proper policy by running up so much debt during a boom, making us unable to do it when we were supposed to during a downturn, causing this proposal to raise taxes just to maintain existing service levels, which should never be necessary at the federal level.

 

[mheslep]

No structure of marginal tax brackets should be seen as permanent or unchangeable.

That's to the good for the government macro planner. Moving the rates around rapidly imposes a cost on business operations through a lack of predictability.

Otherwise, the available tools of fiscal policy are basically rendered impotent to react appropriately to the business cycle.

Even with fiscal room to maneuver, observation shows that is unlikely government can bring itself to pull the correct levels in the short term swings of business cycles, furthermore the fiscal economic guidance of what to do is unclear. The only clear economic lever pulling successes of the last several decades have been in monetary policy, and even there we have had mistakes (easy Greenspan money 01-03).

We should probably set reasonable caps (for instance, no activity should ever be taxed at a combined local-state-federal rate of 40% or greater),

How about 25%? Keynes himself apparently said, "25 percent taxation is about the limit of what is easily borne."

but the rates and brackets themselves should change every year.

As for the specific impact of moving the rate for income over $250,000 from 36% to 39%, it should theoretically have a short-term stimulative effect since the government will spend the money, whereas the private income-earners are saving it, but that will also hurt investment. If "investment" just means stockpiling gold, that could actually be a good thing, but only if the rate goes down again immediately when private investment in productive assets starts to recover, which probably won't happen.

Consider that the savings (instead of investment/spending) in that bracket may well be due to http://en.wikipedia.org/wiki/Permanent_income_hypothesis" of the pending rate increases. Take away that threat, and I suspect investment and spending will start to climb again, in a matter much more likely to increase employment than when the government takes tax money out for stimulus joy ride.

Of course, normally the point of raising marginal rates is to retire debt at the peak of a recovery, and if that's all they're going to do, it's pointless, because we're still closer to the bottom than the top, it would remove any theoretical stimulative effect, and rates are too low right now to justify retiring debt in the absence of a budget surplus. Plus, the more rational way to generate a surplus is organically at the peak of the business cycle when receipts increase even at existing rates and demand for social services hits a low, not to do it at the trough of a cycle by raising rates in the face of otherwise falling receipts.

The larger problem is that we crippled our ability to respond with proper policy by running up so much debt during a boom, making us unable to do it when we were supposed to during a downturn, causing this proposal to raise taxes just to maintain existing service levels, which should never be necessary at the federal level.

The US has been unable to run up debt in this downturn? US federal debt has http://blog.heritage.org/wp-content/uploads/2009/08/tripple-debt.jpg" Just how much additional debt did are you calling for, and to what end? To my mind there are no good examples of successful stimulation of depressed economies through government spending - not in 1990's Japan, not in the US 1930s. After this last ~$1T stimulus attempt and the resulting near 10% unemployment, deficit stimulus spending economics should warrant at the very least great skepticism, and taking for granted that fire hosing money out of a government window must stimulate the economy in all recessions borders on the irrational. Finally, the predicted revenue increase from the repeal of the proposed Bush tax cuts, even if all of it goes through, is only a fraction of the deficit gap caused by current spending ($70B/year).

 

[turbo]

The GOP is squealing about raising the marginal tax rate on the highest-earning Americans from 36-39%. They proclaim that the Bush cuts on the highest earners must be extended, despite the fact that such an extension would add ~$1Trillion to the deficit over the next decade. Extending the tax cuts to the people most able to pay them would be stupid and unproductive, while rescinding those tax cuts to the people whose wages have stagnated or fallen, and whose savings have taken a beating would prolong our economic downturn.

Those of us who have benefited greatly from our economy and our hard work should not lobby to perpetuate and extend the earnings-disparity between the rich and the poor. That's the kind of crap that led our country into the Great Depression. And yes, I was firmly in the upper 2% for several years before illness (and lack of proper accommodation for that) knocked me out of the work-force, so I have a good feel about how much of a "hardship" rescinding 3% of the marginal tax rate would have on me. Not enough to worry about. We live comfortably, and well within our means. I'm certain that the millionaires (including most Senators) who want to continue the tax break can learn to live without it.

 

[mheslep]

The GOP is squealing about raising the marginal tax rate on the highest-earning Americans from 36-39%. They proclaim that the Bush cuts on the highest earners must be extended, despite the fact that such an extension would add ~$1Trillion to the deficit over the next decade...

That's at least 30% high, and since when do you care about deficits (or unemployment for that matter)? I've missed your objections to the last several years of helicopter spending.

 

[turbo]

That's at least 30% high, and since when do you care about deficits (or unemployment for that matter)? I've missed your objections to the last several years of helicopter spending.

Extending unemployment benefits would have cost ~$30 Billion and the GOP wouldn't sign on because it would "add to the deficit". Somehow, Boehner et al had no problem with adding a trillion to the deficit to extend the Bush tax cuts for the top 2%.

If you don't think that I have been outraged by unfunded wars, you're very wrong.

https://www.physicsforums.com/showpost.php?p=2869160&postcount=26

 

[loseyourname]

That's to the good for the government macro planner. Moving the rates around rapidly imposes a cost on business operations through a lack of predictability.

Even with fiscal room to maneuver, observation shows that is unlikely government can bring itself to pull the correct levels in the short term swings of business cycles, furthermore the fiscal economic guidance of what to do is unclear. The only clear economic lever pulling successes of the last several decades have been in monetary policy, and even there we have had mistakes (easy Greenspan money 01-03).

These are sort of competing problems here. The major problem with fiscal policy is that it's lagging because of how slowly spending measures move through Congress. So even though monetary policy has less of the desired effect, we use it more because it's more administratively efficient.

But I'm not talking about making wild rate swings left and right all the time. Just that fiscal policy is only effective when it's actually used and different situations call for different rates. Sometimes you need to raise them and sometimes you need to cut them. They can't be set in stone. As for the effect on business operations, I think that's pretty easily avoided by not taxing business operations.

How about 25%? Keynes himself apparently said, "25 percent taxation is about the limit of what is easily borne."

As far as I know, empirical studies have indicated that 40% is the marginal rate at which the taxed activity starts to be significantly discouraged. You see this with nurses. When overtime starts knocking them into the highest bracket, they stop working overtime.

But what the number is doesn't matter. The point is just that there is a point at which tax rates get too high and we should cap them and allow flexibility beneath that cap.

Consider that the savings (instead of investment/spending) in that bracket may well be due to http://en.wikipedia.org/wiki/Permanent_income_hypothesis" of the pending rate increases. Take away that threat, and I suspect investment and spending will start to climb again, in a matter much more likely to increase employment than when the government takes tax money out for stimulus joy ride.

High-income households have high savings rates regardless of future tax forecasts. Shifting wealth from low- to high-MPC consumers will always have a short-term stimulative effect. That isn't to say it's always the right thing to do, and that's why I qualified the "theoretical projection of effect" above with caveats regarding negative long-term effects. Plus, at a certain point, it's unethical to just confiscate money. Still, there will always be a short-term stimulative effect when you take money that isn't being spent and spend it.

The US has been unable to run up debt in this downturn?

That isn't really what I meant. The government, practically speaking, can issue damn near as much debt as it wants to. But when you run up debt during boom times, you cripple your ability to act prudently during busts. Because now, passing a debt-funded spending package doesn't simply create debt, it creates excessive debt. The proper way to do it is to run surpluses during boom times and deficits during busts to maintain predictable service levels in the face of volatile national income and to smooth the business cycle. Running a deficit all the time just results in a permanently increasing national debt that kills the future. If you run a deficit during booms and then cut back during busts, you just worsen the business cycle and turn booms into bubbles and busts into depressions.

 

[Al68]

...so I have a good feel about how much of a "hardship" rescinding 3% of the marginal tax rate would have on me. Not enough to worry about. We live comfortably, and well within our means. I'm certain that the millionaires (including most Senators) who want to continue the tax break can learn to live without it.

Yep, poor, poor rich people. And lower middle class people like me that feel so sorry for them and take their side against the righteous Dems. People like me who just can't stand the thought of rich people like you having such hardships.

I think it's now safe to assume you are very aware that your representation of those that disagree with you is laughably absurd and fraudulent, and you are not really as uninformed of the opposing viewpoint as you pretend, so there is no point in arguing about it.

 

[turbo]

Yep, poor, poor rich people. And lower middle class people like me that feel so sorry for them and take their side against the righteous Dems. People like me who just can't stand the thought of rich people like you having such hardships.

I think it's now safe to assume you are very aware that your representation of those that disagree with you is laughably absurd and fraudulent, and you are not really as uninformed of the opposing viewpoint as you pretend, so there is no point in arguing about it.

I was earning over 30K/year in a "draw" salary, and far exceeded many, many times that for years in my sales incentives (you could call them bonuses but they were structured very strictly WRT to department performance). My wife and I both came from poor families and we never needed to keep up for appearances.

It is "safe to assume" NOTHING. Get a grip. And get a viewpoint that doesn't originate from political views that are purely neo-con blather. There are conservatives like myself that have had to go independent since the GOP has abandoned all conservative tenets in order to pander to the wealthy.

 

[Al68]

It is "safe to assume" NOTHING. Get a grip. And get a viewpoint that doesn't originate from political views that are purely neo-con blather.

John Lock: neo-con blather-er extraordinaire. Yeah, that's it.

There are conservatives like myself that have had to go independent since the GOP has abandoned all conservative tenets in order to pander to the wealthy.

Yeah, we all know you're the love child of Barry Goldwater and Ayn Rand.

I can play this game, too: I'm a socialist myself, a huge fan of Marx. I just object to the extreme version of socialism advocated by Dems. I favor a more moderate version of socialism favored by the few Republicans left that haven't turned completely into advocates of that radical extreme version of authoritarian socialism.

 

[turbo]

I can play this game, too: I'm a socialist myself, a huge fan of Marx. I just object to the extreme version of socialism advocated by Dems. I favor a more moderate version of socialism favored by the few Republicans left that haven't turned completely into advocates of that radical extreme version of authoritarian socialism.

I have made more money/year than 98% of the inhabitants of the US for a number of years. I also happen to be a fiscal conservative. That is something that the neo-cons fail to appreciate. I expect that you are among them ( the neo-cons)

I don't support the waging of wars fought on arguments that cannot be logically supported (based on lies, if you want to be honest). I do not support the gutting of Social Security by any means. I do not support the imposition of unfunded Federal mandates on state and local governments (No Child Left Behind). If you yearn for a return to "W's" presidency, please provide some rational arguments why this would be a good thing, in the spirit of PF's drive toward balance and fairness.

 

[nismaratwork]

John Lock: neo-con blather-er extraordinaire. Yeah, that's it.Yeah, we all know you're the love child of Barry Goldwater and Ayn Rand.

I can play this game, too: I'm a socialist myself, a huge fan of Marx. I just object to the extreme version of socialism advocated by Dems. I favor a more moderate version of socialism favored by the few Republicans left that haven't turned completely into advocates of that radical extreme version of authoritarian socialism.

Well, speaking as someone who's already earned more money than I'll spend in one lifetime, I agree with Turbo-1 as well, for much the same reasons. Would you care to expand your ad hominem attacks to me as well?

 

[Al68]

I have made more money/year than 98% of the inhabitants of the US for a number of years. I also happen to be a fiscal conservative. That is something that the neo-cons fail to appreciate. I expect that you are among them ( the neo-cons)

Well, if you will define "neo-con", I'll tell you. Is it the same as a classical liberal? I'm only guessing that because you use the term to describe those with classically liberal positions, or as Dems fraudulently say: "for the rich".

I don't support the waging of wars fought on arguments that cannot be logically supported (based on lies, if you want to be honest). I do not support the gutting of Social Security by any means. I do not support the imposition of unfunded Federal mandates on state and local governments (No Child Left Behind). If you yearn for a return to "W's" presidency, please provide some rational arguments why this would be a good thing, in the spirit of PF's drive toward balance and fairness.

I yearn for liberty. W's positions were more economically libertarian than Obama's (which isn't saying much), but far less than mine.

As far as a spirit of balance and fairness, your habit of consistently misrepresenting the views of those you disagree, like using the words "pandering to the wealthy" to describe positions barely more libertarian than Dems, leaves no room for honest debate. I have no intention of presenting any argument in favor of views that no one espouses.

That's an important point: the positions you keep arguing against are positions that no one has advocated. That's called a strawman argument. Try arguing against someone's stated position, and without any reference to their supposed motives (ad hominem argument), or any other well known logical fallacies.

 

[nismaratwork]

Well, if you will define "neo-con", I'll tell you. Is it the same as a classical liberal? I'm only guessing that because you use the term to describe those with classically liberal positions, or as Dems fraudulently say: "for the rich".I yearn for liberty. W's positions were more economically libertarian than Obama's (which isn't saying much), but far less than mine.

As far as a spirit of balance and fairness, your habit of consistently misrepresenting the views of those you disagree, like using the words "pandering to the wealthy" to describe positions barely more libertarian than Dems, leaves no room for honest debate. I have no intention of presenting any argument in favor of views that no one espouses.

That's an important point: the positions you keep arguing against are positions that no one has advocated. That's called a strawman argument. Try arguing against someone's stated position, and without any reference to their supposed motives (ad hominem argument), or any other well known logical fallacies.

You've made some truly absurd claims here that require sourcing. In what way and on what planet was the spending practices of W.'s admin "Libertarian"?! I assume it couldn't have been military spending, or creating The DHS... neither very libertarian moves. You're talking out of your backpassage, so cite in accordance with PF rules or back up.

 

[Al68]

Well, speaking as someone who's already earned more money than I'll spend in one lifetime, I agree with Turbo-1 as well, for much the same reasons. Would you care to expand your ad hominem attacks to me as well?

LOL. Sure, you must be the other love child of Barry Goldwater and Ayn Rand.

You've made some truly absurd claims here that require sourcing. In what way and on what planet was the spending practices of W.'s admin "Libertarian"?! I assume it couldn't have been military spending, or creating The DHS... neither very libertarian moves. You're talking out of your backpassage, so cite in accordance with PF rules or back up.

Why don't you instead cite where I made any claim that W's spending practices were libertarian. I was obviously referring to the subject of this thread: tax cuts.

Who's talking out of their backpassage here?

 

[OmCheeto]

No structure of marginal tax brackets should be seen as permanent or unchangeable. Otherwise, the available tools of fiscal policy are basically rendered impotent to react appropriately to the business cycle. We should probably set reasonable caps (for instance, no activity should ever be taxed at a combined local-state-federal rate of 40% or greater), but the rates and brackets themselves should change every year.

As for the specific impact of moving the rate for income over $250,000 from 36% to 39%, it should theoretically have a short-term stimulative effect since the government will spend the money, whereas the private income-earners are saving it, but that will also hurt investment. If "investment" just means stockpiling gold, that could actually be a good thing, but only if the rate goes down again immediately when private investment in productive assets starts to recover, which probably won't happen.

Of course, normally the point of raising marginal rates is to retire debt at the peak of a recovery, and if that's all they're going to do, it's pointless, because we're still closer to the bottom than the top, it would remove any theoretical stimulative effect, and rates are too low right now to justify retiring debt in the absence of a budget surplus. Plus, the more rational way to generate a surplus is organically at the peak of the business cycle when receipts increase even at existing rates and demand for social services hits a low, not to do it at the trough of a cycle by raising rates in the face of otherwise falling receipts.

The larger problem is that we crippled our ability to respond with proper policy by running up so much debt during a boom, making us unable to do it when we were supposed to during a downturn, causing this proposal to raise taxes just to maintain existing service levels, which should never be necessary at the federal level.

Bah! You sound like you know what you are talking about. I hate that...

---------------------------------
not really. will you be my pf friend? please...

 

[nismaratwork]

LOL. Sure, you must be the other love child of Barry Goldwater and Ayn Rand.

So the answer to, "Will you expand your ad hominem" is "yes". I assume this also means you can't or won't abide by PF rules and support your earlier statements?

 

[Al68]

So the answer to, "Will you expand your ad hominem" is "yes".

That ad hominem attack was intended as humor, not a serious argument. Maybe that wasn't as obvious as I thought it was.

I assume this also means you can't or won't abide by PF rules and support your earlier statements?

OOps, I edited my last post too late. As I said there, I never made the statement you claimed I made. I was obviously referring to the subject of this thread, tax cuts, not spending practices, when I referred to W's position as "barely more libertarian than Dems".

His spending practices were far more "drunk sailorism" than libertarianism.

 

[OmCheeto]

All kidding aside, just watched Peter Orszag on the Charlie Rose show.

Wow. It's amazing how smart young people can be.

I think he said that all the tax cuts should be allowed to expire in the next couple of years.

hmmm... That makes me, the former director of the OMB, and the former chairman of the Fed, that think that.

And I think LisaB was on my side about this also.

One more, and we have a movement.

 

[CRGreathouse]

His spending practices were far more "drunk sailorism" than libertarianism.

Indeed, especially in his last half-year. But how, then, to characterize Obama's spending?

 

[OmCheeto]

Indeed, especially in his last half-year. But how, then, to characterize Obama's spending?

Stimulating!

Sorry... I'm kidding again. Orszag stated that it was a room full of economists who in both the Bush and Obama cases, decided on how best to stimulate the economy.

So I find it a bit disingenuous to characterize either Bush or Obama's spending as being all their fault. They were probably both given a choice. Spend, or watch the US collapse into an economic depression.

Unfortunately, the transcript is not available, so you will either have to watch it in re-run, or take my word for it. But it was an incredibly honest account of the politics that goes on behind the scenes in Washington.

 

[nismaratwork]

Stimulating!

Sorry... I'm kidding again. Orszag stated that it was a room full of economists who in both the Bush and Obama cases, decided on how best to stimulate the economy.

So I find it a bit disingenuous to characterize either Bush or Obama's spending as being all their fault. They were probably both given a choice. Spend, or watch the US collapse into an economic depression.

Unfortunately, the transcript is not available, so you will either have to watch it in re-run, or take my word for it. But it was an incredibly honest account of the politics that goes on behind the scenes in Washington.

Their fault, but not their idea. One key difference is that when you choose to start a war, you build in enormous and unforeseeable expenditures, and that WAS Bush's fault.

 

[mheslep]

His spending practices were far more "drunk sailorism" than libertarianism.

Yes, though the treasury will eventually recoup much of that 2008 spending (and is), at least the portion allocated to TARP.

Indeed, especially in his last half-year. But how, then, to characterize Obama's spending?

Severe cirrhosis of the liver, refusing rehab.

 

[OmCheeto]

Their fault, but not their idea. One key difference is that when you choose to start a war, you build in enormous and unforeseeable expenditures, and that WAS Bush's fault.

Yes. Wars are not what they used to be. I was thinking about that the other day. WWII wrecked most of Europe and much of Asia, and left America rather unscathed, leaving us the only manufacturing superpower for at least a couple of decades. It strikes me as no surprise that we did as well as we did for so long.

I hate to keep dwelling on the Orszag interview, but he made so many salient points, that I could not help but to admire his honesty. One of his points was how important education was, and I interpreted this as the neo-war weapon. Unfortunately, one of my subordinates today pointed out that America is sadly lacking in the upcoming brainpower race. He said that one of those stinking Scandinavian countries was #1 in math and physics, and we were around #25.

I thought that was kind of sad.

hmmm... Maybe Japan invaded us with video games(slash kiddie crack) for a reason.

hmmm...

but I digress from the topic.

Raise taxes! One of these days!

 

[CRGreathouse]

So I find it a bit disingenuous to characterize either Bush or Obama's spending as being all their fault.

I entirely agree.

 

[Al68]

His spending practices were far more "drunk sailorism" than libertarianism.

Indeed, especially in his last half-year. But how, then, to characterize Obama's spending?

How about "drunk sailor in a whorehouse with credit"? I could have said W's spending was libertarian relative to Obama's, but that would be like saying a grasshopper is tall relative to a cricket.

What amazes me most about this tax issue is how the rhetoric is virtually identical to what I heard said by Dems about Reagan 30 years ago, and the position is essentially the same for those favoring a lower top marginal rate, yet some think this is all about some new phenomena called "neoconism" or "Fox news". It's analogous to the way kids now think their generation invented the F-word or sarcasm.

And they spout the same nonsense Dems were spouting 30 years ago thinking they're making some relevant point, while refusing to even acknowledge the other side's point of view, pretending instead, like some in this thread, that they're completely oblivious to the fact that there even is another point of view, just opponents with bad motives instead.

They prefer propaganda like "they're just for the rich" to legitimate debate, knowing full well that debating motives instead of the merits of the issue is flawed logic, because that propaganda is a tried and true method for stirring up hatred among their constituents

 

[Al68]

So I find it a bit disingenuous to characterize either Bush or Obama's spending as being all their fault.

I don't think anyone suggested that, since government spending is the responsibility of congress, too. But both Bush and Obama are responsible for their own official actions, like signing the spending bills passed by congress. Neither can claim spending to "not be their fault" after signing the spending bills into law.

 

[OmCheeto]

propaganda is a tried and true method for stirring up hatred among their constituents

Yes it is: Watch the http://crooksandliars.com/david-neiwert/kurtz-calls-out-hannity-his-deceptiv" .

Even though the above video was in regards to the tax cuts, I don't think that was the point, so let's progress:

The David Brooks - Charlie Rose interview that aired Thursday is http://www.charlierose.com/view/interview/11206" . David also said that we should let all the tax cuts expire in 2012. (around 33 minutes into the interview)

 

[WhoWee]

I have a solution to the entire tax debate - a new "fair tax" concept. Basically, the higher the IQ and Degree - the higher the tax rate charged.

Why(?) you ask? It's simple, the higher your IQ and the greater your education, the greater the advantage you have over the rest of the workforce, thus the higher your potential to earn.

 

[OmCheeto]

I have a solution to the entire tax debate - a new "fair tax" concept. Basically, the higher the IQ and Degree - the higher the tax rate charged.

Why(?) you ask? It's simple, the higher your IQ and the greater your education, the greater the advantage you have over the rest of the workforce, thus the higher your potential to earn.

Except that those with really high IQ's don't usually have any interest in making money.

I am absolutely convinced that no wealth in the world can help humanity forward, even in the hands of the most devoted worker. The example of great and pure individuals is the only thing that can lead us to noble thoughts and deeds. Money only appeals to selfishness and irresistibly invites abuse. Can anyone imagine Moses, Jesus or Ghandi armed with the money-bags of Carnegie?

Christopher Michael Langan (born c. 1952) is an American autodidact whose IQ was reported by 20/20 and other media sources to have been measured at between 195 and 210. Billed by some media sources as "the smartest man in America", he rose to prominence in 1999 while working as a bouncer on Long Island.

But watch out for those that do take an interest:

1 William Gates III IQ 145-160
2 Warren Buffett IQ 135-145+
3 Carlos Slim Helu IQ 135+
http://infoproc.blogspot.com/2009/11/if-youre-so-smart-why-arent-you-rich.html"

hmmm... I wonder what those three think about the tax cuts?

http://www.usatoday.com/money/industries/technology/2003-01-12-gates_x.htm"
By Jim Hopkins, USA TODAY
1/12/2003

SAN FRANCISCO — President Bush, in pushing big tax cuts for America's wealthiest, is about to get an earful from an unlikely opponent, again. Bill Gates Sr. — father of the co-founder of Microsoft who is the USA's richest man — is fighting to keep Bush from killing the estate tax that hits the super-rich but also some small-business owners and farmers.

His son agrees with him, as do billionaires Warren Buffett, David Rockefeller Sr. and others.

...

The tax generates about $30 billion in annual federal revenue, about 1% of all, Gates says. That doesn't sound like much, but it will likely go higher as thousands of Americans who amassed fortunes in recent decades begin to die, putting up for grabs as much as $136.2 trillion in wealth.

Wow. $136 trillion. That would sure take a bite out of he [STRIKE]deficit[/STRIKE] debt($13.5 trillion).

 

[nismaratwork]

Except that those with really high IQ's don't usually have any interest in making money.





But watch out for those that do take an interest:

1 William Gates III IQ 145-160
2 Warren Buffett IQ 135-145+
3 Carlos Slim Helu IQ 135+
http://infoproc.blogspot.com/2009/11/if-youre-so-smart-why-arent-you-rich.html"

hmmm... I wonder what those three think about the tax cuts?




Wow. $136 trillion. That would sure take a bite out of he [STRIKE]deficit[/STRIKE] debt($13.5 trillion).

Not to mention the obvious: being a brilliant scientist often means that you work for the government, which pays for ****. Other options are similar, but unless you're truly exceptional in a narrow field such as pharmaceutical development, your cash-flow is going to sting. Once you're done with the government, or eschewing that entirely, academia is often home, and that pays... also for ****.

Finally, unless your brilliance allows you to personally succeed in the manner of Gates or Buffet, even if you discover a cure for HIV/AIDS... most of the money made is going to the company you're under contract to. If you're a physicist, there are not a ton of high-paying jobs, and mathematicians and computer gurus?... the NSA isn't cheap, but it's hardly going to make you wealthy.

Forget IQ... being bright and being rich are hard to link... being in management or a similar position IS, and that's not the realm of the extremely intelligent AFAIK.

 

[nismaratwork]

Oh, on a separate topic, how about legalizing cannabis and taxing it like cigarettes? That would be a nice fat source of revenue, and would ameliorate at least some expense in criminal proceedings. Just a thought before we go shutting down schools...

 

[OmCheeto]

Oh, on a separate topic, how about legalizing cannabis and taxing it like cigarettes? That would be a nice fat source of revenue, and would ameliorate at least some expense in criminal proceedings. Just a thought before we go shutting down schools...

And make those who cheat on their taxes pay:

http://www.npr.org/templates/story/story.php?storyId=15111003"
October 9, 2007

The government believes if everyone paid what they owed, the IRS would collect $345 billion more than it does now. The tax agency hopes what it learns from the three-year random audit program will help the IRS collect more of that money.

Ha ha! That would make a good poll. We'd have to make it non-incriminating though:

How many of your friends brag about cheating on their taxes, or at least brush it off, claiming that everyone does it.

 

[WhoWee]

How many of your friends brag about cheating on their taxes, or at least brush it off, claiming that everyone does it.[/I]

Why none of course (people cheat on their taxes?).

 

[nismaratwork]

And make those who cheat on their taxes pay:
Ha ha! That would make a good poll. We'd have to make it non-incriminating though:

How many of your friends brag about cheating on their taxes, or at least brush it off, claiming that everyone does it.

Well, honestly I don't know any admitted tax cheats, but I'm not the kind of person that would be first to hear about that; I'm a moral relativist, but I LOATHE cheating of all kinds.

I like the tax cheat idea, especially for these new nutcases who live in "tax free" communities (other than churches, har har) by cheating to reclaim their "sovereignty". Grrrr..Oh, and maybe let's tax religious groups, that works for me too.

 

[mheslep]

And make those who cheat on their taxes pay:

Random Tax Audits Return to the IRS
October 9, 2007

The government believes if everyone paid what they owed, the IRS would collect $345 billion more than it does now. The tax agency hopes what it learns from the three-year random audit program will help the IRS collect more of that mon

I suspect that's got be a static calculation, i.e. how much could theoretically be collected tax cheats, and therefore not very useful.

 

[OmCheeto]

I suspect that's got be a static calculation, i.e. how much could theoretically be collected tax cheats, and therefore not very useful.

I've read that much of the cheating is going on in the very small private business sector. Something I can totally relate to. Not personally mind you, but from what I see, every day.

Here's an example:

http://www.washingtonpost.com/wp-dyn/content/article/2007/04/15/AR2007041501158.html"
Congress Struggles For Way to Fill Gap
By Lori Montgomery
Washington Post Staff Writer
Monday, April 16, 2007


Judging from his tax returns, Dinh Kim Huynh wasn't getting rich in the manicure business. In 2000, Huynh and his wife claimed taxable income of just $7,578 from their two nail salons in Southern Maryland -- so little that they qualified for a tax credit for the working poor. Their tax bill was $195.

But like millions of American business owners who trade primarily in cash, Huynh was not altogether honest with the Internal Revenue Service. When IRS agents poked around, they discovered four cars in Huynh's name, including a $77,000 Mercedes; receipts for diamonds and Rolexes in a closet at his Waldorf home; and a videotape of Huynh flashing a five-carat ring during the purchase of yet another vehicle at a local Honda dealership, court records show.

Huynh, 57, appears to be an especially bold contributor to the tax gap, the difference between what Americans owe the federal government and what they actually pay. By the most recent estimate, the tax gap is $345 billion. Unreported business income accounts for nearly a third of that amount. According to IRS data, U.S. shopkeepers, mechanics, farmers and landlords will pay less than half the taxes they owe on the returns that must be filed by midnight Tuesday.

hmmm...

Maybe I should get a business license for a lemonade stand, so I can write off my $25,000 truck, which I have to use to go to the store to get my lemons.

hmmm...

I wonder if this is how Greece got started? "No one else is paying their fair share, everyone else is cheating on their taxes, why should I be the sucker paying the bill, riding the bus, while Mr. Cheat over there is driving a $77k Mercedes?"

 

[mheslep]

The Greek tax system has nearly destroyed the society there according to author Michael Lewis (Liars Poker, Big Short)

After systematically looting their own treasury, in a breathtaking binge of tax evasion, bribery, and creative accounting spurred on by Goldman Sachs, Greeks are sure of one thing: they can’t trust their fellow Greeks.

[...]

The scale of Greek tax cheating was at least as incredible as its scope: an estimated two-thirds of Greek doctors reported incomes under 12,000 euros a year—which meant, because incomes below that amount weren’t taxable, that even plastic surgeons making millions a year paid no tax at all. The problem wasn’t the law—there was a law on the books that made it a jailable offense to cheat the government out of more than 150,000 euros—but its enforcement. “If the law was enforced,” the tax collector said, “every doctor in Greece would be in jail.” I laughed, and he gave me a stare. “I am completely serious.”
[...]
The Bonfire of Civilization
The day before I left Greece the Greek Parliament debated and voted on a bill to raise the retirement age, reduce government pensions, and otherwise reduce the spoils of public-sector life. (“I’m all for reducing the number of public-sector employees,” an I.M.F. investigator had said to me. “But how do you do that if you don’t know how many there are to start with?”) Prime Minister Papandreou presented this bill, as he has presented everything since he discovered the hole in the books, not as his own idea but as a non-negotiable demand of the I.M.F. The general idea seems to be that while the Greek people will never listen to any internal call for sacrifice they might listen to calls from outside. That is, they no longer really even want to govern themselves.

Thousands upon thousands of government employees take to the streets to protest the bill. Here is Greece’s version of the Tea Party: tax collectors on the take, public-school teachers who don’t really teach, well-paid employees of bankrupt state railroads whose trains never run on time, state hospital workers bribed to buy overpriced supplies. Here they are, and here we are: a nation of people looking for anyone to blame but themselves. The Greek public-sector employees assemble themselves into units that resemble army platoons. In the middle of each unit are two or three rows of young men wielding truncheons disguised as flagpoles. Ski masks and gas masks dangle from their belts so that they can still fight after the inevitable tear gas. “The deputy prime minister has told us that they are looking to have at least one death,” a prominent former Greek minister had told me. “They want some blood.” Two months earlier, on May 5, during the first of these protest marches, the mob offered a glimpse of what it was capable of. Seeing people working at a branch of the Marfin Bank, young men hurled Molotov cocktails inside and tossed gasoline on top of the flames, barring the exit. Most of the Marfin Bank’s employees escaped from the roof, but the fire killed three workers, including a young woman four months pregnant. As they died, Greeks in the streets screamed at them that it served them right, for having the audacity to work. The events took place in full view of the Greek police, and yet the police made no arrests.

As on other days, the protesters have effectively shut down the country. The air-traffic controllers have also gone on strike and closed the airport. At the port of Piraeus, the mob prevents cruise-ship passengers from going ashore and shopping. At the height of the tourist season the tourist dollars this place so desperately needs are effectively blocked from getting into the country. Any private-sector employee who does not skip work in sympathy is in danger. All over Athens shops and restaurants close; so, for that matter, does the Acropolis.

The lead group assembles in the middle of a wide boulevard a few yards from the burned and gutted bank branch. That they burned a bank is, under the circumstances, incredible. If there were any justice in the world the Greek bankers would be in the streets marching to protest the morals of the ordinary Greek citizen. The Marfin Bank’s marble stoop has been turned into a sad shrine: a stack of stuffed animals for the unborn child, a few pictures of monks, a sign with a quote from the ancient orator Isocrates: “Democracy destroys itself because it abuses its right to freedom and equality. Because it teaches its citizens to consider audacity as a right, lawlessness as a freedom, abrasive speech as equality, and anarchy as progress.” At the other end of the street a phalanx of riot police stand, shields together, like Spartan warriors. Behind them is the Parliament building; inside, the debate presumably rages, though what is being said and done is a mystery, as the Greek journalists aren’t working, either. The crowd begins to chant and march toward the vastly outnumbered police: the police stiffen. It’s one of those moments when it feels as if anything might happen. Really, it’s just a question of which way people jump.

 

[OmCheeto]

The Greek tax system has nearly destroyed the society there according to author Michael Lewis (Liars Poker, Big Short)

Sounds like we are in agreement then.

hmmm...

 

[CAC1001]

It gets better than that. We borrow money from China to give tax breaks to the rich, so that they can invest in China, which increases our trade deficit, which ultimately leads to more borrowing from China. Supply-side economics is reduced to a sad joke, in a global economy. The money from tax breaks for the rich doesn't trickle down, it trickles away [as a function of domestic vs foreign manufacturing].

From what I understand, nowhere has supply-side economics ever claimed any kind of "trickle-down" theory (i.e. cut taxes for the rich and their spending will trickle-down to benefit the middle-class and poor).

Certain politicians both on the Left and Right have promoted this view, but it is incorrect.

I am not an economist, but there's two sides to economics I believe: demand-side and supply-side. Demand-side deals with consumer demand. You get a cut in consumer demand, and that can lead to a recession.

Strict demand-side economics claims that without government stimulus of some kind to make up for this drop off in demand, we will see demand drop, then deflation and unemployment will occur as prices go down due to the drop in demand and unemployment goes up. The unemployment creates a further drop-off in demand, which means even further deflation and even more unemployment.

To stop this cycle, government needs to step into temporarily make up for the drop-off in consumer demand.

Government can try to stimulate demand in a few ways: tax cuts for consumers (i.e. middle-class tax cuts (this would mean likely all marginal income tax rates, as $250K isn't rich)), direct government spending, sending people checks in the mail, or some combination of these.

Proponents of spending say that you shouldn't give people money through tax cuts or checks because they will hoard it and it thus won't stimulate whereas with the government, you can be sure they will spend it.

Proponents of tax cuts or checks say that the government is too slow at getting the money out and too inefficient, whereas with giving the money to the people directly, you can flood the economy with stimulus very quickly and the people will know how to spend it better than bureaucrats.

Supply-side economics looks at the other aspect of it: the supply of goods and services the economy is producing. As opposed to demand-side stimulus which is to create demand, supply-side stimulus is to create investment. It thus calls for cuts (if the rates are too high) in things like corporate tax rates, investment taxes, and the upper-income tax brackets, which many small businesses fall under as S-Corporations (although I don't know how many).

If inflation is too high, for example, a demand-sider says that there is too much demand, which must be curtailed through say tax hikes (take away the people's money and thus consumer demand will drop, therefore less demand for the supply of goods/services and prices stop going up).

A supply-sider says you see if investment and business taxes are excessively high, and if they are, you cut those and thus create more goods and services to meet the demand, thus bringing down inflation.

Also the Federal Reserve can increase or decrease the supply of dollars in the economy too.

Historically, tax cuts have usually been some combination of both supply-side and demand-side. When JFK wanted to cut taxes, the Republicans were against it, because JFK's tax cuts were to stimulate demand. The Republicans said it would overflow the economy with excessive demand and drive up inflation.

Ronald Reagan's tax cuts were also a combination of supply-side and demand-side. Republicans always talk of Reagan's stimulating the economy through supply-side economics, which I think he did, but I wonder if Reagan might have also inadverdently given America a good-old Keynesian demand-side stimulus, because he cut taxes across the board (marginal tax rates, investment taxes, etc...) and he upped the defense budget to re-build the defenses. The business and investment taxes, along with deregulation, helped free the economy to produce more, but the middle-class tax cuts and the defense spending were classic Keynesianism.

President George W. Bush's tax cuts were for everyone, across-the-board, and included everything from middle-class income tax cuts to cuts in investment taxes. So Bush's were also a combination of demand-side and supply-side.

BTW, a trade deficit is not necessarilly a bad thing. Historically we have always seen the trade deficit shrink during times of recession (it pretty much became a trade surplus during the Great Depression). This current recession has also slowed it.

It's like a "strong" dollar versus a "weak" dollar. A "weak" dollar will actually help close the trade deficit. The "strong" dollar of the 1990s helped enlarge the trade deficit.

 

[CAC1001]

On extending the Bush tax cuts, I'd say make them permanent for two reasons:

1) I think a snowball has a better chance of surviving a summer in the Sahara than of the government reducing spending with increased revenues from taxes, especially this administration; they seem to see the solution to everything as bigger bureaucracies and more government. The Republicans are not too trusty with this either.

2) Let successful people keep their money! A top rate of 39.6%, combined with state, property, FICA, etc...taxes, means if you work your butt off to say be a highly-paid professional, you are handing more than half your income to the government. At that point, the government is saying, "Here's how much you get to keep of YOUR money."

I have no problem with higher-earners being taxed more highly, but let's not tax excessively. If I make say $400,000 a year, I don't want to have to hand 2/3 or more of it to the government.

One thing the Democrats also need to learn is that they cannot pay for their social-welfare state dream just by taxing the upper-brackets and businesses more. In Europe, they have value-added taxes and high fuel taxes, which primarily hit the poor and the middle-class.

Yes, they hit the rich too, but the rich guy I doubt cares if the price per gallon of gas goes up any to put gas in his Escalade or if his grocery bill goes up some.

 

[Al68]

One thing the Democrats also need to learn is that they cannot pay for their social-welfare state dream just by taxing the upper-brackets and businesses more. In Europe, they have value-added taxes and high fuel taxes, which primarily hit the poor and the middle-class.

Yes, they hit the rich too, but the rich guy I doubt cares if the price per gallon of gas goes up any to put gas in his Escalade or if his grocery bill goes up some.

None of this even affects the personal financial well-being of rich people either way. This obsession Democrats have with rich people is just part of their power hungry delusions. What historical power hungry (oppressive) world leader didn't believe, and have followers who believed, that they were fighting against the "rich and powerful" on behalf of "the people"?

And of course Democratic politicians can't really want their stated agenda to succeed, because the societal "ills" they claim to be fighting against are what keeps them in power.

 

[turbo]

How does giving billions of dollars in tax-cuts to the wealthiest 1-2% of the populace help the economy? The GOP has not managed to elucidate that, though they claim it over and over again.

It is sensible to extend tax cuts to people who earn little money, since they will spend the cut. It is stupid to give tax cuts to multi-millionaires and billionaires, since they don't have to spend the gift, and probably will not. As someone who spent a number of years in the top 2%, I don't have any objection to rescinding that Bush cut while retaining it for poor and middle-class people. If someone making over $250K/y cannot manage to shelter income and reduce their taxable income legally, they have NO sympathy from me.

If you are a right-winger, and buy the GOP argument on the necessity of extending the Bush cuts, please ask yourself why. Why will such an extension benefit the US? Please be specific. If you think (or hope) that such an extension will benefit you personally, please let us know that, too. I have spent years in that tax category, and I would have to lie (with crocodile tears) if I wanted to claim that I would have been crippled (or my behavior changed) by a a 2-3% increase in the marginal tax rate.

 

[nismaratwork]

How does giving billions of dollars in tax-cuts to the wealthiest 1-2% of the populace help the economy? The GOP has not managed to elucidate that, though they claim it over and over again.

It is sensible to extend tax cuts to people who earn little money, since they will spend the cut. It is stupid to give tax cuts to multi-millionaires and billionaires, since they don't have to spend the gift, and probably will not. As someone who spent a number of years in the top 2%, I don't have any objection to rescinding that Bush cut while retaining it for poor and middle-class people. If someone making over $250K/y cannot manage to shelter income and reduce their taxable income legally, they have NO sympathy from me.

If you are a right-winger, and buy the GOP argument on the necessity of extending the Bush cuts, please ask yourself why. Why will such an extension benefit the US? Please be specific. If you think (or hope) that such an extension will benefit you personally, please let us know that, too. I have spent years in that tax category, and I would have to lie (with crocodile tears) if I wanted to claim that I would have been crippled (or my behavior changed) by a a 2-3% increase in the marginal tax rate.

I'm sure they would, but they're too busy chugging the Kool-Aid.

 

[nismaratwork]

None of this even affects the personal financial well-being of rich people either way. This obsession Democrats have with rich people is just part of their power hungry delusions. What historical power hungry (oppressive) world leader didn't believe, and have followers who believed, that they were fighting against the "rich and powerful" on behalf of "the people"?

And of course Democratic politicians can't really want their stated agenda to succeed, because the societal "ills" they claim to be fighting against are what keeps them in power.

So, because the Democrats are lying sacks, you think that the Republicans aren't also? They're in very similar, and often overlapping, pockets, but I don't think this is an example of obsession with the rich. I believe this is an example of not extending a handout from one group of sociopaths, so that they can use that money as a handout for their own group of sociopaths. Even then, it's not a reason to support these cuts, just a reason to hate both parties.

 

[WhoWee]

How does giving billions of dollars in tax-cuts to the wealthiest 1-2% of the populace help the economy? The GOP has not managed to elucidate that, though they claim it over and over again.

It is sensible to extend tax cuts to people who earn little money, since they will spend the cut. It is stupid to give tax cuts to multi-millionaires and billionaires, since they don't have to spend the gift, and probably will not. As someone who spent a number of years in the top 2%, I don't have any objection to rescinding that Bush cut while retaining it for poor and middle-class people. If someone making over $250K/y cannot manage to shelter income and reduce their taxable income legally, they have NO sympathy from me.

If you are a right-winger, and buy the GOP argument on the necessity of extending the Bush cuts, please ask yourself why. Why will such an extension benefit the US? Please be specific. If you think (or hope) that such an extension will benefit you personally, please let us know that, too. I have spent years in that tax category, and I would have to lie (with crocodile tears) if I wanted to claim that I would have been crippled (or my behavior changed) by a a 2-3% increase in the marginal tax rate.

Don't get caught up in the whole rich versus poor debate.

This debate should be framed around incentives to help small business (and business owners).

Some hard choices need to be made. Reckless spending with no return on investment has to be capped. Additionally, how long can people stay on unemployment (benefit extensions) before they start to lose skills? We need to create jobs and like it or not - small businesses create jobs.