Here's an example of just how twisted up the Republicans have become in trying to buy votes and implement failed (long term perspective) policies of the past.
As David Stockman, President Reagan's former budget director, says:
– We need "a higher tax burden on the upper income."
– "After 1985, the Republican Party adopted the idea that tax cuts can solve the whole problem, and that therefore in the future, deficits didn't matter and tax cuts would be the solution of first, second, and third resort."
– The 2001 Bush tax cut "was totally not needed."
– On claims that Reagan proved tax cuts lead to higher government revenues: "Reagan proved nothing of the kind and yet that became the mantra and it just led the Republican Party away from its traditional sound money, fiscal restraint."
– Former Vice President Cheney "should have known better" than claim the Bush tax cuts would pay for themselves.
– "I'll never forgive the Bush administration and Paulson for basically destroying the last vestige of fiscal responsibility that we had in the Republican Party. After that, I don't know how we ever make the tough choices."
http://thinkprogress.org/2010/11/28/stockman-slams-gop-taxes/ (http://thinkprogress.org/2010/11/28/stockman-slams-gop-taxes/)
Indeed. Republicans have adopted the view that tax cuts for the rich are the "savior" of downward spiraling economic times, and see it as an cure all! Nothing could be further from the truth and there are many well educated, respected, and highly credentialed individuals who are experts in economics, who support tax cuts for the lower income individuals and a higher tax burden for the upper 2% of the population.
In 1980, the top income tax rate was 70%.....the richest 1% paid only 19% of all income taxes....when the rate was cut to 35%, they now pay more than double of that share...
86% of all of the federal income is paid by the top 25% of the income earners, that same group only paid 84% of the federal income before 2000.
http://online.wsj.com/article/SB119786208643933077.html (http://online.wsj.com/article/SB119786208643933077.html)
these are facts....
btw...this guy was indicted in a defraud scheme for a Company he was CEO of, this company file chapter 11 AFTER he resigned....he manipulated revenues and earnings...he ended up paying $13 million dollars to keep from going to jail, and he cost as many as 15,000 employee's their jobs around the world
just sayin, this guy is libel to say anything for a buck and sell a book.... :wink:
Quote from: Henry Hawk on November 29, 2010, 01:44:37 PM
. . .
these are facts....
btw...this guy was indicted in a defraud scheme for a Company he was CEO of, this company file chapter 11 AFTER he resigned....he manipulated revenues and earnings...he ended up paying $13 million dollars to keep from going to jail, and he cost as many as 15,000 employee's their jobs around the world
just sayin, this guy is libel to say anything for a buck and sell a book.... :wink:
So you are saying the chief architect of Reagan's fiscal policy, and leader of the Office of Management and Budget during the Reagan administration is a crook? There's a surprise! :rolleyes: Once a crook always a crook no?
He's not selling a book that I am aware of, but he is making those statements on CNN!
Quote from: Henry Hawk on November 29, 2010, 01:44:37 PM
In 1980, the top income tax rate was 70%.....the richest 1% paid only 19% of all income taxes....when the rate was cut to 35%, they now pay more than double of that share...
86% of all of the federal income is paid by the top 25% of the income earners, that same group only paid 84% of the federal income before 2000.
http://online.wsj.com/article/SB119786208643933077.html (http://online.wsj.com/article/SB119786208643933077.html)
. . .
DECEMBER 17, 2007
Quote from: Palehorse on November 29, 2010, 01:55:39 PM
DECEMBER 17, 2007
so?...........the facts does not change......the less percentage of tax posed on the rich, the more they paid, overall. Put them back in that 70% bracket and see if our revenues climb.......I seriously doubt it.
to me this is just commons sense.....
Quote from: Henry Hawk on November 29, 2010, 02:36:20 PM
so?...........the facts does not change......the less percentage of tax posed on the rich, the more they paid, overall. Put them back in that 70% bracket and see if our revenues climb.......I seriously doubt it.
to me this is just commons sense.....
That's not true, but if you want to believe that tripe you go right ahead, Maybe we should all chug on over to mamby pamby land too!
The fact is the revenues are not climbing because the rich are keeping their money just like the rest of us. They aren't spending and they are walking away from million dollar mortgages at a higher percentage than the poor are; with no ramifications what so ever, despite the fact their personal holdings and wealth could pay the mortgage in full many times over.
They aren't creating jobs, they aren't growing our economy, and in fact have barred the doors against the wolves like everyone else.
A friend of mine lives in a rural area of Arizona that contains high end properties and housing. He has watched the lions share of his neighbors walk away from those million dollar homes, seen the property go up for auction, and watched as the same family that lived there bought the house for cash payment at a fraction of what their former mortgage was. Yeah, thats real nice isn't it? They end up living in the very same house they once had a huge mortgage on, and now own it outright!
The fact is the reason this economy is in the shape it is in can be traced back to failed economic policies that encouraged companies to relocate to third world countries because there were no economic penalties in doing so; or at least none that would negatively impact their market share in the United States.
Now third world companies churn out the consumer products this country uses the most, but increasingly the life-blood of this economy, the working class, can no longer afford those things because their jobs used to be making them. Instead, they are slinging hash for minimum wage and facing the prospect of increased healthcare costs, taxation rates, and the implementation of "fees" for services historically covered by property taxes. . . (Double taxation).
. . .Reagan left three major adverse legacies at the end of his second term. First, the privately held federal debt increased from 22.3 percent of GDP to 38.1 percent and, despite the record peacetime expansion, the federal deficit in Reagan's last budget was still 2.9 percent of GDP. Second, the failure to address the savings and loan problem early led to an additional debt of about $125 billion. Third, the administration added more trade barriers than any administration since Hoover. The share of U.S. imports subject to some form of trade restraint increased from 12 percent in 1980 to 23 percent in 1988.
There was more than enough blame to go around for each of these problems. Reagan resisted tax increases, and Congress resisted cuts in domestic spending. The administration was slow to acknowledge the savings and loan problem, and Congress urged forbearance on closing the failing banks. Reagan's rhetoric strongly supported free trade, but pressure from threatened industries and Congress led to a substantial increase in new trade restraints. . .
http://www.econlib.org/library/Enc1/Reaganomics.html (http://www.econlib.org/library/Enc1/Reaganomics.html)
Quote from: Palehorse on November 29, 2010, 02:52:02 PM
That's not true, but if you want to believe that tripe you go right ahead, Maybe we should all chug on over to mamby pamby land too!
The fact is the revenues are not climbing because the rich are keeping their money just like the rest of us. They aren't spending and they are walking away from million dollar mortgages at a higher percentage than the poor are; with no ramifications what so ever, despite the fact their personal holdings and wealth could pay the mortgage in full many times over.
They aren't creating jobs, they aren't growing our economy, and in fact have barred the doors against the wolves like everyone else.
A friend of mine lives in a rural area of Arizona that contains high end properties and housing. He has watched the lions share of his neighbors walk away from those million dollar homes, seen the property go up for auction, and watched as the same family that lived there bought the house for cash payment at a fraction of what their former mortgage was. Yeah, thats real nice isn't it? They end up living in the very same house they once had a huge mortgage on, and now own it outright!
The fact is the reason this economy is in the shape it is in can be traced back to failed economic policies that encouraged companies to relocate to third world countries because there were no economic penalties in doing so; or at least none that would negatively impact their market share in the United States.
Now third world companies churn out the consumer products this country uses the most, but increasingly the life-blood of this economy, the working class, can no longer afford those things because their jobs used to be making them. Instead, they are slinging hash for minimum wage and facing the prospect of increased healthcare costs, taxation rates, and the implementation of "fees" for services historically covered by property taxes. . . (Double taxation).
and do you think raising their taxes WILL create jobs and stimulate our economy? I have that answer and it is an loud NO.
I think it is time to raise tarriffs on China and other major importing countries.......but, we have got to get some consumer confidence going....and get this money we have right here, circulating......extending these tax cuts will have a positive impact on wall street and entreprenuers.....raising taxes will do just the opposite.
call it tripe if you want too, but I may not be the educated, free-spirited thinker that posses this forum...but I have plenty of common sense, and this is clearly an open and shut case...imo
as far as Reagans legacies, I think he had more of a positive effect than the negatives....there was a massive compromise for him to achieve his agenda's....but, you are right, there is plenty of room to place the blame .... but we need to move forward, and make sound moves......
Mises Daily: Wednesday, June 09, 2004 by Murray N. Rothbard. . .Government Spending. How well did Reagan succeed in cutting government spending, surely a critical ingredient in any plan to reduce the role of government in everyone's life? In 1980, the last year of free-spending Jimmy Carter the federal government spent $591 billion. In 1986, the last recorded year of the Reagan administration, the federal government spent $990 billion, an increase of 68%. Whatever this is, it is emphatically not reducing government expenditures.
Sophisticated economists say that these absolute numbers are an unfair comparison, that we should compare federal spending in these two years as percentage of gross national product. But this strikes me as unfair in the opposite direction, because the greater the amount of inflation generated by the federal government, the higher will be the GNP. We might then be complimenting the government on a lower percentage of spending achieved by the government's generating inflation by creating more money. But even taking these percentages of GNP figures, we get federal spending as percent of GNP in 1980 as 21.6%, and after six years of Reagan, 24.3%. A better comparison would be percentage of federal spending to net private product, that is, production of the private sector. That percentage was 31.1% in 1980, and a shocking 34.3% in 1986. So even using percentages, the Reagan administration has brought us a substantial increase in government spending.
Also, the excuse cannot be used that Congress massively increased Reagan's budget proposals. On the contrary, there was never much difference between Reagan's and Congress's budgets, and despite propaganda to the contrary, Reagan never proposed a cut in the total budget.
Deficits. The next, and admittedly the most embarrassing, failure of Reaganomic goals is the deficit. Jimmy Carter habitually ran deficits of $40-50 billion and, by the end, up to $74 billion; but by 1984, when Reagan had promised to achieve a balanced budget, the deficit had settled down comfortably to about $200 billion, a level that seems to be permanent, despite desperate attempts to cook the figures in one-shot reductions.
This is by far the largest budget deficit in American history. It is true that the $50 billion deficits in World War II were a much higher percentage of the GNP; but the point is that that was a temporary, one-shot situation, the product of war finance. But the war was over in a few years; and the current federal deficits now seem to be a recent, but still permanent part of the American heritage.
One of the most curious, and least edifying, sights in the Reagan era was to see the Reaganites completely change their tune of a lifetime. At the very beginning of the Reagan administration, the conservative Republicans in the House of Representatives, convinced that deficits would disappear immediately, received a terrific shock when they were asked by the Reagan administration to vote for the usual annual increase in the statutory debt limit. These Republicans, some literally with tears in their eyes, protested that never in their lives had they voted for an increase in the national debt limit, but they were doing it just this one time because they "trusted Ronald Reagan" to balance the budget from then on. The rest, alas, is history, and the conservative Republicans never saw fit to cry again. Instead, they found themselves adjusting rather easily to the new era of huge permanent deficits. The Gramm-Rudman law, allegedly designed to eradicate deficits in a few years, has now unsurprisingly bogged down in enduring confusion.
Even less edifying is the spectre of Reaganomists who had inveighed against deficits—that legacy of Keynesianism—for decades. Soon Reaganite economists, especially those staffing economic posts in the executive and legislative branches, found that deficits really weren't so bad after all. Ingenious models were devised claiming to prove that there really isn't any deficit. Bill Niskanen, of the Reagan Council of Economic Advisors, came up with perhaps the most ingenious discovery: that there is no reason to worry about government deficits, since they are balanced by the growth in value of government assets. Well, hooray, but it is rather strange to see economists whose alleged goal is a drastic reduction in the role of government cheering for ever greater growth in government assets. Moreover, the size of government assets is really beside the point. It would only be of interest if the federal government were just another private business firm, about to go into liquidation, and whose debtors could then be satisfied by a parceling out of its hefty assets. The federal government is not about to be liquidated; there is no chance, for example, of an institution ever going into bankruptcy or liquidation that has the legal right to print whatever money it needs to get itself—and anyone else it favors—out of any financial hole. . .
. . . One way in which Ronald Reagan has tried to seize the moral high road on the deficit question is to divorce his rhetoric from reality even more sharply than usual. Thus, the proposer of the biggest deficits in American history has been calling vehemently for a Constitutional amendment to require a balanced budget. In that way, Reagan can lead the way toward permanent $200 billion deficits, while basking in the virtue of proposing a balanced budget amendment, and trying to make Congress the fall guy for our deficit economy. . .
Tax Cuts. One of the few areas where Reaganomists claim success without embarrassment is taxation. Didn't the Reagan administration, after all, slash income taxes in 1981, and provide both tax cuts and "fairness" in its highly touted tax reform law of 1986? Hasn't Ronald Reagan, in the teeth of opposition, heroically held the line against all tax increases?
The answer, unfortunately, is no. In the first place, the famous "tax cut" of 1981 did not cut taxes at all. It's true that tax rates for higher-income brackets were cut; but for the average person, taxes rose, rather than declined. The reason is that, on the whole, the cut in income tax rates was more than offset by two forms of tax increase. One was "bracket creep," a term for inflation quietly but effectively raising one into higher tax brackets, so that you pay more and proportionately higher taxes even though the tax rate schedule has officially remained the same. The second source of higher taxes was Social Security taxation, which kept increasing, and which helped taxes go up overall. Not only that, but soon thereafter; when the Social Security System was generally perceived as on the brink of bankruptcy, President Reagan brought in Alan Greenspan, a leading Reaganomist and now Chairman of the Federal Reserve, to save Social Security as head of a bipartisan commission. The "saving," of course, meant still higher Social Security taxes then and forevermore. . .
Since the tax cut of 1981 that was not really a cut, furthermore, taxes have gone up every single year since, with the approval of the Reagan administration. But to save the president's rhetorical sensibilities, they weren't called tax increases. Instead, ingenious labels were attached to them; raising of "fees," "plugging loopholes" (and surely everyone wants loopholes plugged), "tightening IRS enforcement," and even revenue enhancements." I am sure that all good Reaganomists slept soundly at night knowing that even though government revenue was being "enhanced," the president had held the line against tax increases.
"Reagan's foreign economic policy has been the exact opposite of its proclaimed devotion to free trade and free markets."
The highly ballyhooed Tax "Reform" Act of 1986 was supposed to be economically healthy as well as "fair"; supposedly "revenue neutral," it was to bring us (a) simplicity, helping the public while making the lives of tax accountants and lawyers miserable; and (b) income tax cuts, especially in the higher income brackets and in everyone's marginal tax rates (that is, income tax rates on additional money you may earn); and offset only by plugging those infamous loopholes. The reality, of course, was very different, In the first place, the administration has succeeded in making the tax laws so complicated that even the IRS admittedly doesn't understand it, and tax accountants and lawyers will be kept puzzled and happy for years to come.
Secondly, while indeed income tax rates were cut in the higher brackets, many of the loophole plugs meant huge tax increases for people in the upper as well as middle income brackets. The point of the income tax, and particularly the marginal rate cuts, was the supply-sider objective of lowering taxes to stimulate savings and investment. But a National Bureau study by Hausman and Poterba on the Tax Reform Act shows that over 40% of the nation's taxpayers suffered a marginal tax increase (or at best, the same rate as before) and, of the majority that did enjoy marginal tax cuts, only 11% got reductions of 10% or more. In short, most of the tax reductions were negligible. Not only that; the Tax Reform Act, these authors reckoned, would lower savings and investment overall because of the huge increases in taxes on business and on capital gains. Moreover savings were also hurt by the tax law's removal of tax deductibility on contributions to IRAs.
Not only were taxes increased, but business costs were greatly raised by making business expense meals only 80% deductible, which means a great expenditure of business time and energy keeping and shuffling records. And not only were taxes raised by eliminating tax shelters in real estate, but the law's claims to "fairness" were made grotesque by the retroactive nature of many of the tax increases. Thus, the abolition of tax shelter deductibility was made retroactive, imposing huge penalties after the fact. This is ex post facto legislation outlawed by the Constitution, which prohibits making actions retroactively criminal for a time period when they were perfectly legal. A friend of mine, for example, sold his business about eight years ago; to avoid capital gains taxes, he incorporated his business in the American Virgin Islands, which the federal government had made exempt from capital gains taxes in order to stimulate Virgin Islands development. Now, eight years later, this tax exemption for the Virgin Islands has been removed (a "loophole" plugged!) but the IRS now expects my friend to pay full retroactive capital gains taxes plus interest on this eight-year old sale. Let's hear it for the "fairness" of the tax reform law!
But the bottom line on the tax question: is what happened in the Reagan era to government tax revenues overall? Did the amount of taxes extracted from the American people by the federal government go up or down during the Reagan years? The facts are that federal tax receipts were $517 billion in the last Carter year of 1980. In 1986, revenues totaled $769 billion, an increase of 49%. Whatever that is, that doesn't look like a tax cut. But how about taxes as a percentage of the national product? There, we can concede that on a percentage criterion, overall taxes fell very slightly, remaining about even with the last year of Carter. Taxes fell from 18.9% of the GNP to 18.3%, or for a better gauge, taxes as percentage of net private product fell from 27.2% to 26.6%. A large absolute increase in taxes, coupled with keeping taxes as a percentage of national product about even, is scarcely cause for tossing one's hat in the air about a whopping reduction in taxes during the Reagan years.
In recent months, moreover; the Reagan administration has been more receptive to loophole plugging, fees, and revenues than ever before. To quote from the Tax Watch column in the New York Times (October 13, 1987): "President Reagan has repeatedly warned Congress of his opposition to any new taxes, but some White House aides have been trying to figure out a way of endorsing a tax bill that could be called something else.". . .
Deregulation. Another crucial aspect of freeing the market and getting government off our backs is deregulation, and the administration and its Reaganomists have been very proud of its deregulation record. However, a look at the record reveals a very different picture. In the first place, the most conspicuous examples of deregulation; the ending of oil and gasoline price controls and rationing, the deregulation of trucks and airlines, were all launched by the Carter administration, and completed just in time for the Reagan administration to claim the credit. Meanwhile, there were other promised deregulations that never took place; for example, abolition of natural gas controls and of the Department of Energy.
Overall, in fact, there has probably been not deregulation, but an increase in regulation. Thus, Christopher De Muth, head of the American Enterprise Institute and a former top official of Reagan's Office of Management and the Budget, concludes that "the President has not mounted a broad offensive against regulation. There hasn't been much total change since 1981. There has been more balanced administration of regulatory agencies than we had become used to in the 1970s, but many regulatory rules have been strengthened."
In particular, there has been a fervent drive, especially in the past year; to intensify regulation of Wall Street. A savage and almost hysterical attack was launched late last year by the Securities and Exchange Commission and by the Department of Justice on the high crime of "insider trading." Distinguished investment bankers were literally hauled out of their offices in manacles, and the most conspicuous inside trader received as a punishment (1) a fine of $100 million; (2) a lifetime ban on any further security trading, and (3) a jail term of one year, suspended for community service. And this is the light sentence, in return for allowing himself to be wired and turn informer on his insider trading colleagues. [Editor's note: Ivan Boesky was sentenced to three years in prison.]. . .
http://mises.org/daily/1544 (http://mises.org/daily/1544)
Quote from: Henry Hawk on November 29, 2010, 02:36:20 PM
so?...........the facts does not change......
an example of what I am trying to say....
Former President Ronald Reagan used to tell the story of his experiences as an actor in the high tax era of the 1950s. He found that his income from being the lead actor in five feature film productions each year left his family with a comfortable income. However, if he made a sixth movie the additional income earned from that movie would push him into a higher tax bracket (which was in the 90% range in those days) which, after paying the higher tax on that portion of his income, left him and his family with very little additional income for that year. The 90% tax on his income earned by making more than five movies per year was the same as having his pay for additional movies cut by 90%. Faced with the choice of spending time home relaxing with his family or working on location for a few weeks for 10% of his normal pay, he choose to limit himself to five films. This, of course meant that many of the other workers on the set whose jobs and income were tied to Reagan's movies were also limited to five films per year and, since they were in lower tax brackets, they suffered a cut in income due to less work.
There are two reasons for these numbers surrounding Reaganomics: One is they start with a recession, the change in the economy is responsible for most of these changes. The second reason is a short term effect. During 1981 when there was talk of a Capital Gains Tax cut people held off selling their assets until the tax cut. Then people rushed to sell assets before the 1986 tax raise happened.
I submit the very same thing surrounding spending and tax cuts is going on right now. . .In 1993 Clinton raised the taxes on the rich, the opposite of Reaganomics, opponents argued that this would stop the growing economy. That did not happen.
Remember one thing though, the economy in the 90's was riding on a wave from the huge tech boom....most of Clintons administration.....to say that the revenue increase was because of the tax increase is a bit over-simplified......I say, the economy grew was in spite of the tax increase, not because of it....
Quote from: Henry Hawk on November 29, 2010, 04:15:02 PM
an example of what I am trying to say....
Former President Ronald Reagan used to tell the story of his experiences as an actor in the high tax era of the 1950s. He found that his income from being the lead actor in five feature film productions each year left his family with a comfortable income. However, if he made a sixth movie the additional income earned from that movie would push him into a higher tax bracket (which was in the 90% range in those days) which, after paying the higher tax on that portion of his income, left him and his family with very little additional income for that year. The 90% tax on his income earned by making more than five movies per year was the same as having his pay for additional movies cut by 90%. Faced with the choice of spending time home relaxing with his family or working on location for a few weeks for 10% of his normal pay, he choose to limit himself to five films. This, of course meant that many of the other workers on the set whose jobs and income were tied to Reagan's movies were also limited to five films per year and, since they were in lower tax brackets, they suffered a cut in income due to less work.
Ronald Reagan was one of the worst thing that has happened to America. Old Ron with the help of Newt Gingrich with his contract of America started all the the bad things that have happen to American is his time in office.
He with David Stockman created the TRICKLE DOWN SYSTEM. David Stockman has admitted this year the the TRICKLE DOWN didn't work and they knew it wouldn't work when they put it in. The trickle down was put in to pay back the super rich and corporations for getting the Republicans elected. So don't give me that bullshit that Ronald Reagan was a good president, because the wasn't.
Henry you raising tax on Chinese goods is just the same as raising taxes. But it will be a tax on the middle class and the poor. Because the super rich does not buy anything made in China. Why, because they have the money to but better products made some where else. You sure don't know nothing about history and economics.
Quote from: Palehorse on November 29, 2010, 01:17:22 PM
Indeed. Republicans have adopted the view that tax cuts for the rich are the "savior" of downward spiraling economic times, and see it as an cure all! Nothing could be further from the truth and there are many well educated, respected, and highly credentialed individuals who are experts in economics, who support tax cuts for the lower income individuals and a higher tax burden for the upper 2% of the population.
I knew as soon as I read this that Henry would come along beating this drum in complete denial of the facts even while he just watched the economy collapse despite exactly those tax cuts that he constantly claims are the panacea for the economy.
I've said it before and I'll say it again...it is really diabolically clever how these folks have managed to fool people who don't know any better into consistently supporting politicians and policies that are directly contrary to their own best interests.
Quote from: Exterminator on November 30, 2010, 11:31:52 AM
I knew as soon as I read this that Henry would come along beating this drum in complete denial of the facts even while he just watched the economy collapse despite exactly those tax cuts that he constantly claims are the panacea for the economy.
I've said it before and I'll say it again...it is really diabolically clever how these folks have managed to fool people who don't know any better into consistently supporting politicians and policies that are directly contrary to their own best interests.
Indeed. I do not understand how so many can be so easily misled into going along with those lies. . . Especially when they have been proven to be lies in the first place!
What I find amazing is exactly what you guys are amazed about, but for the opposite reasons.
I have provided information that 100% supports tax cuts, with facts and numbers to support it. More importantly, we all have lived throught these times and saw first hand exactly how tax cuts HELPED this nation. There was no LIE involved with the economic recoveries of the Kennedy era, the Reagan era and the George W era........Tax cuts was put into place and we had a recovery...............it was/is that simple.
Now, other political moves such as oversight on Fannie Mae was mishandled, NAFTA was mishandled and other issues come into play that ended economic growth....but this crap that raising taxes is going to help an economy of a Country that is CLEARLY over spending is, INDEED, diabolically unclever.
You are delusional...enjoy your little make-believe world. :rolleyes:
This is not my writing, but it is an excellent explanation of how tax cuts work:
According to October 11, 2006 news reports, the Federal deficit (the amount by which government spending exceeds tax and other government revenues) has shrunk to its lowest amount in four years. In addition to being good news, it also showed that the tax cuts implemented by the Bush administration are working.
The tax cuts are working in that they are generating more revenue than before they were cut. Why does cutting taxes result in MORE tax money being collected? The short answer is that by reducing tax rates (the percent of tax collected on each dollar of income) the government encourages people to work and earn more. Just as a business will often opt to reduce the price of its goods in order to increase the amount sold, the government is basically reducing the cost of working and thereby encouraging people to work and earn more. While it takes less in taxes on each dollar taxpayers earn, it collects the smaller amount from a much larger base of income thereby raking in a larger amount of tax dollars from a larger volume of taxable income.
The longer explanation has to do with the progressive nature of our tax system. Our Federal income tax has a series of rates rather than one rate. Basically, what the government does is set a schedule of tax brackets, say $1 -$20,000 worth of income is taxed at 10%; 20,001 - $30,000 at 20%; and $30,001 and above at 50%. In this scenario , everyone, from the poorest to the richest taxpayer pays 10% of the first $20,000 worth of income. A wealthy person earning $100,000 per year pays 10% of the first $20,000 she earns while the high school student with a part-time job earning $10,000 pays 10% of his income. While the high school student just pays his $1,000 in taxes (10% of $10,000); the wealthy person also has to pay 20% or $2,000 on the income earned between $20,001 and $30,000 and another $35,000 in taxes on the income between $30,001 and $100,000 (50% of the remaining $70,000 of income).
By reducing the top bracket rates, the government provides more incentive to work (prior to Ronald Regan, the top rate in the U.S. was about 90%, while in England the top rate at that time was something like 101% which resulted in the taxes on the income in the last bracket being more than the amount earned). Once a person earns enough to pay their basic living expenses (food, clothing and shelter) they can afford to choose between work and leisure. The higher the marginal tax rates (the taxes on the marginal or last amount of income earned) the less incentive one has to work. The idea behind the high rates is that the high marginal rates apply only to rich people who can afford the taxes because it does not deprive them of the money needed for life's basic needs. This is true, However, since they have already earned enough in the lower brackets to pay for their basic needs, they now have a choice between working all day and having the government tax most of the recent income away or quit work for the rest of the year and play golf. When people stop working, they stop stop producing (meaning there are fewer goods being produced for the rest of us to buy) but they are also not making any money that the government can tax. If the tax on income in excess of, say $30,000 is 90% and people stop working as soon as their income for the year reaches $29,999 then the government gets to collect taxes at the rate of 90% of nothing.
Most of us can't stop working when our income reaches a certain figure. However, higher income people are often professionals who have some control over the hours they work. Thus, people like doctors, lawyers, stockbrokers, etc. can usually control their hours and cut back as their income rises. Former President Regan himself experienced this while he was an actor. As a star actor he was in a position to accept or reject a script. He calculated that making five pictures per year put his income just below the highest bracket. So, if he did a sixth picture, most of the income would go to Uncle Sam. As a result he limited himself to 5 pictures per year and spent more time with his family. With other actors doing the same, the public had fewer shows to watch. However, this did not stop with star actors working less and the public making do with fewer new movies. With fewer shows being made, there was less work for lower paid actors who were below the star level as well as all the other behind the scenes people who help to make a movie. Not only did the government lose taxes on the extra money that the star actors would have made if they had not voluntarily left the workforce but it also lost the taxes the larger group of lower paid actors and other workers would have made if they had not been laid off involuntarily due to lack of work.
While people making lower incomes usually cannot temporarily stop working on their regular job in order to avoid being pushed into a high rate tax bracket, they can keep their income down by turning down extra work. The factory worker who accepts less overtime because additional overtime will throw him into a higher tax bracket. The person working a part-time job in addition to their full time job who quits the part-time job because most of it goes to taxes. Finally, the working spouse. In many cases one spouse, due to education and experience, will have a considerably higher income than the other spouse. With high marginal taxes, couples in this situation will find that the income from the lower income spouse is not worth the effort because most of it goes to taxes. How is this so? Well, for most households income taxes are calculated on the combined incomes of the husband and wife. Let's assume a 90% tax on incomes in excess of $40,000 and assume that the husband earns $39,999 and the wife earns $20,000. With a 90% tax the $20,000 being brought in by the wife works out to an additional income for the household of $2,000 because $18,000 of her income is taxed away. Unless the husband is able to cut his hours and reduce his income by $20,000 to keep the household income at $39,999 it does not make sense for the wife to continue working.
By reducing high marginal tax rates more people have the incentive or opportunity to work and more people have the incentive to work longer hours and this not only generates more goods and services but a much larger income base on which to levy taxes.
So, why do deficits increase every time the government cuts taxes? While reductions in tax rates begin immediately, which causes a temporary drop in government revenues, the adjustment process takes a while as people slowly realize that their paychecks are suddenly larger and could be even larger if they worked more. Along with this realization process, there is also a lag between people deciding to work more and actually finding that work. The other, more important, reason why deficits initially balloon when taxes are cut is that Congress not only refuses to cut spending but continues increasing spending.
This is nothing more than tripe from someone as misinformed as you are. There is zero factual basis for this article which is precisely why the (unknown) author doesn't cite any sources. The problem with people like you is that you lack critical thinking and analytical skills. Your goal is never to actually learn anything but to reinforce what you already believe. It's like a big mental-midget circle jerk.
The numbers do not support any of your assertions, period.
(http://zfacts.com/metaPage/lib/US-National-Debt-GDP.gif)
Quote from: Exterminator on December 01, 2010, 10:32:23 AM
This is nothing more than tripe from someone as misinformed as you are. There is zero factual basis for this article which is precisely why the (unknown) author doesn't cite any sources. The problem with people like you is that you lack critical thinking and analytical skills. Your goal is never to actually learn anything but to reinforce what you already believe. It's like a big mental-midget circle jerk.
The numbers do not support any of your assertions, period.
:pray: Amen Brother Exterminator, you sure hit the nut on the head. :thumbsup:
I'm sure that Henry won't read it but here is a report prepared by the CBO in 2003 under the direction of a supply-side economist hand picked by the White House. It concludes that in no way would Bush's tax cuts come close to paying for themselves over their 10 year life-span:
http://www.dlc.org/documents/03-25-AnalysisPresidentBudget-Final.pdf (http://www.dlc.org/documents/03-25-AnalysisPresidentBudget-Final.pdf)
Tax cuts can not and do not pay for themselves; in fact, they have, in every case in the past 30 years, resulted in increased deficits.
Ex, there is a big difference between Tax Cuts and spending....THAT is what happened under Reagan to produce those charts you got from a Berkley Professor, who has his own z-facts, liberal web-site. THAT does not sound like critical thinking or using your analytical skills, but rather parroting MORE liberal trash............imo.
Why is it then when the top 1 percent of the tax payers saw their share of the income tax bill climb even more dramatically, from 17.6 percent in 1981 to 27.5 percent in 1988, during that time frame you are talking about.....
the RICH paid MORE taxes by cutting them....and the federal revenue GREW.....we screwed up by allowing congress to spend, spend, spend....Reagan let the dem controlled house do it, to accomplish his goals of stomping out the cold war....
facts are, unemployment grows when we do NOT raise taxes.....fact is NOW is not a good time to increase ANY taxes, while we have nearly 10% unemployed.....
the numbers actually DO support all of my assertions.....PERIOD!
Quote from: Exterminator on December 01, 2010, 11:56:12 AM
Tax cuts can not and do not pay for themselves; in fact, they have, in every case in the past 30 years, resulted in increased deficits.
THAT IS BECAUSE OF THE OUT OF CONTROL SPENDING ... NOT BECAUSE OF TAX CUTS.
We have got to couple Tax Cuts along with Spending Cuts.........THEN, and only then will we restore our economy to where it should be.
"Greg Mankiw, chairman of the Council of Economic Advisers under George W. Bush, has responded to the view that broad-based tax cuts would pay for themselves, as follows: 'I did not find such a claim credible, based on the available evidence. I never have, and I still don't.' Indeed, he has referred to those who believe this as 'charlatans and cranks'."
Google "Dynamic Scoring Finally Ends Debate On Taxes, Revenue" and learn something. You've been sold a bill of goods, to wit, that you can have your cake and eat it too. It is a lie and a sham to garner votes from gullible people looking for a free lunch.
One of the gravest dangers to the survival of our republic is an ignorant electorate routinely feeding at the trough of propaganda. -- Locutus
Indeed. And their addiction to it is ponderous!
Quote from: Exterminator on December 01, 2010, 12:08:40 PM
Google "Dynamic Scoring Finally Ends Debate On Taxes, Revenue" and learn something. You've been sold a bill of goods, to wit, that you can have your cake and eat it too. It is a lie and a sham to garner votes from gullible people looking for a free lunch.
Ex, the bottom line to ALL of this is...........we spend too much money. Raising Taxes to pay for way too many things that is NOT the governments responsiblity in the first place. Where exactly do you think our taxes should be? How much should the tax payers be paying?
Ex, I am asking YOU this question, what role is it of our government to decide how much money they get to take away from hard working people and "give" it away to others? Is that in our constitution?
Palehorse, everything that I have discussed regarding tax cuts, is not a propaganda bill of goods. It is simple math and common sense. What IS propaganda, is OUR Government spending nearly a $trillion$ in one year, and telling the people it is going to stimulate this economy! That speaks volume of the ignorant electorant. Those who believe that our government is here to fix our problems. They want MORE revenue, to pass out MORE entitlement programs, and pad their own personal beings so they can live a luxorous lifestyle. You bitch at Coporate America, and yet think that those in Washington know better on how we should invest our money, and live our lives.
I have accepted being referred to as ignorant on here by you guys for years now. Only because I really do know better. I find it bothersome how arrogant those on the left are, with their pompous beliefs, and are the first to criticize those that does not match up with theirs.
Guys, I have done a remarkable amount of research and reading regarding this economy. Despite what some say, that I am delusional, that I lack critical thinking and analytical skills because I don't buy into the information THEY think is the Gospel.
I can confidently stand on my principals.....principals that are supported by millions of others who ARE proven analytical and critical thinkers. I could walk away from here, and nothing will be lost or missed by any member. You guys have challanged me beyond my beliefs, but yet, I still have only managed to grow on what I knew was correct in the first place. There are some on here who have no desire to even try to learn, and are first to start with childish name-calling. I fell into that once, and will not return to that.
Done rambling, but will confidently not back down from this stance. Raising taxes will only HARM this economy.
Quote from: Henry Hawk on December 01, 2010, 02:21:58 PM
Done rambling, but will confidently not back down from this stance.
I can only lead a horse to water...people like you are the only ones who still believe in supply-side (voodoo) economics. The rest of the world knows it was nothing more than a (very effective) political ploy that has become a joke, much like those who still cling to it despite overwhelming empirical evidence to the contrary.
Quote from: Exterminator on December 01, 2010, 02:35:23 PM
I can only lead a horse to water...people like you are the only ones who still believe in supply-side (voodoo) economics. The rest of the world knows it was nothing more than a (very effective) political ploy that has become a joke, much like those who still cling to it despite overwhelming empirical evidence to the contrary.
Let me break this down:
Lower Taxes = more Jobs
Higher Taxes = more Government
nuff said!
Let me break this down...where are the 'more jobs' produced by the tax cuts made 10 years ago.
I know you think you're wise but you aren't.
This is exactly why I rarely post here any more...what is the point of even trying?
Quote from: Henry Hawk on December 01, 2010, 02:21:58 PM
Ex, I am asking YOU this question, what role is it of our government to decide how much money they get to take away from hard working people and "give" it away to others? Is that in our constitution?
How about you ask yourself that question because the reality is that what you're preaching has served only to allow the accumulation of wealth by a certain group at the expense of the country's infrastructure, education, and social safety net.
Quote from: Exterminator on December 01, 2010, 03:17:25 PM
Let me break this down...where are the 'more jobs' produced by the tax cuts made 10 years ago.
I know you think you're wise but you aren't.
This is exactly why I rarely post here any more...what is the point of even trying?
First of all, you never TRIED to do anything but chastise and name call....but that is not what we are talking about.
I'm not trying to be a wise ass, but, logic tells anyone,
raising taxes, means giving MORE money for Politicians to spend.
lowering taxes, means more money for the private sector to spend.
Is this not plain and simple Ex?
Quote from: Exterminator on December 01, 2010, 03:30:04 PM
How about you ask yourself that question because the reality is that what you're preaching has served only to allow the accumulation of wealth by a certain group at the expense of the country’s infrastructure, education, and social safety net.
Okay, I'm not following this?
Quote from: Exterminator on December 01, 2010, 03:30:04 PM
How about you ask yourself that question because the reality is that what you're preaching has served only to allow the accumulation of wealth by a certain group at the expense of the country's infrastructure, education, and social safety net.
Exactly Ex, but for whatever reason there are some who refuse to see the reality of the nation today. Antiquated methodology is now insufficient to address the needs of this country moving forward in each of the sectors you highlighted above, and failure to address it does nothing but exacerbate the problem and extend its negative impact.
The saddest part is that those wailing the loudest will soon be the ones needing the benefits, and if they get their way they will get NOTHING but thrown out onto the streets to starve and freeze.
Quote from: Exterminator on December 01, 2010, 03:17:25 PM
Let me break this down...where are the 'more jobs' produced by the tax cuts made 10 years ago.
The last 10-years has been a turbulent decade....to say tax cuts was not effective is based on no real logic.
we DID have job growth, and we DID have increase in Federal Revenue....had we not been losing jobs to Mexico and two wars, it may have been much better.
but that is speculation of course....
Quote from: Henry Hawk on December 01, 2010, 04:08:26 PM
The last 10-years has been a turbulent decade....to say tax cuts was not effective is based on no real logic.
we DID have job growth, and we DID have increase in Federal Revenue....had we not been losing jobs to Mexico and two wars, it may have been much better.
but that is speculation of course....
Seriously? :spooked:
http://mises.org/daily/1544 (http://mises.org/daily/1544)
Quote from: Palehorse on December 01, 2010, 09:41:44 PM
Seriously? :spooked:
http://mises.org/daily/1544 (http://mises.org/daily/1544)
Well if Murray N. Rothbard of the Ludwig Von Mises Institutes in Australia says it MUST be so!!... :eek: :biggrin:
Hank,
Your responses in this thread are a prime example of what I pointed out about how you emotionally latch on to a proposition (pre-bias), look for other nitwits that support that position and consider that proof of the truth of the proposition (the logical fallacy Appeal to Popularity), and defend it emotionally by ignoring the evidence that proves the proposition to be false (faith).
It bears no resemblance to the process of critical thinking and analysis.
Quote from: Palehorse on December 01, 2010, 09:41:44 PM
http://mises.org/daily/1544 (http://mises.org/daily/1544)
Excellent article, PH, but you really didn't expect that Henry would actually read it; did you?
Just this year David Stockman, who with Reagan dreamed up the Trickle Down Theory. Said, that they knew it wouldn't work then they put it to us.
Just this week David Stockman said we need to raise taxes to help put a stop to the raising deficits.
Just think, David Stockman thinks we need to raise taxes and Henry thinks we need to cut taxes. WOW! Who would you believe? Henry Hawk or David Stockman.
Quote from: The Troll on December 02, 2010, 03:22:33 PM
...then they put it to us.
LOL! Very appropriate choice of words.
Quote from: Exterminator on December 02, 2010, 01:34:27 PM
Excellent article, PH, but you really didn't expect that Henry would actually read it; did you?
Nah. . . but you cannot win if you do not play! :smile:
QuoteWhen asked about the role of the Bush tax cuts in terms of job creation Obama said, "It doesn't, which is why I was opposed to it — and I'm still opposed to it. The issue here is not whether I think that the tax cuts for the wealthy are a good or smart thing to do. I've said repeatedly that I think they're not a smart thing to do, particularly because we've got to borrow money, essentially, to pay for them."
Obama framed the tax cuts as the first shot in a battle over the tax code, "The problem is, is that this is the single issue that the Republicans are willing to scotch the entire deal for. And in that circumstances — in that circumstance, we've got, basically, a very simple choice: Either I allow 2 million people who are currently getting unemployment insurance not to get it, either I allow the recovery that we're on to be endangered or we make a compromise now, understanding that for the next two years this is going to be a central battle as part of a larger discussion about how do we reform our tax code so that it's fair and how do we make sure that we actually are dealing with the deficit and debt in an intelligent way?"
http://www.politicususa.com/en/obama-tax-npr
I believe that Obami thinks that this move will help him with the conservatives in 2012 but we see the wolf tail sticking out of his antichrist sheep costume.
Quote from: Doc on December 12, 2010, 09:11:29 AM
I believe that Obami thinks that this move will help him with the conservatives in 2012 but we see the wolf tail sticking out of his antichrist sheep costume.
Let me tell you something, other that the worst of worst 33% of wingnut Christians here in American. The other Americans would not live under a religious government you want. No way. Every day, every year you Christians loose more and more people. One day the people will look back at you people and think is was the same as worshiping the sun and Thor and the other gods.
I for one would fight you to the death. You people are really the Antichirst. Evil to the bone. :devil29: