Re: Pointed Question December 6, 2010 Author: Anthony Dent Category: CRDaily Because money, unlike carbon-based energy resources, is infinite, duh! We can just print more, silly! Share this:TweetEmailLike this:Like Loading...
21 thoughts on “Re: Pointed Question”
I doubt you realize it, but your answer is correct. Money is not a finite natural resource.
Can anyone explain why rich people need more tax cuts?
Can anyone explain why we approach this question assuming this money by default belongs to the federal government? I would love to see everyone get an additional tax cut, but that's not what is happening. Rather we're keeping rates where they are. They deserve these tax extensions because it is their money, and because they can put it to better use than Washington D.C. If you don't believe me, think back to the stimulus bill…I'm sure glad we passed it, else unemployment would've skyrocketed to near 10%. Oh wait, that's where it's at now.
Your stance is not a serious one. If it's "their money" then why should they pay any taxes at all?
The problem is approaching the issue believing the government is entitled to the money.
The government is legally entitled to collect taxes, so what's your point?
The question is, should the wealthy get an enormous tax cut and thus an even larger share of the national wealth at a time when all of us not-rich people are dealing with a particularly shitty economy? There's no evidence that such a tax cut will benefit anyone except those who need it the least. At least it makes it obvious that conservatives don't have any real interest in the deficit except as a bludgeon to use against a Democratic administration.
Your class warfare politics aside, you are assuming that we are talking about is in fact a tax cut. Of course, it's not a tax cut, but rather a continuation of existing tax rates. Failure to extend these rates amounts to raising taxes. So, a better question to consider is why anyone would consider raising taxes in our current economic situation.
I am not assuming anything, I'm aware that it's a continuation of current rates, but of course you omit the fact that those rates were set as a temporary "tax holiday" which is now set to expire. I suppose the lesson here is that the GOP never negotiates in good faith, not that I expect any Dems to ever figure that out.
Cutting off unemployment benefits and failing to prosecute any bankers for tanking the economy is class warfare, so let's not talk about my class warfare politics, let's talk about yours. Governments frequently raise taxes in order to raise revenue, and at a time when income inequality is near an all-time high and corporate America just had its most profitable quarter in recorded history, it makes sense to look at raising revenue from places where there is revenue to be raised. There are always federal programs that can be cut, but is this really the right time to lay off, say, hundreds of thousands of federal employees and contractors? I find it odd that the conservative approach is always that instead of attempting to address the problem of a failing system of one sort or another (in this case, banking) there should be great suffering inflicted on the poor and middle class, while the rich and powerful should be protected from any consequences of their actions.
We're an angry little Marxist aren't we? If I remember correctly, I believe that it was the Democrats who insisted that the sunset provision be included in the tax cuts and have resisted any attempts to extend the cuts or make them permanent for the last 10 years.
Governments can also cut taxes and raise revenue (as happened in 1981 with the Reagan tax cuts) if those governments are effectively over-taxing their citizens (via the Laffer Curve). Of course, government revenue doesn't appear to be your main concern. You appear to view taxes as primarily useful for re-distributing income. Regardless, given the unprecedented pace of government spending over just the last two years, it would seem that the majority of the federal government's cash flow issues reside in the spending side of the equation, rather than the revenue side. You can raise marginal income taxes to 100%, but if your man Barack keeps spending like he has, it won't make a shred of difference. Also consider that if the rich are truly rich, than that means they have money. And with that money they can consume, invest, and save it. That in turn creates economic growth. While I'm sure it makes you feel all warm inside to give people at the poverty level tax breaks, poor people don't hire people and start businesses, rich people do. If you want to create economic growth, you have to encourage people with money to spend it.
I'm not a Marxist, and Obama is not my man, but nor do I have much sympathy for the plutocrats and their enablers. Do you have any other examples of tax cuts increasing revenue? There's hardly any consensus that the 1981 cuts had that effect, and why would you want to increase revenue anyway? I thought the conservative goal was to starve the federal government of revenue and force across the board cuts to everything except the military and prisons.
"Also consider that if the rich are truly rich, than that means they have money. And with that money they can consume, invest, and save it. That in turn creates economic growth."
This sounds great, but it has no basis in reality. "Trickle down" economics was always a fraud. Taxes are already at historic lows now, so why isn't there any job growth? Rich people have apparently figured out how to create "economic growth" for themselves without having to create jobs for everyone else.
In theory, this current economic situation is where the federal government can step in with things like unemployment benefits and food stamps to ameliorate the effects of an ongoing recession, but even those are under attack, and now with this new tax deal it looks like Obama is going to go down in history as the President who allowed the GOP to wreck Social Security.
We're already taking 50% + of their income, total, implementing dozens of new taxes, restricting innovation across industries by replacing spontaneous growth with federal fiat, hiking cap gains rates and dividend rates, taking huge amounts of money out of future production via borrowing, and worst of all, we're replacing private direction of the economy with a federally-imposed direction.
It's a testament to capitalism that private employment has gone up at all.
50% + of whose income? The top marginal rate is 35%, down from a historic high of around 90% in conservatives' favorite decade, the 1950s.
+ state and local!
I'd just like to point out that my favorite decade is the 1980's. Now, of course, that's just my opinion. But as someone who finds himself around conservatives a lot, I have the feeling the 1980's will win out over the 1950's nine times out of ten. Maybe even ten times out of ten.
Per your first question, the White House Office of Management and Budget confirms that after the Reagan tax cuts, federal revenues did indeed increase. The same story holds true for the Bush tax cuts. Heritage has a nice little graph: http://www.heritage.org/budgetchartbook/federal-g…. You'll notice the approximately 45 degree angle the chart takes after the Reagan tax cuts begin to take effect. Per your second question, you're more or less right, but you forgot highways. I'm a big fan of highways. So the military, prisons, and highways.
Trickle down economics does actually work. You'll also notice that in addition to increasing federal revenues, the Reagan tax cuts also increased GDP by about 4-8% every year until about 1991. That definitely beats the rather meager 1-2% growth we're currently getting with our "stimulative" subsidization of unemployment. Here's a chart: http://www.google.com/publicdata?ds=wb-wdi&ct…
Also, Social Security is doing a pretty good job of wrecking itself. Ignoring the fact that if any private individual offered a plan comparable to Social Security, they end up sharing a cell with Bernie Madoff, Social Security has already started paying out more in benefits than it takes in in taxes. Absent any changes, either the government will go broke trying to pay for this thing, or (more likely) you will not receive any Social Security benefits upon your retirement. President Bush had a plan for reforming Social Security that was both fair and equitable, but the lunatic Left successfully killed that. As far as Social Security reform goes, the Democrat Party is the party of no.
In the best of times you have to make a lot of assumptions to claim that tax cuts cause an increase in revenue. In the current situation it's transparently nonsensical — tax revenue is already falling, long-term unemployment is rising, and the states especially need money now, not in a few years or whenever any economic growth resulting from rich people buying more yachts will occur. Tax cuts for the people who need them the least is a terrible substitute for actual stimulus spending on things like infrastructure.
And, you're kidding about trickle down economics, right? I know it's part of conservative orthodoxy but it so obviously hasn't worked out as advertised. After 3 decades of this conservative economic fantasy, the US poverty rate now is higher than it was in 1980. Productivity has risen while real wages have fallen, with family income lagging far behind productivity growth. "Trickle down" has been great for rich people, as intended, but not so good for everyone else.
You'll have to forgive me, but I'm having a hard time finding any facts in your statement amongst all of your unsubstantiated postulations. In 1981, there was double digit unemployment, interest rates, and inflation. The economic situation was significantly more bleak then than it is now. Yet, the 1981 tax cuts managed to correct all three problems and set off a 25-year (largely uninterrupted) economic boom. It is historical fact that tax cuts have increased revenue and generated economic growth.
My quick glance at Wikipedia shows that you are wrong on poverty (http://en.wikipedia.org/wiki/File:US_poverty_rate_timeline.gif) and wrong on wages (http://en.wikipedia.org/wiki/File:US_Real_Wages_1964-2004.gif). Both indicators show improvements from 1981 on. My brief perusal of the internet also shows increases in income in every income group. (http://en.wikipedia.org/wiki/File:United_States_Income_Distribution_1967-2003.svg). Kind of looks like trickle down works.
It's pathetic, but not surprising, that you're so lazy. I don't think you even looked at those charts, because they don't show what you say they do.
Real wages for nonfarm workers
1980: $281.27 per week.
2004: $277.57 per week
(Bureau of Labor)
The "25-year economic boom" was great for the wealthy but pretty much bypassed everyone else. Workers' productivity rose significantly during those years, but the benefits of that increase accrued almost entirely to the upper classes. That's class war, not an anonymous commenter on the internet saying things that might hurt rich people's feelings.
I used 1981 (i.e. the year the tax cut was passed) as my base year. I'll also note that that data is taken from BLS and Census data. If you look closely, you'll notice that both wages and poverty have improved since 1981. While I don't have the time to plow through government websites to confirm the data (I'll note that you didn't either), as both pages provide links to their sources, I have no reason to believe the charts were manipulated. Also, where is it written that productivity is perfectly correlated with wages, such that an increase in productivity leads to equal increases in wages? As your so-called upper class presumably made capital investments that resulted in that productivity (i.e. the workers didn't just magically become more productive on their own), it would make sense that the owners of capital would realize profits from productivity increases. The fact of the matter is that the 25-year economic boom created tens of millions of jobs (see http://research.stlouisfed.org/fred2/series/USPRI… that benefited everyone, which is a lot more than Mr. Obama can claim. Also, I suggest that you look up the definition of class warfare, as your perception of history is unabashedly Marxist.
I'm not saying the charts were manipulated, but maybe you just can't read them correctly?
For a more recent view, consider the effect of the Bush tax cuts for millionaires: total nonfarm employment increased from 132.5 million in January of 2001 to 133.5 million in January 2009, just over one million jobs created in 8 years, or 11,250 per month. That's a pretty terrible record, and only one of the reasons Bush remains so unpopular.
Prior to the onset of the recession, total nonfarm employment was approx. 138 million.
So, unless you want to argue that the tax cuts caused the recession, the tax cuts created something in the neighborhood of 6 million jobs. Of course if you take your starting point as 2003 (when schedule implementing the tax cuts was shortened), jobs created climbs to approx. 8 million. Of course a lot of those gains were wiped out by the recession, but that didn't have anything to do with the tax cuts.
If you don't take Anthony's word for it, just ask Big Fed Ben.