[Todd D.]

So tax CUTS are gonna DECREASE deficit and debt ?

Do you also believe in Tooth Fairies ?

Tax cuts increased federal revenue in the mid 1980's as well as the early 21st century (after the 2003 recession, of course). If you look at 2004 to 2007, the budget deficit decreased fairly substantially despite no increase in taxes AND pretty significant increases in expenditures. It wasn't until the recession hit that federal receipts tanked so significantly (hard to pay income taxes without an income, right?).

In either example, if the government had kept federal spending in check (particularly military spending), then it's entirely possible that it would have eliminated the deficit entirely. It was well on pace to in the latter part of this decade before the recession hit (I think the projection was a surplus by 2011, but I could be wrong).

[JohnRawls]

Todd don't go Reagan/Tatcher on me all of the sudden . It is fine to use tax cuts to stimulate growth when there is room for more defecit and debt but there is none right now for the Usa .

Just servicing the debt takes around 20% of your budget . ( I don't remember the percentages )

I understand how right wing conservatives and libertarians are for lower taxes but get real please . Lowering taxes ain't gonna do anything with your debt .

[Todd D.]

You're using circular logic here. First you argue that tax cuts can't possibly be used to increase tax receipts (arguing that such a belief is on part with believing in the tooth fairy), but then you claim we can't afford tax cuts because it will increase our deficit and debt.

The point is that if 1) we keep spending within reasonable levels, and 2) we don't have a huge fuck off recession, then tax cuts can, and indeed have, increased tax revenue paid to the state.

[DanDaMan]

Quote:
So tax CUTS are gonna DECREASE deficit and debt ?

Do you also believe in Tooth Fairies ?

It's simple.
The reason Walmart makes so much money is because of it's volume sales.
Lower taxes and government regulation means the entire country goes to work and we have to bus in more workers.
This is why China is beating the world. China supplies Walmart.

Let's face it... the top 10% of Americans pay something like 40% of the taxes.
If you keep raising taxes on them... is that an incentive to stay in the country or go where you're not robbed?

[PBVBROOK]

Let's face it... the top 10% of Americans pay something like 40% of the taxes.

Just read this DDM. Don't talk. Just read it. Don't try to figure out how to be cute about it just read and understand it.

For the first time this year, we are also presenting data on the top 0.1% of tax returns (the top 10 percent of the top 1 percent). This 10 percent of the returns in the top 1 percent amounts to only 141,000 tax returns but accounts for nearly 12 percent of the adjusted gross income earned and approximately 20 percent of the nation's federal individual income taxes. The average income for a tax return in this top 0.1 percent is $7.4 million, while the average amount of income tax paid is $1.6 million, indicating an average effective individual income tax rate of 21.5 percent. This very top income group actually has a lower average effective tax rate than the rest of the top 1 percent of returns because these extremely high-income returns are more likely to have income from capital gains and dividends, which are typically taxed at lower rates.

A single make earning $75,000 per year would pay a higher percentage of his pay than did the average of the top 10% of the top 10%.

Now remember DDM. The top 10% commences at about $100K. Two starting NYC police officers are in the top 10%.

Now remember that the top 20% of the incomes own 91% if the financial wealth of America. Shouldn't they pay 91% of the taxes?

The bottom 99% own 65% of the money in America and the top 1% own about 35% of the income. At an average tax they pay of about 24% they are dramatically under taxed.

DDM take comfort. The country will simply inflate the currency any day now and deal with our deficit. In the meantime the rich in this country get a far better deal than they deserve.

Tell me this DDM. Why in YOUR opinion should capital gains be taxed lower than other income?

[Huntster]

Now remember that the top 20% of the incomes own 91% if the financial wealth of America. Shouldn't they pay 91% of the taxes?

No. Why should they? Where do these taxes go?



Looks to me that most of it is for entitlement benefits, which the rich don't qualify for.

The bottom 99% own 65% of the money in America and the top 1% own about 35% of the income. At an average tax they pay of about 24% they are dramatically under taxed.

I disagree. First of all, if their assets include real estate, they pay those taxes (commensurate with it's value).

Secondly, everybody in the nation benefits from some federal expenditures, whether it's security from military and law enforcement spending, transportation from road building or public transit expenditures, etc. So if anyone is not paying taxes, it is they who are cheating the system, not the wealthy.

A flat tax is "fair", but as I've written elsewhere, "fair" doesn't cut it, and so we'll never have such a tax system. We'll continue to have the Robin Hood system.

DDM take comfort. The country will simply inflate the currency any day now and deal with our deficit. In the meantime the rich in this country get a far better deal than they deserve.

So who takes it in the shorts when that happens? Won't it be the "rich" who foolishly invested in this country's securities?

Think that will happen again anytime soon?

Fuck the goose who lays the golden egg, and you won't be seeing eggs for a while.

And the world turns............................

[DanDaMan]

Now remember that the top 20% of the incomes own 91% if the financial wealth of America. Shouldn't they pay 91% of the taxes?

No.
They do not use 91% of the country's services.
Also, I do not envy them or feel they should cover for me.

I fail to see how tearing them down makes me the bigger man.
I was taught the bigger man never envies.

[Todd D.]

Why in YOUR opinion should capital gains be taxed lower than other income?

There are a few reasons:

• The money used to invest was already taxed, meaning that the capital gains tax actually goes OVER the previous tax rate.
• Investment in companies provides capital to that company, which in turn spurs job creation (theoretically and historically), something that we want to encourage.
• Capital gains taxes only apply to long term investments (securities held for at least a year). Short term investments (aka market speculation) is taxed at the normal income tax rate, so by keeping the capital gains tax low, you are encouraging saving and investing for your own retirement rather than overconsumption. Obviously something we want to encourage as well.

All three seem pretty valid to me.

[JohnRawls]

You're using circular logic here. First you argue that tax cuts can't possibly be used to increase tax receipts (arguing that such a belief is on part with believing in the tooth fairy), but then you claim we can't afford tax cuts because it will increase our deficit and debt.

The point is that if 1) we keep spending within reasonable levels, and 2) we don't have a huge fuck off recession, then tax cuts can, and indeed have, increased tax revenue paid to the state.

If you read my words a bit more attentively . I said that it can encourage growth , note growth , but with reduced taxes it means that growth will only lead to same amount of taxes . Like the reagan theory/tatcher theory .

That taxes will look something like this \/ < - something like this curve in some time .

BUT the service of debt and the additional debt aquired during that time will make the DEBT worse . As i said , the debt will only get worse with tax cuts and you don't have much time to repay it .

Becides even with your current tax rates there is growth and blaming ALL of the growth on your tax cuts is stupid. Again in your situation i think it is better to get rid of the debt first then thinking about tax cuts.

[Todd D.]

If you read my words a bit more attentively . I said that it can encourage growth , note growth , but with reduced taxes it means that growth will only lead to same amount of taxes . Like the reagan theory/tatcher theory

And you're wrong. Tax cuts can (depending on the previous tax level) lead to HIGHER tax revenue, not the same amount. That's what we saw in the 1980's, and it's what we saw with the Bush tax cuts. For example, federal income in 1997 was 1.65 Trillion, and in 2006 it was 2.2 Trillion, AFTER taxes were lowered. The reason you saw higher deficits was described above.

BUT the service of debt and the additional debt aquired during that time will make the DEBT worse . As i said , the debt will only get worse with tax cuts and you don't have much time to repay it .

Again in your situation i think it is better to get rid of the debt first then thinking about tax cuts.

You're again presumig tax cuts lead to a decrease in revenue, which is not at all established.

[JohnRawls]

Todd , i would be happy with your equation if

a) ALL the growth was produced by the tax cuts .

b) Inflation didn't exist .

There are different factors driving tax revenue.

[Todd D.]

a) ALL the growth was produced by the tax cuts .

True. It's impossible to prove that the growth was due to tax cuts, or coversely that the same growth wouldn't have happened if taxes were not lowered.

b) Inflation didn't exist .

Inflation has been fairly benign for the past 2 decades, and growth outpaced inflation during pretty much all the time periods described.

[Kman]

Cutting taxes and reducing government spending makes sure that hard working people gain a bigger benefit from working and because of this they work harder and that work creates more job opportunities for others to get employed and that further reduces government expenditures because it lowers costs for unemployment benefits.

Its simple really, if you want economic prosperity severely slash government spending.

Its also important to note that government keeping a balanced budget is just as important as keeping its expenditures under control since if you deficit spend then that deficit has to be covered by either foreign loans (which has to be paid back with interests) or by printing money and printing money is just like taxing people except it also taxes people that have savings in their banks because it reduces the value of each monetary unit.

[JohnRawls]

Inflation has been fairly benign for the past 2 decades, and growth outpaced inflation during pretty much all the time periods described.

But still it either increases or decreases the revenue from taxes greatly.

To Kman .

It is good you understand that much but tax cuts lead DIRECTLY to budget deficit and loans or printing money. You should only cut taxes when you have budget surplus , like we did in estonia for example , not go into deficit .

But in your case you need a budget surplus to pay the debt so its out of the question in my opinion.

[Kman]

To Kman .

It is good you understand that much but tax cuts lead DIRECTLY to budget deficit and loans or printing money. You should only cut taxes when you have budget surplus , like we did in estonia for example , not go into deficit .

You can cut taxes also if you slash government spending on the military, health care and social services.

[JohnRawls]

Yes you can but that will destroy jobs which you can't do once again with your already high unemployment ?

[Rei Murasame]

Todd don't go Reagan/Tatcher on me all of the sudden . It is fine to use tax cuts to stimulate growth when there is room for more defecit and debt but there is none right now for the Usa .

Just servicing the debt takes around 20% of your budget . ( I don't remember the percentages )

I understand how right wing conservatives and libertarians are for lower taxes but get real please . Lowering taxes ain't gonna do anything with your debt .

I should add as well that Margaret Thatcher would actually re-arrange taxes, but she wouldn't actually cut them in the midst of a recession. The Tory government's 1981 budget actually did raise taxes, there was not a word about tax cuts at that time, since while tax cuts are seen as 'good' by them, they also weren't so dogmatic as to prescribe a tax cut when it wasn't actually needed.

The Libertarians have actually made up their own history on that, about a mythical recession tax-cut that never actually occurred.

[Kman]

Yes you can but that will destroy jobs which you can't do once again with your already high unemployment ?

Government jobs are leeching off tax payer money coming from people working in the private sector, cutting most of them makes it easier for the private sector to recover (you need a small amount of government jobs to run the state and keep law and order, but countries around the world are nowhere near this number).

[JohnRawls]

Government jobs are leeching off tax payer money coming from people working in the private sector, cutting most of them makes it easier for the private sector to recover (you need a small amount of government jobs to run the state and keep law and order, but countries around the world are nowhere near this number).

There are a lot of things that are not profitable but necessary services and things that are provided by the government and are necessary for the business to prosper .

For example Us post. It delivers mail to all people around the usa . But companies will just skip those areas(where it is unprofitable to deliver mail) or charge ridiculousness money for it .

Same goes for most infrastructure construction etc etc etc . Non-profitable companies are sometimes GOOD for the general economy because if it can provide cheap services and private companies , which buy those services , will make more profit .

[DanDaMan]

How about you naming some government services/spending that can be eliminated, John?

How about abolishing the National Endowment for the Arts?