Tax Cuts for the Wealthy

[fatsheep]

The Bush tax cuts have often been criticized as being skewed to the wealthy few. Both democratic candidates campaign against tax cuts to the wealthy. On the other hand, John Mccain and other Republicans have sworn to make the Bush tax cuts permanent.

Do you think that cutting taxes for the wealthy is good for stimulating the economy and encouraging investment, or just a good way to run up large deficits?

[Vladimir Lenin]

Tax Cuts are a good policy. Just look at the 1980's under Reagan.

[fatsheep]

Tax Cuts are a good policy. Just look at the 1980's under Reagan.

We're not just talking about tax cuts here. We are talking about tax cuts where the wealthy are the primary beneficiary.

[bushbush]

Tax Cuts are a good policy. Just look at the 1980's under Reagan.

of which led to massive debts, deficits and the recession in early 1990s?

plus, the so-called growth under him was more or less caused by huuge military spending.

real tax cuts should be given to small-middle business, which creates the most jobs in America.

[the_mango55]

Bad idea

[Big War Bird]

The Bush tax cuts have often been criticized as being skewed to the wealthy few. Both democratic candidates campaign against tax cuts to the wealthy. On the other hand, John Mccain and other Republicans have sworn to make the Bush tax cuts permanent.

Do you think that cutting taxes for the wealthy is good for stimulating the economy and encouraging investment, or just a good way to run up large deficits?

Obstensively the purpose of taxation is to raise revenue to fund the operations of government. As such the tax rates should be set to acheive that objective. However it is erroneous to beleive that lowering tax rates would lower revenue. This is called static scoring. Static scoring does not take into account the inpact of tax rate changes to economic behavior. Dynamic scoring as you might guess does. Time and again static scoring of tax cutrs have predicted revenue loss when reality has shown an increase in tax receipts when taxes have been cut. What should be apparent is that there is an optimal tax rate that would maximize revenue. So long as tax cuts continue to produce more revenue, raising taxes would be counterproductive.

[Rush Limbaugh]

of which led to massive debts, deficits and the recession in early 1990s?

What led to that was the deomcratic congress spending like whores. Reagan had to let them pass all their pork to get support for his military projects. The tax cuts doubled federal income. Your spewing crap.

[bushbush]

What led to that was the deomcratic congress spending like whores. Reagan had to let them pass all their pork to get support for his military projects. The tax cuts doubled federal income. Your spewing crap.

LMAO. So what happened to his Star War piece of ? was it worth it for all those money to be spent?

nice work Reagan. Economic growth. Huge debt for America. Recession.

great president my ass.

[Big War Bird]

In this year’s budget, President Bush is requesting an additional $513,000 for the Treasury Department’s Office of Tax Analysis in order to create a new division for dynamic analysis. The idea is to improve estimates of the revenue effects of proposed tax changes so that they are more accurate. But many critics charge that the goal is obfuscation — making the revenue losses from tax cuts appear smaller than they really are.

The debate over dynamic scoring goes back almost thirty years. Historically, estimates of the revenue effect of tax changes were done by accountants, people who simply took the most recent year’s tax data, plugged in the proposed changes, and looked at the revenue effect. They then would try to estimate the impact on future revenues by making some assumptions about growth in the number of taxpayers and the tax base. The estimates were normally done only for a single year.

Eventually, economists replaced accountants, and computers replaced adding machines. More sophisticated methods of estimating inflation, economic growth, and employment were incorporated into the estimates. However, the economists retained one of the accountants’ operating principles: The tax changes were assumed to have no impact on behavior or the economy as a whole. Hence, this method of revenue estimating came to be called “static” analysis.

One reason for this is that prior to the 1970s economists didn’t really have the mathematical tools to make a dynamic analysis that incorporated all the effects of tax changes on things like work, saving, and investment. Furthermore, there was really no demand for dynamic analysis decades ago because the vast bulk of proposed tax changes were too small to have any impact on the economy as a whole.

Another reason is that until the 1970s, most economic thinking was dominated by the theories of John Maynard Keynes, who believed that fiscal policy affected the economy only through its impact on disposable income. Consequently, the incentive effects of taxation interested very few economists.

The great recession of 1973-75 was a severe blow to Keynesian economics because inflation was high while at the same time there was significant unused capacity in the form of unemployment and idle factories. Theoretically, this wasn’t supposed to happen. Also, the failure of traditional Keynesian medicine, especially the tax rebate of 1975, led economists to search for other causes and cures for economic malaise.

One group of economists fingered the capital-gains tax as a key problem area because it had especially pernicious effects on entrepreneurship and risk-taking. Historically, the tax on long-term capital gains had been fixed at 25 percent. But in 1969, congressional liberals raised the rate to 35 percent in order to soak the rich — those who realized the most capital gains. The result was that venture capital virtually dried up while it became much more difficult to finance new business start-ups.

In 1978, a bipartisan effort was made in Congress to cut the capital gains rate back to 25 percent. The problem was that static scoring showed this to be a big revenue loser because it was assumed that the same amount of gains would be realized, only taxed at a lower rate. But one does not need to be a professional economist to see that when you cut the price of something, sales of it will probably rise.

Advocates of cutting the capital gains rate, including Harvard economist Martin Feldstein, argued that it would produce an unlocking effect that would cause many more gains on old investments to be realized. This would both raise federal revenue and create a pool of capital that would be reinvested in new businesses and industries, thus spurring growth.

After Congress cut the capital-gains tax in 1978, the Treasury Department studied the impact and concluded that the tax cut had indeed raised federal revenue. There was also a huge jump in venture-capital financing that many economists credit for starting the high-tech revolution we have witnessed over the last 25 years.

Subsequently, many so-called supply-side economists argued that there were other types of tax cuts that might also pay for themselves, and those that would do so partially, thus reducing the actual revenue loss below official estimates. Few economists today would disagree with the statement that an across-the-board tax-rate reduction would have reflows of about 35 percent. That is, static-revenue-loss estimates would be 35 percent too high. (Similarly, revenue gains from tax-rate increases would tend to be 35 percent too high.)

This is a long way from saying that all tax cuts will pay for themselves, as some overly exuberant conservatives sometimes argue. In any case, if a few extra dollars will improve the Treasury Department’s ability to analyze the effects of taxation, it is all to the good.

http://www.nationalreview.com/nrof_b...0602150837.asp

[Kiljan Arslan]

not get what support? Dude Reagans military spending was largley the cause of the deficits.

I believe Tax cuts are a good Idea if say the rich are being taxed 60% or above during peace time because that certainly would promote progress, however I feel that tax cuts should not be used during times of war, or when increaced spending is needed for that will result in inflation.

BWB the National Review is a magazine with conservative bias, it be like me using the American Prospect.

Also small businesses should get tax cuts.

[Vladimir Lenin]

I believe Tax cuts are a good Idea if say the rich are being taxed 60% or above during peace time because that certainly would promote progress, however I feel that tax cuts should not be used during times of war, or when increaced spending is needed for that will result in inflation.

(Emphasis Mine)
60%!!!!!!!!!! HOLY GOD!

[Kiljan Arslan]

We use to do 80% in England at one point it was as high as 90%.

[Vladimir Lenin]

We use to do 80% in England at one point it was as high as 90%.

I think that's the reason why it's not done much anymore.

[Rush Limbaugh]

Economic growth. Huge debt for America. Recession.

What recession?

It's the Reagan Economy, Stupid

It was Reagan's supply side economic ideas -- the policy of marginal rate tax cuts, a strong dollar, trade globalization (the Gipper started NAFTA with a U.S.-Canadian free trade agreement), deregulation of key industries like energy, financial services and transportation, and a re-armed military -- all of which unleashed a great wave of entrepreneurial-technological innovation that transformed and restructured the economy, resulting in a long boom prosperity that continues to throw off economic benefits to this day.

The trend of the stock market, shown in the accompanying chart, provides compelling evidence that the real turning point of the U.S. economy was the early 1980s, not the early 1990s. From 1967-82, the 15 years before Reaganomics, the Dow-Jones industrial average suffered one of its blackest bear markets in history, falling 23 percent in nominal terms and nearly 70 percent per year in inflation adjusted real terms. Stagflationary anti-market Keynesian fine-tuning policies caused the wealth of American families to vanish right before their very eyes.

In 1982, the Dow Jones Industrial Average swooned to its nadir of 800. Over the rest of the Reagan years the market more than tripled. In the 1990s it would nearly quadruple (to 11,000 today). During the 1982-2000 Reagan bull market stocks soared by 12 percent per year, raising the net worth of U.S. households by some $30 trillion. To match this performance over the next 20 years, the Dow-Jones would have to soar to about 120,000 by 2020. If Washington politicians do no harm, and stay on Reagan's road, even this outsized dream remains possible.

Today, over 80 million Americans own stocks. This new Investor Class, which has become the invisible hand of politics, proves that Karl Marx is both dead and wrong. In present day America it is the workers who own the means of production. And

Did they teach you that crap in school?

And star wars bankrupt the USSR

[bushbush]

Did they teach you that crap in school?

someone called "Rush Limbaugh" talking about education? LMAO.

What recession?

http://www.nber.org/March91.html

that was the result of years of BS reagan economics (Bush Sr. continued it)

not mention the debt (thanks to star war) and the huge unemployment.

It's the Reagan Economy, Stupid

that article's 90% of words were talking about how stock ownership increased.

how's that economic growth?

Reagan economics is essentially huge increase in Governmetn spending to mortgage the future for present growth. The result? debt + eventual recession in the late 80s and early 90s.

remember what happened to the stock market in late 1980s?

http://en.wikipedia.org/wiki/Black_Monday_%281987%29

edit:

not to mention this

http://en.wikipedia.org/wiki/Savings_and_Loan_crisis

thanks a lot, deregulation and President Reagon.

[Rush Limbaugh]

How Reagan's Tax Cuts Saved Clinton and Gore

Clinton also got credit for eliminating the federal deficit, of course. It is no coincidence, however, that the deficit didn't start coming down until the Republicans took control of Congress in 1994. As for the touted "Reagan deficits," the indisputable fact is that revenues grew tremendously during Reagan's two terms -- but spending by the Democratically controlled Congress grew even faster, at an astronomical rate. And contrary to the liberal media spin, the lion's share of the growth of the federal budget under Reagan was not on defense, but rather on social entitlement programs such as social security and Medicare.

Contrary to Democratic demogoguery about "tax cuts for the rich," incidentally, the rich actually paid higher taxes after Reagan's tax cuts. How could that be? Simple. Along with cutting tax rates, Reagan also eliminated many tax shelters and loopholes. Before Reagan, the rich avoided paying taxes by investing in windmills and other boondoggles blessed by the federal government (the "targeted" tax cuts that Al Gore wanted to reinstate). After Reagan, the rich shifted their investments to the free market, greatly stimulating the private economy and causing the information technology boom.

that was the result of years of BS reagan economics (Bush Sr. continued it)

That was a hiccup. 8 months even if you stretch it.


You cant deny cutting taxes brings in more revenue. Its a proven fact. The problem is government over spending.

[Sidmen]

You cant deny cutting taxes brings in more revenue. Its a proven fact.

That is hardly a proven fact. Cutting taxes sometimes improves revenues, it also sometimes reduces them. It depends on the state of the economy that it is being done to. A booming economy requires more taxes, since investment is already high, a floundering economy requires less taxes so there is more investment.

[Rush Limbaugh]

That is hardly a proven fact. Cutting taxes sometimes improves revenues, it also sometimes reduces them. It depends on the state of the economy that it is being done to. A booming economy requires more taxes, since investment is already high, a floundering economy requires less taxes so there is more investment.

It has always worked here since we introduced income tax, Bush is generating more money than Clinton did just as Reagan generated more than Carter. If you tax the rich they dont invest or spend. They sit on their money. Then the rest of us starve. Its like asking the government to take your fathers money and give some to the kids while they keep the rest. Without the rich we have nothing. Its they who pay for all this crap and you guys just you want more of their money. Stop being jealous.

[Vladimir Lenin]

It has always worked here since we introduced income tax, Bush is generating more money than Clinton did just as Reagan generated more than Carter. If you tax the rich they dont invest or spend. They sit on their money. Then the rest of us starve. Its like asking the government to take your fathers money and give some to the kids while they keep the rest. Without the rich we have nothing. Its they who pay for all this crap and you guys just you want more of their money. Stop being jealous.

Rush. That was an amazingly heroic post. +rep

Proof of Reaganomics working:

Economic Growth. The average annual growth rate of real gross domestic product (GDP) from 1981 to 1989 was 3.2 percent per year, compared with 2.8 percent from 1974 to 1981 and 2.1 percent from 1989 to 1995. The 3.2 percent growth rate for the Reagan years includes the recession of the early 1980s, which was a side effect of reversing Carter's high-inflation policies, and the seven expansion years, 1983-89. During the economic expansion alone, the economy grew by a robust annual rate of 3.8 percent. By the end of the Reagan years, the American economy was almost one-third larger than it was when they began. [13] Figure 1 shows the economic growth rate by president since World War II. That rate was higher in the 1980s than in the 1950s and 1970s but was substantially lower than the rapid economic growth rate of more than 4 percent per year in the 1960s. The Kennedy income tax rate cuts of 30 percent that were enacted in 1964 generated several years of 5 percent annual real growth.

Economic Growth per Working-Age Adult. When we adjust the economic growth rates to take account of demographic changes, we find that the expansion in the Reagan years looks even better and that the 1970s' performance looks worse. GDP growth per adult aged 20-64 in the Reagan years grew twice as rapidly, on average, as it did in the pre- and post-Reagan years.

Median Household Incomes. Real median household income rose by $4,000 in the Reagan years--from $37,868 in 1981 to $42,049 in 1989, as shown in Figure 2. This improvement was a stark reversal of the income trends in the late 1970s and the 1990s: median family income was unchanged in the eight pre-Reagan years, and incomes have fallen by $1,438 in the anti-supply-side 1990s, following the 1990 and 1993 tax hikes. [14] Most of the declines in take-home pay occurred on George Bush's watch. Under Bill Clinton's tenure, there has been zero income growth in median household income.

Employment. From 1981 through 1989 the U.S. economy produced 17 million new jobs, or roughly 2 million new jobs each year. Contrary to the Clinton administration's claims of vast job gains in the 1990s, the United States has averaged only 1.3 million new jobs per year in the post-Reagan years. The labor force United States has averaged only 1.3 million new jobs expanded by 1.7 percent per year between 1981 and 1989, but by just 1.2 percent per year between 1990 and 1995. [15]

Hours Worked. Table 1 confirms that hours worked per adult aged 20-64 grew much faster in the 1980s than in the pre -or post-Reagan years.

Unemployment Rate. When Reagan took office in 1981, the unemployment rate was 7.6 percent. In the recession of 1981-82, that rate peaked at 9.7 percent, but it fell continuously for the next seven years. When Reagan left office, the unemployment rate was 5.5 percent. This reduction in joblessness was a clear triumph of the Reagan program. Figure 3 shows that in the pre-Reagan years, the unemployment rate trended upward; in the Reagan years, the unemployment rate trended downward; and in the post-Reagan years, the unemployment rate has fluctuated up and down but today remains virtually unchanged from the 1989 rate.

Productivity. For real wages to rise, productivity must rise. Over the past 30 years there has been a secular downward trend in U.S. productivity growth. Under Reagan, productivity grew at a 1.5 percent annual rate, as shown in Figure 4. This was lower than in the 1950s, 1960s, and 1970s but much higher than in the post-Reagan years. Under Clinton, productivity has increased at an annual rate of just 0.3 percent per year--the worst presidential performance since that of Herbert Hoover.

Inflation. The central economic evil that Ronald Reagan inherited in 1981 from Jimmy Carter was three years of double-digit inflation. In 1980 the consumer price index (CPI) rose to 13.5 percent. By Reagan's second year in office, the inflation rate fell by more than half to 6.2 percent. In 1988, Reagan's last year in office, the CPI had fallen to 4.1 percent. Figure 5 shows the inflation and interest rate trend.

http://www.cato.org/pub_display.php?pub_id=1120&full=1

[bushbush]

Rush. That was an amazingly heroic post. +rep

Proof of Reaganomics working:

http://www.cato.org/pub_display.php?pub_id=1120&full=1

LMAO

good job copying the entire from a well known conservative thinking tank.

the fact is that with 12 years of Reagan economics (bush and reagan), US was in much greater debt, very high unemployment, high inflation, high budget deficit, high military spending, and came to a recession finally in 1991.

those facts don't lie about a policy no matter how you twist it.