First there was this report, now this. I wonder what Romney, conservatives, et al will say about this…
According to a new study by the Congressional Research Service (non-partisan), there’s no evidence that tax cuts spur growth. In fact, although correlation is not causation, when you compare economic growth in periods with declining tax rates versus periods with high tax rates, there seems to be evidence that tax cuts might hurt growth. But we’ll leave that possibility for another day.
One thing that tax cuts do unequivocally do–at least tax cuts for the highest earners–is increase economic inequality. Given that economic inequality is one of the biggest problems we face in this country right now, this conclusion is very important.
Give me the same set of statistics and I will reach 3 different conclusions.
The Congressional Research Service is non-partisan? According to themselves?
I have seen many non-partisan studies that are funded by partisans, if I dig deep enough.
Researchers will have a subconscious tendency to be biased towards the people that write their paychecks.
Economic inequality is difficult to paint a face on. The reasons are multifaceted.
Tax cuts for the wealthy generally refer to taxes on income, not taxes on other means of accumulating wealth.
The middle class is less inclined to invest in tax-free municipal bonds, for example.
Since the government does not create, it can only redistribute, taxes should always be raised in times of prosperity, and lowered in times of recession. A nation’s government should be as minimal of a burden on it’s economy as possible.
I cannot seriously believe that any idiot would think that taking money out of the economy during a recession is a good thing.
orchidcup being uncharacteristically rambunctious says:
9/21/2012 at 11:11 am
Give me the same set of statistics and I will reach 3 different conclusions. /// And in most cases, two will easily be shown to be wrong. Depends on the data base and the conclusions though.
The Congressional Research Service is non-partisan? According to themselves? /// No, compared to most other self proclaimed partisan sources.
I have seen many non-partisan studies that are funded by partisans, if I dig deep enough. /// Yep, that why self proclaimed are easier to work with. Just compare opposite partisans for the boundaries of the discussion.
Researchers will have a subconscious tendency to be biased towards the people that write their paychecks. /// Or just the opposite. Bias is like that.
Economic inequality is difficult to paint a face on. /// No–you just define it. Eg==more than 1000 times as much.
The reasons are multifaceted. /// What isn’t unless you are blind?
No meat? I’ll have the fish burger.
Tax cuts for the wealthy generally refer to taxes on income, not taxes on other means of accumulating wealth.
The middle class is less inclined to invest in tax-free municipal bonds, for example.
Unlike bobbo, I must go to work and fulfill my duty as a lazy freeloading taxpayer that depends on the government as Willard Romoney pointed out.
Would you say you are not smart about work?
orchidcup in Part Two continues and says:
9/21/2012 at 11:33 am
True enough.
Economic inequality is not a problem, /// of course it is a problem. Sociologically, when enough people believe it exists, social unrest results.
it is a result of the capitalist system. /// Usually concomitant–not a logically necessary result. Just the Western Experience with it the result of other decisions made. I blame the Calvinists.
Capitalism infers that economic inequality will always exist. // No it doesn’t. Like Jessica Rabbit: “Its just drawn that way.”
No economic system is capable of providing an equal income /// Certainly “capable”–just pass a law.
or equal result for all parties involved. /// Results? Defined as what? How much money is saved after 10 years? While it is a popular straw man of the right, the left rarely argues for equal results. Everyone can see, that negates the value of individual contribution.
People make different investment decisions and possess different skills in the workforce, so no particular outcome can be predicted given the same income. /// Correct—-making a strong argument for providing equal income, or credits, to begin with as in having an level playing field.
Some people are stupid with money, some people are smart with money. End of story. /// Used to have a rich boss who married rich. The joke was Larry made his millions by starting with 10’s of millions. Intelligence regarding money is one facet in what you seen to forget is a multi-faceted conjecture.
May I has some fries with that?
I’d like to see a better chart. First they show charts from 1945-2010, and then they show 5 year averages starting from 1987?
Makes things look very confusing, when the 1986 tax cuts are weighted in with the 1990 tax hike, and the 2nd Bush tax cuts are lumped in with the housing collapse.
One wonders if they tried different windows and time frames to get the results they wanted to show.
As for income inequality, you can’t get to there from just looking at individual years’ tax data. You need to use a larger study that looks at people’s tax returns over multiple years. Some portion of income taxes of the wealthy each year are people who are selling assets such as a family business or farm, and will not be appearing in the top 1% any other years. Also people move from bracket to bracket, so against this messes up the inequality argument. People from the bottom bracket are more likely to move up than stay where they are.
From Wikipedia(DANGER, DANGER!)
Income mobility of individuals was considerable in the U.S. economy during the 1996 through 2005 period with roughly half of taxpayers who began in the bottom quintile moving up to a higher income group within 10 years. In addition, the median incomes of those initially in the lower income groups increased more than the median incomes of those initially in the higher income groups.[14]
Hey morons, we wouldn’t need to raise taxes if we didn’t spend most of it on these phoney baloney drug and terror wars.
Sorry, facts are in a way of your hate: out of 5.6 T$ Obama administration deficit (and consequential borrowing) 565B$ are for wars. 10%. Of remaining 90%, taxing the rich as demanded by Obama would net 70-80B$. Barely 1+% of deficit spending.
The one and only way out is severe, immediate cut in size, scope and spending of the Government. (Even taxing the rich 100% does not raise more than 20% of the gap). Not in 10 years. Not in “slowing the growth” (both are Obama Administration official offers). How to cut Government? – Equally everywhere PLUS elimination of all Departments not specifically authorized by Constitution: largest ones are Education, Agriculture, Energy, EPA,… all STATE responsibilities. Not only are these vampires on taxpayers necks for funding but their policies and regulations make our industry uncompetitive (at least) and in some cases are outright killing segments of it (coal industry? energy industry? education? agriculture?…).
And that is where the (Left driven) article fails. It is NOT only about cutting taxes. That is in a way consequence. You can’t take in account situation where taxes were cut and Government grew( ex. Progressive Right Bush policies). “New” idea is to cut taxes AND Government size and scope. Only those two combined yield certain growth and certain prosperity AND freedom and dying corruption (small, weak, irrelevant Government does not foster corruption, big, powerful one does).
Bullshit, you’ve never heard of the black budget? Oh, but it probably doesn’t exist in your world.
FACTS: Remember Donny Rumsefeld questioning the disappearance of TRILLIONS from the Pentagon the day before 9/11, huh, remember THAT? We’re not even allowed to audit the fed, find out how many trillions went to foreign banks, and you idiots want to raise MY taxes. Tell me where all of the money is going, then we can have this conversation.
9 Trillion missing from Federal Reserve
McCullough don’t waste your time. Dusanmal spent many years eating lead paint chips before the EPA banned lead in paint.
So we unfairly target individuals for no other reason than their financial attributes?
If we MUST have an income tax system, then go with a flat tax system and get rid of ALL deductions / loopholes. Deductions / loopholes are all the same. If you’re rich, we call them loopholes. If you’re not rich, we rename it as a deduction.
But it won’t happen because government has gotten too big and cannot afford to have its existence choked.
And it will crush the poor and middle class. But you can’t understand why.
Actually, you’ll have to explain why you think that. (Just ‘cuz you say so doesn’t make it so.)
When I was working, (before becoming disabled and could still get jobs,) I was paying about 30% income taxes. (Notice its not the 33% bullshit trigger figure. 🙂 )
Why did I pay a tax rate more that twice what Mittenz is paying? (And he’s actually got some money.)
The idea that we can take one fiscal data point in an economy and say that proves the value or worthlessness of a specific policy is idiotic.
But, I could just as easily point to the the Bush I & Clinton presidencies, where government spending was moderating (and actually sometimes being reduced), and show the economic value of reductions in government spending. I could also then show that spending not only increased but greatly accelerated under first GWB & now Obama to prove that government spending is indeed the culprit to worsening economic conditions.
The next thing this dude will be claiming is that tax increases make the economy better like Admin. claims that putting people on food stamps grows the economy.
Doing one year or less tax cuts leaving business people uncertain doesn’t cut it especially when you are writing pickup truck loads of costly regulations and cap it off with a huge cost of doing business increase called Obama care. I can’t even imagine what the costs of doing the book keeping on that is going to cost plus the costs of doing everything the WH’s way.
Nothing said matters. Those in the cult of Obama will merely swear allegiance to their god made flesh and struggle on until the economy does its final melt down.
Missing the point.
A couple of Strage things to note abut taxes..
1. if they remove it from 1 thing, they added it SOME PLACE ELSE..
2. how much are you paying in NON-DIRECT taxes? about 60-80% of you money ends up in tax of one sort or another.
3. THE CORP, sees tax lowering so they KNOW you are getting more money(supposedly) so they ADD to the prices.
http://whatistaxed.com/other_taxes.htm
http://newrochelletalk.com/node/2103
There are so many State and federal taxes, and SOME are hidden by Layers. SHipping tax from State to state are a hidden tax. Taxes you pay for your PHONE are hidden taxes.
Compounding this, you are paying the TAX for a STORE, for all the power, electric, sewer, property tax…. on and on.
Under shipping, Many states can not say they can be Food independent. They cant MAKE food that will feed their own people.(last state to do it was idaho) It may be harvested in 1 area and shipped 3-4 times…YOU PAY for all the shipping taxes.
So, the question comes, WHICH TAX? and where will they ADD that tax..
As far as it goes, sure, times of overall prosperity may well co-inside with times of higher taxes, but that does not mean higher taxes cause prosperity or that tax cuts cause downturns.
More likely, when times are prosperous, and everyone is doing better, they are more inclined to share and put up with higher taxes. While, when times are bad, Uncle Sam tries to boost things by cutting taxes, whether it actually works or not.
And the rich have other ways of avoiding existing taxes. According to Wikipedia, Leona Helmsley: “Following allegations by unpaid contractors that work done on her home had been charged to her company, she was investigated and convicted of federal income tax evasion and other crimes in 1989.” And “Helmsley’s fate was sealed when a former housekeeper testified during the trial that she had heard Helmsley say: “We don’t pay taxes. Only the little people pay taxes…””
You can bet that others rich A-holes don’t buy luxury goods and services retail, if they can help it. But have some “front” company purchase it for them, and get a special low (or no) tax rate. Helmsley was just the only one they singled out, as the Fed’s example to the public that they’re doing their job. But really, they’re letting most of them off the hook.
Just like Martha Stewart was the only one singled out for insider trading. When many more have likely done it. For example, Hillary Clinton. It’s been said she made more money, than anyone trading stock at one time. And likely had insider trading and losses forgiven. But that got covered up, when she became the 1st lady.
Back to Martha Stewart for a moment. It’s said she got away with NOT paying her catering staff overtime, because the house she ran it out of was zoned as farm property. And there’s a special wage clause dealing with farm workers. But people making horderves and Swordfish Skewers, can hardly be lumped in with manure spreaders. So Martha used tricks save paying skilled labor wages. Still adore her?
There’s really two claims about taxes being frequently made these days. Tax cuts increase economic growth is the Republican argument. Tax increases increase government income and reduce the deficit which is championed by the Democrats.
There’s evidence that the government doesn’t bring in more money with higher taxes. In that case, even if taxes don’t increase economic activity why raise taxes? Three cheers for class warfare and punishing success!
Obama said that he wanted to increase tax rates as a matter of fairness, even if it brings in less revenue.
How long have we had tax breaks since George W put them into place? Did not save us from a recession and did not help us after the recession. What helps is more people working and more people getting paychecks. The economy is run by people making and spending money. A few extra dollars in tax savings every month means nothing to a large economy. Same reason 850 billion in stimulus did nothing. America can’t pump enough money into the economy to fix it. Just ask Ben Bernanke.
Economic growth comes after creative people design new things that non-creative people will work harder to buy. The non-creative people build the things that the creative people design.
NOTHING out there is worth me thinking “Oh, I have to work harder to afford to buy ‘X’!”
Some people broke into my house recently, and stole my 40″ TV, Xbox360, and PS3. I have no desire to replace these items; don’t need them.
I am still waiting for someone who claims by cutting taxes you increase revenue (due to increased economic activity) to state what the optimal tax rate is. I.e. the lowest tax rate that produces the maximum revenue. I believe everyone will be for this tax rate if it can only be determined.
But please do not fall into the trap of ever decreasing tax rates will always produce more revenue, it is mathematically impossible.
The Laffer Curve. Total taxes about 70% is thought to be maximally effective for governmental revenue: http://en.wikipedia.org/wiki/Laffer_curve
As in most things in this great big universe, there are singular examples of anything you want to wish was generally true but most things fall on a Laffer type (Bell Shaped) curve.
On this tax issue, most liars and stooges claim we are well past the apex even though historical facts show that we are well before it.
Poor people like McCullough fighting to keep their buck fifty voting for tax provisions that allow Vulture Capitalists to keep Millions. Same personalities: not appreciating what it takes to keep a society healthy.
Speaking of Healthy—seems old white trash is losing life expectancy. The Puke base indeed is dying off from the throat cutting policies they have been voting for:
http://nytimes.com/interactive/2012/09/21/health/a-troubling-trend-in-life-expectancy.html?ref=us
Ain’t it a bitch when your stupidity can be measured?
Why was Obama elected without “carefully examining [his] background, character, career, and plans,” while ignoring the fact that he lacked any record of significant achievements? /// He voted against the War in Iraq. He promised change and we hoped he would.
The Alternatie was the McSame policies that drove us into the ditch >>>>>>>>>>>JUST AS IT IS NOW.
You may want the fire, but I chose the frying pan.
Same as it ever was.
Ok,
and what education is required for president or congress, representatives??
HOW about the 1000’s of idiots that have jobs NOT requiring election?? that surround them..
NONE to very little…
Mitt romney’s campaign is not about the fact checkers.
Where did they get that last chart? It’s not in the paper or the appendix.
Do you want a solution tho…to haveing so many UNEMPLOYED??
Its been done once, and can be done again..
Have the State/fed employ, and then TAX the beans out of the corps to pay for it..
Then put all these low paid employees to work on the infrastructure in this nation.
PUT 50,000,000 people to work. there is TONS of knowledge out there waiting for OUTPUT.
KEEP PEOPLE WORKING.
PEOPLE with JOBS pay taxes.
Well, I think that the statement: “Unlike middle class and upper middle class folks the country’s highest earners don’t spend all the money they earn. So this money doesn’t get circulated back into the economy, where it can become revenue for other companies and salaries for other workers.” pretty much sums up what history has shown to be true. A larger middle class will spend more money and drive the economy to grow. The “trickle-down” theory has been proven over an extended time not to work. When the ultra-rich get more money, they don’t spend it to create jobs.
Interestingly enough, it turns out the guy that produced this report is an Obama supporter. Sure sounds non-partisan to me!!
Yes, and once upon a time doctors applied actual leeches to their patients.
Turned out though, that wasn’t such a good idea.
Maybe in a few hundred years the word will get out that leeches aren’t so good for the economy either.
Of course, you won’t hear that from the leeches.