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Forums - General - The big problem with Obama's economic plan.

Heritage is like PNAC or Huffington Post. Useless.

I think you are mixing up cause and effect.



I would cite regulation, but I know you will simply ignore it.

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steven787 said:
Heritage is like PNAC or Huffington Post. Useless.

I think you are mixing up cause and effect.

 

I just did a global search and came up with that site. They had numbers, and a nice quote from Kennedy. 

Care to come up with a site that illustrates where in our history raising taxes generated more revenue for our country?



TheRealMafoo said:
"Tax rates were slashed dramatically during the 1920s, dropping from over 70 percent to less than 25 percent. What happened? Personal income tax revenues increased substantially during the 1920s, despite the reduction in rates. Revenues rose from $719 million in 1921 to $1164 million in 1928, an increase of more than 61 percent."

http://www.heritage.org/research/taxes/wm327.cfm

Your examples are too extreme.  I agreed with you that there is a point of taxation that is too high and is self-defeating.  But you are assuming that lowering our current taxes would increase revenue, which is about as far from the truth as you could get.  Our current tax level for the top 1% of America is around 30%.  If we raised that to say 40% we would gain revenue.  This is illustrated on the Laffer Curve even though it is an oversimplification.

None of your examples contradict that either.  In each example the taxation went from one extreme to another.

You have also overlooked me and steven's arguments about 1) Inflation and 2) Total Gross Revenue of a Country Increasing each year (which can be substantial, even up to a 50% level in a span of a decade).

The rule of 70 tells us that if you divide 70 by the average rate of GDP growth (let's say 3%), then the economy will double in value in that amount of years, so 23 years in the example.  If it is higher rate of growth, it takes even less time. 

Total revenue goes up when an economy grows as years go on, which these analyses are not accounting for.  All things equal, an economy will collect more revenue the next year than the year before because the economy has grown.

You are arguing the minority view here which is not agreed upon by all economists, thus you cannot claim that we need to disprove you.  Just because you pulled it off some website doesn't mean that is what most economists actually believe.  Traditional knowledge tells us that raising taxes will increase revenue of course with the concession that there is a point of diminishing returns if taxes become too high.

If we drop taxes from 30% to 10% we will not gain revenue.  People are not going to work three times as hard because their taxes are that much lower.

 



We had two bags of grass, seventy-five pellets of mescaline, five sheets of high-powered blotter acid, a salt shaker half full of cocaine, a whole galaxy of multi-colored uppers, downers, screamers, laughers…Also a quart of tequila, a quart of rum, a case of beer, a pint of raw ether and two dozen amyls.  The only thing that really worried me was the ether.  There is nothing in the world more helpless and irresponsible and depraved than a man in the depths of an ether binge. –Raoul Duke

It is hard to shed anything but crocodile tears over White House speechwriter Patrick Buchanan's tragic analysis of the Nixon debacle. "It's like Sisyphus," he said. "We rolled the rock all the way up the mountain...and it rolled right back down on us...."  Neither Sisyphus nor the commander of the Light Brigade nor Pat Buchanan had the time or any real inclination to question what they were doing...a martyr, to the bitter end, to a "flawed" cause and a narrow, atavistic concept of conservative politics that has done more damage to itself and the country in less than six years than its liberal enemies could have done in two or three decades. -Hunter S. Thompson

TheRealMafoo said:
steven787 said:
Heritage is like PNAC or Huffington Post. Useless.

I think you are mixing up cause and effect.

 

I just did a global search and came up with that site. They had numbers, and a nice quote from Kennedy. 

Care to come up with a site that illustrates where in our history raising taxes generated more revenue for our country?

Care to come up with a site that illustrates that your viewpoint is what most economists actually believe?



We had two bags of grass, seventy-five pellets of mescaline, five sheets of high-powered blotter acid, a salt shaker half full of cocaine, a whole galaxy of multi-colored uppers, downers, screamers, laughers…Also a quart of tequila, a quart of rum, a case of beer, a pint of raw ether and two dozen amyls.  The only thing that really worried me was the ether.  There is nothing in the world more helpless and irresponsible and depraved than a man in the depths of an ether binge. –Raoul Duke

It is hard to shed anything but crocodile tears over White House speechwriter Patrick Buchanan's tragic analysis of the Nixon debacle. "It's like Sisyphus," he said. "We rolled the rock all the way up the mountain...and it rolled right back down on us...."  Neither Sisyphus nor the commander of the Light Brigade nor Pat Buchanan had the time or any real inclination to question what they were doing...a martyr, to the bitter end, to a "flawed" cause and a narrow, atavistic concept of conservative politics that has done more damage to itself and the country in less than six years than its liberal enemies could have done in two or three decades. -Hunter S. Thompson

akuma587 said:
TheRealMafoo said:
steven787 said:
Heritage is like PNAC or Huffington Post. Useless.

I think you are mixing up cause and effect.

 

I just did a global search and came up with that site. They had numbers, and a nice quote from Kennedy. 

Care to come up with a site that illustrates where in our history raising taxes generated more revenue for our country?

Care to come up with a site that illustrates that your viewpoint is what most economists actually believe?

 

Ahh, so we are back to what analysts "think". I like history better. Show me where we have raised taxes and increased revenue. I have shown you where we have lowered it. Why is the burden on me when you come into my thread and call me wrong?



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Ok, how about this one:

"A defining feature of the 1986 reform was the broadening of the tax base and the lowering of tax rates, and it is widely believed that these changes enhanced economic efficiency. High tax rates (whether the base is income or consumption) exacerbate the distortions that taxes invariably create. Moreover, distortions arise when similar activities are subject to different tax treatments. Such distortions reduce economic efficiency as households and businesses respond to the tax code rather than to underlying economic fundamentals. Lowering tax rates by broadening the tax base generally will reduce the costs of such distortions, which are approximately proportional to the square of the tax rate. Over the years, economists have disagreed about the size of the efficiency gains that might be achieved from a broader base and lower rates, but there can be little doubt regarding their positive effect."

-- Alan Greenspan

http://www.federalreserve.gov/boarddocs/testimony/2005/20050303/

 



 

Edit: That quote is funny.  He is saying what I said.  The positive effects of more revenue and more money in the pockets of the private citizen are positive, but the lasting effects (efficiency gains) can be far different than the short term.

There is another issue, this doesn't address his plan. People are not better off today than they were 8 years ago. Their real income is lower.

Obama's plan is to expand the graduated income tax. Meaning lower taxes for lower and middle income families (Let's say as an example: bottom ~40%), keep them the same for middle to upper income, and raise rates them for the wealthy (mostly through eliminating the caps the rich have on Social Security Taxes).

This can be argued against or for. There are arguments against it, I am a libertarian so I am not to comfortable with it myself. But I look at it from the realist perspective - the elite pay for the services of the masses to keep them from revolting. Sad but that is the way it is.

My ideology isn't very pragmatic, so I vote Democrat.

What would this do for the economy?
The lower and middle class would spend the difference raising consumer spending and production instead of capital investment.



I would cite regulation, but I know you will simply ignore it.

TheRealMafoo said:
akuma587 said:

And people completely ignore that some of the services that the government would provide if people were taxed that much (such as healthcare), people wouldn't have to pay for out of their pocket, so the taxes they pay would be offset in their disposable income.

 

name one service the government provides that's cheaper then the private sector.... one.

Everything the government pays for, you and I pay for. If the people don't pay for it out of there pockets, where is the money coming from? it doesn't come out of thin air.

 

   We pay a boatload for health care and its complete crap.  We pay more then any nation and the care is vastly inferior to anywhere else in the world.  I sprained my ankle badly while on vacation in Britian and I recieved better care free of charge (and I'm a US citizen) then I ever have in the states.  In the states I went to the emergency room with a bad kidney stone and fought the insurance company for months to get ANY coverage. 

 

I got bills and crap from the hospital for service at 3x the rate the insurance was billed for (nearly 10k for a 4 hour visit where 3 of the hours were spent in the waiting room) for over a year after.  If you aren't insured in this country you get billled for 4x the ammount insurance is billed for and its perfectly legal.

 

  The health insurance industry in this nation is a sick joke, and worst of all the joke is on us.

 

   For other things the govt does well/better then the private sector the mail, retirement plans (since social security is guaranteed and company retirement plans are raided over and over by greedy corporations that shortchange their workers while providing excessive CEO pay), infastructure (we have private roads in california, if you want to use them for 10 miles it costs 5 dollars each way, Ill take the public roads thank you very much) college education (most of the top schools in the world are American public universities) and, when Republicans aren't in office, scientific research (since govt funded research can be into things that are not immedietly geared to profit like the human genome project or the large hadron colider which may very well show us how the universe began).  There are a lot of things the government does well and a lot of things private industry does very very badly. 

 

   Talking about taxes, I know 15% is far too low on capital gains tax.  Billionaires who make most of their money on investment income (the vast majority of the super rich pay capital gains not income tax) pay 15% which is less then the tax rate people making under 30k are paying.




 PSN ID: ChosenOne feel free to add me

steven787 said:

 

Edit: That quote is funny.  He is saying what I said.  The positive effects of more revenue and more money in the pockets of the private citizen are positive, but the lasting effects (efficiency gains) can be far different than the short term.

There is another issue, this doesn't address his plan. People are not better off today than they were 8 years ago. Their real income is lower.

Obama's plan is to expand the graduated income tax. Meaning lower taxes for lower and middle income families (Let's say as an example: bottom ~40%), keep them the same for middle to upper income, and raise rates them for the wealthy (mostly through eliminating the caps the rich have on Social Security Taxes).

This can be argued against or for. There are arguments against it, I am a libertarian so I am not to comfortable with it myself. But I look at it from the realist perspective - the elite pay for the services of the masses to keep them from revolting. Sad but that is the way it is.

My ideology isn't very pragmatic, so I vote Democrat.

What would this do for the economy?
The lower and middle class would spend the difference raising consumer spending and production instead of capital investment.

   Steven's last point is the most important one.  Studies have been done showing that everyone is better off under democrats on average over the last century, while only the rich are better off under Republicans (the super rich at that).  The big reason is the consumer spending point Steven makes.  Poor and middle class people have more money so they spend more which gives more money to everyone working in jobs that require consumer spending to function (more or less every non defense job).  Rich people owning these companies benefit as do their workers, win win.  Look at the Clinton years vs the Bush years (either Bush) or the Kenedy/Johnson years vs the Nixon ones.  Democrats nearly always (other then Carter) are better stewards of the economy then Republicans, suply side DOES NOT WORK, rich people don't spend the money domesticly, they spend it internationally and the tax losses become huge debts.

 




 PSN ID: ChosenOne feel free to add me

Last thing that America needs at the moment is a tax increase, it never solves anyrthing only slows economy even more. Taxes on small business would cramp any hope of quick recovery since they are the ones that employ most people and expand quicker.

Supply side, there is no proof that rich people dont invest their money, middle class and those better off do invest domestically, and trough that more people have jobs, and those poorer get richer as well because of the money being pumped into the economy. Demand side does not pump money into system trough consumer spending, because those with money are hurt by taxes, and those that benefit from it do not spend enough money for consumer boom to have effect.

Plus tax cuts does not mean that those that are poor would be hurt (they will pay less taxes as well) it does not mean cessaction any benefits they have now.

And Clinton, well you say he managed economy well, yes because his administration stayed away from it, why because even if they wanted to, Congress blocked anything. Look at Clinton's Health plans (that would cost a lot) they got destroyed in congress by Gingrich and his Republicans.

And saying that democrats can handle economy, well why not mention about Carter and how crap it was under him?, and dont start about Johnson and the spendings on Great Society (which was a failure) and Billions pumped into War. Great Society increased beuracracy in Washington and power of central government, and for billions brought very little, medicare and medicaid and improvment in education., so much more was promised.

edit: Well i never said medicaid and medicare werent big, is just compared to Johnson and his administration promised and tried to tackle with big billions, it was extremely limited success.