Thread: The Problem with Taxes

Originally Posted by Decker

Here are portions of a letter printed in the Milwaukee Journal/Sentinel concerning tax cuts & hikes:

“Raising taxes is counterproductive. When you take money out of the private sector, less is available for real investments - the ones that create jobs. When there is less money for investment, government revenue actually goes down.”

“…every time taxes are cut, we not only have an economic boom but government revenue increases dramatically. When taxes creep up, the economy slows and the government takes in less money.”
http://www.jsonline.com/story/index.aspx?id=589410

This type of thinking occurs when plutocratic propaganda is one’s main source for knowledge.

Let me paraphrase the two points above:

1. Decreasing tax revenues increases tax revenues
2. Increasing tax revenues decreases tax revenues

This represents a total paralysis of reason and perspective.

Tax cuts may stimulate the economy but they have NEVER even come close to increasing tax revenue to cover the cost of the tax cut itself. There is no free lunch.

Some point to Reagan's tax cuts in the 1980s as a shining example of the miracles of tax cuts.

Reagan slashed income and corporate taxes. However the federal government hemorrhaged revenues.

In all, Reagan raised taxes 7 times in his 8 years including the largest tax increase (as a percentage of GDP) in US history passed in 1982. He raised the FICA tax by about 50%.

So....

is this your prelude to support the Democrat's Budget Resolution ?

BTW... good to see you

Tax cuts would most certainly work if they were in conjunction with an equal reduction in the size/cost of running the government.

Lower tax rates can yield higher revenues.

Period. You can argue all you want. Cut and paste all you want, but higher tax rates strangle businesses.

I would argue more with you, but what would be the point?

Reagan's cuts did increase revenue. It baffles me that you won't admit that.

The deficit swelled b/c of the spending.

Originally Posted by Decker

Reagan slashed income and corporate taxes. However the federal government hemorrhaged revenues.

This statement is probably the most inaccurate statement in IM history. Congrats. Somewhere Formeman is relieved.

Funny thing is Clinton is the only one to ever lower it out of the last 4 presidents. A true Conservative

http://zfacts.com/p/318.html

Originally Posted by Witmaster

So....

is this your prelude to support the Democrat's Budget Resolution ?

BTW... good to see you

Good to see you as well Witmaster. I'll take a look at that budget resolution you posted.

Originally Posted by ALBOB

Tax cuts would most certainly work if they were in conjunction with an equal reduction in the size/cost of running the government.

You are correct sir. Tax cuts without spending cuts is an exercise in futility.

Originally Posted by NordicNacho

Funny thing is Clinton is the only one to ever lower it out of the last 4 presidents. A true Conservative

http://zfacts.com/p/318.html

Um..clinton raised taxes. Remember the 39.6% rates?

Come on guys. I am not doing tax returns 12 hours a day anymore. YOu can't post this tax nonsense anymore.

EDIT: OK, I see. YOu are talking deficits, not taxes. Yes, the deficit went down under Clinton. I don't think you can really credit him for it, but I won't argue with you.

Originally Posted by Pepper

Lower tax rates can yield higher revenues.

Period. You can argue all you want. Cut and paste all you want, but higher tax rates strangle businesses.

I would argue more with you, but what would be the point?

First off, Nice to see you Pepper. Stop being mean.

I wrote most of that first post...except for the quotes. I.e., no cut and paste.

Tax cuts are a type of Keynesian governmental spending but without a goal or object--e.g., The CCC or such.

Tax cuts do stimulate the economy. No one is claiming otherwise. Are there confiscatory rates of taxation? Yes. Is our current tax scheme confiscatory? No.

Originally Posted by Pepper

Reagan's cuts did increase revenue. It baffles me that you won't admit that.

The deficit swelled b/c of the spending.

No doubt Reagan's tax cuts stimulated the economy but the fact of the matter is is that tax revenues went through the floor until Reagan started raising taxes again.

Originally Posted by Decker

Is our current tax scheme confiscatory? No.

Ask the guys in AMT if it is confiscatory!

I had a guy exercise stock options. He did not receive a nickle of cash and he owed $230K in AMT.

Was I being mean?

Originally Posted by Decker

No doubt Reagan's tax cuts stimulated the economy but the fact of the matter is is that tax revenues went through the floor until Reagan started raising taxes again.

Flat out inaccurate statement. I'd say lie but don't want to be mean.

Originally Posted by Pepper

This statement is probably the most inaccurate statement in IM history. Congrats. Somewhere Formeman is relieved.

I disagree. Reagan shifted the tax burden from the rich to the poor and middle class by raising FICA almost 50%--the largest tax increase in the history of the country.

There is no floor on FICA (like w/ income taxes) everyone pays it but it the wealthy aren't hurt as much b/c they make more.

Originally Posted by Pepper

Flat out inaccurate statement. I'd say lie but don't want to be mean.

Tax cuts stimulate economic growth but do not pay for themselves.

My god even Bruce Bartlett admits that.

Never in the history of the US has a federal tax cut financed itself.

Never.

Originally Posted by Decker

I disagree. Reagan shifted the tax burden from the rich to the poor and middle class by raising FICA almost 50%--the largest tax increase in the history of the country.

There is no floor on FICA (like w/ income taxes) everyone pays it but it the wealthy aren't hurt as much b/c they make more.

I am about to assume you are just kidding. Reagan pretty much exempted most of the poor from taxes. Exempted. The Passive Activity rules hammered the wealthy. The marginal rate on the rich went down but very often the tax went up. Millions of working poor were just simply dropped from the tax rolls.

You are correct about the FICA tax, it is a ridiculous, regressive and unfair tax on working people and employers.

"Reagan's cuts never fully took effect. They were scaled back in 1982 by a tax increase that averaged $37.5 billion over its first four years."

FactCheck.org: Bush Ad Claims His Tax Cuts Exceed Reagan's


Reagan's tax cuts were starving the federal government. Just after Reagan's tax cuts were enacted, FICA was jacked up through the roof to make up the difference...along with several other tax hikes.

The end result looks like business as usual re gross tax receipts but the joke is really on the poor and middle class.

I'm done with this. Decker, you've lost it.

This is why I have trouble taking liberals seriously. THey simply will argue ANYTHING.

Originally Posted by Pepper

I am about to assume you are just kidding. Reagan pretty much exempted most of the poor from taxes. Exempted. The Passive Activity rules hammered the wealthy. The marginal rate on the rich went down but very often the tax went up. Millions of working poor were just simply dropped from the tax rolls.

You are correct about the FICA tax, it is a ridiculous, regressive and unfair tax on working people and employers.

The poor are exempted from income taxes. Wonderful. But the poor pay the bulk of their taxes in payroll taxes.

We are in basic agreement. Tax cuts do stimulate the economy.

Where we diverge is the point as to whether the cuts are paid for by the attendant business upsurge. I say, "no" and you say, "yes."

Originally Posted by Decker

The poor are exempted from income taxes. Wonderful. But the poor pay the bulk of their taxes in payroll taxes.

We are in basic agreement. Tax cuts do stimulate the economy.

Where we diverge is the point as to whether the cuts are paid for by the attendant business upsurge. I say, "no" and you say, "yes."

On reason the poor pay most of their tax in the form of FICA is because they pay little or no income tax. The fica tax could be $10 a week and be most if not all of their federal tax burden.

Then they claim the Earned Income Credit and get back twice what they paid in.

Originally Posted by Pepper

I'm done with this. Decker, you've lost it.

This is why I have trouble taking liberals seriously. THey simply will argue ANYTHING.

You're right. I'm delirious and your supply-side nonsense is correct.

BARTLETT (4/6/07): The original supply-siders suggested that some tax cuts, under very special circumstances, might actually raise federal revenues...

But today it is common to hear tax cutters claim, implausibly, that all tax cuts raise revenue. Last year, President Bush said, ''You cut taxes and the tax revenues increase.'' Senator John McCain told National Review magazine last month that ''tax cuts, starting with Kennedy, as we all know, increase revenues.'' Last week, Steve Forbes endorsed Rudolph Giuliani for the White House, saying, ''He's seen the results of supply-side economics firsthand—higher revenues from lower taxes.”

Pepper you are engaging in substituting a reasoned position with propaganda.

Look at Bartlett's quote in a larger excerpt:

Today, supply-side economics has become associated with an obsession for cutting taxes under any and all circumstances. No longer do its advocates in Congress and elsewhere confine themselves to cutting marginal tax rates — the tax on each additional dollar earned — as the original supply-siders did. Rather, they support even the most gimmicky, economically dubious tax cuts with the same intensity.
The original supply-siders suggested that some tax cuts, under very special circumstances, might actually raise federal revenues. For example, cutting the capital gains tax rate might induce an unlocking effect that would cause more gains to be realized, thus causing more taxes to be paid on such gains even at a lower rate. Economist's View: Bruce Bartlett: How Supply-Side Economics Trickled Down

Pepper believes it, so it's true. Where are your guys' sources?

Decker, I love you (no homo) but I can't keep arguing with you.

Let's just agree to disagree.

Originally Posted by MWpro

Pepper believes it, so it's true. Where are your guys' sources?

I have posted so many sources. IRS stats, etc. over and over again.

Not in this thread but in prior threads.

I'd do it again, but he won't accept any stats that don't come from one of his "moveon.org" type sites.

Originally Posted by Pepper

On reason the poor pay most of their tax in the form of FICA is because they pay little or no income tax. The fica tax could be $10 a week and be most if not all of their federal tax burden.

Then they claim the Earned Income Credit and get back twice what they paid in.

That scenario could happen. But I don't see the relevancy. What does that have to do with the topic at hand? I also don't agree that the reason the poor pay most of their taxes in the Form of FICA is b/c they pay little or no income tax. Everybody pays FICA.

The social security/medicare portions of tax revenue have been "borrowed" since the late 1960s from those programs to finance other unrelated governmental spending leaving behind Treasury Notes.

Originally Posted by Pepper

Decker, I love you (no homo) but I can't keep arguing with you.

Let's just agree to disagree.

Ok.

PS I love you too...I'm a married man in love with his wife but our time together is special Pepper.

I...can't...help it. Here's some more Bartlett quotes:

But today it is common to hear tax cutters claim, implausibly, that all tax cuts raise revenue. Last year, President Bush said, “You cut taxes and the tax revenues increase.” Senator John McCain told National Review magazine last month that “tax cuts, starting with Kennedy, as we all know, increase revenues.” Last week, Steve Forbes endorsed Rudolph Giuliani for the White House, saying, “He’s seen the results of supply-side economics firsthand — higher revenues from lower taxes.”
This is a simplification of what supply-side economics was all about, and it threatens to undermine the enormous gains that have been made in economic theory and policy over the last 30 years. Perhaps the best way of preventing that from happening is to kill the phrase “supply-side economics” and give it a decent burial. Economist's View: Bruce Bartlett: How Supply-Side Economics Trickled Down

btw, I wouldn't say "all tax cuts raise revenue"