It's perhaps the biggest, longest standing lie in the Republican arsenal, that tax cuts for the wealthy stimulate the economy. Common sense tells us otherwise. Give the money to people who actually need it and spend it on goods that make up the bulk of the economy. And the more money you give rich people via cap gains cuts and income tax cuts, not to mention estate tax cuts, the less incentive they have to produce income and create wealth. Makes it so easy, all that low-taxed passive income. Why work hard or create anything?

Besides, every study ever done says the motivating factor behind new business has a whole lot more to do with the passion for the idea than it does with getting rich.

I'm surprised the report did not come out on a Friday. What they should have is another graph showing the total debt as a percentage of GDP over time with and without the tax cuts.

O.K. Kevin! Lets watch the idiots defend tax cuts. Calling all idiots!

Options to fix the deficit:

1) http://www.fairtax.org/

^

You want everybody paying their fair share? There you go.

2) A flat tax. Everybody pays the same rate.

3) Every resident pays the same amount; divvy up the tab 300 million or so ways.

The absolutely last option should be to punish the most productive by taking most of their money. We want to encourage people to become computer programmers and lawyers, not janitors. Our tax system ought to be structured accordingly.

Long term financial models are works of art. One can get any output one wants. I disagree with Kevin that the Tresury guys were trying to make their boss's tax cuts look good. If they had wanted to make Bush's tax cut look good, they could have done so, given

1. the uncertainly of future economies

2. the uncertainty of cause-and-effect.

2. the ability to put whatever assumptions they wanted to into the model.

Note the Treasury comment, "the study casts doubt on claims that the tax cuts are responsible for much of the recent growth in investment and jobs." casts doubt on?? They can't even be sure of the cause of the current recovery. Imagine how much less certain they must be of similar conclusions in the far out hypothetical future.

Thanks Kevin, another republican talking point given what it deserves -- a swift kick to the curb.

I count 2 idiots so far and it's early!

Hawk is right, I was shooting to become a super-rich lawyer, but the taxes were too high so I became a janitor.

RL: I count 2 idiots so far and it's early!

Kevin and who else???

What's more, they even admit that this is an absolutely best case scenario that assumes massive spending cuts starting in a few years, something that's plainly not going to happen. Under more reasonable assumptions, the tax cuts would almost certainly have either no effect or a negative effect, so the report doesn't bother with those.

Apparently, they did put whatever assumptions they wanted in the model and it still came up with negligible results. What is more, the model's (assumptions) massive spending cuts are not going to happen because we are spending billions a month in Iraq -- and since our Fearless (AWOL) Leader is leaving the resolution of that little spending spree to future presidents, I guess the tax cuts having a net positive growth effect on the economy is just another Tall Tale from our own little pathological mental case in the White House.

When are the craven ones going to finally realize that the emperor has no clothes?

It would be interesting to poll college students planning on careers in computer programming or law and see how many seriously considered becoming janitors---except anyone except American Hawk already knows what the result would be.

Or for that matter, poll janitors and see how many decided against becoming computer programmers and lawyers....

"We want to encourage people to become computer programmers and lawyers, not janitors. Our tax system ought to be structured accordingly."

You're absolutely right, Hawk. As it happens, I'm starting law school this Fall. But my continued enrollment is contigent upon renewing the Bush tax cuts. After all, I'm planning on becoming a big shot attorney with a post tax income of $350,000. But why bother if my post tax income will only be $325,000? I might as well become a janitor.

American Hawk--wingnut logic in full bloom.

The Republican fetish with cutting taxes is centered on the fatuous assumption that all human behavior is predicated on it's tax consequences. As if Bill Gates wouldn't have invented DOS if he hadn't considered the tax consequences first. How foolish.

Just goes to show how the power of propaganda can make absolutely stupid ideas seem plausible. Idiotic ideas like this explain how this country can go from a $300 billion surplus to a multi-trillion deficit that my children and grandchildren are going to have to pay off. If these people had a decent bone in their body, they would hang their heads in shame.

Even this best case scenario, gain is dependent on large unspecified cuts later...

The featured results in the Treasury study are based on the assumption that government programs are cut sharply starting in 2017 in order to pay for the tax cuts. In total, government spending would have to be reduced by the equivalent of about 1.3 percent of GDP after 2017.[5] That would be equivalent to cutting domestic discretionary spending in half. This is substantially larger than the budget cuts the President has proposed. Thus, the featured Treasury estimates are estimates of the long-term economic effects not of the tax cuts per se, but of the combination of the tax cuts that the President has proposed and unspecified, deep program cuts that he has not proposed.

In this scenario — the more optimistic dynamic-scoring scenario presented by the administration — the cost of the tax cuts would equal about 1.27 percent of GDP annually, after their dynamic effects on the economy are taken into account — which is more than 90 percent of the conventional cost estimate of the tax cuts (see Figure 2).

Finding #4: The Treasury study confirms that it is more prudent to raise taxes by a small amount today than to raise them by a larger amount in the future.

Actually, the real prize comes when those super-rich people give the Republican Party their kickbacks in the form of campaign contributions, funding the Swift Boat Veterans, etc.

Hawk is right, I was shooting to become a super-rich lawyer, but the taxes were too high so I became a janitor. - nutty little nut nut

Tell it brother! I used to be a CEO in the Pharmaceutical field and made MILLIONS gouging grandma for her cancer meds, but the fucking government took too much in taxes so I quit to sell roses by the freeway off ramp. Now I spend my days fighting stray dogs for edible garbage but every dime I make is mine! Screw you Uncle Sam, I beat your 'punish the rich' system!

The effect of tax cuts can be estimated by using the Laffer Curve. No one knows what the curve is in terms of its shape and the number of its extrema, but the curve shows convincingly that tax cuts lead to a better economy for all, especially the low income folks. I suppose that in their greedy quest for power, the libs are willing to abandon the poor people, just as they have abandoned the Jews. :)

Hawk and his cohorts have never evolved beyond the 'survival of the fittest, (read meanest and most selfish)' still thinking of life as a zero sum endeavor. As more dangerous and sophisticated weapons spread around the world all those zero sum people will eventually take the rest of us, who know that we are all in this together, down with them. Then in their righteous victory all will become zero, them included.

To clarify the above:

Yes, I do consider people like Hawk no better than fundmentalist terrorists, in their lack of ability to introspect and begin to understand the idiocy of their positions.

They just 'run on automatic' their whole lives, elbowing others aside, caring naught for the damage they may cause.

Hey Kevin,

Your comment clock is six minutes fast.

I spend too much time talking to myself, don't I.

Yes, I do.

yup...

The trolls try desperate lame spam to clog.

Won't work, fascist asshole.

"No one knows what the curve is in terms of its shape and the number of its extrema, but the curve shows convincingly that tax cuts lead to a better economy for all..."

There's dogma for you.

We want to encourage people to become computer programmers and lawyers, not janitors. Our tax system ought to be structured accordingly.

Does anybody here know anyone who turned down a promotion or a higher-paying job opportunity because it would have put them in a higher tax bracket?

"Does anybody here know anyone who turned down a promotion or a higher-paying job opportunity because it would have put them in a higher tax bracket?"

Know anybody who wouldn't complain bitterly if their boss suddenly cut their salary by that same percentage?

gcc, you're an idiot. Here's how the tax system works - say you make $99.99 and that qualifies you for the 15% bracket and the 25% bracket doesn't start until $100.00. If you get a $0.02 raise, you don't start paying taxes on your whole $100.01 income at the 25% level - you just pay 25% on your income above the $100.00.

Since you're probably some dumb 15 year old who might not understand arithmetic you should start by digesting the above scenario and then realise how big a moron you are.

Does anybody here know anyone who turned down a promotion or a higher-paying job opportunity because it would have put them in a higher tax bracket?

I once offered to promote an employee from a branch in Florida to the Home Office near San Francisco. He quickly turned the job down. He explained that the raise I offered him was less than difference in income tax, so his take home pay would be reduced.

And the fact that the two locations had different tax structures relates to the question how?

Apparently you are also an ex-thinker

Stephen Kriz:

This is a minor point (and please, any geeks wishing to correct this memory from the ancient mists, please feel free), but ...

Bill Gates didn't invent DOS. He ported it from IBM-DOS (itself a ported version of the 8-bit CP/M OS) and signed a licensing agreement with IBM for the specific aspects of IBM-DOS copied by MS-DOS, so Gates could sell MS-DOS for clone PCs, since IBM's architecture was an open book to hardware manufacturers. Gates' genius was to anticipate the non-IBM PC market.

This happened aboard a famous airplane ride with IBM execs. The legend goes that Bill Gates was just another Southern California computer hobbyist, one who leveraged his modest coding knowledge into a small company -- like many others in what was to become Silicon Valley.

He hopped on that plane with exactly the right vision at exactly the right moment.

Because it surely wasn't his software writing acumen that made Microsoft what it is today, unfortunately ...

Bob

Tom Burka's got the real scoop:

Happy Days, indeed.

No one knows what the curve is in terms of its shape and the number of its extrema, but the curve shows convincingly that tax cuts lead to a better economy for all, especially the low income folks.

Yep. Laffer's curve tells us that if you drop taxes to zero, revenue becomes infinite.

Ponnies for everyone!

i know! let's create the american hawk tax!!! we'll just raise taxes so hi on the poor that they'll just have to become rich fat cat lawyers!!!!

Bob,

I thought MS met IBM in Seattle, and they basically said they could do anything Big Blue wanted. IBM asked for an operating system, and MS went out and bought QDOS (quick and dirty operating system) for $100K paid over several months/years.

Enough off topic.
Hawk is an idiot.

Scott

Kevin wrote:

"at the level of taxation we have in America today, tax cuts have virtually no effect on economic growth. They do allow the super-rich to keep more of their money, though."

You omitted the part about federal income tax revenues plunging to 1959 levels, thereby causing the largest massive federal deficits and debt in American history.
.

And the fact that the two locations had different tax structures relates to the question how?

This anecdote illustrates that low tax rate jurisdictions are more successful places to run businesses. People want to work there because they have more take home pay. Investors want to start businesses there, because their after-tax return is higher. Lower tax rates is one reason why the US economy has been booming while the European economy is in the doldrums. Hamilton, Bermuda has become one of the largest financial centers in the world, despite its lack of trained employees and high cost of living, because there's no income tax.

This anecdote casts doubt the Treasury claim that income tax rates have infinitesimal impact on economic growth.

'Hawk' posted:

"A flat tax. Everybody pays the same rate."

And you bankrupt the Middle-class.

The originators of the misleadingly termed "Flat Tax", Professors Robert Hall and Alvin Rabushka, freely admitted in the 1983 edition of their book, that the "Flat Tax" will be "a tremendous boon to the economic elite from the start." In an appendix to the book, Hall and Rabushka estimated that their flat tax proposal would increase the tax bill for the lowest income families by 78 percent, and decrease it for the very richest families by 41 percent.

UTTER LUNACY.
.

"This anecdote illustrates that low tax rate jurisdictions are more successful places to run businesses."

For example, Montgomery, Alabama, which enjoys relatively low tax rates and a per-capita income nearly five times that of high-tax areas such as New York City and San Diego.

'ex-liberal' posted:

"Lower tax rates is one reason why the US economy has been booming while the European economy is in the doldrums."

Gibberish.

Explain why the two periods of greatest prosperity in the 20th Century, the early 1960s and the late 1990s, had the highest income tax rates on the Rich & Corporate.
.

Scott:

I don't think Bill Gates was responsible for IBM-DOS, which was based on other 8-bit operating systems (CP/M in particular) floating around at the time. Tandys, Commodores, Ataris, Sinclairs and other pre-IBM PCs were entirely 8-bit; the Intel 808x architecture had a 16-bit bus and an 8-bit internal word.

IBM-DOS and MS-DOS are two different things, though they share many functions. E.g. early IBM PCs had BASIC in ROM; MS-DOS had BASIC as a software program.

Posting off-topic is fun :)

Bob

VJ asks: Explain why the two periods of greatest prosperity in the 20th Century, the early 1960s and the late 1990s, had the highest income tax rates on the Rich & Corporate.

The boom in the 1960's followed JFK's huge cut in tax rates, particularly as affected the rich.

The Clinton boom came about even though Clinton didn't cut taxes. Here are three theories of the cause.

I have seen it argued that the Clinton boom was a continuation of the boom caused by the Reagan tax cuts.

Another reason for the Clinton boom may have been that Clinton's presidency was blessed by an absence of major wars. The Cold War was over. The world hadn't yet begun to deal with the growing danger of Islamic extremism.

A third possible reason for the Clinton boom may have been wise decisions by Clinton's financial appointees.

once offered to promote an employee from a branch in Florida to the Home Office near San Francisco. He quickly turned the job down. He explained that the raise I offered him was less than difference in income tax, so his take home pay would be reduced.
Posted by: ex-liberal on July 29, 2006 at 11:36 PM | PERMALINK

Not to mention that the cost of living in SF is like, waaayyyy more than Florida. What were you offering? Where would he be able to live in SF for that???? Tax brackets are almost beside the point when you are talking about relocating to one of the most expensive cities in the US.

A third possible reason for the Clinton boom may have been wise decisions by Clinton's financial appointees.
Posted by: ex-liberal on July 30, 2006 at 12:40 AM | PERMALINK

No shit Sherlock.

I have seen it argued that the Clinton boom was a continuation of the boom caused by the Reagan tax cuts.

Question for ex-liberal, and no cheating. Who was the president of the United States between 1989 (the end of Ronald Reagan's term) and 1993 (the beginning of Bill Clinton's term)? Bonus question: How was the economy doing in those same years?

drjimcooper ~ it will do you no good to ask a troll to "think". They are all copying and pasting their marching orders. It might be a question of documenting posts for later payment. I'm not sure, but it seems logical given the activity and the quality of the activity.
For sure, however, they are bound and determined not to give any credit to BigDog for his political and economic acumen. Geez, they might be asked to give some $$ back for posting something like that!!

drjimcooper - I guess you're implicitly asserting that Reagan's tax cuts, which produced rapid growth, couldn't have had enough oomph left to produce even more economic growth after a mild recesssion. You may be right, but you haven't proved it.

Note that even after Bush 41's and Clinton's tax increases, the US still had considerably lower tax rates than Europe, which gave us an econmic advantage. So, IMHO it's conceivable that the Reagan tax cuts continued to help the economy in the 1990's and beyond.

American Hawk wrote "The absolutely last option should be to punish the most productive by taking most of their money." Sure, but nobody is talking about taking "most" of anybody's money. "Most of someone's money" definitely means more than half, and no major political party is calling for tax rates exceeding 50%.

During parts of the Eisenhower administration, the top income tax rate was 90%. During this time, America experienced strong economic growth. We can continue to achieve strong economic growth with top tax rates below 50% but high enough to balance the budget — something Republicans used to believe in.

This anecdote illustrates that low tax rate jurisdictions are more successful places to run businesses

Once again ex-thinker demonstrates his moniker. No, what your anecdote illustrates is your inability to answer the question with a relevant example. It illustrates nothing about where successful places to run businesses are located.

All you've shown is that you asked an employee to take a pay cut by moving to a city with higher taxes and a higher cost of living, that he was smart enough to refuse, and your contempt for said employee by asking him to take this pay cut.

Since most people are ashamed to call themselves republicans now, why do the last four or five Kool-Aid drinkers have to snort about here? Here is a case where no amount of shilling will ever suffice. Whatever "properity" America has left now comes from the ground in the disintegrating Middle East and from an IOU to China. It is a weird world. Minimum-wage shills for the GOP advocating increased wealth for the rich while demanding higher taxes and less benfits for themselves. Wow. It is almost like Saudi Arabia is indirectly supporting Israel by allowing the U.S. to funnel weapons and AVGAS to their war efforts in Lebanon.
Welcome to Bizarro World, 2006.

wonk:

The tax cuts were across the board. You get rid of them, they go up across the board. If you're talking about somehow increasing taxes on the rich only in the brackets above their income level, say so.

How many people do you think cross tax brackets by a nickel?

ex-lib or currrent-idiot:
See http://swz.salary.com/CostOfLivingWizard/layoutscripts/coll_start.asp

For someone currently making $50,000 in Orlando, FL:
"The cost of living in San Francisco, CA is 74.4% higher than in Orlando, FL. Therefore, you would have to earn a salary of $87,220 to maintain your current standard of living."

So ex-lib, did you offer a 74% raise? And why do people live in SF given this? Why are there jobs in SF? It must be all the janitors beating the tax system!

gcc, wonk ~

look ....if you are a working grunt and are lucky enough to have some kind of company medical or 401(k) benefits and you are within one nickel of a different tax bracket, what you do is sign up for a pre-tax benefit that changes where you fall relative to the tax brackets. Simple.

If you are not lucky enough, then you are shit out of luck and have to rely on knowing what the hell you have avaialble on the 1040 return. At any rate, being on the cusp of a tax bracket affects far fewer people than being saddled with generations of debt thanks to the current occupants of The White House. Which is what is happening with the current (in)famous Bush tax cut.

'ex-liberal' posted:

"The boom in the 1960's followed JFK's huge cut in tax rates"

Nope.

There were no JFK tax cuts. The referenced tax legislation wasn't enacted by the Kennedy administration. The tax bill was passed by Congress and sent to the president to sign into law in 1964. JFK was shot dead in 1963.

Additionally, there was no subsequent "boom". The national economy actually experienced a slow-down in 1966, less than 18 months after the tax reduction took effect.

The national American economy ALWAYS slows dramatically or enters recession following tax rate cuts for the wealthy.

.

"I have seen it argued that the Clinton boom was a continuation of the boom caused by the Reagan tax cuts"

Only a fool would make that argument. There was no "boom" during either of Bonzo Ronnie's terms. The only BOOM was between the ears of the RightWingers. Everything was going the WRONG WAY economically at the end of his eight years. You can't get there from there.

.

"Another reason for the Clinton boom may have been that Clinton's presidency was blessed by an absence of major wars. The Cold War was over. The world hadn't yet begun to deal with the growing danger of Islamic extremism."

Now that's REALLY lame.

.

"A third possible reason for the Clinton boom may have been wise decisions by Clinton's financial appointees."

And who appointed them and who's policies were they implementing ?

.

"Note that even after Bush 41's and Clinton's tax increases, the US still had considerably lower tax rates than Europe, which gave us an econmic advantage. So, IMHO it's conceivable that the Reagan tax cuts continued to help the economy in the 1990's and beyond."

You're delusional.
.

OT But US Central Command - which is responsible for troops in Iraq and Afghanistan - does have a team reading blogs and responding to what they consider inaccuracies about the so-called war on terror.

via BBC: http://news.bbc.co.uk/2/hi/technology/5226254.stm

Merkel proposed a flat tax during the election but abandoned the proposal during the campaign because of opposition to it. The opposition arose because, as even Merkel's economic adviser admitted, instituting a flat tax would lead to drops in revenue. To make up for the lost revenue, the plan called for the value-added tax to be raised, which would tax consumption. However, it is the middle and lower classes who consume a greater percentage of their income because they cannot afford to save as much as the rich. For instance, a working-class family that saves up to replace their broken fridge is going to use any money they receive in a tax cut to buy a new fridge. The rich have less an incentive to consume new basic consumer goods, so the money is more likely to just collect interest in the bank instead of being spent to raise aggregate demand and boost the economy. If you want tax cuts to help out the economy, you have to target those who are more likely to consume and less likely to save. If you want to cut taxes on the rich, just be up front that you are doing that for ideological reasons. You have to be dropping taxes on the rich from around 90% to under 50% to really see any results; otherwise, you just get marginal returns that do not necessarily help out the economy enough to counteract the negative effects of the tax cut. Also, as a CATO study by one of Reagan's old econ guys that Sebastian Mallaby mentioned showed, since the rise of supply-side economic policies, cutting taxes has led to an increase in government spending. This happens in part because it seems like we are getting the same government services while paying less, ignoring that our deficit is financed by the likes of China who are more worried about the Yuan than responding to economic incentives to lend us money (which are comparatively poor when compared to other ways China could use its money).

"But US Central Command - which is responsible for troops in Iraq and Afghanistan - does have a team reading blogs and responding to what they consider inaccuracies about the so-called war on terror."
--toast

Your tax dollars hard at work. When are these right-wingnuts going to admit that the Pentagon and the Orwellian-named Dept. of Homeland Security are the biggest wasters of American tax money as this article so amptly demonstrates?

If we didn't have such a bloated, corrupt military machine and anti-democratic organizations like DHS, CIA and NSA, our taxes wouldn't need to be so high!

"Give the money to people who actually need it and spend it on goods that make up the bulk of the economy."

That sure sounds like a very simple plan. Just give every non-millionaire a million dollars and the economy will be booming.

Encouraging the young to become computer programmers is soooooo 1990.

Computer programming has been outsourced almost as thoroughly as building nuclear power stations.

(Ask the man who just put his son through a Big Name computer school how eagerly employers are looking for computer programmers. Go ahead. And stand real close to the computer monitor so that the cream pie he'll respond with can get through the glass.)

Well, the reason for the 90's boom is pretty easy. Investment money flowed from investment markets to consumer markets, through VC funding which resulted in additional demand for fixtures and services, not to mention creating well-paying jobs.

Actually, if I were to come up with a tax scheme to grow the economy, I'd greatly slash tax income on VC/direct investments, and increase taxes on market investment income, to direct money back into the real economy.

Are the evil Nazi Jews still massacring woman and children in Lebanon?

Employment in professional and business services also continued to grow in
"June (+25,000). Job gains in the industry have averaged 27,000 per month so
far in 2006, compared with 41,000 per month in 2005. In June, employment
edged up in accounting and bookkeeping services and in computer systems de-
sign. Temporary help services employment edged down slightly over the month
and has decreased by 36,000 since December."

I guess the computer industry is only hiring conservatives right Jeffrey?

Take as much money away from the evil US government as you can, by not paying taxes, by tax cuts, however, so this disgusting government cannot give it the evil Jews, who then use it to massacre woman and children in Lebanon.

He-e-e's back....!!!

Take as much money away from the evil US government as you can, by not paying taxes, by tax cuts, however, so this disgusting government cannot give it the evil Jews, who then use it to massacre woman and children in Lebanon.

Posted by: pal on July 30, 2006 at 10:43 AM | PERMALINK

Yawn. Zzzzzzzzzz.

"Investment money flowed from investment markets to consumer markets, through VC funding which resulted in additional demand for fixtures and services, not to mention creating well-paying jobs."

Investments only mean anything if whatever you are investing in can actually generate a profit. Of course, during the bubble internet boom, a lot of the investments went into crazy schemes that never ever made a dime. This is analogous to the wealth distribution scheme. Poor people are poor because they are not good at generating wealth. By transfering wealth from those who actually generate them to those who don't, you are basically sinking money into a rathole.

the janitor of my building is going to start practicing law. He didn't want to be rich before due to the onerous tax rates. But now with the rate reductions he says he really doesn't have a choice.

Comparing tax rates in the United States to tax rates in Europe is an invalid comparison. Europeans get much more for their tax dollars than we do. Europeans often get their healthcare and education paid for by their governments. They also tend to work fewer hours per week than their U.S. counterparts, and get more weeks of vacation per year than we do in the U.S.

In short, they get a much greater value for their taxes.

"In short, they get a much greater value for their taxes."

Yeah, in part because they're not pissing it away occupying other countries.

Poor people are poor because they are not good at generating wealth. By transfering wealth from those who actually generate them to those who don't, you are basically sinking money into a rathole.

Damn those poor people, they just spend all their money on food, goods, and services. Doesn't do a damn bit of good for the economy.

When Exxon makes 10 billion in profit they know precisely where to spend it to help the larger economy. They invest 70+ % of it in shares of Exxon, a company that knows where to spend large amounts of capital to help the larger economy. If they invest enough money in Exxon stock we'll never run out of oil.

The problem is that any issue related to tax is so far above the comprehension level of most people - let alone that their interest level is low in these areas.

So it become more about who is saying it than anything else - and tax cuts can never mean less money for "ME", right....

Whatever, Lars. Since it's obvious you are so "far above the comprehension level of most people", why don't you go back to polishing your jewelry? Buttwipe.

most of the comments above seem degenerative and opinion versus factual.

Kevin's correct, the tax cuts don't pay for themselves. The accounting on budget and off budget in DC is seriously out of balance. When Budget numbers's are released they don't even include NSA, CIA, special ops, much of Iraq, Afganistan budgets or costs. further there is no fiscal accountability...by the administration, congress or anyone really it seems.

those that argue incentive depletion, probably aren't the movers and shakers anyway. The real movers make things happen, are resourceful and work around the system anyway.

it's spend spend spend regardless of which party runs the roost, in spite of whatever "PR" snow, rove and crew are spouting this moment.

I'm a consultant, and I do fine financially, but the BS arguments here don't have much basis in fact. about lack of incentives.. etc... they are just BS. It resembles the "deregulation" arguments, which in practice rarely produce the benefits that the espousers claim. Example, power deregulation, (Enron) has massively increased power bills in California. Prices of power to PGE are deregulated, prices PGE can charge customers is fixed. who in their right mind would Partially deregulate like this... politicos... they understand that after everything fails... they can always directly or indirectly "tax" the constituents.

fairtax and other studies have shown the tax code could be vastly simplified and the actual and marginal tax rates reduced under an indexed flat tax... i double anyone with a decent work ethic is going to wring their hand's and say, "that's it, i just have to stop working" BS.

Bush tax cuts are roughly 10 Trillion dollars.
or 1 Trillion per annum

50% of 1 Trillion or $500 Billion/yr, goes to the top 1.5 Million income (earned/passive) earners.

50% of 1 Trillion or $500 Billion/yr, goes to the bottom 135.0 Million income earners.

[1.5/(135 + 1.5)] * 100% = 1.1%.

2/3 of the economy is driven by consumer spending. 1/3 by corporations or the "passive" income class. But 1.1% of the tax payers get 50% of the tax cuts, and 98.9% fo the tax payers get the other 50%.

It's clear that the bulk of the consumers aren't getting the bulk of the tax cuts. No doubt the economy would be much more robust and stonger if the tax cuts were made available to the bulk of the consumers.

"Not to mention that the cost of living in SF is like, waaayyyy more than Florida."

Seriously. Either you are promoting idiots who are more worried about the california income tax than the ludicrous SF cost of living or maybe this person was just smart enough to know how to manipulate a right wing bubble head like yourself with an excuse that you would eat up, if the story is true at all.

Also the good economic growth in the mid sixties preceeded the tax cuts. These tax cuts were enacted in 1964 (kennedy was arguing for them a couple years earlier), but economic growth picked up in 1962.

From 1960 to 1970 real GDP growth was (calculating from a real gdp database at http://eh.net/hmit/gdp/):
1961-2.2%
1962-5.7% - economy growing strongly
1963-4.2%
1964-5.5% - kennedy tax cut year
1965-6%
1966-5.1%
1967-2.4% - growth definately slowing
1968-4.6%
1969-2.9%
1970-1.7%
The tax cuts are right in the middle of five years of very good growth.

I dug into the data after that CATO institute report claiming that tax increases always lead to decreased growth and tax cuts always lead to increased growth. It turned out that thier dates were accurate only to the decade for a very good reason: increased growth in fact preceeded two of the three tax cuts they talked about and economic slowdown preceeded two of the two tax increases they talked about and they still had to ignore about half the decades this century completely.

The most amusing was the tax increase in 1933 or so that allegedly caused the great depression. Curiously there was a large tax cut in 1928 or 29 that they failed to mention.

The correlation that was clear from the actual data was that previous to the 1980's tax rates tend to go down when revenues are up (because of a robust economy), and tend to go up with revenues are down (because of a weak economy). Basically the government adjusted the tax rates in an attempt to keep revenue constant.

After 1980 tax cuts correlate very strongly with dumb republican presidents and quickly increasing deficits. The economy wobbles around with no obvious correlation.

"Basically the government adjusted the tax rates in an attempt to keep revenue constant."

Or probably more accurately the government adjusted tax rates to be as low as possible while funding the services the people demand.

After 1980 dumb republican presidents (and dumb congresses of either party) found that they could fund services with massive debt and leave the mess for somebody else.

American Hawk:

"The absolutely last option should be to punish the most productive by taking most of their money. We want to encourage people to become computer programmers and lawyers, not janitors. Our tax system ought to be structured accordingly."

Others have already cogently responded to you, showing that reasons that people are in one sort of work rather than another have little to do with taxation and that either increasing or decreasing taxation makes little impact on their choices.

I assume that you are using these as examples. Janitor = low-paying jobs like burger flipping, bed-making, restroom-cleaning, etc. Programmer = higher-paying jobs like engineers, doctors, lawyers, etc.

Couple of problems with your reasoning.

1. Are there really so many jobs at the higher levels of pay, that all (or a significant portion) of the people now working as janitors (or burger flippers or bed-makers) would have likelihood of employment in these higher paying jobs?

2. I’m assuming that you realize that regardless of pay scale or tax structure, we still need janitors, bed-makers, burger-flippers, etc. So if all the people or a significant portion became computer programmers, lawyers, or whatever, who would do the needed work of bed-making, burger-flipping, or janitorial?

3. Computer programming is also a rather poor choice of example, since that is one of the types of work being most highly outsourced to other countries.

I believe, and correct me if I’m wrong, that you share an underlying assumption with other conservatives whom I have known. Which is that people doing low-paying jobs are lazy and not hard-working, and so “deserve” their low-paying jobs. Also that they are pissing their money away rather than investing it to get ahead like they “should” be doing, completely overlooking that they are probably just struggling to pay for food, lodging, and clothing, and have little if anything left over to invest.

And that people in higher-paying jobs are working much harder and so therefore “deserve” their higher pay, and that they don’t piss their money away, but after paying basic living expenses, use the extra to invest in ways which not only profit them but benefit the rest of this.

I’m not saying that there aren’t people making little money currently who aren’t able to get ahead. Or that people with higher paying jobs aren’t investing their money in ways the benefit society in general. I’m just saying that this isn’t an automatic result. I’m also saying that poor people aren’t necessarily lazy, and that there is no reason to believe that either poor people or rich people “deserve” their station. I’m saying that there are many reasons why people are either poor or rich, and that our system works very much against poor people being able to rise out of poverty, and that this is getting worse. And that there is nothing inherently moral about how much money one has whether one is rich or poor or middle class.

Reading this thread has helped to cement in my thinking an idea I've had for a long time, and that is that conservatives simply hold the poor in contempt.
You hear they're lazy, stupid, undeserving, etc. but that the rich are productive, hard-working, and other good epithets. You might even hear Rush Limbaugh take offense that the top of the lower class is called "the working class".
They try to claim that the rich somehow "deserve" more of the money they couldn't have earned anywhere else (besides the civilized West) but the poor don't deserve to earn enough to live. They trot out lies which have been debunked over and over, and try to convince those who don't yet know better you care about them...
I live in a city full of conservatives, and they try to hide their contempt (unless they think you're "one of them") but it's so damned clear.
Why bother to try to hide it? You're really not fooling anyone with your elitist-worshipping political ideology. Why pretend? We already know...

blognround wrote: It's clear that the bulk of the consumers aren't getting the bulk of the tax cuts.

This is true, even though the percentage reduction in income tax is greater for the lower paid. The key is that the less wealthy pay very little income tax, so there's not much income tax to cut.

IRS data for 2003 show that:

-- the top half of taxpayers paid over 96% of Federal individual income taxes while the bottom half accounts for just less than 3.5 percent.

-- The top ten percent accounted for 65.84% percent of these taxes. The bottom 90 percent paid less than 35% of personal income taxes.

-- The top one percent of tax filers paid 34.27 percent of Federal personal income taxes.

ex lib...seems fair...

the top one percent hold 40-percent of the wealth

and..

the top 1-percent earn more than the bottom 40-million in the u-s...

if they don't like it...i hear taxes are lower in iraq...

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"Tax the rich, feed the poor,
Until they are rich no more"

Sounds like a better plan in the long run. Rich people are powerful and use more of the Earth's resources than poor people. Consequently the rich damage the the Earth's environment more than poor people ever can.

In the long run, it will be the Midas Touch that will ultimately destroy our most remarkable civilization. It's been built by spending the capital that nature has left for us during the past 4.5 billion years. We've used most of it up in less than 200. All so the rich and powerful could 'do their thing'. So are the rich and powerful happy?

Let's be scientific. First a hypothesis:

If tax cuts do pay for themselves, we would expect tax revenues to increase by a bigger percentage after tax cuts were enacted than during periods when there were no tax cuts.

Now let's test that hypothesis:

Using '83-'90 to illustrate the awesome growth spurred by the Reagan tax cuts (revenue went from 600.6 to 1032.1, or 71.8% growth). Let's look at some other 8 year periods when there weren't tax cuts in order to compare.

From '75 till '82 saw revenue growth from 279.1 to 617.8 for an increase of 121.4%

From '93 till '00 saw revenue growth from 1154.5 to 2025.5 for an increase of 75.4%

and for shits and giggles, let's use Bush's numbers for a four year period and double the percentage of growth to get an estimate of how he compares.

From '02 till '05 saw revenue growth from 1853.4 to 2153.9 for an increase of 16.2% which we can double to 32.4%

Since we see that revenue growth was faster during periods that there weren't tax cuts, that would lead an intellectually honest person to believe that tax cuts reduce revenue growth.

When we look at this data along with the Congressional Budget Office study that estimates as a best case scenario that only 22% of the revenue lost from a 10% tax cut is regained during the first 5 years and only 33% is regained after the second 5 years,

PLUS

The fact that Bush supporters even admit that the increased revenue due to the economic stimulus of the cuts is not enough to cover the lost revenue from the cuts themselves,

This would lead an intellectually honest person to admit that the evidence for tax revenues being increased by tax cuts is inconclusive at best.

'Jay' posted:

"Employment in professional and business services also continued to grow in June (+25,000). Job gains in the industry have averaged 27,000 per month so far in 2006, compared with 41,000 per month in 2005."

There are still MILLIONS fewer workers in the national workforce now than there were in 2000. Negative job growth for the six straight year is nothing to brag about.
.

There's only one tax rate: it's the % of money which all gov'ts, from Dog King to Dog Crushers, exact from the citizenry over the course of a year. There's a whole lot of robbing Peter to pay Paul to pay for stuff and gassy rhetoric about tax cuts, but that actual % doesn't fluctuate much. If at all.

I have seen it argued that the Clinton boom was a continuation of the boom caused by the Reagan tax cuts.

Oh, just great. Now I have coffee all over my monitor.

anyone who listens to rmick/bob is a fool. jerkoff confuses seattle, so-cal, AND silicon valley in one simple little post. loser.

"Now, you know that the Treasury guys were doing their level best to make the boss's tax cuts look good. And yet, this was the best they could come up with. What's more, they even admit that this is an absolutely best case scenario..."

Jaysus. Why doesn't Drum look at the chart he includes in his own post before hitting the "post" key? It says "At Best, Tax Cuts Would Have Almost... etc" -- it's obviously designed to "prove" the point that tax cuts do not work. The chart, of course doesn't prove it at all, and cannot. Only the underlying analysis can. (As a matter of fact, it doesn't).

But to imply that this figure is put together by supply-siders trying to support the prez is just asinine.

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Good grief! Economists can't even predict how much the economy is going to grow next month, and you people spend time debating the merits of tax cuts based on projections 10-20 years in the future.

Historical (last 40 years) data reveals results that are even worse than this estimate. Bush's first term had the second-worst growth of any presidential four-year term since 1960. In general, Democratic presidents experience better growth than Republican presidents. (Republicans see about 70% of the average annual growth that Democrats see.)

'Yancey' posted:

"Economists can't even predict how much the economy is going to grow next month, and you people spend time debating the merits of tax cuts based on projections 10-20 years in the future."

What projections ? The Bushies tax cuts swung the federal budget from surplus to deficit in the VERY first year they were enacted, and further tanked the economy as well.

The results are eventually the same EVERY time the failed RightWing policy of tax rate cuts is implemented. It happened after 1964, after 1981, and after 2001.

As Albert Einstein said, insanity is doing the same thing over and over again and expecting different results.
.

VJ,

Then make the arguments against tax cuts based on what happens today. Arguing against them by showing graphs about a projected miniscule difference in the size of the economy 10 years from now is just as idiotic as the arguments made for the tax cuts using the same kinds of projections.

For myself, I am willing to forgo tax cuts and give up the ones passed if some spending cuts are on the table as well. Neither party seems to want to propose such compromises.

CP/M had nothing to do with DOS, except as a model to rip off functionality from. Gary Kildall and Digital Research were too arrogant to cut a deal with IBM, so IBM cut a deal with Microsoft and Microsoft bought DOS from Seattle Computer. The original PC had Microsoft BASIC in ROM, as at the time it was unheard of to ship a computer without BASIC in ROM. IBM DOS (as it ran on the IBM PC, IIRC there was an unrelated DOS on IBM mainframes years ago) was MS-DOS, relabeled as part of the deal with IBM. I don't think there was a separate MS-DOS actually sold until clones started appearing.

'Yancey' posted:

"Then make the arguments against tax cuts based on what happens today."

I did. They turned surpluses into deficits in the very first year and further tanked the economy. They dropped federal income tax revenues to 1959 levels which created massive historic deficits.

.

"For myself, I am willing to forgo tax cuts and give up the ones passed if some spending cuts are on the table as well."

Outside of the Military Industrial Complex and Corporate Welfare, spending is not the problem. The deficits were overwhelmingly a result of a massive drop in revenues.

The Military Industrial Complex and interest on the Reagan/Bush/Moron federal debt comprise almost 2/3rds of the federal budget. Exactly where would you cut spending ?
.

Employment in professional and business services also continued to grow in
"June (+25,000). Job gains in the industry have averaged 27,000 per month so
far in 2006, compared with 41,000 per month in 2005. In June, employment
edged up in accounting and bookkeeping services and in computer systems de-
sign. Temporary help services employment edged down slightly over the month
and has decreased by 36,000 since December."

I guess the computer industry is only hiring conservatives right Jeffrey?

I really hoped you noticed that your post didn't address my point.

I love confronting wingnuts in the field of economics because unlike religion it is not sheilded from refutation by hard material facts.
In short economic truisms are the weakest pillar of the wingnut worldview because economics will not let itself be reduced to an ideology or a morality, despite the best efforts of the Austrian school.

Tax cuts produce diminishing returns.

That is all you need to know to refute the wingnut on tax policy.