Raising taxes

Discussion in 'Clean Debate Zone' started by Wiseacre, Aug 2, 2012.

  1. Wiseacre
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    Wiseacre Retired USAF Chief Supporting Member

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    Obama's campaign is focusing on the issue of ending the Bush tax cuts for the top marginal rate, raising it from 35% to 39.6%. He talks about cutting the debt and deficits, as though raising traxes in tough economic times has no consequences. And yet both he and Bill Clinton have said it makes no sense to raise taxes in a bad economy, and yet here he is advocating just that.

    Consider: our deficits are projected by the WH to be 1.2 trillion dollars this year, which is likely understated. It was 1.3 trillion in 2010 and 2011, and 1.4 trillion in 2009, and I see no reason to assume this year will be any better. Especially considering the major drought we're having, but nonetheless say it's 1.2 trillion. You know what you get if the top rate is not extended? Somewhere around 70-80 billion a year, and that is an optimisitc estimate givien the state of the world economy. So - 1.2 trillion minus 80 billion leaves you 1.12 trillion in deficits. And that's assuming there are no negative consequences to the tax hike, which most economists say would be the case.

    What about the 1.12 trillion that's still there in deficits? That's it, problem solved, vote for me cuz I fixed the problem? How can you possibly make an issue out of what amounts to about 6-7% of the problem without addressing the other 93-94%?

    When tax rates go up, so does tax evasion. That's why thousands of wealthy Frenchmen, Spaniards, Italians, and Greeks are leaving their countries for more financially favorable locales. And US rich people are already doing the same thing; especially if the tax hikes in the ACA bill on capital gains and dividends go into effect as they're supposed to.

    I am always amazed at how liberal dems can assume all these tax increases can occur and still believe they will be no blowback. Fairness! More equality! Soak the rich! Sounds great; but it won't work. There's too many other places where it'll be easier to get rich and stray rich.
     
  2. Vidi
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    Vidi CDZ prohibited

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    Are you saying that business will turn away from America and do business elsewhere if the tax rates go up?

    Did businesses close up and move elsewhere in 1953 when the top tax rate was a whopping 93%? Or did businesses stay and do business here in the largest consumer nation in the world?

    Will some people grandstand and make a show of their move? Probably...but its essentially just like the people who said if Bush got elected theyd move to Canada. Theyre all still here and the businesses will stay as well.
     
  3. Wiseacre
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    Wiseacre Retired USAF Chief Supporting Member

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    Bush didn't raise taxes or increase regulations like Obama has. Some may have left for other reasons, but for the most part it's all about costs and profits. I can see raising tax rates when the economy is cookin' like in the 90s, but now? No way.
     
    Last edited: Aug 2, 2012
  4. Vidi
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    Vidi CDZ prohibited

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    Obama hasnt raised taxes. He has PROPOSED raising taxes, but it has not happened yet.

    Should we get into the various theories of economics to see which one is viable? Your thread not sure where you want to go with this.
     
    Last edited: Aug 2, 2012
  5. Wiseacre
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    Wiseacre Retired USAF Chief Supporting Member

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    Is there an economic theory that says taxes should be raised in a bad economy? BTW, didn't Obama sign into law the ACA that definitely raises taxes, and not only on the top 1% either.
     
  6. swizzlee
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    swizzlee RedWhiteAndBlue

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    Businesses will opt for any solution that will keep their costs under control and taxes are one of the costs of doing business, just as the currently unknown costs of healthcare is a major concern.

    At the moment untold numbers of companies, large and small, are holding back on hiring because of the uncertainty of healthcare costs. That action is a contributing factor in our high unemployment and it will not change until there is more certainty. Adding an additional tax burden may cause any number of actions by businesses depending on their particular situation, including closing their doors.

    If you read a bit of history on this, I think you will find that the 50s represented the beginning of our global expansion. So, yes, many companies found themselves stagnating under those taxes and began the research into foreign expansion - rather successfully, I might add.

    This is a little more serious and goes beyond "grandstanding." Our Congress would be pouring gas on a burning fire by increasing taxes at this point.

    Taxes need simplifying, removing the exemptions that produce zero taxes for those who are the least in need. That would be a plan that most people would consider fair. The Bush tax cuts need to be extended ONLY while Congress works on tax reform.
     
  7. Avorysuds
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    Avorysuds Gold Member

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    I'll make you a deal, if you can provide me with 1 person that paid 93% taxes I'll give you everything I own.
     
  8. Vidi
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    Vidi CDZ prohibited

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    Actually the ACA lowered taxes in many ways, the most readily available to my tired brain at this hour is the tax breaks for small businesses.

    Taxes can be raised when interest rates are low and credit isnt moving as it should. This gives the government more revenue to put back into the system in order to spur growth.

    I apologize for not knowing off the top of my head exactly which theory says this, I believe its Keynesian which I know some will oppose outright.

    I would also like to add that most economic theory on which we on the forums like to argue is no longer valid as it is based on a closed or nearly closed system. We think in too small of terms.

    For example, Trickle down is an excellent theory in a closed system. But in a global ecomony with competing nations, if we want to spur grwoth in America, Trickle down is NOT the way to go as there is no guarantee that the money stays local. The "job creators" may just take the money overseas and create jobs in Singapore. In "theory", Trickle Down would have then produced exactly the results it predicts but not the results we desire for our own well being.
     
  9. saveliberty
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    saveliberty Diamond Member

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    Most of our economic expansion is not domestic. That growth period started in the 50s and is now only a marginal part of overall growth. Domestically, small business has contracted with fewer employees and less revenue. If I was approaching the 39% tax bracket, I would simply stop short of that number and reduce my staff and customers accordingly. Being at the low end of a higher tax bracket is to be avoided.

    These program cuts are of course, only on paper. They will occur many years from now, during another administration. A cut could be made today. It could become effetive immediately. Any tax increase is going to take time to see the revenue. As has been stated many times, you could tax at a much higher rate and still not make significant changes to our debt/deficit. Cuts are necessary.

    Until government becomes more responsible with the funds we already send them, I'm not about to give them more to work with. I had kids, I know how that works.
     
  10. Some Guy
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    Some Guy Deregulated User

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    It's purely obvious that the idea of raising taxes on the rich is little more than a political ploy to grab votes. It's class warfare knowing that the top 1%, by virtue of being only 1% of the population, doesn't that the votes to compete with the other 99%, or even 50%.

    And second; where has this administration especially (or government in general under any political party the last 30 years) shown fiscal responsibility? We've run deficits for nearly 30 straight years now and are now at record shattering levels. Taxing the rich is fine if you put that money into the hands of someone who knows what to do with it. Thing is, no one has shown that they know what to do with that money more so than the rich. Bitch all you want about their personal income but it wouldn't be that high if not for the hundreds or thousands of people they employ nation/world wide. If a major company adds a new product line to earn that rich guy at the top more money and employs another 150 people in the process: oh, how, horrible.
     
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