Spend More, Tax the Rich Americans Say

[manu1959]

i always wonder why those that advocate higher and more taxes don't just add a "tip" in their payment to the irs in april.....you know...to do their part as one of "the rich"....

 

[The Rabbi]

A rightist will refer to capital flight and the Laffer Curve as justifications against more steeply progressive taxation; a leftist will refer to diminishing marginal utility, as $10 is effectively worth more to a man with $100 than to a man with $1,000, to put it in simpler terms. I'd agree that the latter justification is more persuasive for various reasons.

The problem with the Laffer Curve is that it's correct, but also almost completely irrelevant. Yes, cutting taxes can increase revenue by spurring growth... if your top tax rate is somewhere in the neighborhood of 85 percent. To put it another way, you could double today's top tax rate and still not hit the point of diminishing returns in revenue. I'm not arguing that we should do that, but it's pretty stupid to use this as an argument against any increase in taxation.

We can add ignorance of the Laffer Curve to your other sins.
I believe the Laffer Curve postulated that the ideal tax rate was about 36% of GDP. So that means that total taxation, federal, state, property etc, cannot exceed 36% without causing damage to the economy. And we are well beyond that figure now.

 

[The Rabbi]

Oh OK> That proves it. Your taxes didnt go down, so the tax cuts didn't do anything.
Do you realize how absolutely stupid that sounds?

But you said EVERYONE got a tax cut... I didn't. So no, the tax cuts DIDN'T do anything. They certainly didn't stimulate the economy or create jobs, as Shrub promised they would, did they?

No, I didn't say that everyone got a tax cut. Please show where I did.
The cuts certainly stimulated not only the economy and job growth, but also federal revenues, which skyrocketed. Please get your facts straight before misinterpreting them.

 

[Polk]

A rightist will refer to capital flight and the Laffer Curve as justifications against more steeply progressive taxation; a leftist will refer to diminishing marginal utility, as $10 is effectively worth more to a man with $100 than to a man with $1,000, to put it in simpler terms. I'd agree that the latter justification is more persuasive for various reasons.

The problem with the Laffer Curve is that it's correct, but also almost completely irrelevant. Yes, cutting taxes can increase revenue by spurring growth... if your top tax rate is somewhere in the neighborhood of 85 percent. To put it another way, you could double today's top tax rate and still not hit the point of diminishing returns in revenue. I'm not arguing that we should do that, but it's pretty stupid to use this as an argument against any increase in taxation.

We can add ignorance of the Laffer Curve to your other sins.
I believe the Laffer Curve postulated that the ideal tax rate was about 36% of GDP. So that means that total taxation, federal, state, property etc, cannot exceed 36% without causing damage to the economy. And we are well beyond that figure now.

All the Laffer Curve postulated was that since both a tax rate of zero percent and 100 percent would yield no revenue, that there must be a point at which revenue is maximized. The idea isn't new or unique to Laffer. The general insight is actually stated in Keynes's General Theory.

While I chose a high-end number to illustrate the point, research by Paul Pecorino (Tax rates and tax revenues in a model of growth through human capital accumulation
published in the Journal of Monetary Economics) showed that the revenue maximum occurs around 65 percent. The idea that our current rate rests beyond the maximizing point can be proven false by both study and real world examples.

The tax cuts promoted by the Bush administration in 2001 and 2003 did not increase revenue, which they would have if your claim was correct. Furthermore, a 2005 CBO study (Analyzing the Economic and Budgetary Effects of a 10 Percent Cut in Income Tax Rates) showed that, even under the scenario most optimistic to your position, only around a quarter of the revenue lost from reducing the rate would be recovered from increased output.

 

[ihopehefails]

Americans want their government to create jobs through spending on public works, investments in alternative energy or skills training for the jobless.

They also want the deficit to come down. And most are ready to hand the bill to the wealthy.

A Bloomberg National Poll conducted Dec. 3-7 shows two- thirds of Americans favor taxing the rich to reduce the deficit.

Even though almost 9 of 10 respondents also say they believe the middle class will have to make financial sacrifices to achieve that goal, only a little more than one-fourth support an increase in taxes on the middle class. Fewer still back cuts in entitlement programs such as Social Security and Medicare or a new national consumption tax. ...

The findings are in tune with the job-promotion initiatives President Barack Obama announced Dec. 8, as well as the administration’s assurances it will address the deficit, and proposals from some Democratic lawmakers to raise taxes on the wealthy. ...

While the public sees both unemployment and the deficit as a threat, anxiety over unemployment is higher. Eight out of 10 poll respondents rate unemployment a high risk to the economy in the next two years and 7 of 10 say the same about the deficit.

Infrastructure Spending

The poll contains some of the features Obama announced in his jobs plan. Two-thirds of Americans back boosting spending on infrastructure. Six of 10 also support more spending on alternative energy to stimulate job growth, another measure Obama announced. ...

Americans support a range of other potential new government initiatives presented as employment programs, with ideas from both parties backed by wide majorities. An across-the-board tax cut, a favorite of some Republicans, also is supported by 6 of 10 Americans.

A tax credit for businesses that hire new workers, which Obama favored as a presidential candidate and this week proposed in a limited form available only to small firms, gains backing from 7 of 10 Americans.

Skeptical About Results

Americans support the proposals even as they express doubts the federal government will help cut joblessness. A 51 percent majority say they are pessimistic about the prospects.

When it comes to the deficit, they are more distrustful: 61 percent say they are pessimistic the government will bring down the budget shortfall.

Nearly 9 out of 10 Americans say the middle class will have to make sacrifices to cut the deficit. That doesn’t mean that they are ready to embrace the idea. ...

The appeal of taxes on the wealthy crosses party lines. About half of Republicans back the idea and it is more popular among Democrats and independents. ...

The poll shows that an across-the-board 5 percent cut of all discretionary government spending also attracts support as a deficit-reduction measure, with 57 percent saying they would back it.

Majorities of poll respondents also say some big government programs either are not justified or could be cut. They included the $700 billion rescue of the nation’s banking system, the auto industry bailout, Iraq War funding, the $787 billion economic stimulus package and funding for the Afghanistan War.

Cuts in funding for the Medicare prescription drug program would be resisted by 71 percent.

Americans Want Government to Spend for Jobs, Send Bill to Rich - Bloomberg.com

I have a hunch, Rasmussen's poll would show something completely different.....just sayin'

I have a hunch that might happen to and I also know that something like climategate won't happen to them.

 

[ihopehefails]

The problem with the Laffer Curve is that it's correct, but also almost completely irrelevant. Yes, cutting taxes can increase revenue by spurring growth... if your top tax rate is somewhere in the neighborhood of 85 percent. To put it another way, you could double today's top tax rate and still not hit the point of diminishing returns in revenue. I'm not arguing that we should do that, but it's pretty stupid to use this as an argument against any increase in taxation.

We can add ignorance of the Laffer Curve to your other sins.
I believe the Laffer Curve postulated that the ideal tax rate was about 36% of GDP. So that means that total taxation, federal, state, property etc, cannot exceed 36% without causing damage to the economy. And we are well beyond that figure now.

All the Laffer Curve postulated was that since both a tax rate of zero percent and 100 percent would yield no revenue, that there must be a point at which revenue is maximized. The idea isn't new or unique to Laffer. The general insight is actually stated in Keynes's General Theory.

While I chose a high-end number to illustrate the point, research by Paul Pecorino (Tax rates and tax revenues in a model of growth through human capital accumulation
published in the Journal of Monetary Economics) showed that the revenue maximum occurs around 65 percent. The idea that our current rate rests beyond the maximizing point can be proven false by both study and real world examples.

The tax cuts promoted by the Bush administration in 2001 and 2003 did not increase revenue, which they would have if your claim was correct. Furthermore, a 2005 CBO study (Analyzing the Economic and Budgetary Effects of a 10 Percent Cut in Income Tax Rates) showed that, even under the scenario most optimistic to your position, only around a quarter of the revenue lost from reducing the rate would be recovered from increased output.

They did dude so shut the fuck up or something!

 

[ihopehefails]

People never consider themselves among the stupid either

That explains your situation...

 

[The Rabbi]

The problem with the Laffer Curve is that it's correct, but also almost completely irrelevant. Yes, cutting taxes can increase revenue by spurring growth... if your top tax rate is somewhere in the neighborhood of 85 percent. To put it another way, you could double today's top tax rate and still not hit the point of diminishing returns in revenue. I'm not arguing that we should do that, but it's pretty stupid to use this as an argument against any increase in taxation.

We can add ignorance of the Laffer Curve to your other sins.
I believe the Laffer Curve postulated that the ideal tax rate was about 36% of GDP. So that means that total taxation, federal, state, property etc, cannot exceed 36% without causing damage to the economy. And we are well beyond that figure now.

All the Laffer Curve postulated was that since both a tax rate of zero percent and 100 percent would yield no revenue, that there must be a point at which revenue is maximized. The idea isn't new or unique to Laffer. The general insight is actually stated in Keynes's General Theory.

While I chose a high-end number to illustrate the point, research by Paul Pecorino (Tax rates and tax revenues in a model of growth through human capital accumulation
published in the Journal of Monetary Economics) showed that the revenue maximum occurs around 65 percent. The idea that our current rate rests beyond the maximizing point can be proven false by both study and real world examples.

The tax cuts promoted by the Bush administration in 2001 and 2003 did not increase revenue, which they would have if your claim was correct. Furthermore, a 2005 CBO study (Analyzing the Economic and Budgetary Effects of a 10 Percent Cut in Income Tax Rates) showed that, even under the scenario most optimistic to your position, only around a quarter of the revenue lost from reducing the rate would be recovered from increased output.

Here is Laffer himself on the subject:
The Laffer Curve: Past, Present, and Future

And here's the WSJ editorial page showing how the Bush tax cuts increased revenue.
Facts are not friends here:
How to Soak the Rich (the George Bush Way) - WSJ.com

 

[Polk]

We can add ignorance of the Laffer Curve to your other sins.
I believe the Laffer Curve postulated that the ideal tax rate was about 36% of GDP. So that means that total taxation, federal, state, property etc, cannot exceed 36% without causing damage to the economy. And we are well beyond that figure now.

All the Laffer Curve postulated was that since both a tax rate of zero percent and 100 percent would yield no revenue, that there must be a point at which revenue is maximized. The idea isn't new or unique to Laffer. The general insight is actually stated in Keynes's General Theory.

While I chose a high-end number to illustrate the point, research by Paul Pecorino (Tax rates and tax revenues in a model of growth through human capital accumulation
published in the Journal of Monetary Economics) showed that the revenue maximum occurs around 65 percent. The idea that our current rate rests beyond the maximizing point can be proven false by both study and real world examples.

The tax cuts promoted by the Bush administration in 2001 and 2003 did not increase revenue, which they would have if your claim was correct. Furthermore, a 2005 CBO study (Analyzing the Economic and Budgetary Effects of a 10 Percent Cut in Income Tax Rates) showed that, even under the scenario most optimistic to your position, only around a quarter of the revenue lost from reducing the rate would be recovered from increased output.

Here is Laffer himself on the subject:
The Laffer Curve: Past, Present, and Future

Who cares what Laffer has to say? His great insight was basically just restating someone else's previous work and he's so knowledgeable about the U.S. budget that he thinks Medicare is a private sector program.

And here's the WSJ editorial page showing how the Bush tax cuts increased revenue.
Facts are not friends here:
How to Soak the Rich (the George Bush Way) - WSJ.com

That editorial is a steaming load of horse shit.

First, his numbers about the increase in tax receipts are totally misleading. Since the economy grew in each of those years, tax receipts would have increased even without the tax cuts. The reason for that is so simple that even you can understand it: X percent of a larger number is more than X percent of a smaller number. According to figures compiled by officials at Treasury while Bush was still in office, the 2001 tax cuts decreased federal revenues by 3.4 percent per year on average during the first four years after passage. The 2003 tax cuts reduced revenues by 2.5 percent per year.


Furthermore, Moore claims that the increase in tax share paid by the very top earners increased is evidence that the cuts were fair. It, in fact, shows no such thing. He distorts (by selective choosing the peak of the dot-com boom as his point of comparison) the data about the share of national income going to those at the top of share because telling the truth destroys his argument. The reason the share of taxes paid by the top earners increased is because their share of national income skyrocketed. The income of those in the top 0.01 percent of earners almost doubled between 2000 and 2007. The bottom 90 percent saw their share of national income dip from 55 percent to 50 percent.

 

[Vast LWC]

We can add ignorance of the Laffer Curve to your other sins.
I believe the Laffer Curve postulated that the ideal tax rate was about 36% of GDP. So that means that total taxation, federal, state, property etc, cannot exceed 36% without causing damage to the economy. And we are well beyond that figure now.

Actually you are completely wrong here. Not about the Laffer Curve, but about taxes.

Total tax Revenue, last I checked was about 28% of GDP:

http://www.oecd.org/dataoecd/48/27/41498733.pdf

Unless you have some information that I am unaware of.

That would be 8% lower than your ideal position on the Laffer Curve.

And of course, the Laffer Curve also clearly states that moving BELOW the ideal position is also bad for revenue, doesn't it?

 

[Vast LWC]

the rich contribute more money too all those "programs" than the poor....

Wow, that is false.

The Social Security tax caps when salary reaches $80,000.

All income beyond that is not subject to Social Security taxes.

Which means that a man making 80k a year pays 6% of his income in Social Security taxes...

While a man making 500k a year pays less than 1% of his income in Social Security taxes.

 

[Polk]

We can add ignorance of the Laffer Curve to your other sins.
I believe the Laffer Curve postulated that the ideal tax rate was about 36% of GDP. So that means that total taxation, federal, state, property etc, cannot exceed 36% without causing damage to the economy. And we are well beyond that figure now.

Actually you are completely wrong here. Not about the Laffer Curve, but about taxes.

Total tax Revenue, last I checked was about 28% of GDP:

http://www.oecd.org/dataoecd/48/27/41498733.pdf

Unless you have some information that I am unaware of.

That would be 8% lower than your ideal position on the Laffer Curve.

And of course, the Laffer Curve also clearly states that moving BELOW the ideal position is also bad for revenue, doesn't it?

Another massive hole blown through the side of "Rabbi"'s argument.

 

[Polk]

the rich contribute more money too all those "programs" than the poor....

Wow, that is false.

The Social Security tax caps when salary reaches $80,000.

All income beyond that is not subject to Social Security taxes.

Which means that a man making 80k a year pays 6% of his income in Social Security taxes...

While a man making 500k a year pays less than 1% of his income in Social Security taxes.

Actually, the cap is 106,800 and only applies to the Social Security portion (the Medicare portion of FICA does not have a cap). The thrust of the argument though is spot on.

 

[Polk]

between 2000 and 2007 jobs were created and the economy expanded.....whether it was a direct result of tax cuts is debateable....

It's not debatable. There is zero evidence that cutting taxes has a sizable effect on economic expansion. Taxes were increased in both 1990 and 1993 and were cut in 2001 and 2003, yet the 1990s saw far more economic growth and job creation than this decade did.

 

[Vast LWC]

Here is Laffer himself on the subject:
The Laffer Curve: Past, Present, and Future

And here's the WSJ editorial page showing how the Bush tax cuts increased revenue.
Facts are not friends here:
How to Soak the Rich (the George Bush Way) - WSJ.com

You WSJ article states that Capital Gains revenues increased, which is true...

Capital Gains revenues increased because there were tens of Trillions of dollars worth of fake assets, in the form of Credit Default Swaps and Mortgage Backed Securities, on the market.

The reason why this happened during the Bush administration was not due to his lowering of the Capital Gains tax... but was in fact due to the legalizing of Credit Default Swaps in the infamous 2000 Commodities Futures Modernization Act.

 

[Vast LWC]

Actually, the cap is 106,800 and only applies to the Social Security portion (the Medicare portion of FICA does not have a cap). The thrust of the argument though is spot on.

I thought it was 80k for individuals and the higher number for married couples...

Well, I may be wrong, or they may have raised the cap since I last checked.

 

[Polk]

Actually, the cap is 106,800 and only applies to the Social Security portion (the Medicare portion of FICA does not have a cap). The thrust of the argument though is spot on.

I thought it was 80k for individuals and the higher number for married couples...

Well, I may be wrong, or they may have raised the cap since I last checked.

It's pegged to inflation.

 

[rightwinger]

We should just have a vote on whether we should tax the rich more

Democracy in action

 

[The Rabbi]

Here is Laffer himself on the subject:
The Laffer Curve: Past, Present, and Future

And here's the WSJ editorial page showing how the Bush tax cuts increased revenue.
Facts are not friends here:
How to Soak the Rich (the George Bush Way) - WSJ.com

You WSJ article states that Capital Gains revenues increased, which is true...

Capital Gains revenues increased because there were tens of Trillions of dollars worth of fake assets, in the form of Credit Default Swaps and Mortgage Backed Securities, on the market.

The reason why this happened during the Bush administration was not due to his lowering of the Capital Gains tax... but was in fact due to the legalizing of Credit Default Swaps in the infamous 2000 Commodities Futures Modernization Act.

SO mortgage backed securities are fake assets?
So much for your credibility, Goober.

 

[The Rabbi]

We can add ignorance of the Laffer Curve to your other sins.
I believe the Laffer Curve postulated that the ideal tax rate was about 36% of GDP. So that means that total taxation, federal, state, property etc, cannot exceed 36% without causing damage to the economy. And we are well beyond that figure now.

Actually you are completely wrong here. Not about the Laffer Curve, but about taxes.

Total tax Revenue, last I checked was about 28% of GDP:

http://www.oecd.org/dataoecd/48/27/41498733.pdf

Unless you have some information that I am unaware of.

That would be 8% lower than your ideal position on the Laffer Curve.

And of course, the Laffer Curve also clearly states that moving BELOW the ideal position is also bad for revenue, doesn't it?

Another massive hole blown through the side of "Rabbi"'s argument.

Oh wow, I got a detail wrong. Just roll me in doo-doo and call me stinky. It's the end of the world.
You on the other hand can post errant nonsense all day long and feel no shame whatsoever.