The Great Tax Lie

[indago]

Toro touted:

The debt is the accumulation of all deficits over time less any debt repayment. Debt is repaid when a government runs a surplus, or when government revenues exceed expenditures in a given fiscal year.

Now, we wouldn't want you attempting to deceive anyone into believing that the DEBT has been repaid when the chart shows otherwise, now would we?

 

[Toro]

Toro touted:

Now, we wouldn't want you attempting to deceive anyone into believing that the DEBT has been repaid when the chart shows otherwise, now would we?

Any "deception" can only occur if you do not know what happened or if you do not understand basic terminology of the fiscal budget.

We are discussing basic fact.

 

[indago]

Toro touted:

Any "deception" can only occur if you do not know what happened or if you do not understand basic terminology of the fiscal budget. We are discussing basic fact.

Yes, and the BASIC FACT is the DEBT has not been paid off, even going back to 1940...



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[JeffWartman]

Toro touted:

Now, we wouldn't want you attempting to deceive anyone into believing that the DEBT has been repaid when the chart shows otherwise, now would we?

When you say surplus, educated people know you are talking about a budget surplus.

It's over, you have been proven wrong.

 

[JeffWartman]

Toro touted:

Yes, and the BASIC FACT is the DEBT has not been paid off, even going back to 1940...



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Which no one has even come close to implying. Is reading comprehension really that big of a challenge for you?

 

[indago]

JeffWartman has babbloniously blustered:

Which no one has even come close to implying. Is reading comprehension really that big of a challenge for you?

It says here: "Debt is repaid when a government runs a surplus, or when government revenues exceed expenditures in a given fiscal year."

There is a distinct difference between BUDGET DEFICIT and NATIONAL DEBT.

 

[Toro]

Toro touted:

Yes, and the BASIC FACT is the DEBT has not been paid off, even going back to 1940...



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No, it has not been paid off. Nobody said that it was. What we are saying is that Clinton left a budget surplus. That is not debatable.

The data for your graph comes from here.

http://www.whitehouse.gov/omb/budget/fy2006/pdf/hist.pdf

Your graph comes from here

http://www.cedarcomm.com/~stevelm1/usdebt.htm#_ftn2

This is on page 119 of the government document.

This would explain why debt in your graph continued to rise under Clinton. The government did not pay down the national debt but instead invested the surplus elsewhere. That investment is in the column that says "Less: Held by Federal Government Accounts." That is why gross debt rises and net debt falls.

I'm not entirely sure where all the investments are held, though I imagine it is in assets for future liabilities such as social security. But what matters is net debt, not gross debt. If you have a $200,000 mortgage, your gross debt is $200,000. But if your house is also worth $200,000, your net debt is $0. And under Clinton, the net debt fell, as one would expect.

 

[JeffWartman]

JeffWartman has babbloniously blustered:

It says here: "Debt is repaid when a government runs a surplus, or when government revenues exceed expenditures in a given fiscal year."

There is a distinct difference between BUDGET DEFICIT and NATIONAL DEBT.

Listen to me carefully:

When educated people converse, and one refers to the surplus, it is understood that they are referring to the budget surplus. I have economic discussions like this every single day, and no one has ever made the mistake that you made.

 

[indago]

JeffWartman posted:

I have economic discussions like this every single day, and no one has ever made the mistake that you made.

It wasn't a mistake. I wanted to point out the deceptions promoted concerning the facts, and I believe that anyone reading this thread will see what the facts are, your opinion on the matter notwithstanding...

 

[jreeves]

No, it has not been paid off. Nobody said that it was. What we are saying is that Clinton left a budget surplus. That is not debatable.

The data for your graph comes from here.

http://www.whitehouse.gov/omb/budget/fy2006/pdf/hist.pdf

Your graph comes from here

http://www.cedarcomm.com/~stevelm1/usdebt.htm#_ftn2

This is on page 119 of the government document.

This would explain why debt in your graph continued to rise under Clinton. The government did not pay down the national debt but instead invested the surplus elsewhere. That investment is in the column that says "Less: Held by Federal Government Accounts." That is why gross debt rises and net debt falls.

I'm not entirely sure where all the investments are held, though I imagine it is in assets for future liabilities such as social security. But what matters is net debt, not gross debt. If you have a $200,000 mortgage, your gross debt is $200,000. But if your house is also worth $200,000, your net debt is $0. And under Clinton, the net debt fell, as one would expect.

Clinton's cutting of the military and his turning a blind eye to terrorism (USS Cole, Somalia, the African Embassy bombings), has caused the expontential increase in government spending. Because of his ineptitude in dealing with this new threat he has put the federal government in catch up mode, in order for the government to deal effectively with radical terrorism. Fact, 9/11 took years and years of planning, in the meanwhile Clinton was more worried about sexual relations with that woman.

 

[Zoomie1980]

No, it has not been paid off. Nobody said that it was. What we are saying is that Clinton left a budget surplus. That is not debatable.

The data for your graph comes from here.

http://www.whitehouse.gov/omb/budget/fy2006/pdf/hist.pdf

Your graph comes from here

http://www.cedarcomm.com/~stevelm1/usdebt.htm#_ftn2

This is on page 119 of the government document.

This would explain why debt in your graph continued to rise under Clinton. The government did not pay down the national debt but instead invested the surplus elsewhere. That investment is in the column that says "Less: Held by Federal Government Accounts." That is why gross debt rises and net debt falls.

I'm not entirely sure where all the investments are held, though I imagine it is in assets for future liabilities such as social security. But what matters is net debt, not gross debt. If you have a $200,000 mortgage, your gross debt is $200,000. But if your house is also worth $200,000, your net debt is $0. And under Clinton, the net debt fell, as one would expect.

Of course he did because for much of his Presidency he had the tech boom feeding tax dollars into the system ( a boom he nor anyone else in Washington had ANYTHING to do with), and a Republican congress that forced him to lower taxes, keep social spending at a near stand still, and force Welfare Reform on him. Bush had the unfortunate timing of being hit with the BUST of the tech boom, 9/11 and three of the four most devastating natural disasters in the country's history and, of course, the Afghan and Iraq conflicts.

 

[Toro]

Of course he did because for much of his Presidency he had the tech boom feeding tax dollars into the system ( a boom he nor anyone else in Washington had ANYTHING to do with), and a Republican congress that forced him to lower taxes, keep social spending at a near stand still, and force Welfare Reform on him. Bush had the unfortunate timing of being hit with the BUST of the tech boom, 9/11 and three of the four most devastating natural disasters in the country's history and, of course, the Afghan and Iraq conflicts.

Yes, there is credence to this argument. Clinton was a benefactor of the tech boom, and probably would not have balanced the budget had it not been from capital gains receipts. Having said that, the fiscal balance began improving after Clinton raised taxes, not lowered them, and Bush's monstrous deficits occurred after he cut taxes.

As for Bush, Iraq was a war of choice and cutting taxes was a policy of choice. Even if you are fully supportive of the war, it will have cost $700 billion at the end of this fiscal year and is a contributor to the widening budget.

And of course, if you are going to give props to the Republican Congress of 1994 onwards, you must surely condemn them for their reckless and irresponsible way in which they ran the budget from 2002-2006. Can't have it both ways.

 

[Toro]

Clinton's cutting of the military and his turning a blind eye to terrorism (USS Cole, Somalia, the African Embassy bombings), has caused the expontential increase in government spending. Because of his ineptitude in dealing with this new threat he has put the federal government in catch up mode, in order for the government to deal effectively with radical terrorism. Fact, 9/11 took years and years of planning, in the meanwhile Clinton was more worried about sexual relations with that woman.

Oh, yeah, that's right - its Clinton's fault that Bush invaded Iraq and cut taxes. :

This is not a serious argument.

 

[jreeves]

Oh, yeah, that's right - its Clinton's fault that Bush invaded Iraq and cut taxes. :

This is not a serious argument.

Cutting taxes increased tax revenues, its a fact. No it's Clinton's fault that Osama Bin Laden viewed us as a "paper tiger". We ran from Somalia after we suffered casualities under Clinton.

 

[Alpha1]

Not sure I understand the logic of these sort of posts? Why would anyone spend time defending the rich or arguing about whether they pay enough taxes?

Are you rich and feel you want to keep more?

This is kind of stupid left wing logic that will ask that question but not ask,
"Why would anyone want to support civil rights for blacks?
"Are you black and want your civil rights?

Defending principle for the sake of principle is foreign to them.....

 

[Zoomie1980]

Yes, there is credence to this argument. Clinton was a benefactor of the tech boom, and probably would not have balanced the budget had it not been from capital gains receipts. Having said that, the fiscal balance began improving after Clinton raised taxes, not lowered them, and Bush's monstrous deficits occurred after he cut taxes.

As for Bush, Iraq was a war of choice and cutting taxes was a policy of choice. Even if you are fully supportive of the war, it will have cost $700 billion at the end of this fiscal year and is a contributor to the widening budget.

And of course, if you are going to give props to the Republican Congress of 1994 onwards, you must surely condemn them for their reckless and irresponsible way in which they ran the budget from 2002-2006. Can't have it both ways.

Clinton did NOT raise taxes, other than some fringe federal fees. The federal revenue boom was due almost entirely to tax receipt from the tech boom of the 1990's. The congress kept a lid on ANY tax increase proposed by the Clinton Administration.

Most of the federal spending under Bush has been primarily because of Clinton's neglect of the military and his neglect of the terrorist threat. Both came to roost during the Bush administration and even though the Rep congress is as guilty as anyone concerning earmarks and such, most the spending has been military related. Both to re-equip the military, finish off the missle-defense program, and fighting in Aghanistan and Iraq, neither of which would have been needed under Bush had Clinton took care of business....but the money would have been spent earlier had he taken care of business.

 

[Toro]

Cutting taxes increased tax revenues, its a fact.

It is not a fact. It is utter nonsense. Republican economists say so.

http://usmessageboard.com/showthread.php?t=51527

This one problem in the Republican Party today - the economic illiteracy of so many of its members who believe tax cuts pay for themselves.

Guess what, not even Arthur Laffer thinks the Bush tax cuts paid for themselves. AND the father of supply side economics praises Clinton.

http://usmessageboard.com/showthread.php?t=51626

This is from Greg Mankiw, Bush's former economics advisor

http://gregmankiw.blogspot.com/2006/11/what-happened-to-surplus.html

It just makes me cringe to hear people saying that tax cuts cause government revenue to increase.

Some more on this silliness.

http://finance.yahoo.com/expert/article/economist/4065

But here's the problem when we take Laffer's theory and try to apply it in the U.S.: We don't have a 99 percent marginal tax rate. Or 70 percent. Or even 50 percent. We start with low marginal tax rates relative to the rest of the developed world. (Yes, I understand that it may not feel that way after the check you wrote last month.)

So cutting the tax rate from 36 percent to 33 percent is not going to give you the same kind of economic jolt as slashing a tax rate from 90 percent to 50 percent. There's no huge black market to be shut down, no big supply of skilled workers to be lured back into the labor market, and so on.

Will it generate new economic activity? Probably. And that will generate some incremental tax revenue for the government. But remember, it also means that the government will be taking a smaller cut of all the economic activity that we already have.

Think about a simple numerical example: Assume you've got a $10 trillion economy and an average tax rate of 30 percent. So the government takes $3 trillion.

Let's cut the average tax rate to 25 percent and, for the sake of example, assume that it generates $1 trillion in new economic growth (a Herculean assumption, by the way). So now, what does Uncle Sam get? One quarter of $11 trillion is only $2.75 trillion. The economy grows, government revenues shrink.

That's basically what happened with the large Reagan and George W. Bush tax cuts, both of which were followed by large budget deficits. Yes, spending has a lot to do with that, but the bottom line is unequivocal: In both cases, government revenue was lower than it would have been without the tax cuts.

Can't Lose Weight by Eating More

Neither the Reagan nor the George W. Bush tax cuts were "self-financing," as the Laffer disciples like to argue. According to The Economist -- my former employer and no bastion of left-wing thought -- the current Bush Administration's top economist, Gregory Mankiw, estimated that decreasing taxes on labor would generate enough growth to recoup only about 17 cents for each lost dollar; a tax cut on capital is better, paying for more than half of itself. Still, the bottom line from the Bush Administration itself is that tax cuts reduce Uncle Sam's take.

So why does Laffer's sketch on Dick Cheney's cocktail napkin rank near the top of my list of bad economic ideas? Because, when applied to the U.S., it's intellectually dishonest. The Laffer Curve offers the false promise that we can cut taxes without making any sacrifice on the spending side, and that's simply not true. It's the economic equivalent of arguing that you can lose weight by eating more.

And more

http://usmessageboard.com/showthread.php?t=51330
http://usmessageboard.com/showthread.php?t=51044

 

[Toro]

Clinton did NOT raise taxes, other than some fringe federal fees. The federal revenue boom was due almost entirely to tax receipt from the tech boom of the 1990's. The congress kept a lid on ANY tax increase proposed by the Clinton Administration.

There's a lot of revision going on here today.

The Republicans were saying that the Clinton tax increases were the biggest in history.

http://www.heritage.org/Research/Budget/BG928.cfm
http://www.factcheck.org/treasury_tax_expert_to_bush_clintons_increase.html

And, clearly, whether or not it was the biggest in history, Clinton did raise taxes.

Second, in 1981, ERTA was enacted, which provided for the indexation of the individual income tax parameters. The combination of indexation and relatively large federal budget deficits helped cause 9 of the 11 major tax bills enacted between 1982 and 1993 to increase federal revenue.

Third, all 8 of the major tax bills enacted after 1993 have reduced federal revenue

Omnibus Budget Reconciliation Act of 1993 C created 36% and 39.6% tax rates for individuals C repealed income cap on Medicare taxes C increased transportation fuels taxes by 4.3 cents per gallon C increased taxable portion of Social Security benefits C permanently extended phase-out of personal exemption and limit on itemized deductions C created 35% tax rate for corporations

http://www.ustreas.gov/offices/tax-policy/library/ota81.pdf

 

[Zoomie1980]

It is not a fact. It is utter nonsense. Republican economists say so.

http://usmessageboard.com/showthread.php?t=51527

This one problem in the Republican Party today - the economic illiteracy of so many of its members who believe tax cuts pay for themselves.

Guess what, not even Arthur Laffer thinks the Bush tax cuts paid for themselves. AND the father of supply side economics praises Clinton.

http://usmessageboard.com/showthread.php?t=51626

This is from Greg Mankiw, Bush's former economics advisor

http://gregmankiw.blogspot.com/2006/11/what-happened-to-surplus.html

It just makes me cringe to hear people saying that tax cuts cause government revenue to increase.

Some more on this silliness.

http://finance.yahoo.com/expert/article/economist/4065



And more

http://usmessageboard.com/showthread.php?t=51330
http://usmessageboard.com/showthread.php?t=51044

That's more a testament to the overall lack of influence ANY Federal fiscal policy has on the economy. These checks are going to have a depressingly SMALL impact on the economy because they don't represent enough money injected into the system to make a difference. Tax cuts DO, over time, INCREASE Federal revenue, but not by much, because these cuts don't ever amount to much. Cutting Capital Gains tax, for instance from 28% to 15% is really pissing into the wind. American marginal tax rates are low, and don't move much. Now moving those marginal rates from today back to 50% would probably put is in a depression rivaling that of the 1930's, because they likely wouldn't open up all the deductions we used to enjoy back in the 1980's...

Bottom line, for fiscal policy to have a real impact it needs to be applied in doses for beyond what politicians are ever willing to do. The economy is largely INDEPENDENT of any one country's economic policy because it is so huge that no one country, even the US, can really impact enough to matter by their country's economic policy.

I only cringe when I hear people blaming this President or that Congress for whatever economic ill they perceive, because those people simply don't matter. The Federal Reserve has about the only real power over the economy and even that is limited as we have seen as these rate cuts have had almost NO intended effect on anything other than to tank the dollar.

 

[jreeves]

It is not a fact. It is utter nonsense. Republican economists say so.

http://usmessageboard.com/showthread.php?t=51527

This one problem in the Republican Party today - the economic illiteracy of so many of its members who believe tax cuts pay for themselves.

Guess what, not even Arthur Laffer thinks the Bush tax cuts paid for themselves. AND the father of supply side economics praises Clinton.

http://usmessageboard.com/showthread.php?t=51626

This is from Greg Mankiw, Bush's former economics advisor

http://gregmankiw.blogspot.com/2006/11/what-happened-to-surplus.html

It just makes me cringe to hear people saying that tax cuts cause government revenue to increase.

Some more on this silliness.

http://finance.yahoo.com/expert/article/economist/4065



And more

http://usmessageboard.com/showthread.php?t=51330
http://usmessageboard.com/showthread.php?t=51044

Tax rate reductions increase tax revenues. This truth has been proved at both state and federal levels, including by President Bush's 2003 tax cuts on income, capital gains and dividends. Those reductions have raised federal tax receipts by $785 billion, the largest four-year revenue increase in U.S. history. In fiscal 2007, which ended last month, the government took in 6.7% more tax revenues than in 2006.

These increases in tax revenue have substantially reduced the federal budget deficits. In 2004 the deficit was $413 billion, or 3.5% of gross domestic product. It narrowed to $318 billion in 2005, $248 billion in 2006 and $163 billion in 2007. That last figure is just 1.2% of GDP, which is half of the average of the past 50 years.

Lower tax rates have be so successful in spurring growth that the percentage of federal income taxes paid by the very wealthy has increased. According to the Treasury Department, the top 1% of income tax filers paid just 19% of income taxes in 1980 (when the top tax rate was 70%), and 36% in 2003, the year the Bush tax cuts took effect (when the top rate became 35%). The top 5% of income taxpayers went from 37% of taxes paid to 56%, and the top 10% from 49% to 68% of taxes paid. And the amount of taxes paid by those earning more than $1 million a year rose to $236 billion in 2005 from $132 billion in 2003, a 78% increase.

Finally, another inconvenient truth is that there have been 49 consecutive months of job growth as a result of the economic expansion induced by President Bush's 2003 tax rate reductions.


http://opinionjournal.com/columnists/pdupont/?id=110010798

http://www.treas.gov/press/releases/reports/revenue growth.jpg

http://www.cato.org/testimony/ct-sm03182003.html

http://www.freedomworks.org/informed/issues_template.php?issue_id=2685

Revenues increased ....