Bush TAX Cut Extensions Will Increase Deficit

[Trajan]

Invest?

They haven't "invested" in 8 years..what makes you think they are going to start now?

Many think that day trading in the market is investing.

A Large majority of them don't even do that.

The rich don't retain their wealth taking risks (especially with their own money). They do it by getting into a sure thing.

for Christs sake....

 

[asterism]

This all assumes a static view of the economy which is false. Does anyone know of a projection made by the CBO that came true?

Why do you think its a static view?

It's an analysis based on one variable, the personal income tax rate. It doesn't take into account changes in the economy as a result of those tax rates.

 

[Sallow]

Many think that day trading in the market is investing.

A Large majority of them don't even do that.

The rich don't retain their wealth taking risks (especially with their own money). They do it by getting into a sure thing.

for Christs sake....

Well go on..feel free.

Name all the new innovative companies that came to be under Bush because of new investment, directly due to revenue from Tax cuts.

You think someone like Donald Trump, invests his own cash, into anything??

 

[Toro]

This all assumes a static view of the economy which is false. Does anyone know of a projection made by the CBO that came true?

Why do you think its a static view?

It's an analysis based on one variable, the personal income tax rate. It doesn't take into account changes in the economy as a result of those tax rates.

How do you know that? Did you look at the study? I didn't. Most of these type of econometric forecasts are dynamic. I assumed it was no different. Am I wrong?

 

[Trajan]

A Large majority of them don't even do that.

The rich don't retain their wealth taking risks (especially with their own money). They do it by getting into a sure thing.

for Christs sake....

Well go on..feel free.

Name all the new innovative companies that came to be under Bush because of new investment, directly due to revenue from Tax cuts.

You think someone like Donald Trump, invests his own cash, into anything??

Warren Buffett loses billions
Berkshire Hathaway drops $10.9bn in investor's worst year since 1965.


Warren Buffett loses billions - Telegraph


that took 5 seconds.....

 

[Sallow]

for Christs sake....

Well go on..feel free.

Name all the new innovative companies that came to be under Bush because of new investment, directly due to revenue from Tax cuts.

You think someone like Donald Trump, invests his own cash, into anything??

Warren Buffett loses billions
Berkshire Hathaway drops $10.9bn in investor's worst year since 1965.


Warren Buffett loses billions - Telegraph


that took 5 seconds.....

Buffett's little investment club is innovation????

He was dumping cash into the Market. And that's because he thought it was his civic duty to stop a crash.

 

[boedicca]

By about 2% of GDP per year.

Bush Tax Cuts: Economic Growth vs. Fiscal Sustainability | The Big Picture

Complete and utter nonsense.

Such models are based on static growth. In reality, we know that lower taxes spur economic growth, with a resultant rise in tax receipts.

How do we know that? Because the leaders of the right cannot be wrong?

We know this from history, a subject for which those who advocate high taxation and centralized planning have either a very poor understand or an utter lack of respect.

 

[Revere]

It's only an issue on Obama's current spending path.

No amount of taxes will fill the hole he is digging.

And nothing to show for it.

 

[SFC Ollie]

Now I'm not any economist or all that super with high financing. But I seem to recall hearing how those who have the money to make the investments that would lead to job growth aren't investing because they don't know what Obama's policies are going to do to them.

Made sense to me.

 

[Toro]

From the report

CBO estimates that permanently extending the tax provisions of EGTRRA and JGTRRA would increase the deficit by $1,215 billion over five years and by $3,312 billion over 10 years.12 ...

12 CBO, The Budget and Economic Outlook: An Update, August 2010, Table 1.7. The increase in debt service is included in these estimates. ...

The estimated budgetary costs of permanently extending the provisions of the Bush tax cuts are reported in Table 1. Over five years, extending the provisions are estimated to reduce tax revenues by $1,141 billion. The 10-year revenue loss is estimated to be $2,805 billion. By far the costliest provision to extend is the reduced individual income tax rates (which includes keeping the 10%, 25%, 28%, 33%, and 35% tax rates), accounting for over 50% of the total revenue loss. The estimated cost of extending these provisions amounts to over half of the estimated budget deficit that would result from allowing the Bush tax cuts to expire as scheduled.14 Debt service costs associated with permanently extending the Bush tax cuts are also reported in Table 1. Over the 10-year budget window, debt service costs are estimated to be $606 billion. Furthermore, the alternative minimum tax (AMT), which is likely to be indexed to inflation, interacts with the extension of the Bush tax cuts. The last row of Table 1 reports the combined costs of indexing the AMT, extending the Bush tax cuts, and associated debt service, which is estimated to be $5,048 billion over 10 years.

Bush.tax.Cuts.crs 10.27

The CBO uses a dynamic, not a static model to estimate future revenues.

 

[loosecannon]

Now I'm not any economist or all that super with high financing. But I seem to recall hearing how those who have the money to make the investments that would lead to job growth aren't investing because they don't know what Obama's policies are going to do to them.

Made sense to me.

It wasn't true tho. They are hoarding for the same basic reason that households are hoarding. It helps their bottom line at a time when expansion is a huge gamble.

Cut inventory, cut staff, cut overhead and increase profits. That's what nearly every business in the US is doing. The rest are edging toward insolvency.

The entirety of our economy from the household to the county, state feds is all based on spending tomorrows money today, with the expectation that spending pre emptively will generate non stop growth, which is now required to cover the spending already accounted for.

If the economy doesn't grow under this business plan then the household, county, state, feds end up unable to balance the books because there isn't money to pay for expenses and interest.

Businesses and households are responding rationally by paying down debt, deferring investments and aborting the business practice that caused this calamity in the first place> spending tomorrow's money today.

The counties, states and feds can't do that, so they just borrow and balance budgets with accounting tricks.

If Warren Buffet was president and every business knew exactly what he was gonna do for them businesses still would be hunkering down waiting for a real recovery before they speculate on growth.

 

[Sallow]

Now I'm not any economist or all that super with high financing. But I seem to recall hearing how those who have the money to make the investments that would lead to job growth aren't investing because they don't know what Obama's policies are going to do to them.

Made sense to me.

It wasn't true tho. They are hoarding for the same basic reason that households are hoarding. It helps their bottom line at a time when expansion is a huge gamble.

Cut inventory, cut staff, cut overhead and increase profits. That's what nearly every business in the US is doing. The rest are edging toward insolvency.

The entirety of our economy from the household to the county, state feds is all based on spending tomorrows money today, with the expectation that spending pre emptively will generate non stop growth, which is now required to cover the spending already accounted for.

If the economy doesn't grow under this business plan then the household, county, state, feds end up unable to balance the books because there isn't money to pay for expenses and interest.

Businesses and households are responding rationally by paying down debt, deferring investments and aborting the business practice that caused this calamity in the first place> spending tomorrow's money today.

The counties, states and feds can't do that, so they just borrow and balance budgets with accounting tricks.

If Warren Buffet was president and every business knew exactly what he was gonna do for them businesses still would be hunkering down waiting for a real recovery before they speculate on growth.

Add in..most rich people don't play with their own money. The get money from other people..or use funds to take chances. So risk is socialized and profit is privatized.

Plus Buffet probably got a nice return on his investment when he dumped all that cash into the Market. Especially after TARP.

 

[Revere]

Now I'm not any economist or all that super with high financing. But I seem to recall hearing how those who have the money to make the investments that would lead to job growth aren't investing because they don't know what Obama's policies are going to do to them.

Made sense to me.

It wasn't true tho. They are hoarding for the same basic reason that households are hoarding. It helps their bottom line at a time when expansion is a huge gamble.

Cut inventory, cut staff, cut overhead and increase profits. That's what nearly every business in the US is doing. The rest are edging toward insolvency.

The entirety of our economy from the household to the county, state feds is all based on spending tomorrows money today, with the expectation that spending pre emptively will generate non stop growth, which is now required to cover the spending already accounted for.

If the economy doesn't grow under this business plan then the household, county, state, feds end up unable to balance the books because there isn't money to pay for expenses and interest.

Businesses and households are responding rationally by paying down debt, deferring investments and aborting the business practice that caused this calamity in the first place> spending tomorrow's money today.

The counties, states and feds can't do that, so they just borrow and balance budgets with accounting tricks.

If Warren Buffet was president and every business knew exactly what he was gonna do for them businesses still would be hunkering down waiting for a real recovery before they speculate on growth.

Add in..most rich people don't play with their own money. The get money from other people..or use funds to take chances. So risk is socialized and profit is privatized.

Who invests and does not participate in profit, only the risk?

 

[william the wie]

I think the corporate tax code is actually the bigger culprit here rather than individual taxes. Next worse is regulatory burden and our screwed up immigration laws. People who want to insource jobs to the US as entrepreneurs still have to jump through hoops to get in. As long as immigrants pass background checks and physicals why should they have to jump through any other hoops to bring jobs into this country? French MBAs go on a waiting list to get in here to create jobs and I have to ask why? Yeah, I would rather tax stupidity through a national lottery than have an individual income tax but that is priority four for me.

 

[loosecannon]

The corporate tax is nearly a non issue imo because corporations actually pay very few taxes. But it is an issue.

I can't agree with your assertion that the personal income tax is a bigger issue and here is why:

Because of globalization corporations can export industries abroad, without globalization this would be next to impossible.

So corps can shop around the globe for better "host" nations, and of course that shopping will be influenced by wages, regulations, taxes, barriers to entry, access to infrastructure, qualified labor etc. But equally important is income tax of the executive class.

Nothing would piss off wall street more than having the income of their execs capped or increasing those exec's tax burden. It effects their personal bottom line immediately.

 

[Revere]

Do free countries cap people's income?

 

[loosecannon]

Add in..most rich people don't play with their own money. The get money from other people..or use funds to take chances. So risk is socialized and profit is privatized.

Who invests and does not participate in profit, only the risk?

Nobody, you inverted his statement.

But if you meant to ask who invests and does not participate in risks, only profits then the easy answer is "those that are too big to fail, and anybody who buys US bonds".

 

[Revere]

Would it piss off NFL Players Association or the Screen Actors Guild if their salaries were capped, too?

 

[loosecannon]

Do free countries cap people's income?

yes.

 

[loosecannon]

Would it piss off NFL Players Association or the Screen Actors Guild if their salaries were capped, too?

yes.

Altho it would be fun to be able to hand out $25K fines over the weekend if you don't like a CEO's tude with the press.

That might really piss em off. So let's do it!