Can you pay down the debt WITHOUT growing the "economy"?

[itfitzme]

It occurs to me that a problem is that macro econ and business accounting is a bit to complicated for many people. The problem that alot of folks seem to have with macro econ is that there are short run and long run effects that are completely opposite. The problem with business econ is that the accounting is not like a household where taxes are usually before expences.

Together, these seem to cause every manner of confusion.

 

[itfitzme]

...When your taxes are lowered, so is everyone elses. Everyone then has more money for the same amount of goods being produced. For a few months, output may be stimulated but shortly, prices just rise to consume all monies.

This is what's great about Macroeconomics-- the idea is that when costs (=taxes) are lowered, not only do consumers have more money to buy, but producers see lower costs and respond by producing more products at lower prices. It's a positive feedback loop AKA "virtuous circle".

BTW , taxes are not a cost. Taxes are a percentage of earnings (for businesses).

Earnings are after costs. Hence ther terms EBT and EBIT.

Costs come out of revenues. Often, for companies, there are no earnings so no taxes.

Costs/unit = fixed cost/qty + variable cost
Total cost = Cost/Unit * Qty
Revenues = Price * Qty
Earning Before Interest and Taxes(EBIT) = Revenues - Total Cost
EBT = EBIT - Interest
Profit = EBT(1-t) where t is tax rate

 

[KissMy]

Is the tax burden the tax rate or the amount of taxes paid? Just sayin, I don't get how the tax rate is the actual share of burden. But then I'm just a math major what would I know about these monkey charts.

Piketty & Saez used raw IRS data provided by the Statistics of Income Division for their computations. They divide average net tax revenues collected by the average modified income for each quintile. As a math major, I assume you know what a quintile is?

And I guess you call them "monkey charts" because in your world of people too lazy to look up the methodological notes for anything you don't agree with, ignorance is superior to honesty.

No offense oldfart, but the chart shown above does not just show quintiles of income earners. Everyone knows the bottom 51% don't pay any federal income tax after they get their checks back. Everyone can see this chart has 7 bars not 5.

You can't believe everything you read. This graph is crap.

It is designed to add two "extra" bars to the quin-tile and focus on those as if they were a part of the quin-tile. They are counting the 80% group 3 times in this graph. Once for 80-100 another time for 99-100 and yet a third time for 99.9-100. It's like one of those cig commercials with the chick up top and the warning at the bottom. The truth in this chart is that the bottom two bars are at zero but the "zero" line is "absent" The other truth in this chart is that the two middle class income groups (40-80) and the upper class income group (80-100) are carrying the entire burden for the lower two income groups (0-40%).

This is the real quintile chart:

Your graph is crap! It leaves out payroll taxes that are funding government tax breaks for rich carried interest assholes.

 

[rdean]

Piketty & Saez used raw IRS data provided by the Statistics of Income Division for their computations. They divide average net tax revenues collected by the average modified income for each quintile. As a math major, I assume you know what a quintile is?

And I guess you call them "monkey charts" because in your world of people too lazy to look up the methodological notes for anything you don't agree with, ignorance is superior to honesty.

No offense oldfart, but the chart shown above does not just show quintiles of income earners. Everyone knows the bottom 51% don't pay any federal income tax after they get their checks back. Everyone can see this chart has 7 bars not 5.

You can't believe everything you read. This graph is crap.

It is designed to add two "extra" bars to the quin-tile and focus on those as if they were a part of the quin-tile. They are counting the 80% group 3 times in this graph. Once for 80-100 another time for 99-100 and yet a third time for 99.9-100. It's like one of those cig commercials with the chick up top and the warning at the bottom. The truth in this chart is that the bottom two bars are at zero but the "zero" line is "absent" The other truth in this chart is that the two middle class income groups (40-80) and the upper class income group (80-100) are carrying the entire burden for the lower two income groups (0-40%).

This is the real quintile chart:

So you are saying the wealthiest Americans pay less than 15% and everyone else 5% or less? You sure?

Well?

 

[itfitzme]

No offense oldfart, but the chart shown above does not just show quintiles of income earners. Everyone knows the bottom 51% don't pay any federal income tax after they get their checks back. Everyone can see this chart has 7 bars not 5.

You can't believe everything you read. This graph is crap.

It is designed to add two "extra" bars to the quin-tile and focus on those as if they were a part of the quin-tile. They are counting the 80% group 3 times in this graph. Once for 80-100 another time for 99-100 and yet a third time for 99.9-100. It's like one of those cig commercials with the chick up top and the warning at the bottom. The truth in this chart is that the bottom two bars are at zero but the "zero" line is "absent" The other truth in this chart is that the two middle class income groups (40-80) and the upper class income group (80-100) are carrying the entire burden for the lower two income groups (0-40%).

This is the real quintile chart:

So you are saying the wealthiest Americans pay less than 15% and everyone else 5% or less? You sure?

Well?

The entire problem with this idea is that it is based on the assumption that the money belongs to anyone specifically. It doesn't. They are a public good, a tool that we use to communicate information. Tax rates are whatever they need to be to maximize the functionality of the economy.

 

[expat_panama]

...taxes are not a cost. Taxes are a percentage of earnings...

--so every time taxes go up it means that the earnings have gone up!!

 

[itfitzme]

...taxes are not a cost. Taxes are a percentage of earnings...

--so every time taxes go up it means that the earnings have gone up!!

You don't do much business accounting, do you?

Taxes are on earnings, not on revenues. If a company has zero revenues, it pays zero taxes.

Profit = Earnings * (1-t)
Taxes = Earnings * t

Earnings = Revenues - Costs.

So, Taxes = ( Revenues - Costs ) * t

So, when earnings increase, taxes increase as do profits.

I have no idea what you think you've said with "every time taxes go up it means that the earnings have gone up"

Perhaps you might want to take algebra. Cus, this;

Just demonstrates your stupidity.

 

[RKMBrown]

No offense oldfart, but the chart shown above does not just show quintiles of income earners. Everyone knows the bottom 51% don't pay any federal income tax after they get their checks back. Everyone can see this chart has 7 bars not 5.

You can't believe everything you read. This graph is crap.

It is designed to add two "extra" bars to the quin-tile and focus on those as if they were a part of the quin-tile. They are counting the 80% group 3 times in this graph. Once for 80-100 another time for 99-100 and yet a third time for 99.9-100. It's like one of those cig commercials with the chick up top and the warning at the bottom. The truth in this chart is that the bottom two bars are at zero but the "zero" line is "absent" The other truth in this chart is that the two middle class income groups (40-80) and the upper class income group (80-100) are carrying the entire burden for the lower two income groups (0-40%).

This is the real quintile chart:

So you are saying the wealthiest Americans pay less than 15% and everyone else 5% or less? You sure?

Well?

Define wealthiest. This chart has almost nothing to do with people's assets. It is a chart showing effective income tax rate by quintile.

 

[Quantum Windbag]

...When your taxes are lowered, so is everyone elses. Everyone then has more money for the same amount of goods being produced. For a few months, output may be stimulated but shortly, prices just rise to consume all monies.

This is what's great about Macroeconomics-- the idea is that when costs (=taxes) are lowered, not only do consumers have more money to buy, but producers see lower costs and respond by producing more products at lower prices. It's a positive feedback loop AKA "virtuous circle".

BTW , taxes are not a cost. Taxes are a percentage of earnings (for businesses).

Earnings are after costs. Hence ther terms EBT and EBIT.

Costs come out of revenues. Often, for companies, there are no earnings so no taxes.

Business do not figure taxes after earnings, which is why you should never comment on economics, despite the fact that you read a book.

 

[RKMBrown]

This is what's great about Macroeconomics-- the idea is that when costs (=taxes) are lowered, not only do consumers have more money to buy, but producers see lower costs and respond by producing more products at lower prices. It's a positive feedback loop AKA "virtuous circle".

BTW , taxes are not a cost. Taxes are a percentage of earnings (for businesses).

Earnings are after costs. Hence ther terms EBT and EBIT.

Costs come out of revenues. Often, for companies, there are no earnings so no taxes.

Business do not figure taxes after earnings, which is why you should never comment on economics, despite the fact that you read a book.

Correct, but most do "estimate" earnings before they determine how to avoid taxes

 

[itfitzme]

This is what's great about Macroeconomics-- the idea is that when costs (=taxes) are lowered, not only do consumers have more money to buy, but producers see lower costs and respond by producing more products at lower prices. It's a positive feedback loop AKA "virtuous circle".

BTW , taxes are not a cost. Taxes are a percentage of earnings (for businesses).

Earnings are after costs. Hence ther terms EBT and EBIT.

Costs come out of revenues. Often, for companies, there are no earnings so no taxes.

Business do not figure taxes after earnings, which is why you should never comment on economics, despite the fact that you read a book.

Taxes are on earnings.

The term is EBIT, Earnings Before Interest and Taxes. There is also Earnings Before Taxes. There is a reason that these are the standard terms.

Why are you having such a hard time with this. In what odd reality do you believe that the tax rate is applied to revenues? That is ridiculous because then products would be taxed multiple times.

It is not Earnings = Revenues * (1-tax rate) - costs. That is absurd.

It is Profit = Earnings * (1 - tax rate) = (1 - tax rate) ( Revenues - costs)

If you are so damned sure, prove it.

 

[itfitzme]

If you like, we can use

Gross Profit
Net Profit
Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)
Earnings Before Interest and Taxes (EBIT)
Earnings Before Taxes (EBT)
Earnings After Tax/ Net Profit After Tax
Earnings After Tax/ Net Profit After Tax

Instead of simply "Revenue", "Cost", "Earnings" and "Profit".

 

[Quantum Windbag]

BTW , taxes are not a cost. Taxes are a percentage of earnings (for businesses).

Earnings are after costs. Hence ther terms EBT and EBIT.

Costs come out of revenues. Often, for companies, there are no earnings so no taxes.

Business do not figure taxes after earnings, which is why you should never comment on economics, despite the fact that you read a book.

Correct, but most do "estimate" earnings before they determine how to avoid taxes

True.

Yet taxes are still listed as an expense, and deducted before a company reports its profits/earnings on its annual report.

 

[Quantum Windbag]

BTW , taxes are not a cost. Taxes are a percentage of earnings (for businesses).

Earnings are after costs. Hence ther terms EBT and EBIT.

Costs come out of revenues. Often, for companies, there are no earnings so no taxes.

Business do not figure taxes after earnings, which is why you should never comment on economics, despite the fact that you read a book.

Taxes are on earnings.

The term is EBIT, Earnings Before Interest and Taxes. There is also Earnings Before Taxes. There is a reason that these are the standard terms.

Why are you having such a hard time with this. In what odd reality do you believe that the tax rate is applied to revenues? That is ridiculous because then products would be taxed multiple times.

It is not Earnings = Revenues * (1-tax rate) - costs. That is absurd.

It is Profit = Earnings * (1 - tax rate) = (1 - tax rate) ( Revenues - costs)

If you are so damned sure, prove it.

Is it because you read a book?

Taxes are reported as an expense. The reason you get earnings before taxes is that idiots, like you, wrote the law to make the business pretend that taxes are not payed by the people who buy the product the business sells, not because the business actually pays the taxes.

 

[RKMBrown]

Business do not figure taxes after earnings, which is why you should never comment on economics, despite the fact that you read a book.

Correct, but most do "estimate" earnings before they determine how to avoid taxes

True.

Yet taxes are still listed as an expense, and deducted before a company reports its profits/earnings on its annual report.

AYUP and no CEO ever got fired by the owners for keeping taxes to a minimum. A CEO would have to be incompetent to have a significant amount corporate taxes, that could have been otherwise mitigated, on the annual report.

 

[itfitzme]

Business do not figure taxes after earnings, which is why you should never comment on economics, despite the fact that you read a book.

Taxes are on earnings.

The term is EBIT, Earnings Before Interest and Taxes. There is also Earnings Before Taxes. There is a reason that these are the standard terms.

Why are you having such a hard time with this. In what odd reality do you believe that the tax rate is applied to revenues? That is ridiculous because then products would be taxed multiple times.

It is not Earnings = Revenues * (1-tax rate) - costs. That is absurd.

It is Profit = Earnings * (1 - tax rate) = (1 - tax rate) ( Revenues - costs)

If you are so damned sure, prove it.

Is it because you read a book?

Taxes are reported as an expense. The reason you get earnings before taxes is that idiots, like you, wrote the law to make the business pretend that taxes are not payed by the people who buy the product the business sells, not because the business actually pays the taxes.

Because I learn, work and live in the real world. Sorry to hear you can't read.

Oh, and btw,,, I didn't write any laws, so your just displaying some weird paranoid delusional fantasy. You repeatedly demonstrate that you are living in a deluded fantasy land of your own design where no manner of reality is allowed to creep in. That was obvious from the get go.

You can bullshit all you want, but the fact remains that taxes are on earnings after costs. It would be stupid to make them on revenues before costs because then the taxes could exceed earnings. Of course costs are subtracted out first. Interest expenses are also subtracted out.

If you are so stupid to hire an accountant or business exec that never read a book, well, what an we say? Your costs is another persons revenues.

 

[Quantum Windbag]

Taxes are on earnings.

The term is EBIT, Earnings Before Interest and Taxes. There is also Earnings Before Taxes. There is a reason that these are the standard terms.

Why are you having such a hard time with this. In what odd reality do you believe that the tax rate is applied to revenues? That is ridiculous because then products would be taxed multiple times.

It is not Earnings = Revenues * (1-tax rate) - costs. That is absurd.

It is Profit = Earnings * (1 - tax rate) = (1 - tax rate) ( Revenues - costs)

If you are so damned sure, prove it.

Is it because you read a book?

Taxes are reported as an expense. The reason you get earnings before taxes is that idiots, like you, wrote the law to make the business pretend that taxes are not payed by the people who buy the product the business sells, not because the business actually pays the taxes.

Because I learn, work and live in the real world. Sorry to hear you can't read.

Oh, and btw,,, I didn't write any laws, so your just displaying some weird paranoid delusional fantasy. You repeatedly demonstrate that you are living in a deluded fantasy land of your own design where no manner of reality is allowed to creep in. That was obvious from the get go.

You can bullshit all you want, but the fact remains that taxes are on earnings after costs. It would be stupid to make them on revenues before costs because then the taxes could exceed earnings. Of course costs are subtracted out first. Interest expenses are also subtracted out.

If you are so stupid to hire an accountant or business exec that never read a book, well, what an we say? Your costs is another persons revenues.

I didn't say you wrote any laws, I said you are an idiot. If you weren't an idiot you would have known that.

 

[itfitzme]

Is it because you read a book?

Taxes are reported as an expense. The reason you get earnings before taxes is that idiots, like you, wrote the law to make the business pretend that taxes are not payed by the people who buy the product the business sells, not because the business actually pays the taxes.

Because I learn, work and live in the real world. Sorry to hear you can't read.

Oh, and btw,,, I didn't write any laws, so your just displaying some weird paranoid delusional fantasy. You repeatedly demonstrate that you are living in a deluded fantasy land of your own design where no manner of reality is allowed to creep in. That was obvious from the get go.

You can bullshit all you want, but the fact remains that taxes are on earnings after costs. It would be stupid to make them on revenues before costs because then the taxes could exceed earnings. Of course costs are subtracted out first. Interest expenses are also subtracted out.

If you are so stupid to hire an accountant or business exec that never read a book, well, what an we say? Your costs is another persons revenues.

I didn't say you wrote any laws, I said you are an idiot. If you weren't an idiot you would have known that.

Right, you said, " idiots, like you, wrote the law to make the business".... Oh, so sorry for the confusion. Of course, doesn't change that you have some paranoid delusion.

Just explain, why is it that you work so hard at being a moron?

 

[Quantum Windbag]

Because I learn, work and live in the real world. Sorry to hear you can't read.

Oh, and btw,,, I didn't write any laws, so your just displaying some weird paranoid delusional fantasy. You repeatedly demonstrate that you are living in a deluded fantasy land of your own design where no manner of reality is allowed to creep in. That was obvious from the get go.

You can bullshit all you want, but the fact remains that taxes are on earnings after costs. It would be stupid to make them on revenues before costs because then the taxes could exceed earnings. Of course costs are subtracted out first. Interest expenses are also subtracted out.

If you are so stupid to hire an accountant or business exec that never read a book, well, what an we say? Your costs is another persons revenues.

I didn't say you wrote any laws, I said you are an idiot. If you weren't an idiot you would have known that.

Right, you said, " idiots, like you, wrote the law to make the business".... Oh, so sorry for the confusion. Of course, doesn't change that you have some paranoid delusion.

Just explain, why is it that you work so hard at being a moron?

Yes, idiots, like you, wrote the law. In other words, I compared you to the idiots that wrote the law. If I had remembered that you can't parse a sentence I would have split that up into two sentences so you wouldn't have been confused.

 

[expat_panama]

...When your taxes are lowered, so is everyone elses. Everyone then has more money for the same amount of goods being produced. For a few months, output may be stimulated but shortly, prices just rise to consume all monies.

This is what's great about Macroeconomics-- the idea is that when costs (=taxes) are lowered, not only do consumers have more money to buy, but producers see lower costs and respond by producing more products at lower prices. It's a positive feedback loop AKA "virtuous circle".

BTW , taxes are not a cost. Taxes are a percentage of earnings (for businesses). Earnings are after costs. Hence ther terms EBT and EBIT...

People can define these words anyway they want to. What happens in business is people agree to define these words according to generally accepted accounting principles (GAAP), and that means the word "earnings" means "net income" and a typical standard income statement shows net income with taxes already subtracted.

None of that matters, it's just stuff I've used in the market place where continued participation depends on good faith. This conversation however appears to have wandered into political squabbling where success depends instead on an increasingly emotional fervor needed maintain the devotion of its followers.

That stuff's way over my head and I try to leave it to the experienced professionals