Congressional Research Service Report On Tax Cuts For Wealthy Suppressed By GOP
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jasonnfree
Gold Member
- May 23, 2012
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That's all. They were promised they would get trickle down from Reagan. Give it time. it was just three decades ago.
Liberal
Libruhl! Libruhl!
Congressional Research Service Report On Tax Cuts For Wealthy Suppressed By GOP
Once again, the GOP is trying to deny the facts.
This was non-partisan committee and was a study brought in fruition by the republicans trying legitimize their "lower taxes for my buddies" plans. They got more than they bargained for and tried to suppress it..
But, I am sure that committee is now "partisan" or even "librul", and there will be plenty of people attempting to say otherwise.
Once again, the GOP is trying to deny the facts.
This was non-partisan committee and was a study brought in fruition by the republicans trying legitimize their "lower taxes for my buddies" plans. They got more than they bargained for and tried to suppress it..
But, I am sure that committee is now "partisan" or even "librul", and there will be plenty of people attempting to say otherwise.
Steph. do you believe that lower tax rates on the ultra rich will benefit you?
Or do you just dismiss anything that doens't fit into your belief system?
Wiseacre
Retired USAF Chief
The report in question was never requested by any member of Congress, according to it's author Thomas Hungerford. Obviously the report is a political bonus for the Obama campaign, appearing at a most opportune time. Turns out that Mr. Hungerford has donated to the Obama campaign and Senate Campaign and worked as a economist in the White House budget office under Bill Clinton. So, one might question if the report was politically motivated and possibly flawed in it's accuracy. There are other studies that purport the opposite of what Mr Hungerford's study says; apparently it was not peer reviewed.
g5000
Diamond Member
- Nov 26, 2011
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I will tell you what I believe. I believe any additional money taken from the rich will mean additional spending. I know we will continue to have deficit spending.
Our problem is not low taxes. Our problem is big spending.
.
Wiseacre
Retired USAF Chief
different problems and no one soloution.
g5000
Diamond Member
- Nov 26, 2011
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All right. Long post coming up. Dust off your attention span.
I'm not going to get all Laffer on you, but I firmly believe there is a point where too high taxes negatively impacts GDP, and there is a point where too low taxes creates an unnatural concentration of wealth that has a very negative affect on everyone else.
What those exact numbers are is impossible to say, but one can look for the effects to know when one has arrived at either point.
You know what made Ronald Reagan a conservative? Making movies did. Reagan discovered that if he exceeded working in a certain number of movies in a year, 90 percent of everything he earned on subsequent movies would go to the government. So there was no incentive to work beyond that threshold level. And this told him that high taxes results in lowered productivity. If taxes were lower, he would have produced more movies.
If you are of a liberal bent, you may be thinking fewer movies is not a big deal, but you would be missing the point entirely. Movie stars are not the only ones who make a lot of money by making things.
When you look at charts which depict how much of the nation's income was concentrated in the top 0.1 percent during times of high taxes, it is a low figure precisely because the wealthy stop producing, and therefore stop making any more money, when they hit the high tax rate. There literally is no percentage in working and producing more.
So let's pause here and ask ourselves, are the current tax rates too high? Are they causing people to produce less?
The answer is clearly no. We are producing less right now because there is less demand, not because taxes are too high. No one is claiming there is no percentage in producing more.
All right. So what happens if tax rates are too low?
Well, if a person is able to keep more of their money, this is usually a very good thing. But if rich people are able to concentrate their money, something bad frequently happens that is known as the Cantillon effect.
As the early recipients of any new money in the monetary supply, the wealthy are able to build a higher standard of living for themselves at the expense of later recipients.
The latest crash is a textbook example. There was $70 trillion of wealth seeking investments and, combined with the high octane of the Fed's low interest rates, that money concentrated, at first, on the real estate sector and house prices exploded. The reason the money was invested in real estate is because that was the only sector that was performing after the last recession following 9/11.
As the wealthy began pouring their money into that sector, it caused a localized inflation in that sector, driving the price of houses out of the reach of the ordinary person. Banks then had to come up with creative financing in order to keep houses in the reach of ordinary people so they could borrow the wealthy investors' money so the wealthy could make even more money, concentrating wealth even further.
Later, the derivatives created out of mortgages to serve the wealthy were not enough, and so financial firms began to construct derivatives out of every possible debt product. Car loans, credit cards, sovereign debt (Greece, Italy, Spain, etc), college loans, HELOCs, equity loans. As the wealthy demanded more and more of these products, the global financial community had to find more and more ways to get the little people to borrow more and more money.
The Cantillon Effect in full bloom. The rich getting richer at the expense of everyone else.
The poor are bankrupting us through the government. The rich are bankrupting us through the banks.
We are caught in the middle.
Raising taxes can go a long way toward solving one of those problems. But if all we do with the added revenues is turn around and spend it without reducing our debt, then we are just jerking ourselves off.
.
I'm not going to get all Laffer on you, but I firmly believe there is a point where too high taxes negatively impacts GDP, and there is a point where too low taxes creates an unnatural concentration of wealth that has a very negative affect on everyone else.
What those exact numbers are is impossible to say, but one can look for the effects to know when one has arrived at either point.
You know what made Ronald Reagan a conservative? Making movies did. Reagan discovered that if he exceeded working in a certain number of movies in a year, 90 percent of everything he earned on subsequent movies would go to the government. So there was no incentive to work beyond that threshold level. And this told him that high taxes results in lowered productivity. If taxes were lower, he would have produced more movies.
If you are of a liberal bent, you may be thinking fewer movies is not a big deal, but you would be missing the point entirely. Movie stars are not the only ones who make a lot of money by making things.
When you look at charts which depict how much of the nation's income was concentrated in the top 0.1 percent during times of high taxes, it is a low figure precisely because the wealthy stop producing, and therefore stop making any more money, when they hit the high tax rate. There literally is no percentage in working and producing more.
So let's pause here and ask ourselves, are the current tax rates too high? Are they causing people to produce less?
The answer is clearly no. We are producing less right now because there is less demand, not because taxes are too high. No one is claiming there is no percentage in producing more.
All right. So what happens if tax rates are too low?
Well, if a person is able to keep more of their money, this is usually a very good thing. But if rich people are able to concentrate their money, something bad frequently happens that is known as the Cantillon effect.
As the early recipients of any new money in the monetary supply, the wealthy are able to build a higher standard of living for themselves at the expense of later recipients.
The latest crash is a textbook example. There was $70 trillion of wealth seeking investments and, combined with the high octane of the Fed's low interest rates, that money concentrated, at first, on the real estate sector and house prices exploded. The reason the money was invested in real estate is because that was the only sector that was performing after the last recession following 9/11.
As the wealthy began pouring their money into that sector, it caused a localized inflation in that sector, driving the price of houses out of the reach of the ordinary person. Banks then had to come up with creative financing in order to keep houses in the reach of ordinary people so they could borrow the wealthy investors' money so the wealthy could make even more money, concentrating wealth even further.
Later, the derivatives created out of mortgages to serve the wealthy were not enough, and so financial firms began to construct derivatives out of every possible debt product. Car loans, credit cards, sovereign debt (Greece, Italy, Spain, etc), college loans, HELOCs, equity loans. As the wealthy demanded more and more of these products, the global financial community had to find more and more ways to get the little people to borrow more and more money.
The Cantillon Effect in full bloom. The rich getting richer at the expense of everyone else.
The poor are bankrupting us through the government. The rich are bankrupting us through the banks.
We are caught in the middle.
Raising taxes can go a long way toward solving one of those problems. But if all we do with the added revenues is turn around and spend it without reducing our debt, then we are just jerking ourselves off.
.
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