independent economists overwhelmingly side with democrats on economic policy

[Toddsterpatriot]

And when they have two options, expansion in an area with a 20% tax or expansion in an area with a 35% tax, which do you feel they would favor?
There you go again with that false choice. If a company wants to operate in the United States they have to pay the United States corporate tax rate. Just like if a company wants to operate in the United Arab Emirates they have to pay the HIGHER United Arab Emirates tax rate. US companies invested almost ten billion dollars in the UAE last year. Guess tax rates were not part of the decision making process.
Well, after year one, Company A has $100,000 in the bank and company B has $800,000 in the bank.
Thanks for proving my point. At the end of year one they both have one million dollars to invest. But AFTER year one, well there is a huge difference in "money in the bank". So tell me, does not a lower corporate tax rate either encourage investing TOMORROW instead of today, or encourage the stockpiling of cash. Which of course, the current trillions of dollars in company cash reserves kind of indicates that the corporate tax rate is TOO LOW, not that it is too high.
Use logic and explain why a cut from 40% to 34% would cut GDP growth
I have already done that and you seem not to understand. First, the weighted average cost of capital is inversely related to the marginal tax rate. Second, the internal rate of return required to justify an investment increases as the marginal tax rate declines. Which results in, as tax rates decline, companies take less and less risky investments. It also means that rent seeking increases as tax rates decline, and rent seeking is toxic to a growing economy. And finally, as our example has clearly indicated, the opportunity cost of NOT INVESTING in any given year is higher when the tax rate is lower.

You can say all these facts until you're blue in the face, it's not going to make a difference to a zealot like Toddster. And he is a zealot. It's zealotry to argue that trickle-down tax cuts lead to growth...there exists no evidence, outside the realm of theory and fantasy which Toddster exists solely within, that proves even remotely true.

It's zealotry to argue that trickle-down tax cuts lead to growth

What is a "trickle-down tax cut"?
How does it differ from a regular tax cut?
Why doesn't the "trickle-down tax cut" lead to growth?

 

[Winston]

If understanding the dynamics behind tax policy is too difficult for you, then let's just look at the historical record. During the 1950's the highest corporate tax rate was north of 50%. Did we have a problem with companies investing? No, we had a huge manufacturing economy, companies invested in their people, and business was booming. How about the 60's? Well the highest tax rate slipped under 50% by two percentage points in 1965, 1966, and 1967 but 1968 and 1969 saw the highest corporate tax rate in our history, 52.8%. And in 1968 GDP growth was 9.84%, 1969 was 7.28%. The highest tax increase in US history was signed in 1982. 1983 saw GDP growth of 11.39%.

During the 1950's the highest corporate tax rate was north of 50%. Did we have a problem with companies investing?

The fact that most of the world was still rebuilding may have played a part in that as well.

The highest tax increase in US history was signed in 1982.

Really? Which rates rose? By how much?
If you can, give me the before and after rates. Thanks!

And yes, a company can invest retained earnings the next year, and they get to deduct that investment from the next year's taxes.

Excellent! And which of those 2 in my example has more to invest next year?
Seems like you missed this question.

So if I start a new business, I shouldn't ever be allowed to take money OUT OF THE BUSINESS?
Could that reduce the incentive to start a new business?

And these two.

Oh yeah, the old "the world was rebuilding" excuse. Which basically means, regardless of the corporate tax rates, businesses will expand when the opportunity presents itself. So it appears we should be looking at ways to generate opportunities instead of toying with the corporate tax rate.

And to the largest tax increase in American history, it was the Tax Equity and Fiscal Responsibility Act of 1982. It rescinded many of the original Reagan tax cuts but it mostly involved things like reducing accelerated depreciation and reducing cost basis to recapture part of the investment tax credit. Even conservative commentators have credited the TEFRA to increasing taxes by a full percentage point of GDP.

Now, to the investment question. I don't think you get it. Company A has a profit of one million dollars and faces a tax rate of 90%. Company B has a profit of one million dollars and faces a tax rate of 20%. How much money does each company have to invest? I will give you a hint. They both have the same amount to invest.

Here is the thing.

US GDP Growth Rate by Year

http://www.taxpolicycenter.org/site.../content/PDF/corporate_historical_bracket.pdf

The first table is the GDP growth rate by year. The second table is the highest corporate tax rate by year. If you take an honest look at it you can see that when the corporate tax rate was cut in 1988 it basically cut the legs out from under GDP growth. Most certainly, where we had double digit GDP growth in several years that the corporate tax rate was higher, it has never happened since that decrease in 1988.

Which basically means, regardless of the corporate tax rates, businesses will expand when the opportunity presents itself.

And when they have two options, expansion in an area with a 20% tax or expansion in an area with a 35% tax, which do you feel they would favor?

So it appears we should be looking at ways to generate opportunities instead of toying with the corporate tax rate.

Fine. As long as we don't ignore opportunities generated by a lower corporate tax rate.

And to the largest tax increase in American history, it was the Tax Equity and Fiscal Responsibility Act of 1982. It rescinded many of the original Reagan tax cuts

AFAIK, that stopped future cuts in rates that hadn't gone into effect yet.

Now, to the investment question. I don't think you get it.

Excellent. Show me my error.

Company A has a profit of one million dollars and faces a tax rate of 90%. Company B has a profit of one million dollars and faces a tax rate of 20%. How much money does each company have to invest?

Well, after year one, Company A has $100,000 in the bank and company B has $800,000 in the bank.

I will give you a hint. They both have the same amount to invest.

Interesting claim. Post your math.

If you take an honest look at it you can see that when the corporate tax rate was cut in 1988 it basically cut the legs out from under GDP growth.

Use logic and explain why a cut from 40% to 34% would cut GDP growth.

And when they have two options, expansion in an area with a 20% tax or expansion in an area with a 35% tax, which do you feel they would favor?

There you go again with that false choice. If a company wants to operate in the United States they have to pay the United States corporate tax rate. Just like if a company wants to operate in the United Arab Emirates they have to pay the HIGHER United Arab Emirates tax rate. US companies invested almost ten billion dollars in the UAE last year. Guess tax rates were not part of the decision making process.

Well, after year one, Company A has $100,000 in the bank and company B has $800,000 in the bank.

Thanks for proving my point. At the end of year one they both have one million dollars to invest. But AFTER year one, well there is a huge difference in "money in the bank". So tell me, does not a lower corporate tax rate either encourage investing TOMORROW instead of today, or encourage the stockpiling of cash. Which of course, the current trillions of dollars in company cash reserves kind of indicates that the corporate tax rate is TOO LOW, not that it is too high.

Use logic and explain why a cut from 40% to 34% would cut GDP growth

I have already done that and you seem not to understand. First, the weighted average cost of capital is inversely related to the marginal tax rate. Second, the internal rate of return required to justify an investment increases as the marginal tax rate declines. Which results in, as tax rates decline, companies take less and less risky investments.
It also means that rent seeking increases as tax rates decline, and rent seeking is toxic to a growing economy. And finally, as our example has clearly indicated, the opportunity cost of NOT INVESTING in any given year is higher when the tax rate is lower.

There you go again with that false choice. If a company wants to operate in the United States they have to pay the United States corporate tax rate.

If you make a product in the US to ship to Brazil, you'll pay 35% on your profit.
Make the same product in Britain to ship to Brazil, you'll pay 19% on your profit.
Where should the US corp make their product?

Also a foreign company operating here pays 35% on US income to the US Treasury and 0% on European, Asian, African, South American etc income to the US Treasury. A US company operating here pays 35% on US income and 35% (less the foreign rate) on foreign income.....if they bring the money back.



Thanks for proving my point.

Your point was you're confused about the difference between $100,000 and $800,000? You're welcome.

At the end of year one they both have one million dollars to invest.

Wrong, because in one case they paid $900,000 in taxes and in the other, they paid $200,000.
Are you also confused about how companies can deduct expenses for their investments?

So tell me, does not a lower corporate tax rate either encourage investing TOMORROW instead of today, or encourage the stockpiling of cash.

The prospect of keeping $800,000 versus $200,000 makes me want to invest a bunch in the first case and little to none in the second case.

the current trillions of dollars in company cash reserves kind of indicates that the corporate tax rate is TOO LOW, not that it is too high.

I think it indicates they didn't want to invest in the unfriendly environment they saw in the last 8 years.

I have already done that and you seem not to understand. First, the weighted average cost of capital is inversely related to the marginal tax rate.

Yes.

Second, the internal rate of return required to justify an investment increases as the marginal tax rate declines.

Show me your favorite formula to calculate IRR (or WACC) and I'll point out your confusion.

Which results in, as tax rates decline, companies take less and less risky investments.

I believe you are mistaken.

It also means that rent seeking increases as tax rates decline,

It tax rates are low enough, the need for rent-seeking falls.

the opportunity cost of NOT INVESTING in any given year is higher when the tax rate is lower.

I agree.
A tax rate of 20% means I'm missing out on a lot more by not investing, compared to not investing with a rate of 90%.

In regards to opportunity cost, I got it backwards. Let's take our example. With the ninety percent tax rate the company has one million dollars that, if they DO NOT invest by the end of the year, they have to pay a tax of nine hundred thousand dollars. In the second case, with a tax rate of 20%, the cost of holding on to that money instead of investing it is only two hundred thousand dollars. Obviously, the company is going to be more risk averse when the cost of not investing is lower.

Now, there is no doubt that the reason companies are holding on to all that cash is because of the unfavorable environment, but that has more to do with the lack of demand than the current marginal tax rate.

If your name is Todd you are probably in your 50's. Born during the Route 66 television series. At that time corporate taxes accounted for twice the percentage of federal revenues that they do now. The lack of demand can be partially attributed to the fact that consumers are now forced to shoulder that additional tax burden. It is all about the pie. And you are totally wrong about rent seeking. When tax rates are high rent seeking is less profitable. Most all economists now agree, rent seeking is the gorilla in the room that is sucking all the demand out of the market. Companies are not investing in making more pie, like they were back in the 50's and 60's and even the 70's. They are "investing" in taking more of the pie that is already there and the pie they are taking away is the pie of the lower and middle class, the "salt of the earth", the ones that drive demand. A corporate tax rate cut is the perfect example. The corporations will get more pie without producing anything, and that pie has to come from some where. It will not result in GDP growth, it will result in the exact opposite. If not a contraction in GDP a real decline in the already small growth that we struggle to achieve today. History bears that out. Basic Keynesian economics clearly predict that. Even fundamental accounting and capital budgeting indicate as much.

 

[Frankeneinstein]

• 94% of economists support taking action to address climate change.

lol

 

[Winston]

And when they have two options, expansion in an area with a 20% tax or expansion in an area with a 35% tax, which do you feel they would favor?
There you go again with that false choice. If a company wants to operate in the United States they have to pay the United States corporate tax rate. Just like if a company wants to operate in the United Arab Emirates they have to pay the HIGHER United Arab Emirates tax rate. US companies invested almost ten billion dollars in the UAE last year. Guess tax rates were not part of the decision making process.
Well, after year one, Company A has $100,000 in the bank and company B has $800,000 in the bank.
Thanks for proving my point. At the end of year one they both have one million dollars to invest. But AFTER year one, well there is a huge difference in "money in the bank". So tell me, does not a lower corporate tax rate either encourage investing TOMORROW instead of today, or encourage the stockpiling of cash. Which of course, the current trillions of dollars in company cash reserves kind of indicates that the corporate tax rate is TOO LOW, not that it is too high.
Use logic and explain why a cut from 40% to 34% would cut GDP growth
I have already done that and you seem not to understand. First, the weighted average cost of capital is inversely related to the marginal tax rate. Second, the internal rate of return required to justify an investment increases as the marginal tax rate declines. Which results in, as tax rates decline, companies take less and less risky investments. It also means that rent seeking increases as tax rates decline, and rent seeking is toxic to a growing economy. And finally, as our example has clearly indicated, the opportunity cost of NOT INVESTING in any given year is higher when the tax rate is lower.

You can say all these facts until you're blue in the face, it's not going to make a difference to a zealot like Toddster. And he is a zealot. It's zealotry to argue that trickle-down tax cuts lead to growth...there exists no evidence, outside the realm of theory and fantasy which Toddster exists solely within, that proves even remotely true.

It's zealotry to argue that trickle-down tax cuts lead to growth

What is a "trickle-down tax cut"?
How does it differ from a regular tax cut?
Why doesn't the "trickle-down tax cut" lead to growth?

Basic Keynes. A tax cut directed at the wealthy results in more savings, not more investing and not more demand. And yes, there is a huge difference in savings and investing. Savings result in interest, or RENT. And that RENT sucks out income without producing anything as anyone with huge amounts of credit card debt can easily attest. Dozens of economic studies have shown that lower tax rates on the wealthy do not result in additional investment but instead results in increased income inequality. The reason, RENTS on the additional savings generated by the tax cuts. So yes, not only is it zealotry to support additional tax cuts to the wealthy, it is sheer insanity, repeating the same mistakes of the past and expecting different results.

 

[Toddsterpatriot]

During the 1950's the highest corporate tax rate was north of 50%. Did we have a problem with companies investing?

The fact that most of the world was still rebuilding may have played a part in that as well.

The highest tax increase in US history was signed in 1982.

Really? Which rates rose? By how much?
If you can, give me the before and after rates. Thanks!

And yes, a company can invest retained earnings the next year, and they get to deduct that investment from the next year's taxes.

Excellent! And which of those 2 in my example has more to invest next year?
Seems like you missed this question.

So if I start a new business, I shouldn't ever be allowed to take money OUT OF THE BUSINESS?
Could that reduce the incentive to start a new business?

And these two.

Oh yeah, the old "the world was rebuilding" excuse. Which basically means, regardless of the corporate tax rates, businesses will expand when the opportunity presents itself. So it appears we should be looking at ways to generate opportunities instead of toying with the corporate tax rate.

And to the largest tax increase in American history, it was the Tax Equity and Fiscal Responsibility Act of 1982. It rescinded many of the original Reagan tax cuts but it mostly involved things like reducing accelerated depreciation and reducing cost basis to recapture part of the investment tax credit. Even conservative commentators have credited the TEFRA to increasing taxes by a full percentage point of GDP.

Now, to the investment question. I don't think you get it. Company A has a profit of one million dollars and faces a tax rate of 90%. Company B has a profit of one million dollars and faces a tax rate of 20%. How much money does each company have to invest? I will give you a hint. They both have the same amount to invest.

Here is the thing.

US GDP Growth Rate by Year

http://www.taxpolicycenter.org/site.../content/PDF/corporate_historical_bracket.pdf

The first table is the GDP growth rate by year. The second table is the highest corporate tax rate by year. If you take an honest look at it you can see that when the corporate tax rate was cut in 1988 it basically cut the legs out from under GDP growth. Most certainly, where we had double digit GDP growth in several years that the corporate tax rate was higher, it has never happened since that decrease in 1988.

Which basically means, regardless of the corporate tax rates, businesses will expand when the opportunity presents itself.

And when they have two options, expansion in an area with a 20% tax or expansion in an area with a 35% tax, which do you feel they would favor?

So it appears we should be looking at ways to generate opportunities instead of toying with the corporate tax rate.

Fine. As long as we don't ignore opportunities generated by a lower corporate tax rate.

And to the largest tax increase in American history, it was the Tax Equity and Fiscal Responsibility Act of 1982. It rescinded many of the original Reagan tax cuts

AFAIK, that stopped future cuts in rates that hadn't gone into effect yet.

Now, to the investment question. I don't think you get it.

Excellent. Show me my error.

Company A has a profit of one million dollars and faces a tax rate of 90%. Company B has a profit of one million dollars and faces a tax rate of 20%. How much money does each company have to invest?

Well, after year one, Company A has $100,000 in the bank and company B has $800,000 in the bank.

I will give you a hint. They both have the same amount to invest.

Interesting claim. Post your math.

If you take an honest look at it you can see that when the corporate tax rate was cut in 1988 it basically cut the legs out from under GDP growth.

Use logic and explain why a cut from 40% to 34% would cut GDP growth.

And when they have two options, expansion in an area with a 20% tax or expansion in an area with a 35% tax, which do you feel they would favor?

There you go again with that false choice. If a company wants to operate in the United States they have to pay the United States corporate tax rate. Just like if a company wants to operate in the United Arab Emirates they have to pay the HIGHER United Arab Emirates tax rate. US companies invested almost ten billion dollars in the UAE last year. Guess tax rates were not part of the decision making process.

Well, after year one, Company A has $100,000 in the bank and company B has $800,000 in the bank.

Thanks for proving my point. At the end of year one they both have one million dollars to invest. But AFTER year one, well there is a huge difference in "money in the bank". So tell me, does not a lower corporate tax rate either encourage investing TOMORROW instead of today, or encourage the stockpiling of cash. Which of course, the current trillions of dollars in company cash reserves kind of indicates that the corporate tax rate is TOO LOW, not that it is too high.

Use logic and explain why a cut from 40% to 34% would cut GDP growth

I have already done that and you seem not to understand. First, the weighted average cost of capital is inversely related to the marginal tax rate. Second, the internal rate of return required to justify an investment increases as the marginal tax rate declines. Which results in, as tax rates decline, companies take less and less risky investments.
It also means that rent seeking increases as tax rates decline, and rent seeking is toxic to a growing economy. And finally, as our example has clearly indicated, the opportunity cost of NOT INVESTING in any given year is higher when the tax rate is lower.

There you go again with that false choice. If a company wants to operate in the United States they have to pay the United States corporate tax rate.

If you make a product in the US to ship to Brazil, you'll pay 35% on your profit.
Make the same product in Britain to ship to Brazil, you'll pay 19% on your profit.
Where should the US corp make their product?

Also a foreign company operating here pays 35% on US income to the US Treasury and 0% on European, Asian, African, South American etc income to the US Treasury. A US company operating here pays 35% on US income and 35% (less the foreign rate) on foreign income.....if they bring the money back.



Thanks for proving my point.

Your point was you're confused about the difference between $100,000 and $800,000? You're welcome.

At the end of year one they both have one million dollars to invest.

Wrong, because in one case they paid $900,000 in taxes and in the other, they paid $200,000.
Are you also confused about how companies can deduct expenses for their investments?

So tell me, does not a lower corporate tax rate either encourage investing TOMORROW instead of today, or encourage the stockpiling of cash.

The prospect of keeping $800,000 versus $200,000 makes me want to invest a bunch in the first case and little to none in the second case.

the current trillions of dollars in company cash reserves kind of indicates that the corporate tax rate is TOO LOW, not that it is too high.

I think it indicates they didn't want to invest in the unfriendly environment they saw in the last 8 years.

I have already done that and you seem not to understand. First, the weighted average cost of capital is inversely related to the marginal tax rate.

Yes.

Second, the internal rate of return required to justify an investment increases as the marginal tax rate declines.

Show me your favorite formula to calculate IRR (or WACC) and I'll point out your confusion.

Which results in, as tax rates decline, companies take less and less risky investments.

I believe you are mistaken.

It also means that rent seeking increases as tax rates decline,

It tax rates are low enough, the need for rent-seeking falls.

the opportunity cost of NOT INVESTING in any given year is higher when the tax rate is lower.

I agree.
A tax rate of 20% means I'm missing out on a lot more by not investing, compared to not investing with a rate of 90%.

In regards to opportunity cost, I got it backwards. Let's take our example. With the ninety percent tax rate the company has one million dollars that, if they DO NOT invest by the end of the year, they have to pay a tax of nine hundred thousand dollars. In the second case, with a tax rate of 20%, the cost of holding on to that money instead of investing it is only two hundred thousand dollars. Obviously, the company is going to be more risk averse when the cost of not investing is lower.

Now, there is no doubt that the reason companies are holding on to all that cash is because of the unfavorable environment, but that has more to do with the lack of demand than the current marginal tax rate.

If your name is Todd you are probably in your 50's. Born during the Route 66 television series. At that time corporate taxes accounted for twice the percentage of federal revenues that they do now. The lack of demand can be partially attributed to the fact that consumers are now forced to shoulder that additional tax burden. It is all about the pie. And you are totally wrong about rent seeking. When tax rates are high rent seeking is less profitable. Most all economists now agree, rent seeking is the gorilla in the room that is sucking all the demand out of the market. Companies are not investing in making more pie, like they were back in the 50's and 60's and even the 70's. They are "investing" in taking more of the pie that is already there and the pie they are taking away is the pie of the lower and middle class, the "salt of the earth", the ones that drive demand. A corporate tax rate cut is the perfect example. The corporations will get more pie without producing anything, and that pie has to come from some where. It will not result in GDP growth, it will result in the exact opposite. If not a contraction in GDP a real decline in the already small growth that we struggle to achieve today. History bears that out. Basic Keynesian economics clearly predict that. Even fundamental accounting and capital budgeting indicate as much.

In regards to opportunity cost, I got it backwards.

Yes. The fact that you got it right had to mean you flipped it.

Obviously, the company is going to be more risk averse when the cost of not investing is lower.

Obviously, the company is going to take on more risk when the after tax return is $800,000 than when the after tax return is $100,000.

Show me your favorite formula to calculate IRR (or WACC) and I'll point out your confusion.

Now, there is no doubt that the reason companies are holding on to all that cash is because of the unfavorable environment, but that has more to do with the lack of demand

No, the unfavorable environment was due to the White House attacking the successful and burying them under thousands of pages of new regulations.

 

[jillian]

The truth of the matter is that republicans in office only care about their own financial interests, so they will only formulate policy for that reason. Actual educated economists, however, do not.

This quote from an article below sums up the statistics:

Opinions of economists
There are many different ways to assess the consensus of economists on policy issues. Much of the public believes that economists tend to be libertarian and to favor laissez faire economic policy. That idea- that economic wisdom favors leaving all things to the free market- is actually dead wrong. Economists generally tend to support policies at least as liberal as the policies the Democratic Party supports. Some examples:

• 71% of economists favor using government to redistribute wealth and only 8% strongly oppose it. In fact, the concept of the diminishing marginal utility of wealth is a very well established and non-controversial economic principle. Even Adam Smith expressed the view that the government should redistribute wealth.

• Only 12% of economists take the view that the costs of the stimulus outweighed the benefits- a view passionately held by nearly all Republicans.

• 75% of economists favor government tuning the economy with monetary policy- an idea often vehemently rejected by the Republican Party- while only 4% of economists strongly oppose it.

• Zero percent- not a single economist in the entire sample- of economists agree with the central tenant of Republican fiscal policy that cutting tax rates would boost the economy enough to cause revenues to increase.

• 94% of economists support taking action to address climate change.

In terms of specific policies, economists appear to consistently and overwhelmingly either support the Democrats' policies or to be to the left of the Democrats. This stance on policy issues unsurprisingly translates into which party economists support: Democratic economists outnumber Republican economists by 2.5 to 1. In 2012, economists felt that President Obama had a better grasp of economics than Mitt Romney by a margin of almost 2-to-1 and that President Obama would grow the economy faster than Mitt Romney by a a margin of 20 points

Which Party Is Better for the Economy?

trickle down economics is a proven fail... hence normal educated people not agreeing with it.

 

[Oldstyle]

Social Security isn't revenue, Winston! It's money that the government owes...not money that it's taken in as revenue. The fact that you two can't seem to grasp this concept BAFFLES me!

You conservatives are a hypocritical bunch aren't you. You count Social Security taxes as revenue when it serves your purpose. And you count it as a liability when it serves your purpose. You might want to remember that it was Ronald Reagan that started the practice of raiding Social Security receipts. And it was also Ronald Reagan that significantly expanded both the amount of income subject to the Social Security tax and the rates collected. In fact, the income subject to Social Security taxes will go up again next year thanks to Ronald Reagan.

The difference is simple. The government can borrow money on the public market, that is called Treasury bonds. Or the government can borrow money from itself. As I have explained already, it is like the difference in borrowing money from a bank or borrowing money from your life insurance policy.

For your information it was LBJ that was the first US President to raid the Social Security fund. That took place back in 1968 to help pay for the Vietnam war.

But what Reagan did was nothing less than a total con job. He promised to cut taxes, and he did on the wealthy. But what he did to the poor and middle class was beyond the pale. In fact, until Obama came along Reagan was the only president to cut taxes on the wealthy while simultaneously increasing them on the poor. Trump is slated to do the very same thing.

Reagan's administration completely revamped Social Security, increasing both the rate of the tax and the income subject to that tax. I remember it well. Everyone got a little bit of a raise on their check and then, a couple of weeks later, it magically disappeared. It went to Social Security. And Reagan's reasoning to do so was to shore up the "reserves" for the coming retirement of the boomers. Then he promptly raided every damn penny of the additional revenue for the General Fund.

The whole right wing agenda of cutting taxes can be boiled down to one simple statement. The rich figured out it was better to loan the government money at interest than pay the government taxes.

The Reagan tax cuts in 1981 were a 25% across the board cut, Winston. You're claiming Reagan increased taxes on the poor? Please show where that took place.

As you conservatives are so fond of saying, the poor don't pay income taxes. So a twenty five percent cut in zero is still zero. But as I have pointed out, Reagan increased the tax rate of both the OASDI tax and the HI tax, the two components of the Social Security tax, which the poor do pay from the very first dollar.

To be quite frank, Winston...I think EVERYONE should pay some amount of tax! It's simple common sense that if you don't have to pay for entitlements...then you want all the entitlements you can get. I'd like to see a consumption tax instead of an income tax. That way EVERYONE has some skin in the game!

 

[Oldstyle]

The truth of the matter is that republicans in office only care about their own financial interests, so they will only formulate policy for that reason. Actual educated economists, however, do not.

This quote from an article below sums up the statistics:

Opinions of economists
There are many different ways to assess the consensus of economists on policy issues. Much of the public believes that economists tend to be libertarian and to favor laissez faire economic policy. That idea- that economic wisdom favors leaving all things to the free market- is actually dead wrong. Economists generally tend to support policies at least as liberal as the policies the Democratic Party supports. Some examples:

• 71% of economists favor using government to redistribute wealth and only 8% strongly oppose it. In fact, the concept of the diminishing marginal utility of wealth is a very well established and non-controversial economic principle. Even Adam Smith expressed the view that the government should redistribute wealth.

• Only 12% of economists take the view that the costs of the stimulus outweighed the benefits- a view passionately held by nearly all Republicans.

• 75% of economists favor government tuning the economy with monetary policy- an idea often vehemently rejected by the Republican Party- while only 4% of economists strongly oppose it.

• Zero percent- not a single economist in the entire sample- of economists agree with the central tenant of Republican fiscal policy that cutting tax rates would boost the economy enough to cause revenues to increase.

• 94% of economists support taking action to address climate change.

In terms of specific policies, economists appear to consistently and overwhelmingly either support the Democrats' policies or to be to the left of the Democrats. This stance on policy issues unsurprisingly translates into which party economists support: Democratic economists outnumber Republican economists by 2.5 to 1. In 2012, economists felt that President Obama had a better grasp of economics than Mitt Romney by a margin of almost 2-to-1 and that President Obama would grow the economy faster than Mitt Romney by a a margin of 20 points

Which Party Is Better for the Economy?

trickle down economics is a proven fail... hence normal educated people not agreeing with it.

Educated people understand that there is no such thing as "trickle down economics", Jillian! Profit "trickles" up...it always has...it always will! The only people who believe in trickle down economic theory are liberals who never took economics in college!

 

[Oldstyle]

And when they have two options, expansion in an area with a 20% tax or expansion in an area with a 35% tax, which do you feel they would favor?
There you go again with that false choice. If a company wants to operate in the United States they have to pay the United States corporate tax rate. Just like if a company wants to operate in the United Arab Emirates they have to pay the HIGHER United Arab Emirates tax rate. US companies invested almost ten billion dollars in the UAE last year. Guess tax rates were not part of the decision making process.
Well, after year one, Company A has $100,000 in the bank and company B has $800,000 in the bank.
Thanks for proving my point. At the end of year one they both have one million dollars to invest. But AFTER year one, well there is a huge difference in "money in the bank". So tell me, does not a lower corporate tax rate either encourage investing TOMORROW instead of today, or encourage the stockpiling of cash. Which of course, the current trillions of dollars in company cash reserves kind of indicates that the corporate tax rate is TOO LOW, not that it is too high.
Use logic and explain why a cut from 40% to 34% would cut GDP growth
I have already done that and you seem not to understand. First, the weighted average cost of capital is inversely related to the marginal tax rate. Second, the internal rate of return required to justify an investment increases as the marginal tax rate declines. Which results in, as tax rates decline, companies take less and less risky investments. It also means that rent seeking increases as tax rates decline, and rent seeking is toxic to a growing economy. And finally, as our example has clearly indicated, the opportunity cost of NOT INVESTING in any given year is higher when the tax rate is lower.

You can say all these facts until you're blue in the face, it's not going to make a difference to a zealot like Toddster. And he is a zealot. It's zealotry to argue that trickle-down tax cuts lead to growth...there exists no evidence, outside the realm of theory and fantasy which Toddster exists solely within, that proves even remotely true.

Tax cuts have been successfully used to stimulate growth since JFK called for them back in the 1960's, Derp. Saying there is no evidence that tax cuts lead to economic growth is patently false.

 

[danielpalos]

Best- and worst-run states: Survey of all 50

Guess who's rated as the worst run State, Derp! Duh!

You cite improvements to Cali as proof that they're run well? Gee, when you're LAST there isn't any place to go but up...

California’s economy ranked sixth in the world in 2016, according to rankings released by Palo Alto economist Stephen Levy on Friday. That’s the same as the year before, when California overtook France and Brazil. But the state’s economy isn’t stagnating; California’s economy is growing so quickly that Levy thinks the state will overtake the United Kingdom this year for No. 5.

Read more here: California the world’s fifth largest economy? Look out, Britain

 

[danielpalos]

The truth of the matter is that republicans in office only care about their own financial interests, so they will only formulate policy for that reason. Actual educated economists, however, do not.

This quote from an article below sums up the statistics:

Opinions of economists
There are many different ways to assess the consensus of economists on policy issues. Much of the public believes that economists tend to be libertarian and to favor laissez faire economic policy. That idea- that economic wisdom favors leaving all things to the free market- is actually dead wrong. Economists generally tend to support policies at least as liberal as the policies the Democratic Party supports. Some examples:

• 71% of economists favor using government to redistribute wealth and only 8% strongly oppose it. In fact, the concept of the diminishing marginal utility of wealth is a very well established and non-controversial economic principle. Even Adam Smith expressed the view that the government should redistribute wealth.

• Only 12% of economists take the view that the costs of the stimulus outweighed the benefits- a view passionately held by nearly all Republicans.

• 75% of economists favor government tuning the economy with monetary policy- an idea often vehemently rejected by the Republican Party- while only 4% of economists strongly oppose it.

• Zero percent- not a single economist in the entire sample- of economists agree with the central tenant of Republican fiscal policy that cutting tax rates would boost the economy enough to cause revenues to increase.

• 94% of economists support taking action to address climate change.

In terms of specific policies, economists appear to consistently and overwhelmingly either support the Democrats' policies or to be to the left of the Democrats. This stance on policy issues unsurprisingly translates into which party economists support: Democratic economists outnumber Republican economists by 2.5 to 1. In 2012, economists felt that President Obama had a better grasp of economics than Mitt Romney by a margin of almost 2-to-1 and that President Obama would grow the economy faster than Mitt Romney by a a margin of 20 points

Which Party Is Better for the Economy?

trickle down economics is a proven fail... hence normal educated people not agreeing with it.

Educated people understand that there is no such thing as "trickle down economics", Jillian! Profit "trickles" up...it always has...it always will! The only people who believe in trickle down economic theory are liberals who never took economics in college!

Trickle down has Always meant, bailout the rich and then let it trickle down, to the left.

 

[danielpalos]

And when they have two options, expansion in an area with a 20% tax or expansion in an area with a 35% tax, which do you feel they would favor?
There you go again with that false choice. If a company wants to operate in the United States they have to pay the United States corporate tax rate. Just like if a company wants to operate in the United Arab Emirates they have to pay the HIGHER United Arab Emirates tax rate. US companies invested almost ten billion dollars in the UAE last year. Guess tax rates were not part of the decision making process.
Well, after year one, Company A has $100,000 in the bank and company B has $800,000 in the bank.
Thanks for proving my point. At the end of year one they both have one million dollars to invest. But AFTER year one, well there is a huge difference in "money in the bank". So tell me, does not a lower corporate tax rate either encourage investing TOMORROW instead of today, or encourage the stockpiling of cash. Which of course, the current trillions of dollars in company cash reserves kind of indicates that the corporate tax rate is TOO LOW, not that it is too high.
Use logic and explain why a cut from 40% to 34% would cut GDP growth
I have already done that and you seem not to understand. First, the weighted average cost of capital is inversely related to the marginal tax rate. Second, the internal rate of return required to justify an investment increases as the marginal tax rate declines. Which results in, as tax rates decline, companies take less and less risky investments. It also means that rent seeking increases as tax rates decline, and rent seeking is toxic to a growing economy. And finally, as our example has clearly indicated, the opportunity cost of NOT INVESTING in any given year is higher when the tax rate is lower.

You can say all these facts until you're blue in the face, it's not going to make a difference to a zealot like Toddster. And he is a zealot. It's zealotry to argue that trickle-down tax cuts lead to growth...there exists no evidence, outside the realm of theory and fantasy which Toddster exists solely within, that proves even remotely true.

Tax cuts have been successfully used to stimulate growth since JFK called for them back in the 1960's, Derp. Saying there is no evidence that tax cuts lead to economic growth is patently false.

Why so much debt? Cutting taxes should mean, no Debt.

 

[The Derp]

What is a "trickle-down tax cut"?

Call it whatever you want;; "supply side economics", "voodoo economics", "trickle-down"...it's all the same. The idea that cutting taxes for the wealthy will somehow lead to increased investment and growth. It's never happened ever when put in practice, yet you still adhere to it. That's what makes you a zealot.

How does it differ from a regular tax cut?

You're not arguing for regular tax cuts, you're here arguing for tax cuts for the rich becuase you think that if they get a tax cut, they will take that tax cut and spend it in the consumer market or "invest" (generalized, vague term) it.

Why doesn't the "trickle-down tax cut" lead to growth?

Because when you cut taxes, you produce deficits, then those deficits have to be closed and they're closed by cutting spending to things like education and health care. When you cut education and health care spending, you increase the out of pocket expenses which forces people to spend less in the consumer economy, where most of the jobs are created and represents 70% of our entire economy, and more on things like health care and education. All trickle down tax cuts do is shift the burden of paying for essential services on to the middle and lower classes.

It's precisely what happened in Kansas. Brownback and your fellow zealots cut taxes for the rich, promised the moon and the stars, produced only deficits, debt, and poor growth; then those deficits were closed by raiding the welfare block grant (meaning Kansas used welfare to pay for trickle-down) and cutting funding for things like the KS State University System; which forced the KS Board of Regents to raise tuition, which forced students and their families to borrow more to cover increased tuition costs, which increased their debt load.

All while producing growth below the national average. So your trickle down tax cutting policy in Kansas was a drag on Obama's economy. Proving once again that Conservatives will stoop to no low in order to tarnish Obama's legacy because his mere presence reminds them why he won in the first place; Conservative policy during the Bush Era produced nothing but failures, and you are unable to reconcile your belief system's responsibility for it.

 

[The Derp]

Tax cuts have been successfully used to stimulate growth since JFK called for them back in the 1960's, Derp.

Wrong. What stimulated growth during LBJ was the fact that he increased government spending by 50% from 1964-1969 (and by 89% from 1961 - 1968), and introduced a huge entitlement program called Medicare, not to mention the Space Race which produced a ton of growth and innovation that was entirely publicly funded. Also, the tax cut was from 90% down to 70%. So if you want to emulate Kennedy, then let's emulate Kennedy and get a 70% top tax rate. I'm down with that.

Saying there is no evidence that tax cuts lead to economic growth is patently false.

There is no evidence. All you have is a correlation-is-causation argument, and you ignore other meaningful contributors to growth like the fact that from 1961-1968 government spending nearly doubled. Fact is, tax cuts have a long history of under-delivering on their promises. That's why Reagan passed the largest tax increase in history in 1982. It's why Obama let the Bush Tax Cuts expire on the wealthy in 2013. It's why Kansas Republicans repealed trickle-down tax cuts, overriding Brownback's veto this past spring.

 

[The Derp]

To be quite frank, Winston...I think EVERYONE should pay some amount of tax!

The same gross amount or the same tax rate? In either case, it's a stupid idea.

It's simple common sense that if you don't have to pay for entitlements...then you want all the entitlements you can get.

WTF? Do you know what "entitlement" means in this context? You don't get Social Security if you don't pay into it. You don't get Medicare if you don't pay into it. You don't get virtually any federal entitlement if you don't pay into it. Conservatives simply have no ******* idea what they're talking about, ever.

I'd like to see a consumption tax instead of an income tax. That way EVERYONE has some skin in the game!

A consumption tax merely shifts the tax burden more on the lower and middle classes, who cannot spend as much in the consumer economy. A much more efficient and non-economy-constricting policy would be to replace the income tax with a carbon (or waste) tax. If you want to tax consumption, let's tax the waste from consumption instead of consumption itself. That way, those with a larger carbon footprint, who are generating the most waste, will pay more for doing so.

 

[The Derp]

Educated people understand that there is no such thing as "trickle down economics", Jillian! Profit "trickles" up...it always has...it always will!

What a goddamned ******* idiot. Profit doesn't "trickle up"...who the **** thinks this way? is your brain so damaged that you cannot process complex thoughts and ideas? If profit "trickled up", that would mean the employees are the ones who control the company, not the owners or shareholders. What a ******* idiot. No wonder Conservatives have never been able to successfully grow an economy without using a credit card and exploding our debt.

The only people who believe in trickle down economic theory are liberals who never took economics in college!

You believe that cutting taxes for the rich is "trickle up" economics? What kind of ******* idiot are you? Or are you just a Russian troll trying to spam the board with propaganda because that's what you're paid to do?

 

[Oldstyle]

Tax cuts have been successfully used to stimulate growth since JFK called for them back in the 1960's, Derp.

Wrong. What stimulated growth during LBJ was the fact that he increased government spending by 50% from 1964-1969 (and by 89% from 1961 - 1968), and introduced a huge entitlement program called Medicare, not to mention the Space Race which produced a ton of growth and innovation that was entirely publicly funded. Also, the tax cut was from 90% down to 70%. So if you want to emulate Kennedy, then let's emulate Kennedy and get a 70% top tax rate. I'm down with that.

Saying there is no evidence that tax cuts lead to economic growth is patently false.

There is no evidence. All you have is a correlation-is-causation argument, and you ignore other meaningful contributors to growth like the fact that from 1961-1968 government spending nearly doubled. Fact is, tax cuts have a long history of under-delivering on their promises. That's why Reagan passed the largest tax increase in history in 1982. It's why Obama let the Bush Tax Cuts expire on the wealthy in 2013. It's why Kansas Republicans repealed trickle-down tax cuts, overriding Brownback's veto this past spring.

You don't even know the difference between LBJ and JFK...do you? God, you're clueless!

 

[The Derp]

You don't even know the difference between LBJ and JFK...do you? God, you're clueless!

Eat ******* shit. You're just trying to search for a red herring in order to avoid answering for the point that your correlation-is-causation argument in favor of trickle down is a load of horseshit.

So you seek to find the most trivial thing and you latch onto that.

I have news for you, you piece of shit. JFK didn't pass a tax cut. "The JFK tax cut" was passed in 1964 by LBJ, and was called the Revenue Act of 1964. I'm not sure if you're aware because you're a Russian bot, but Kennedy was assassinated in 1963. So you're here, saying Kennedy cut taxes when the tax cut happened after Kennedy was assassinated.

Seriously, your inability to do even the simplest of Google searches belies who and what you are; a posturing fool incapable of thinking for yourself.

 

[Oldstyle]

Educated people understand that there is no such thing as "trickle down economics", Jillian! Profit "trickles" up...it always has...it always will!

What a goddamned ******* idiot. Profit doesn't "trickle up"...who the **** thinks this way? is your brain so damaged that you cannot process complex thoughts and ideas? If profit "trickled up", that would mean the employees are the ones who control the company, not the owners or shareholders. What a ******* idiot. No wonder Conservatives have never been able to successfully grow an economy without using a credit card and exploding our debt.

The only people who believe in trickle down economic theory are liberals who never took economics in college!

You believe that cutting taxes for the rich is "trickle up" economics? What kind of ******* idiot are you? Or are you just a Russian troll trying to spam the board with propaganda because that's what you're paid to do?

Spoken like someone who's never owned a business! Let me explain how it works in the real world, Sparky! If I start a business...I pay a contractor to do the build out...I pay purveyors for inventory...I pay my staff...I pay for insurance and whatever licensing fees government can gouge out of me...and only after I've done all THAT...if there is a profit left over from the goods or services I've sold...only THEN do I possibly derive profit. I can't stiff the contractor...he wants at least half of his money up front and the rest when the job is done, LONG before I've made a dime! I may get 45 days to pay my purveyors if I've got great credit and they work with new businesses. I've got to have insurance and licenses before I'm allowed to open the doors! I've got to hire and train employees and pay them whether I ever make a profit. I also have to pay my share of their FICA tax. Profits DO trickle up and anyone who's EVER owned a business will tell you the same thing! The fact that you can't grasp that concept tells me you've probably never worked at a real job!

As for what I believe cutting taxes does? Investment is stimulated by the anticipation of profit. If I look at a business opportunity and I'm told I'll be able to keep $65 of every $100 in profit that I've made after taxes in location A and I'll be able to keep only $35 of every $100 in profit I've made after taxes in location B...which location am I more likely to invest my capital to start a new business? The fact that you can't grasp THAT concept either lets me know you've never run a business or invested in one!

 

[Oldstyle]

You don't even know the difference between LBJ and JFK...do you? God, you're clueless!

Eat ******* shit. You're just trying to search for a red herring in order to avoid answering for the point that your correlation-is-causation argument in favor of trickle down is a load of horseshit.

So you seek to find the most trivial thing and you latch onto that.

I have news for you, you piece of shit. JFK didn't pass a tax cut. "The JFK tax cut" was passed in 1964 by LBJ, and was called the Revenue Act of 1964. I'm not sure if you're aware because you're a Russian bot, but Kennedy was assassinated in 1963. So you're here, saying Kennedy cut taxes when the tax cut happened after Kennedy was assassinated.

Seriously, your inability to do even the simplest of Google searches belies who and what you are; a posturing fool incapable of thinking for yourself.

I don't need to do a Google search to know that Kennedy asked Congress for tax cuts because I studied both economics and history in college. I know what Kennedy asked for off the top of my head. You on the other hand are a functional idiot if you can't Google!