Save America: Lower Taxes Now

[Micky G. Jagger]

Reagan was a net tax reducer - by a considerable margin...

Nope, you're wrong.

Reagan raised taxes more than he cut them.

Oh really!!!

Now how about you do a bit of clarifying of that little statement...

Reagan cut taxes once. But, he raised taxes six times.

Reagan signed the Deficit Reduction Act of 1984 which repealed the 15% net interest exclusion, reduced benefits from income averaging, reduced tax benefits for property leased by tax-exempt entities, raised the telephone excise tax and increased the depreciation life for real property.

 

[loosecannon]

Whatever the optimal tax code, and whatever Americans should pay, the US is not burdened by a prohibitive tax code that stifles growth. I read somewhere that federal taxes are 14% of GDP, the lowest since 1940. More than half the people in this country don't pay income taxes. America has one of the lowest tax takes in the developed world.

Bingo. Whatever taxes are they have to match expenditures, period. lowering taxes today in the hopes of stimulating greater revenue in the future is a sleazy way of spending tomorrow's prosperity today.

And while that might be a cool idea if used rarely, our whole economy is based on that same trick.

It is great that our economy has maintained 2% growth for 150 years. But 2% growth isn't enough. We need 2.5% -3.5% growth each and every year to keep the monetarism machine fed.

And if we cheat the future of it's prosperity for short term advantage today then we will need even more growth in the future just to keep the money lending machinery fed.

It's all a bunch of tricks, just like the accounting tricks that CA has used to balance the budget without cutting spending. Like moving the fiscal year backwards one month to save one months spending, or cheating the counties out of sales tax revenues with promises to repay it in the future.

IOW there is no such thing as an optimal tax. Unless it is a mandatory pay as you go tax structure.

Whatever you spend, you have to pay for, with taxes and revenues. TODAY! No deferment of today's liabilities into the future.

All of the prosperity enjoyed in the US in the last 20 years came as a result of gimmicks to create artificial wealth today that would have to be dealt with later.

Dot Com bubble, housing bubble (those two cost us $11 trillion or more than an entire year's GDP) derivatives bubbles.

Our whole economy has been based on ponzi like schemes that eventually deliver predictable ponzi like results.

We gotta stop this shit asap.

Beginning with paying taxes to cover what we really spend.

Period!

 

[Sinatra]

Interesting responses folks - keep them coming!!!
____

History has shown that tax reductions increase revenue - that is an indisputable fact. it is also indisputable that the Reagan era tax cuts were particularly effective in increasing overall tax revenue.

From the Joint Economic Committee Report:
____

Since 1984 the JEC has provided factual information about the impact of the tax cuts of the 1980s. For example, for many years the JEC has published IRS data on federal tax payments of the top 1 percent, top 5 percent, top 10 percent, and other taxpayers. These data show that after the high marginal tax rates of 1981 were cut, tax payments and the share of the tax burden borne by the top 1 percent climbed sharply. For example, in 1981 the top 1 percent paid 17.6 percent of all personal income taxes, but by 1988 their share had jumped to 27.5 percent, a 10 percentage point increase. The graph below illustrates changes in the tax burden during this period.

The share of the income tax burden borne by the top 10 percent of taxpayers increased from 48.0 percent in 1981 to 57.2 percent in 1988. Meanwhile, the share of income taxes paid by the bottom 50 percent of taxpayers dropped from 7.5 percent in 1981 to 5.7 percent in 1988.

A middle class of taxpayers can be defined as those between the 50th percentile and the 95th percentile (those earning between $18,367 and $72,735 in 1988). Between 1981 and 1988, the income tax burden of the middle class declined from 57.5 percent in 1981 to 48.7 percent in 1988. This 8.8 percentage point decline in middle class tax burden is entirely accounted for by the increase borne by the top one percent.
Edited, per Copyright Rules of this board, please review our copyright terms of service for this board.

The Reagan Tax Cuts: Lessons for Tax Reform

 

[Micky G. Jagger]

the Reagan era tax cuts were effective in increasing overall tax revenue.

Nope, you're wrong.

The annual rate of growth of real federal tax revenue per capita during the economic cycle which ran from 1979 to 1990, which included the Reagan years from 81-89, was lower than the annual growth rate during the previous economic cycle which ran from 1973 to 1979.

 

[asterism]

Taxes inhibit growth – period. And without growth, the economy begins to cannibalize itself. Fewer new jobs are created, which in turn reduces overall tax revenues for critical services. Big government proponents then simply push for higher tax rates to offset these losses in revenues, which in turn, actually reduce growth even further and thus, reduce future tax revenues. Unless major tax reform is enacted now there will soon come a time of complete economic collapse. The fall of the Roman empire is just such an example, and the fall of the Soviet Union a more recent example.

Read more: Save America: Lower Taxes Now | Newsflavor

Except that plan will actually increase the amount of taxes paid, which is why it needs to be accurately called a tax increase.

____

Yes, decreasing taxes increases revenue.

Now why can't the president and Congress understand that????

Because they are using the tax code as a means to control the economy and the people, not to efficiently fund government operations.

 

[Care4all]

Before ANY tax cuts are given, the SPENDING has to be reduced.....and with the medicare pill bill enacted under President Bush, and the increased size of the defense budget and the homeland security department enacted by him, and the faith based initiatives enacted under him, and the no child left behind budget enacted by him, and the housing initiatives enacted by him and the Republicans while they were in control, would ALL HAVE TO BE REDUCED.....

Good luck with that!!!

 

[edthecynic]

Reagan was a net tax reducer - by a considerable margin...

Nope, you're wrong.

Reagan raised taxes more than he cut them.

Oh really!!!

Now how about you do a bit of clarifying of that little statement...

your wish is my command.

In 1980, according to Congressional Budget Office estimates, middle-income families with children paid 8.2 percent of their income in income taxes, and 9.5 percent in payroll taxes. By 1988 the income tax share was down to 6.6 percent but the payroll tax share was up to 11.8 percent, and the combined burden was up from 17.7% to 18.4%, shifting some of the tax burden from the PROGRESSIVE income tax to the REGRESSIVE payroll tax.

Here is a list of Reagan's tax increases after his ONLY tax cut in 1981.

First term

1. Tax Equity and Fiscal Responsibility Act of 1982

2. Highway Revenue Act of 1982

3. Social Security Amendments of 1983

4. Interest and Dividend Tax Compliance Act of 1983

5. Deficit Reduction Act of 1984

Second term

6. Omnibus Budget Reconciliation Act of 1985

7. Tax Reform Act of 1986

8. Omnibus Budget Reconciliation Act of 1987

 

[edthecynic]

The Reagan tax cuts actually produced an inflation-adjusted increase in tax revenue of 28%.

That's a crock!!!!

9/11 Reagan's tax cuts produced a DROP in revenue and the worst recession since the Great depression until the present Bush Depression. After the drop in revenue St Ronnie RAISED taxes 8 times in 6 years and the revenue increased and the economy recovered. You revisionists always attribute the economic growth from 1983 on, which were due to the 8 tax increases, to the 1981 tax cuts which caused a recession.

Total Federal Tax Collections (billions)

Year Constant (87 dollars)
---------------------------------------
1980 $728.1
1981 766.6 < Reagan tax cut passed in August
1982 738.2 < drop in total revenue
1983 684.3 < drop in total revenue
1984 730.4 < Reagan raises taxes
1985 776.6 < Reagan raises taxes again, 81 level recovered
1986 790.0 < Reagan raises taxes yet again
1987 854.1 < Reagan raises taxes some more
1988 877.3

Source - Internal Revenue Service.

Kennedy tax cuts

Federal Income Tax Collections (Constant dollars, CPI-U)

Year Receipts Percent change from previous year
--------------------------------------------------
1961 $138,069 ---
1962 150,567 + 9.0%
1963 155,375 + 3.2
1964 156,804 + 0.9 < tax cut takes effect
1965 154,475 - 1.5 < drop in revenue

Source - U.S. Office of Management and Budget, Historical Tables, Budget of the US Government, FY 1996. Dollar conversions made from CPI-U.

Clinton tax increase

Individual Income Taxes (millions)

Year Current Constant (87 dollars)
-------------------------------------------
1990 $466,884 $413,355
1991 467,827 397,677 < recession year
1992 475,964 392,969
1993 509,680 411,032 < Clinton tax passes
1994 543,055 429,496 < takes effect
1995 590,244 458,300

 

[Sinatra]

Before ANY tax cuts are given, the SPENDING has to be reduced.....and with the medicare pill bill enacted under President Bush, and the increased size of the defense budget and the homeland security department enacted by him, and the faith based initiatives enacted under him, and the no child left behind budget enacted by him, and the housing initiatives enacted by him and the Republicans while they were in control, would ALL HAVE TO BE REDUCED.....

Good luck with that!!!

____


Agree with all of that - as well as the vast and numerous other entitlement programs. Government spending must be cut - as well as taxes.

Only then will the true potential of the United States be able to pull us from the brink of this economic collapse.

The Obama White House and the Democrat Congress have taken the worst economic aspects of the Bush years and doubled down on them - it is fiscal insanity run wild...

 

[antagon]

our tax system's relationship with growth is tenuous. i argue that rather than the rate, that the method and structure of our taxation has the most influence.

 

[Sinatra]

our tax system's relationship with growth is tenuous. i argue that rather than the rate, that the method and structure of our taxation has the most influence.

That could be somewhat true.

Lower rates and a much simplified system would free up the entire free market system allowing for greater wealth creation and resulting jobs...

 

[antagon]

as a business owner, i cant entirely agree that simpler is better. there is a degree which makes filing cumbersome, but a system which allows the deductions which directly promote business investment is welcome. most of my investment is consumable or depreciating, hence expensible, like many small businesses. there is a pain in the ass factor for tax filing in a complicated system, but it is worth the tens of thousands allowed small businesses which take reinvestment and expense allowances in the code to heart.

 

[Sinatra]

as a business owner, i cant entirely agree that simpler is better. there is a degree which makes filing cumbersome, but a system which allows the deductions which directly promote business investment is welcome. most of my investment is consumable or depreciating, hence expensible, like many small businesses. there is a pain in the ass factor for tax filing in a complicated system, but it is worth the tens of thousands allowed small businesses which take reinvestment and expense allowances in the code to heart.

___

I am right there with you! That is partly the issue - the deductions scenario you speak of has become increasingly confusing.

The Obama health care bill alone is a monstrosity of government red tape placed squarely on the backs of business - both large and small...

 

[antagon]

i guess so. the h/c bill wont be the end of the world for my business depending on how the 1099 reporting is enforced. i've heard some stories of business models which couldn't be sustained, depending on this factor. having read the part of the bill related to employee coverage, it is pretty straightforward. my suspicion is that it would make picking coverage a lot less dodgy than it is now. red tape wise, its not like amortization or anything really monsterous.

the most red tape in this country is from local governments at the state to city level, which lay down regulatory inefficiency that gets worse the smaller the government is. this stuff costs thousands upon thousands, especially in construction. its not even fees and taxes, it just evaporates; nobody wins. i wish there was a way to crack down on this kinda shit, especially with the economy the way it is.

 

[Sinatra]

i guess so. the h/c bill wont be the end of the world for my business depending on how the 1099 reporting is enforced. i've heard some stories of business models which couldn't be sustained, depending on this factor. having read the part of the bill related to employee coverage, it is pretty straightforward. my suspicion is that it would make picking coverage a lot less dodgy than it is now. red tape wise, its not like amortization or anything really monsterous.

the most red tape in this country is from local governments at the state to city level, which lay down regulatory inefficiency that gets worse the smaller the government is. this stuff costs thousands upon thousands, especially in construction. its not even fees and taxes, it just evaporates; nobody wins. i wish there was a way to crack down on this kinda shit, especially with the economy the way it is.

The 1099 issue alone is huge.

State and local innefficency gets its lead from the Feds. Big Government has come home to all of us, no matter how small the community - and it's killing American business great and small...

 

[rdean]

The United States is a nation greatly burdened by a prohibitive tax code that stifles prospective economic growth and endangers our future.


...What then of reducing taxes? American history has proven time and again that tax reduction leads to increased economic prosperity, and that while tax rates are reduced, actual tax revenues increase. Why? Simply put, if an economy is growing, more businesses are formed, expanded, and more jobs are created – jobs which produce more tax payers, consumers, and thus, overall tax revenues. When a free market economy is actually allowed the freedom to grow, wonderful opportunity is created. When this same economy is stifled by a constrictive tax code, diminished growth and opportunity result.

For example, one need look no further than the Reagan tax cuts of the 1980s. It is a common misconception repeated by Big Goverment advocates, that the Reagan tax cuts caused an increase in the federal deficit. A basic review of the simple historical revenue facts paints a far different picture. The Reagan tax cuts actually produced an inflation-adjusted increase in tax revenue of 28%. Where the budget deficits were truly created was in the big government spending of the Democrat dominated Congress for most of Reagan’s two terms as president. Each year the Congress promised spending reductions, and each year, these promises were for the most part, unkept. Instead, this Congress took the increases in overal tax revenue and spent even more. And this is not just a Democrat issue – the Republicans during the George W Bush presidency did the same exact thing – spend far more than what was actually coming in.
____


Full article here:

Save America: Lower Taxes Now | Newsflavor

And yet, a tax cut of 2.4 trillion led to economic ruin. That on TOP of the fact we are paying the lowest taxes in 50 years.

Guess the right needs to find another "policy". 'Cuz this one doesn't seem to be working.

 

[antagon]

i guess so. the h/c bill wont be the end of the world for my business depending on how the 1099 reporting is enforced. i've heard some stories of business models which couldn't be sustained, depending on this factor. having read the part of the bill related to employee coverage, it is pretty straightforward. my suspicion is that it would make picking coverage a lot less dodgy than it is now. red tape wise, its not like amortization or anything really monsterous.

the most red tape in this country is from local governments at the state to city level, which lay down regulatory inefficiency that gets worse the smaller the government is. this stuff costs thousands upon thousands, especially in construction. its not even fees and taxes, it just evaporates; nobody wins. i wish there was a way to crack down on this kinda shit, especially with the economy the way it is.

The 1099 issue alone is huge.

State and local innefficency gets its lead from the Feds. Big Government has come home to all of us, no matter how small the community - and it's killing American business great and small...

the 1099 thing is a loophole which may or may not be closed depending on enforcement. i think that if businesses were leaning on that really hard, that they were flirting with trouble to start with. lots of smaller contractors use it to circumvent workman's comp. because i pay workmans comp for all my dudes, i could care less about these types of firm's bitchin. there are other business models which might be more innocent in their use of the 1099, and i wish a big-biz loophole was squeezed instead of the 1099 -- mainly a smallfry cheat, but nothing's really changed with the law. SS UI MC, all the fringes have always asked for justification that subs weren't actually employees.

i really disagree about the state and local inefficiency bit. even though the feds take a long time to pay, contracting for the fed government is a breeze compared to the county. on private projects, the smallest jurisdictions in the country squeeze the hardest on growth. at the fed level - the big picture - growth is a good thing. cities (and it gets worse when they are smaller) have just the opposite set of values: growth and development is negative. being a bit backward, cities and counties use their inefficiency and regulation as a tool for this anti-development agenda. the cost is immense and lasts year round, not just april.

 

[Big Fitz]

The United States is a nation greatly burdened by a prohibitive tax code that stifles prospective economic growth and endangers our future.

Kaching, kaching, kaching!

Whatever the optimal tax code, and whatever Americans should pay, the US is not burdened by a prohibitive tax code that stifles growth. I read somewhere that federal taxes are 14% of GDP, the lowest since 1940. More than half the people in this country don't pay income taxes. America has one of the lowest tax takes in the developed world.

But besides that, the US economy has grown at a rate of 2% per capita per year for at least 150 years, regardless of what the tax take has been.

I would take these arguments more seriously if they were intellectually honest.

If that analysis was true, we shouldn't be in this mess now, should we?

 

[Sinatra]

The United States is a nation greatly burdened by a prohibitive tax code that stifles prospective economic growth and endangers our future.

Kaching, kaching, kaching!

Whatever the optimal tax code, and whatever Americans should pay, the US is not burdened by a prohibitive tax code that stifles growth. I read somewhere that federal taxes are 14% of GDP, the lowest since 1940. More than half the people in this country don't pay income taxes. America has one of the lowest tax takes in the developed world.

But besides that, the US economy has grown at a rate of 2% per capita per year for at least 150 years, regardless of what the tax take has been.

I would take these arguments more seriously if they were intellectually honest.

If that analysis was true, we shouldn't be in this mess now, should we?

____

Now don't go whacking him on the head with his own ignorance!!!


Obama Doesn&#8217;t Get It | Newsflavor

 

[finebead]

Folks make it sound like the only thing of economic consequence that occurred in the 80's was the Reagan tax cuts, and that all economic results can be explained by the tax cuts. That is wrong.

Oil prices fell from $35 a barrel down to 10, giving a big boost to the economy, probably bigger than the tax cuts. The reduction in energy prices was a function of increased exploration caused by the higher price (initially) and reduced demand caused by the mandatory fuel efficiency standards for the auto makers.

In 1981, IBM rolled out the first business personal computer, which unleashed a wave of productivity by putting spreadsheet, database and word processing technology in the hands of everyone. Rooms filled with 40 draftsmen were replaced with 4 drafters with AutoCAD.

Whatever happened in the 80's, it was a function of many big factors in addition to the tax policy.

Reagan did quadruple the US deficit during his 8 years, taking total US debt up from 700 billion to 2.8 trillion by the time he left office.