Why the GOP should never rule Warshington

[Care4all]

yeah that's about what the rate is now. Class warfare and the actions Reagan took imply that you believe he is it out for the poor and that just isn't the case. In theory (fun word) one perfectly legitimate way to stimulate the economy is to give rich people and corporations a tax break so they have more money free to invest in their company, hire people and give raises. It is what is referred to as trickle down economics. The flaws in it is that it is open for the overly greedy to take advantage up. I tend to believe people like that are the exception rather than the rule.

Regardless of the mechanism the intent is the same; to help the middle class and the poor. I don't see it as a rich vs. poor. I see it as differing views on how to best help the middle class and poor. Obama believes the middle class and poor will be best served if their taxes go down and the taxes of corporations go up. I don't know maybe he thinks the extra money saved by these people will more than offset the difficulty many businesses will face with tighter budgets. Personally I don't see that happening.

NOT saved by these people but spent by these people....they would have more of their own money to spend...this is what gives those at the top, with all those businesses... the money to give raises and hire...their sales increases from the spending of those in the middle getting the tax breaks and more of their own money.

TRICKLE UP!

Care

 

[Bern80]

NOT saved by these people but spent by these people....they would have more of their own money to spend...this is what gives those at the top, with all those businesses... the money to give raises and hire...their sales increases from the spending of those in the middle getting the tax breaks and more of their own money.

TRICKLE UP!

Care

The math is the problem with that theory though. We already know the people that would benefit from the cut itself pay very little of the tax burden to begin with, simply because the percentage of their income paid in taxes is relatively small. For example the income tax for a single unmarried person making between approx. $33k and $79k is 25%.

Now you have a business that would like to hire new workers, reinvest, give raises etc. Except for whatever reasons it simply can't afford to. Now here comes good old Obama is tax hike on said business is going to make it even harder to do so.

So by how much is Obama planning on cutting that 25%? let's be generous and say 10% so that now an individual making 50k who paid 12.5k in fed income tax now pays 7.5k a year in taxes. A difference of 5k a year. Now it is your contention that that savings is going to be enough such that revenues to ACME motors are going to increase enough to not only offset their reduced revenue from the tax hike, but also be enough to put them in a position to actually hire more people, reinvest and give raises? Is that what you want us to believe?

One of the goals in strengthening the economy is to allow businesses to create jobs and provide better wages. Obama is essentially gambling that the tax cut he is providing to the middle class will not only offset the tax hike to the corporations but actually allow them to do those things.

 

[Care4all]

The math is the problem with that theory though. We already know the people that would benefit from the cut itself pay very little of the tax burden to begin with, simply because the percentage of their income paid in taxes is relatively small. For example the income tax for a single unmarried person making between approx. $33k and $79k is 25%.

Now you have a business that would like to hire new workers, reinvest, give raises etc. Except for whatever reasons it simply can't afford to. Now here comes good old Obama is tax hike on said business is going to make it even harder to do so.

So by how much is Obama planning on cutting that 25%? let's be generous and say 10% so that now an individual making 50k who paid 12.5k in fed income tax now pays 7.5k a year in taxes. A difference of 5k a year. Now it is your contention that that savings is going to be enough such that revenues to ACME motors are going to increase enough to not only offset their reduced revenue from the tax hike, but also be enough to put them in a position to actually hire more people, reinvest and give raises? Is that what you want us to believe?

One of the goals in strengthening the economy is to allow businesses to create jobs and provide better wages. Obama is essentially gambling that the tax cut he is providing to the middle class will not only offset the tax hike to the corporations but actually allow them to do those things.

6 or 1/2 dozen

Some believe if the supply is increased, out of thin air, people will buy their stuff or their service which they are selling. (even if they don't have the income to buy them)

Some believe if the middle class is doing well, they demand more stuff and services, which then makes the supplier, (the business), build more or hire more people to build more....

remember in the top 5% of income earners there are 95 people of moderate or low means for every 5 people of wealth....

Whether the bottom tier pays income taxes or not, is irrellevent to those that believe that demand is what affects supply and not the supply that affects the demand....putting money in their hands is a guarntee that the money makes it to the marketplace immediately! (more of a stimulus in a slowing economy)

yes, you are right Bern, there are two different theories....

Care

 

[Annie]

Tell me more about the private aspect.

Henry Ford: "It is well that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning."

FOREIGN BANKERS OWN MAJORITY OF FEDERAL RESERVE

More that half the shareholdings in the Federal Reserve Bank are controlled by large New York City banks, including National City Bank, National Bank of Commerce, First National Bank, Chase National Bank, and Marine National Bank. When Rockefeller's National City Bank merged with J.P. Morgan's First National Bank in 1955, the Rockefeller group owned 22 percent of the shares of the Federal Reserve Bank of New York, which in turn holds the majority of shares in the Federal Reserve System - 53 percent. But who really owns what? Here are the top controllers of the Federal Reserve Bank

1. Rothchild banks of London and Berlin.

2. Lazard Brothers Banks of Paris.

3. Israel Moses Seif Banks of Italy.

4. Warburg Bank of Hamburg and Amsterdam.

5. Lehman Brothers Bank of New York.

6. Kuhn, Loeb bank of New York.

7. Chase Manhattan Bank of New York, which controls all of the other 11 Federal Rwerve Banks.

8. Goldman, Sachs Bank of New York.

Spoken in the vernacular of a rising Nazi star. Congratulations, you've arrived.

 

[Bern80]

6 or 1/2 dozen

Some believe if the supply is increased, out of thin air, people will buy their stuff or their service which they are selling. (even if they don't have the income to buy them)

Some believe if the middle class is doing well, they demand more stuff and services, which then makes the supplier, (the business), build more or hire more people to build more....

remember in the top 5% of income earners there are 95 people of moderate or low means for every 5 people of wealth....

Whether the bottom tier pays income taxes or not, is irrellevent to those that believe that demand is what affects supply and not the supply that affects the demand....putting money in their hands is a guarntee that the money makes it to the marketplace immediately! (more of a stimulus in a slowing economy)

yes, you are right Bern, there are two different theories....

Care

It is no garuntee that giving people more money means it will end up in the market place. The only difference in the eqation is whos financial burden is lessened and if you make the argument that some greedy CEO's will horde away extra money instead of spending it on the business then the same is true of individuals. Some will invariably simply save it.

And the demand influencing supply not only applies to consumers when they have more money, it also applies to employers when they have more money. They will demand more technology, more skilled employess because just like an individual wants to ever increase their standard of living a company will want to continue to grow.

The problem with Obama's plan is not so much cutting taxes on the middle class. Good for him. The problem is his tax increase on businesses. He has got half the equation right. He has made it easier to infuse more money into the economy, but he will also undeniably make it harder for busimesses to reinvest in themselves. That also has a negative effect on the very same people the tax cut helps. They have more money, but potentially less job security.

Again it's basic math. If Acme wants to hire 10 more people for example, they will need to come up with extra money in their budget. Middle class income for people, call it $500k. They need to genarate at least (because we didn't factor in payroll taxes, healthcare, benefits etc.) $500K MORE THAN last year to afford to hire these people. So Obama has decided to help that by giving the middle class more discretionary income. The theory being that individuals will now spend more money then they did last year on ACMEs products. That is far, far from a given however. AND at the same time Obama has decided that he is going to raise taxes on ACME meaning at the end of the year they will have less income meaning in reality they will have raise much more than $500k to put 10 more people to work. The only way the economy grows under Obamas plan is if people not only spend more, but spend enough to no only offsetm but well exceed the cost of the tax hike. It just isn't very practical to think that a group of people with little purchasing power is going to be able to do that.

 

[Hum Dinger]

Having a good healthy and growing economy means having a well balanced economy. The past 30 years have seen an ever increasing imbalance in the distribution of the wealth in favor of the wealthy.

This has been compensated for by us becoming a ridiculously debt dependant society - one that's reached the end of our rope.

The supply side theory fails because wealthy people do not create jobs just to create jobs, they create jobs to expand their businesses and they only have reason to expand those businesses if there is a MARKET for their products.

Until the recent financial crisis, there was ALWAYS capital available to the wealthy to expand their businesses. It required a MARKET to expand, not a concentration of wealth into the hands of a few.

What we need is increases in wages and salaries, to get the middle class out of debt and buying again. This will create a massive market for goods and services and that will cause businesses to expand.

For the past 8 years, the concentration of wealth has turned into a war on the middle class. The middle class is responding by electing, what is by American standards, a radical government.

So, they've shut the banking system down. This will lead to an economic crisis which will lead to a humanitarian crisis.

It isn't a conspiracy by the wealthy, just a product of infinite individual greed.

Once this becomes a humanitarian crisis, all hell is going to break loose.

 

[Care4all]

It is no garuntee that giving people more money means it will end up in the market place. The only difference in the eqation is whos financial burden is lessened and if you make the argument that some greedy CEO's will horde away extra money instead of spending it on the business then the same is true of individuals. Some will invariably simply save it.

i saw a hearing on c-span reviewing the stimulus and it was shown that the most effective stimulus is that given to the needy...they will put a higher percentage of their stimulus back in to the economy QUICKER than any other income groups, but next in line to them was the middle class and the least stimulus group was the stimulus given to the wealthiest.....

here's an analysis that pretty much says the same thing...and some!!!

commentary- Bush's Economic Report Card: Timely Stimulus, Poor "Bang for the Buck," Disastrous Budgeting
study- http://www.economy.com/dismal/economycom_bushfiscalpolicy.pdf

just some things to ponder....

And the demand influencing supply not only applies to consumers when they have more money, it also applies to employers when they have more money. They will demand more technology, more skilled employess because just like an individual wants to ever increase their standard of living a company will want to continue to grow.

yes, i can understand this view, but it still begins with the bottom up...the middle class has to be purchasing the items already there before the business man can even think about spreading out...

The problem with Obama's plan is not so much cutting taxes on the middle class. Good for him. The problem is his tax increase on businesses. He has got half the equation right. He has made it easier to infuse more money into the economy, but he will also undeniably make it harder for busimesses to reinvest in themselves. That also has a negative effect on the very same people the tax cut helps. They have more money, but potentially less job security.

how so, more details please....i am not really following his tax plan, in particular...just voicing what i think or have read or heard regarding taxes or stimulus tax rebates...

Again it's basic math. If Acme wants to hire 10 more people for example, they will need to come up with extra money in their budget. Middle class income for people, call it $500k. They need to genarate at least (because we didn't factor in payroll taxes, healthcare, benefits etc.) $500K MORE THAN last year to afford to hire these people. So Obama has decided to help that by giving the middle class more discretionary income. The theory being that individuals will now spend more money then they did last year on ACMEs products. That is far, far from a given however. AND at the same time Obama has decided that he is going to raise taxes on ACME meaning at the end of the year they will have less income meaning in reality they will have raise much more than $500k to put 10 more people to work. The only way the economy grows under Obamas plan is if people not only spend more, but spend enough to no only offsetm but well exceed the cost of the tax hike. It just isn't very practical to think that a group of people with little purchasing power is going to be able to do that

I think you are leaving out the MOST important part of the equation Bern...a business does not just decide out of the clear blue to add 10 more people to their business, they have sales and a sales trend that would support the new business plan and expansion...believe me, I worked for several corporations over the decades in executive or management positions and this is not something just done out of the clear blue by anyone in business....all kinds of calculations and analysis goes in to it....as i am certain you probably know as well...it just isn't as simple as you put it...

What I am trying to say is that they would not be thinking about expanding if there was no business to support the business growth...a 4% difference in tax code won't make much of a difference imo, on whether to add 10 people or not.

-you need a strong middle class...this is what America has worked for, this has been america's goal and it has pretty much worked for the last century....
sales increases, faster turns and roi's give warrant to an expansion of ones business...people have to be buying the stuff...

by the way....isn't payroll tax deductable...the $500 k added in payroll would be deducted...from their taxable revenues.

the business would probably not add $500k in added employee expense if they had not had a planned sales increase to accomodate it of anywhere from $3-$5 Million....again, demand for their product would determine all of this...

I am not disregarding your point of view either...there is merit in not overtaxing businesses as you have stated and i don't want to come off as someone who doesn't recognize such...

i just don't want you to disregard the fact that a tax cut on the ''middle and lower'' income groups hits retail near immediately, which is also a way for businesses to get the extra revenues needed to hire more people....

and probably raise consumer confidense faster as well....

care

 

[dilloduck]

consumer confidense

I thinked you've accidently coined a great concept.

 

[sealybobo]

Spoken in the vernacular of a rising Nazi star. Congratulations, you've arrived.

What is that supposed to mean? Knowing that billionaire foreigners and the richest people own the federal reserve and unconstitutionally tax our income thru the irs and they love the national debt skyrocketing because that's just more that we owe them and more that they own us does not make me a nazi.

 

[Care4all]

I thinked you've accidently coined a great concept.

huh?

 

[dilloduck]

huh?

It's ok---other people will get it !

 

[dilloduck]

What is that supposed to mean? Knowing that billionaire foreigners and the richest people own the federal reserve and unconstitutionally tax our income thru the irs and they love the national debt skyrocketing because that's just more that we owe them and more that they own us does not make me a nazi.

You got it sucker---Now let's see you and Obama do something about that Fed and their friends !!

 

[JimH52]

Let's see, bush had a GOP congress for 6 years and failed to even veto one spending bill. He gave a tax cut to the wealthiest as we began the most expensive war(s) in US history.....hhhhmmmm

The average American is beginning to figure out WHO the problem. The GOP is about to suffer the biggest loses in US history.

 

[Diuretic]

Well what does that tell you? You can devise all kinds of tax hits to "soak the rich" and the rich will ALWAYS find a way to thwart you because they have vast resources, those than enact these edicts are themselves rich and always leave a loophole for themselves (and everyone else of means), and in the end, no matter who is in charge, even in the heyday of the old Soviet Union, the rich, powerful, and well connected will ALWAYS thrive.

You simply cannot win because what you believe in defies fundamental human nature.

Oh. So why have laws for anything then?

Why not just facilitate the rich to get richer, the greedy to fulfill their dreams of avarice? If it's human nature then why not give them all a hand?

And because it's human nature is it okay if a bloke I know breaks into your house and steals your stuff?

 

[Diuretic]

The economy is very well. IT is behaving EXACTLY as it SHOULD.
.......

I know this is a few days later but - so how's that economy going?

 

[Diuretic]

Anyone who thinks any politician is a superhero doesn't have a firm grasp on reality.

And those who worship Reagan are political necrophiliacs.

What's worse?

 

[Diuretic]

So shit can the entire effort because of one bad event?

We might as well do away with airplanes, cars, trains, high rise buildings, coal mines, natural gas plants, knives, forks, sewing needles, hockey pucks, lighters, matches...

Those things have all killed people in a time of extreme rare occurance, so clearly they're all unsafe to be pursued in the market.

Harrisburg? Three Mile Island? Forgotten already?

 

[Skull Pilot]

I know this is a few days later but - so how's that economy going?

I'll add that the economy would be behaving exactly as it should IF the government kept out of the market.

Now we have the government saying that it will probably buy stock (and I'll bet they mean controlling interest) in various banks to "save the economy". But the real reason is that government in its unstoppable quest to evolve into an all controlling entity just wants no rather needs to expand its control over the economy and thereby the population.

http://http://www.bloomberg.com/apps/news?pid=20601068&sid=au4PnE_L1TCQ&refer=home

One more step down the slippery slope of socailism.

 

[Diuretic]

Just catching up.

So, the world economy is doing great isn't it?

All that genius of the free market doing its thing.

Anyone embarrassed?

 

[Skull Pilot]

Just catching up.

So, the world economy is doing great isn't it?

All that genius of the free market doing its thing.

Anyone embarrassed?

But it is NOT a free market and it hasn't been for decades. Government has been meddling in the markets since the 19th century.

http://mises.org/story/3145

consider the Panic of 1819. Never heard of it? That's because it came and went, and that's because the government did nothing about it.