The rich. The Dems. The Repubs. ... and Taxes

[landrun]

I've heard liberals/conservatives arguing about extending the tax cuts for the 'rich' and a lot of it doesn't add up.

First, I had a debate with some liberal friends of mine and they argued that it would only have an impact on 2-3% of all business owners because most don't make enough. The 'Bush Tax Cuts' were never for them. Only the super-wealthy. I was presented with articles from the NY Times etc.. that explained how this was so. And how conservatives were lying about the tax cuts being for the middle class.

Now, suddenly, the liberal dems are offering to extend the tax cuts to the lower and middle class but not the rich. Obama says, they'll do it this week even if the repubs would agree. My first reaction is that I guess they've just confessed that the tax cuts were for the middle class all along. Either they were or they weren't. Either it was only for the upper 3% of the people in this country - the super rich - or it was for everybody. How can you extend tax cuts for someone who never had them.

It goes even further. Now some dems are circulating a memo and giving it to dem leaders asking that the tax cuts be extended to everyone.

http://politicalticker.blogs.cnn.com/2010/09/15/more-democrats-break-with-obama-on-tax-cuts/



The letter–written by Utah Rep. Jim Matheson, Illinois Rep. Melissa Bean, Virginia Rep. Glenn Nye and Michigan Rep. Gary Peters–states that after listening to economists, small businesses and families over recent weeks they are concerned that "raising any taxes right now could negatively impact economic growth."

"We believe in times of economic recovery it makes good sense to maintain things as they are in the short term, to provide families and businesses the certainty required to plan and make sound budget decisions. Providing this certainty will give small businesses, the backbone of our economic recovery, confidence and stability," the lawmakers wrote.


So they seem to admit that raising taxes, yes even on the wealthy, will have a negative impact on the economy.

I'm not an economist, and I've heard the cliches thrown around, 'tax and spend', 'trickle-down'. The arguments about keynesian economics etc...

But when this stuff happens I just gotta say that it looks like a lot of people don't really believe what they preach. You can make all the arguments you want to about economic models, but when it comes time for you to do something to impact the economy in a healthy way to save your own career, you do what you truly believe will help. In this case, it looks like the democrats are trying to demonize the rich to the middle class. But in the end, they know their entire economic model really hurts the lower classes. When the rubber meets the road, so to speak, they turn into republicans and want to cut taxes.

If you truly believed that raising taxes on the rich would help out, why not do it? If you think it will help turn the economy around, and thus your chances of getting re-elected, why not do it.

The only way the economy effects these fat cat politicians is when it impacts their chance of getting back in office. So it seems that cutting taxes does help each of us. And they know it but don't care. They're not willing to cut taxes to help your family. They're only will to do it when it is time to help their families.

Having ranted, I'm curious to know what the liberals here have to say to justify liberals behavior over this whole ordeal.

[soonerscuba]

2004 called, it wants your moral courage back.

[picasso]

2004 called, it wants your moral courage back.

Scuba will tell ya that of the two, only of them wants their constituents to stay poor and dependent.

[soonerscuba]

Scuba will tell ya that of the two, only of them wants their constituents to stay poor and dependent.No, I actually think tax cuts are a good idea right now, even for the top bracket. However, they aren't a magic bullet and should have never been implemented via reconciliation. Also, when times are good, we should work towards prosterity as opposed to saying "Hey everybody, here's $600!!!!!!!!"

And the idea of people thinking that conservatives are interested in reduced gov't should be taken out back and beaten with a shovel. There is a void of leadership or sound governance, and it's not isolated to Rs or Ds.

Also, the idea that a 4.5% increase in 1% of the population is going to cripple us is complete garbage.

[picasso]

I completely agree that Republicans are not for reduced government but conservatives are. Right now there's a big difference.

[picasso]

Saucy, seriously.

Go back and read some in depth ideology.

[PhilTLL]

Scuba will tell ya that of the two, only of them wants their constituents to stay poor and dependent.

Yes. Since proceeding on the "rising tide/trickle-down" myth has gotten us so far. Safety nets are for pansies! Bootstraps, bootstraps!

[badger]

We will have a very even-handed government after November's election. I usually vote Republican, but if I've discovered anything during my years of following the government more closely, it's that when one side has absolute power, it's not a good thing.

We need to get a checks/balances system back. If the president is a Democrat, then the House or Senate needs to be an opposing view. Same goes if the president is Republican. That is the only way that the other side will ever listen to good ideas that come from the opposition. Someone's gotta claim credit for it, but everyone can take credit with a balanced government. As it stands now, there's a lot of grandstanding to ensure that no credit can be taken for good ideas right before an election.

:( sad times.

[Chuck Bao]

It is pretty clear that no politician ever wants to raise the tax rate, even when they should and the economy is booming.

If the Tea Party (or conservatives) are true to their belief that a balanced budget is the top priority, they should be in favor of raising taxes to go along with a substantial cut in spending, including the military. But, they are not talking about that. Instead, they want to just talk about their belief in God and a strong military and how the current administration is hell bent on socialism and taking money away from hard-working Americans and just handing it over to a bunch of lazy asses.

[Chuck Bao]

We will have a very even-handed government after November's election. I usually vote Republican, but if I've discovered anything during my years of following the government more closely, it's that when one side has absolute power, it's not a good thing.

We need to get a checks/balances system back. If the president is a Democrat, then the House or Senate needs to be an opposing view. Same goes if the president is Republican. That is the only way that the other side will ever listen to good ideas that come from the opposition. Someone's gotta claim credit for it, but everyone can take credit with a balanced government. As it stands now, there's a lot of grandstanding to ensure that no credit can be taken for good ideas right before an election.

:( sad times.

So, you like gridlock and nothing ever getting done? I thought that was one of the reasons that Washington politicians were so out of favor at the moment.

[badger]

So, you like gridlock and nothing ever getting done? I thought that was one of the reasons that Washington politicians were so out of favor at the moment.

Oh no, I far prefer politicians being told to vote for health bills without reading them ;)

[49r]

.
Kt_UsVIIKlE
.

[GKeeper316]

the really funny thing about obama's plan is that every single item in there was proposed by a republican (except for not extending the tax breaks for the upper 3% of earners)...

the president has basically called out the pubs and said ok, we'll do it your way, try to go to your constituents in november and tell them you oppose extending their tax breaks, just because my name is on the bill.

at this point the pubs are just opposing just to keep the president from getting a win.

[landrun]

It is pretty clear that no politician ever wants to raise the tax rate, even when they should and the economy is booming.

If the Tea Party (or conservatives) are true to their belief that a balanced budget is the top priority, they should be in favor of raising taxes to go along with a substantial cut in spending, including the military. ....

Did you read the article? Or my post? In their heart of hearts, even Democrats don't honestly believe that raising taxes helps the economy. And the certainly the tea-partiers don't. Conservatives believe that raising taxes hurts the economy and thereby decreases the revenue that the government takes in. And thereby decreasing the ability to really balance the budget.

Lowering taxes increases revenue and they argue that human experience shows this without dispute. So why would conservatives want to raise taxes? Liberals will say that they believe what you just suggested. But act like they know it isn't true.

[picasso]

Yes. Since proceeding on the "rising tide/trickle-down" myth has gotten us so far. Safety nets are for pansies! Bootstraps, bootstraps!

Has nothing to do with core principals.

I had an argument with an artist friend recently who said Bush is the one who proclaimed "spend, spend, spend." I told him that I missed the part where he told people to buy homes they couldn't afford.

And PhilTLL, please show me some fine examples of spreading the wealth throughout history.

Thanks.

[soonerscuba]

Conservatives believe that raising taxes hurts the economy and thereby decreases the revenue that the government takes in. And thereby decreasing the ability to really balance the budget.

Lowering taxes increases revenue and they argue that human experience shows this without dispute.ORLY?

http://www.cbpp.org/cms/?fa=view&id=165

[SanJoaquinSooner]

... if I've discovered anything during my years of following the government more closely, it's that when one side has absolute power, it's not a good thing.

:( sad times.

I wish I had said that.

http://www.soonerfans.com/forums/showthread.php?p=2952555#post2952555

[85Sooner]

It is pretty clear that no politician ever wants to raise the tax rate, even when they should and the economy is booming.

If the Tea Party (or conservatives) are true to their belief that a balanced budget is the top priority, they should be in favor of raising taxes to go along with a substantial cut in spending, including the military. But, they are not talking about that. Instead, they want to just talk about their belief in God and a strong military and how the current administration is hell bent on socialism and taking money away from hard-working Americans and just handing it over to a bunch of lazy asses.

I agee CHUCKEE. Have you thought about reducing spending by stopping paying for all the f'ing deadbeats that we are paying for????????????????First????????????Instead of the people protecting us?

[Chuck Bao]

Did you read the article? Or my post? In their heart of hearts, even Democrats don't honestly believe that raising taxes helps the economy. And the certainly the tea-partiers don't. Conservatives believe that raising taxes hurts the economy and thereby decreases the revenue that the government takes in. And thereby decreasing the ability to really balance the budget.

Lowering taxes increases revenue and they argue that human experience shows this without dispute. So why would conservatives want to raise taxes? Liberals will say that they believe what you just suggested. But act like they know it isn't true.

I did read the article and your post. But, I have to highly doubt your assertion that lower taxes increases revenue. Maybe there was a time during the Reagan years that trickle-down economics was valid. But that was then and this is now. How many American companies are still investing overseas and exporting American jobs? Where is the trickle down in that?

Maybe there should be a substantially larger tax credit for companies and individuals who employ "legal" Americans. That would possibly help stem the outflow of jobs and give some relief to small businesses who are feeling the pain of a slowing economy and some pretty onerous employee insurance and benefits and all of that really unnecessary paperwork.

Maybe at the end of the day, we just become a nation of lawyers and accountants. Oh yeah, and heath care professionals and Hollywood paparazzi following the latest starlet who wears a tight skirt and no panties in public to get all that attention. Okay, that has the potential to be trickle down economics.

[Chuck Bao]

Oh no, I far prefer politicians being told to vote for health bills without reading them ;)

How many of the bills that politicians pass into law do you really think any of them actually read? They have aides that read them and brief them and then that is superceded by political advisors who weigh in on the cost-benefit analysis on what favors can be traded that may improve their chances for re-election.

Yeah, I am pretty cynical.

[badger]

I imagine a lot of them are reading stuff a lot more carefully now, because of the hot election year coming up.

However, my district's Congressman already won (John Sullivan) and our Senator up for election isn't going anywhere (Dr. Tom Coburn) so not really sure that any voter angst I have would make a difference this election cycle at the federal level.

At the state level, I think voters are so angry at Dems that Republicans are not only going to get stronger majorities in the state House and Senate than they already have, but Henry's popularity and the fact that Askins is not unlikeable will get cast aside in the gubernatorial race too.

[Chuck Bao]

I agee CHUCKEE. Have you thought about reducing spending by stopping paying for all the f'ing deadbeats that we are paying for????????????????First????????????Instead of the people protecting us?

No, I haven't even thought of that. Maybe some of the unemployed deadbeats should move to China to get a job.

But, I have thought about and very much appreciate those brave men and women who have and are currently serving our country. We really need to separate foreign policy from the popular and highly justified idea of supporting our troops.

I guess that sometimes you don't need a slegehammer: you need a surgeon's scapel. And, I suppose that it really is more cost effective in the long run, even if it is dodgy on legal grounds.

[Leroy Lizard]

I did read the article and your post. But, I have to highly doubt your assertion that lower taxes increases revenue. Maybe there was a time during the Reagan years that trickle-down economics was valid. But that was then and this is now. How many American companies are still investing overseas and exporting American jobs? Where is the trickle down in that?

Well, we could raise their taxes. That should keep them from exporting jobs overseas.

[Crucifax Autumn]

Lowering didn't make them keep those jobs here in the first place.

[Chuck Bao]

Well, we could raise their taxes. That should keep them from exporting jobs overseas.

Awww hell! I don't think it matters much to the big corporations exporting jobs. The US Commerce Department is way, way, way understaffed and cannot track transfer pricing between international subsidiaries unless it is obscene. They'll continue to use their investment tax credits overseas and that has nothing to do with lower labor costs which actually account for probably less than 5% of total manufacturing costs.

[OklahomaTuba]

The US Commerce Department is way, way, way understaffed.Yeah, poor DOC, they only have 141,885 (http://en.wikipedia.org/wiki/United_States_Department_of_Commerce) employees and a $14.2 Billion budget!!!!

[Ike]

So there are a number of things to discuss from the original post...I won't claim that I am considering all of them, but IMO, these are the biggest ones:

From the POV of the government, one of two things will need to happen eventually (or a small mixture of both): A) raise taxes or B) dramatically cut spending. This will need to happen to address the LONG RUN debt problems our government is facing. The biggest drivers of that long run debt projection are rapidly rising health care costs. But that doesn't mean we can't just ignore that and drastically cut spending in other areas to make up for it if we so choose.

If our economy were just toodling along, acting all fine and dandy, this is all we would have to consider.

But we have a pretty damn bad recession going on. Considering that the biggest problem in this recession is a lack of demand for goods and services across all sectors, both of those options are bad for the prospects of economic recovery RIGHT NOW. Because both of those options will further reduce aggregate demand. Tax increases will cause further belt tightening among consumers, and this will be especially felt if taxes increase in the lowest brackets. Low income people pretty much already spend almost everything they take in. With less available to spend amongst those people, demand will sharply drop. In the event that taxes rise on the highest brackets, the drop in demand, while still present, will be less of an effect, as it is likely that the money demanded of the rich will come more out of money earmarked for investment or savings than out of money for consumption. Now, you might be saying "Oh no, we can't take away money for investment!"...well, RIGHT NOW, that may not be as bad as you think. With such high degrees of uncertainty, the majority of the money being invested now is desperately chasing SAFE investments. i.e. bonds. I've read a few stories now about many people pulling out of the stock market altogether to invest in bonds because they believe that the stock market is fundamentally tilted against them. If you want further proof, check the 10 year treasury yield right now. It's pretty damn low. 2.72%. So if the government takes away in taxes money that would be otherwise invested, it's really depleting the pool of money begging to be borrowed by the government (to first order anyway). Yes, that does take away money to be invested into businesses too, but probably not as much....for now anyway. So IF we HAVE to raise taxes RIGHT NOW, raising them on the rich hurts the economy less than anything else...because that really won't do a lot to harm aggregate demand. But it won't help demand either.

Cutting spending RIGHT NOW is equally a bad idea (unless the only spending we cut are the government checks that go out that are fraudulent). That spending gets us something valuable. Whether it be roads, teachers/education, defense, or in the case of SS and Medicare, it gets us the knowledge that there exists a moderate safety net that frees us up to take risks (and thus actually helps the economy). Any reduction in government demand RIGHT NOW reduces aggregate demand RIGHT NOW, because a) whatever it was that the government was getting from it's spending isn't being demanded anymore, and whatever the recipients were getting for that good or service are then less able by that amount to make demands of the free market. So really, the only spending that we can cut RIGHT NOW without further endangering the economy is spending on fraud and waste.

So that leaves us in a spot where addressing what we know will be a problem in the long run may actually make the long run problem worse. If we further tank this precarious recovery, It's going to hurt the governments ability to pay back the debt we have already racked up due to lowered economic output not being able to adequately feed government revenue. A doom spiral, so to speak.

So is there a way out? I tend to think so. Since the market seems perfectly willing to lend money to the government (10 year bond at 2.72%, as I mentioned earlier), IMO, we should be borrowing more (since it's cheap), and spending more (firstly with aid to the states IMO, who are facing equally difficult times, and have a much harder time borrowing money), making investments in ourselves. By that I mean spending money such that it enables us to make more money in the future. Such that it allows for more rapid growth coming out of the recovery. More rapid growth means that spending cuts further down the line (which we will have to make) will be less painful because there will be much more activity in the private sector, and that the tax increases (which we will also probably have to make) may not need to be as large.

[OklahomaTuba]

If our economy were just toodling along, acting all fine and dandy, this is all we would have to consider.
So, you admit that raising taxes would be bad for the economy, so why do it at all??

And we just spent $4 Trillion on Government, and all we have to show for it is double digit unemployment, no real GDP growth, and the highest poverty rate in half a century.

Hope-n-Change!

[OklahomaTuba]

Cutting spending RIGHT NOW is equally a bad idea (unless the only spending we cut are the government checks that go out that are fraudulent). That spending gets us something valuable.

LA really got something valuable out of all this government spending.


Audit of Federal Stimulus Funds in Los Angeles Shows $111 Million in ARRA Grants Has Only Created 55 Jobshttp://www.huffingtonpost.com/wendy-greuel/audit-of-federal-stimulus_b_719817.html

Anyone care to do the math on how much $$ that is per job?

[Chuck Bao]

Yeah, poor DOC, they only have 141,885 (http://en.wikipedia.org/wiki/United_States_Department_of_Commerce) employees and a $14.2 Billion budget!!!!

Alright, I should have said the DOC's International Trade Administration, which investigates unfair trade practices among other things. It has only 1,433 employees and a budget of just $466mn. I guess that they just investigate when someone complains.

http://en.wikipedia.org/wiki/International_Trade_Administration

Who would complain about transfer pricing and tax avoidance since many American companies do the same thing? New investments in Thailand get a 5-year tax holiday, which can be extended by further new investments. What would you suggest that the US government should do on its corporate tax policy? It is pretty difficult to beat a zero tax rate.

[Veritas]

Politicians won't raise taxes on the masses because they don't want to lose votes. Period, full stop.

But the number of folks making around $125K or more is pretty small, so you can take $50K a year and more from them to keep the system going without getting voted out. Especially is you keep telling the masses how those folks are evil and that they make their money ****ing over the common man.

Politicians have zero incentive to make good decisions with respect to taxes and spending because good decisions are going to mean more taxes on the masses and fewer spending programs for the same group.

[GKeeper316]

So, you admit that raising taxes would be bad for the economy, so why do it at all??

And we just spent $4 Trillion on Government, and all we have to show for it is double digit unemployment, no real GDP growth, and the highest poverty rate in half a century.

Hope-n-Change!

none of that **** is the fault of the guy who has been in charge for the last 2 years... you need to look back at the previous 8 for the cause and effect paradigm.

[Fraggle145]

At the state level, I think voters are so angry at Dems that Republicans are not only going to get stronger majorities in the state House and Senate than they already have, but Henry's popularity and the fact that Askins is not unlikeable will get cast aside in the gubernatorial race too.

And This scares the **** out of me...

[OklahomaTuba]

none of that **** is the fault of the guy who has been in charge for the last 2 years...

Yeah, not his at all. Or the Donks who controlled the purse strings since 2006.

http://carnalreason.org/images/graph.gif

[badger]

And This scares the **** out of me...

It's kind of misdirected anger, isn't it? Oklahoma Democrats are some of the most likable, not-crazy, not-extreme Democrats nationwide. Even their Oklahoma Republican counterparts seem to get along much better with our Oklahoma Democrats than our federal level ones. I remember watching a pre-primary event four years ago where the candidates for lt. gov. all sat together before they gave their media addresses - applauding each other, joking around, being friendly.

[OklahomaTuba]

He's just worried he won't be able to leech of the private sector, or what's left of it, once the adults finally get back control of the purse strings. ;)

[Fraggle145]

It's kind of misdirected anger, isn't it? Oklahoma Democrats are some of the most likable, not-crazy, not-extreme Democrats nationwide. Even their Oklahoma Republican counterparts seem to get along much better with our Oklahoma Democrats than our federal level ones. I remember watching a pre-primary event four years ago where the candidates for lt. gov. all sat together before they gave their media addresses - applauding each other, joking around, being friendly.

I'm not angry about it, I'm scared of it. It has nothing to do with the purse strings as Tuba calls it. Its that the Republicans' fundamental ideals are so far different from mine. Oklahoma Democrats in my eyes are basically "liberal" republicans everywhere else and I am totally okay with that.

[Fraggle145]

He's just worried he won't be able to leech of the private sector, or what's left of it, once the adults finally get back control of the purse strings. ;)

You have no ****ing idea what you are talking about. ;)

[Crucifax Autumn]

I don't know why all you guys keep comparing purses.

[badger]

I'm not angry about it, I'm scared of it. It has nothing to do with the purse strings as Tuba calls it. Its that the Republicans' fundamental ideals are so far different from mine. Oklahoma Democrats in my eyes are basically "liberal" republicans everywhere else and I am totally okay with that.

I don't mean your anger, I mean voter anger when they vote against Oklahoma state Dems when the state government has nothing to do with bailouts, healthcare overhauls or... um...anything else out there that's constantly been nagged at for the past two years :D

[Fraggle145]

I don't mean your anger, I mean voter anger when they vote against Oklahoma state Dems when the state government has nothing to do with bailouts, healthcare overhauls or... um...anything else out there that's constantly been nagged at for the past two years :D

I totally agree. And its going to get us into a big **** mess.

[badger]

I totally agree. And its going to get us into a big **** mess.

I am a lifelong Republican (from the north, so I'm probably not considered a hardcore one, hehe) but I would anticipate a few more lawsuits from upcoming Oklahoma legislation passed by this next state House/state Senate in the next few years.

If that state question about raising education per-pupil spending passes, we will not have any money left to fight lawsuits over legislation, so I hope our Republican state reps and senators choose legislation very, very carefully in the coming years. I would love our tax dollars to go toward educating our kids instead of educating our representatives :(

[OklahomaTuba]

The amount spent on fighting Obamacare (which 61% of American's now supports repealing) (http://www.rasmussenreports.com/public_content/politics/current_events/healthcare/health_care_law) pales to the amount of money spent on increased premiums and rationed health care in general.

If anything, the law suit to stop this might just be the best investment OK could ever make.