Right, so tax increases must be on the table if the situation is to be reversed.
So we already know what’s to be done, now we’re just haggling over the price.
You might want to start with understanding what it means yourself.
I am pretty familiar with historical top marginal tax rates. So you think that people won’t understand how raising tax rates by 3% would affect behaviour so you try to analogize it with how people would react to 90% tax rates? You’re trying to compare a pat on the head to a punch in the nose.
Are you under the impression that I don’t understand slippery slope arguments? First of all 35 to 39.5 is not infinitesmally small. I am not arguing that there is no distortive effect arguing that the effect would be very small. No need to ask what would happen at 50% or 60% or 70%. The HIGHEST rates being considered by anyone right now is 39.6% and I don’t think anyone is even thinking about THAT number anymore.
I’m not sure where I said it does nothing. ALL taxes are distortive but the distortion is frequently worth the benefits of what those tax dollars can buy.
huh?
No, I gave you a real world example not just my wishful thinking. So far you are the only one that seems to be engaged in theorizing. Clinton raised taxes at the beginning of the 1990’s when we had just come out of a recession and it didn’t seem to stifle growth.
You seem to keep ignoring the fact that when taxes are levied, the money does not evaporate. It pays down debt or is reinjected into the economy.
I don’t think the stimulus has failed or made things worse. Everybody keeps forgetting how bad things were in 2008/2009. Perhaps congress will fail to raise the debt ceiling and remind everyone what it feels like to look into the abyss once again.
Yes, that’s what I think, and that’s what I was able to prove. As to the last statement, when both involve physical contact would you not say it’s then appropriate to consider who you’re patting on the head?
“But I patted him on the head in 1993, why can’t I do it today?”
“Well Timmy, you’re brother just had a brain tumor removed so now’s not the best time”
Yes actually, because it’s not a slippery close argument, it’s the exact opposite.
In your opinion they would be very small, you don’t know what the actual outcome would be.
And the main problem here is that you apply the “small effect” to a small change, and think you can make another small change with another small effect. Then another, and another. Each time assuming the same small effect.
So now go the other way. If 90% is confiscatory, what if we instead say 85.5%, same small change, would their be a “small effect?”
Clinton’s tax increases in 1993 did waaaaay more than just increase taxes on the rich, you know that right? Increased gas taxes, medicare taxes, social security taxes. That’s a budget plan that makes sense and addresses real issues. Without pretending the rich are a spigot you can turn on and off at will.
That money has already been spent, so you are wrong, it evaporates into interest on past purchases.
Which is oddly enough what I think happened to a lot of the stimulus money, it all evaporated into consumer debt.
For a Keynesian stimulus to work it needs to be short, and specific. It’s not supposed to be years of deficit spending.
And large; much larger than what the Republicans allowed in 2009. But that is inconvenient for your argument.
All you’ve been able to prove in this thread is that you don’t understand basic economics, and when you are called on your nonsense, you resort to strawmen.
Yes, the stimulus needed to be much larger, applied much sooner, and with an end goal in site. Not at all inconvenient for me, but rather inconvenient for the economy.
Not just the amount, but how and where the tax increase(s) are applied. Like I said with the Clinton tax increases in 1993, I’d love to see a tax increase on gas. If Medicare and Social Security is so expensive, make everyone pay more into it. I love to see the government scrap the mortgage interest tax deduction. In fact, the entire “itemizing deductions” is bullshit as far as I’m concerned. Why were my taxes 43 pages long? Pick a rate and apply it.
So to save the job creators’ asses, we put the burden on the people who are, if they are not currently jobless, struggling to make ends meet?
I can just see it. “We’re finally at the point where we feel comfortable enough to start building our businesses up! We need to hire thousands of people! …Hey, where is everyone?”
head asplodes
Don’t worry about it. It’s pretty clear that emacknight started this thread without even realizing that lottery tickets are not actually an investment. It probably began to dawn on him/her when Sam Stone analyzed it as a tax. Now he/she is stuck trying to wiggle out of the OP, so all you are going to get at this point is strawmen and more silliness.
This whole debate about increasing taxes is occurring in the context of trying to reduce the deficit. The alternative to raising taxes is cutting spending. When you say don’t raise taxes you are saying we should either cut spending that much more or that we shouldn’t be focusing on the deficit right now.
Are you saying we should neither cut spending nor raise taxes or is raising taxes the only thing that really hurts the economy?
I still think its slippery slope but perhaps its the fallacy of the beard.
See continuum fallacy (fallacy of the beard) above.
fallacy of the beard.
[quote]
Clinton’s tax increases in 1993 did waaaaay more than just increase taxes on the rich, you know that right? Increased gas taxes, medicare taxes, social security taxes. That’s a budget plan that makes sense and addresses real issues. Without pretending the rich are a spigot you can turn on and off at will.[/quiote]
Son, I know more about the tax code than you will ever want to know.
In what way were medicare and social security and medicare taxes raised in 1993? The rates don’t seem to have increase and the increase in the SS cap seems in line with the COLA adjustments that they have been subject to since as far back as I can remember http://www.ssa.gov/oact/progdata/taxRates.html
I don’t know why we ever turned those spigots off in the first place. I think we should turn on the spigot and leave it running until the debt is down to a manageable level.
WTF are you talking about. The fact that it is spent means it didn’t evaporate.
Still didn’t evaporate.
How long did WWII last?
They are an investment when you win. A tax when you lose. But in Michigan the proceeds are supposed to go to the school system. They have been kicking money into the school fund for a long time.
The tax on gas in nominal. What do you suggest we increase it to considering that every economist agrees that the high price of gas is one of the largest drags on our economic recovery?
If we lifted the cap on social security we would solve the social security liquidity problem but no matter what we do with medicare taxes, medicare costs will eventually swallow the increase in taxes until we “bend the cost curve” Even universal health care will only cut national health care costs in half, which only buys us about 20 years before we are faced with the same problem (of curse we will have universal health care and 20 years to figure shit out).
If you want to use these terms in a non-standard way, that’s up to you. But from an economics standpoint, it’s not an investment, because you can never have a positive projected ROI. You can analyze it as a tax, or you can analyze it as a good (ie, people are purchasing the “thrill” of playing the lottery), but it’s not an investment.
I’m well aware of the lottery as a “tax on the stupid.”
It’s what makes this thread so amusing. Suggesting that we increase the tax rate was met with numerous people predicting fewer purchases. Some how they intuitively believed that a confiscatory tax on a risky venture would reduce participation. And a few people that think it’s a great idea.
On the other hand, when we talk about increasing the top marginal tax rate, that exact same analysis is absent (from many of the same people), and replaced with a lot of hand waving, justification, and wishful thinking.
But playing the lottery isn’t a rational act (and in no way investing), and thus tax implications are unlikely to contribute to the decision whether or not to play. Whether the increase was to 39.5% or 90%, people buying lottery tickets are calculating ROI, and really aren’t worried about what happens after they win, and more than they’re adding up how much they lose. It’s also a net disadvantage to the government since all the money goes to them anyways, and then redistributed out to social services, back to many of the people buying the tickets. It’s essentially a voluntary tax on the poor, to fund services for the poor. A weird sort of way of tricking people into paying for social programs.
Investing, and tax planning, are for the most part rational actions involving experts (ie financial planners and tax specialists). If a person’s tax burden is in the range of $100,000 it’s a pretty safe bet to assume they’ll do things to either reduce that number, or avoid having it go up. How often do you earn mention of capital gains taxes being 15%? For it to be at that rate the stock has to be held for more then a year, selling before a year incurs taxation at your income rate. So obviously when given the option, many people will hold stock for longer than a year to avoid taxes. They’ll also make use of tax loss selling to reduce gains, but at the same time avoid wash sale penalties.
A lot of this is like the difference in polling results when asked “are you for capital punishment” vs “are you for the death penalty.”
Maybe if they weren’t wasting money on lottery tickets they wouldn’t be struggling so much?
The deficit has to be a focus, and it has to be eliminated, and that should be planned out over a reasonable time frame.
But within the context of reducing the deficit, there are actually three options: increase taxes, cut spending, and the third you forgot which is to get GDP growing again.
The US went into the recession with an unnecessary deficit, and when the recession hit the government lost revenue, had more people needing social programs, AND spent more money on the stimulus.
Frankly, I don’t really give a shit about tax increases or spending cuts, what I care about is negative impact the deficit spending has on the economy. As far as I’m concerned, the issue needs to be about increasing revenue, decreasing costs. Those two things could be accomplished by increasing the tax rate, or decreasing entitlement benefits. But I’d rather that instead of raising taxes, and cutting unemployment, we have more people working, thus paying taxes and not collecting unemployment.
So, the trillion dollar question is then how do we get more people working? I’d like to make sure it doesn’t cost more to hire people.
Both a devastating to the economy when the economy is already in rough shape. If we consider the US economy a very sick patient, we have to consider if its able to withstand surgery, chemo, and radiation. While each of those technically treat cancer, they each have side effects that can kill the patient.
Those that tend to lean left are intuitively aware of how spending cuts hurt the poor, yet for some reason tend to be oblivious to how “taxing the rich” may also hurt the poor. As far as taxes go, we need to find a balance between getting more revenue, while also trying to grow GDP. If GDP can start to improve we can get employment down which will ultimately help the poor.
Omnibus Budget Reconciliation Act of 1993:
[ul][li]It created 36 percent and 39.6 income tax rates for individuals in the top 1.2% of the wage earners.[2][/li][li]It created a 35 percent income tax rate for corporations.[/li][li]The cap on Medicare taxes was repealed.[/li][li]Transportation fuels taxes were raised by 4.3 cents per gallon.[/li][li]The taxable portion of Social Security benefits was raised.[/li][li]The phase-out of the personal exemption and limit on itemized deductions were permanently extended.[/li][*]Part IV Section 14131: Expansion of the Earned Income Tax Credit and added inflation adjustments[/ul]
:dubious:
Well why not tax at 100%, ok there’s no free money there. But what about 99%? Hmmm,s till too high. 98%? 97%? At 100% you clearly get nobody playing, but as you lower the tax rate you begin to see folks trickly in, differnt folks have differentthresholds when they will start playing. But undeniably as you lower the marginal rate you apss that threshold for morre people. So at 90% some people wil still play, but there would certainly be fewer than at 50%.