I meant less damaging for Obama. Also, you can check your partisan rhetoric at the door. I am discussing which will be worse politically for Obama regardless of whether or not I agree with eliminating the COLA, not what the eeevulll Republicans are planning to do.
You don’t see any correlation between the Bush tax cuts and the tax receipts as percentage of GDP in this chart?
http://www.heritage.org/budgetchartbook/current-tax-receipts
Not to mention that there is no evidence that the higher taxes on top wage-earners creates a drag on the economy at all, certainly not the modest increase back to Clinton-era rates (when the economy hummed along quite nicely for the most part).
One might also note that the only years in which we ran a budget surplus were the years in which tax receipts as a percentage of GDP was more like 20% - getting back there might be a good idea, no?
This will gain no sugar for Obama from Republicans.
It does however, make him look weak.
He needs to stop pandering, and get ready to veto the GOP’s irresponsible tax cut initiatives.
I know you really, really want to believe this, but you are speaking an article of faith here. It’s not true.
Seriously. You need to take a couple steps into reality and start dealing with the world as it is, not demanding that people live in the world as your ideology really, really wants it to be.
I wasn’t proposing anything. I was discussing which would provide better political cover.
Obviously. I was not discussing instant savings. With that being said, eliminating the COLA will do little to reduce the deficit if we are still hiring more federal employees.
People alter their behavior or shift how they receive compensation in order to lower their tax burden. That is common sense.
The question is what would a tax increase have done for the economy over the last decade?
Did you bother to read the title of the chart you linked to? Here…take a look at a chart that compares federal tax receipts (as a % of GDP) to top marginal tax rate:
I think that depends on his intended audience. Republicans might have preferred some job cuts (although I’m not sure), but I don’t think he is trying to make an impression on them.
So raises taxes cannot lead to an increase in revenue because the changes in behavior will always cancel out the entire increase in taxes? That’s not common sense at all. It’s rather bizarre.
There would not have been a tax increase. We are talking about expiring tax cuts. And there would have been more tax revenue and a lower deficit. I don’t see how this would have harmed the economy.
Funny, if you look closely it shows that tax receipts dropped as a result of the Reagan and Bush II tax cuts, and tax receipts increased after the Bush I tax increases.
But it’s very clever to have such a small chart that it makes hundreds of billions of dollars look like a very small tick on an almost straight line.
In any case, comparing the top marginal rate to overall receipts is a really stupid comparison. Whoever thought of that must have received an “F” in macroeconomics. I mean, it’s a really, really, really lame point to make, because a very great number of people pay taxes, and very, very few pay the top marginal rate.
Though he may be trying to make an impression on independents who voted against his party a few weeks ago.
“Cannot” is different than “do not”
Tax increase…expiring tax cut…the only difference is semantics. Also, you assume more tax revenue and lower deficit. You really don’t see how separating people from their money may harm the economy?
Well, he may have made a decision for me. In about two years, I am going to be a very desirable employee with some hard-to-find skills that could make a meaningful contribution to national security, and one of my options is the federal government. It’s a lot less money than I could be making somewhere else, but the stability is attractive. If it loses that stability and federal employees become political pawns (the way state workers are in CA), the US government is going to lose it’s ability to attract top talent to critical positions.
Would that have been caused by the tax cuts or from the recessions?
I think you missed the point of the chart.
Hmmm…are you saying that raising the top rate will do nothing for overall tax receipts?
Exactly. I saw that chart as well and realized immediately that it is worthless. You might as well compare Bill Gate’s marginal tax rates to federal tax receipts and try to make a point based on that.
Oh, and right on cue, here is Boehner’s response:
So yup, “thanks for doing half of what we wanted and taking the heat off of us, now do the rest of what we want and we’ll call it bi-partisan.”
No… he’s saying that showing the change for only the top rate, and not the others, masks the overall effects of the changes. If you cut all tax rates (including the low- and middle-class rates, where there is a stimulative effect), you might not see a reduction in revenue if economic growth counteracts it.
If you only raise high-income rates (where there is little stimulative effect), then you will almost certainly see higher revenues.
You do realize, by the way, that your chart (if you take it to be meaningful) cuts against your argument as well… if a 90% top rate is the same as a 35% one, then why do you care if it goes up to 38%?
Ceasing COLAs for a couple of years is (IMO) considerably shy of creating “instability.”
I agree. And I think eliminating jobs would draw criticism from the right and left, so I don’t see it helping him with independents.
If it can happen, why are you saying it does not happen?
It’s not semantics. You asked how a tax increase would have helped the economy, and I was pointing out that there wouldn’t have been a tax increase. The tax cuts would not have existed. That’s not semantics.
I don’t think that’s an assumption. The government has spent more money than it took in, so there is a deficit. If it takes in more revenue, the deficit is smaller.
I see how it may, yes. In this case don’t see how it does.
It’s your chart, and you’re already dissembling that it means anything? Boy, your argument popped like a balloon.
No, I think I understand the point of the chart. It’s to make lousy economic arguments between unrelated issues and display them on deceptive eye-charts to make the uninformed observer think that tax policy is irrelevant to economic growth, without actually having to show that the economy fared better during those times when taxes on the very wealthy were higher.
No, that’s not what I’m saying. I’m saying that the people who work at the think-tank are either stupid or lying when they imply that the top marginal rate is any kind of useful indicator of overall tax policy.
But if that is what you are saying, what’s the harm in raising the top rate to 39%? It won’t make any difference to anyone, according to your flawed chart.
I grew up in a family of California state workers, and saw very clearly how “let’s fuck with the state worker’s paychecks” became a very easy way to get some cheap political points, to the detriment of ordinary people working ordinary office jobs. Politicians wanting to look like they are “doing something” would decide to stop issuing state worker’s paychecks (or whatever) and it was my family that had to pay.
I have choices my family members didn’t have, and if this becomes a trend among federal employees, I will quite quickly find it preferable to work for federal contractors. They will still be paying me either way, but at least with a contractor you know if your paycheck is at risk it is for real financial reasons, not just someone wanting to make it a show of “sticking it to those lazy government employees.”
To me, the more important point to that graph is that tax revenue has remained remarkably consistent, regardless of changes to the tax code. Over the years there have been increases and decreases in just about every form of tax, yet revenue doesn’t seem to change much.
The main conclusion to draw from that is that raising tax rates is not likely to get you to a balanced budget - not when you’d have to raise more than 5% of GDP to do it. There’s simply no precedent in American tax history for a change in revenue like that.
Two years late. But a step in the right direction.
I didn’t realize “we” were handing out money. That’s a bummer.
I still have the Andrew Jackson in my wallet that I had yesterday. Did I miss it when I gave some of my money to rich people? I might have been asleep, I realize.