The reason the exchange is important is that it shows Obama admitting that raising taxes on the wealthy is not because it’s good fiscal policy, it’s because it aligns with his socialistic sense of “fairness”. Which helps to understand his great desire to redistribute wealth. It’s not enough that tax policy help the poor, it’s either at least as important or more important—to him—that in penalize the wealthy.
I felt like I was the only one noticing the OK Republican talking empirically about the past. Now, we somehow have this strawman here, as if any conservative ever said the word “always” in “tax cuts always bring in more revenue.” That word was introduced to this thread, not surprisingly, by tomndebb.
Most of us who support a particular politician find the motivation far less important than the actual policy being implemented- I don’t really care why he wants to raise taxes on the rich. I believe raising taxes on the rich by a small amount will help the country and the economy in the long run. I don’t want to punish the rich, and I don’t care if Obama does- I just want the policy implemented.
what do you hope to accomplish by raising taxes on the rich?
Even if it results in lower tax revenues that can then be used to help the poorer among us?
Wait—Barack, is that you?
Bring in more revenue that can be used to lower the deficit, pay down the debt, and pay for government programs.
No, I would oppose raising taxes on the rich by a small amount if I believed it would lower revenue. I only support it because I believe it would increase revenue- and I think it’s very clear that a small increase (to 35 or 40% on a new top bracket of >$1mil, for example) would increase revenue, not lower it.
And what if the higher tax rate results in lower revenues? As they have in Oklahoma. Would you then be in favor of lowering the tax rate?
That’s fair enough. You want to increase revenues and whatever tax policy that would result in that you’d favor. So, if you lived in OK, you’d be opposed to raising taxes…correct?
In Oklahoma, I don’t believe lower revenues are caused by higher taxes, or higher revenues are caused by lower taxes, at the levels being discussed. If there is a correlation, it is because of other economic factors- there was no causative link.
I believe in the Laffer curve- with the peak revenue probably at between 50 and 70%. I don’t support a tax rate that high- if I were in charge, I would have a very graduated bracket with a top bracket of something like 45% for income above $10 mil, or something similar.
Okay. So, you break with Obama in that you’d not be in favor of higher rates that lowered revenues due to some notion of “fairness”. Makes sense.
Quick question, how many times would you need to see lower rates result in higher revenues to think that lower tax rates are the way to go? Regardless if their is a direct, knowable, causal link?
Wiggle all you want, my point stands. There is nothing in Shannon’s statement that says “it only worked, here” or “it has worked in a limited number of occasions.” He said every time they did A, B followed, which is close enough to the claim it rebuts. I have not even addressed the fact that Shannon was engaged in the post hoc, ergo propter hoc fallacy, (provided he was not lying to begin with).
Since it is hardly a serious discussion point, I am not surprised to find you trying to enlarge it to one, however.
I thought the crux of your objection was that higher taxes would not discourage investment because taxes only apply on positive profit. Both Sam Stone and I pointed out that you were incorrect. Higher taxes can easily discourage investment by reducing the return below the level where it cannot compete with other uses of your money as you stand at this point in time. If all you were doing was a nitpick about the phrase breaking even, then ok, but it isn’t particularly relevant.
I’d need to see it within context of the Laffer curve, and it would depend on the actual rates. If lowering them from 80% to 70% happened at the same time as increased revenue, I would not be surprised at all, and a causative link would seem very likely. If lowering them from 20% to 15% coincided with increased revenue, I would be very skeptical that the rates had anything to do with increased revenue.
It’s not hard math- if someone (a small business owner, perhaps) makes $100,000 one year at a tax rate of 20%, his take-home pay is 80K. If the next year the tax rate is 15%, then he keeps an extra 5K or so. For that to result in greater tax revenue (greater than 20K) the following year from this taxpayer, that extra 5K of take home pay, re-invested in his own business, would have to increase his income to greater than 133K! That’s just ridiculous- that 5 thousand extra dollars can result in, on average, 33 thousand in greater income in just a year. Clearly, in this case, something else is going on- perhaps there’s an economic boom due to external forces, or his income just happened to go up by 33K because he made a great business move (or just got lucky).
So, under a certain rate, it’s just not reasonable that lowering taxes increases revenue. Just like above a certain rate, it’s not reasonable that raising taxes increases revenue. And the rates we’re talking about in the US today are well below the rates in which lowering them would result in greater revenue. When lowering taxes around current levels coincides with increased revenue, something else is going on. Mathematically, it can’t just be the taxes- there must be other factors.
The curve is made up it doesn’t exist. All they’re saying is that economic growth leads to more tax revenue. If tax cuts alone account for economic growth is a ridiculous debate that only a shaved monkey could have.
Wow. You really, really don’t like being shown to be wrong do you? It was a large enough point for you to provide a site to support your assertion. But now, you pooh-pooh it as unimportant. And you’re wrong again, even as you erect the straw man of “it only worked here”. Notice how Shannon did not use that word. The same way he never said that it ALWAYS works, everywhere, universally. That’s just you putting that field of straw to use.
His claim was that every time “they did it”, it resulted in increases revenues. Do you deny that he was talking about what THEY (Oklahoma) did? Do you disagree that “did” is the past tense? Assuming you don’t, why would you assume that Shannon’s statement of what they did in Oklahoma can be used as a proof that a Republican claimed that a reduction in the tax rate always—in all instances in the past and the future—results in increased revenues?
You know, you’ll be much better off here with a “You know, magellan01, you’re correct. I misspoke. I withdraw my assertion.” The first rule of holes and all that.
I think I generally would agree with that. But I think one of the things left out of your very micro one-business scenario is the affect a small change in the general business climate can mean writ large.
That’s true. And, all other things being equal, lowering taxes will always help the economy. But all things aren’t equal- if taxes are lower, than revenues will (probably) be lower, and thus the government will have less to spend. Government spending also, all things being equal, always helps the economy.
I’m a believer in “trickle-up” economics- that is, that real economic growth comes from the bottom. Businesses will only hire more people or invest in more capital if they believe they need to in order to meet greater demand. If they can only make 10 widgets per day, but get orders for 20, then they’ll hire more workers to make more widgets. But if they only get 10 orders per day, then a tax cut won’t result in more hiring or more investment- the owner will just pocket it. So the most effective policies to effect economic growth, in my opinion, are policies that result in more money to people at the bottom. Dumping money out of helicopters would help the economy more, in my opinion (not including the resulting chaotic violent scramble!), then giving tax cuts to businesses (for the same amount of money). The best use of money for helping the economy is money spent… and who spends nearly all the money they have? People at the bottom. Working people spend almost all of their income- and if they have more income, they will spend more money. I think policies should be directed towards this. Not dumping money out of helicopters, but job training and actual jobs for things like infrastructure improvement- train and hire engineers and workers to make better roads, bridges, railroads, electric grid, etc.- and all of those people will spend most of their income from the government paycheck.
Is this a joke? If higher taxes did result in lower revenues, then taxes - individual and corporate - should be incrementally raised until revenues match expenditures. It’s that straightforward. All loopholes should be closed and the IRS given broad authority to crack down on companies using international subsidiaries to funnel taxable profits. The U.S government does itself no favors in the lackadaisical approach it has to getting money. For example, let’s say you’re hit with a $1000 tax bill and decide, “Fuck it, I’m not going to pay my federal tax return, I’ll pay them in eight months. Yeah, fuck the government.” If you did this, your penalty fine would be a max of $135. Pretty sweet deal, eh? In case you’re in doubt, here’s the relevant section in the IRS code:
[QUOTE=Internal Revenue Service]
If you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100% of the unpaid tax
[/QUOTE]
It’s unacceptable, because in the real world, not paying your bills for >2 months leads to asset seizure, pay garnishment, account termination, and/or eviction. A $135 late fee would be the least of your problems. IMHO, there’s no need to raise taxes anymore than 50% on anyone, all we need to do is make certain that the IRS is putting the fear of God to any individual or corporation funneling money through international banks for the purpose of tax evasion. The money is (obviously) there, it’s just that the IRS is not aggressive enough in getting it.
The U.S government also bungled the sell of GM shares. I swear to God, it was almost as if Timothy Geithner wanted to sell the governments shares at a loss to the taxpayer. What Mr. Geithner should have unwound the government’s stake in GM when the shares reached the break-even price. This would ensure that the government would not take a loss on the bailout. Oh well, too late for that.
- Honesty
You are just so fired up to find something with which to disagree with me that you will make the silliest, blown up issue out of even an off-hand post.
Have fun. You obviously need this more than I do. 