Cut taxes or spending? - Page 5

rj1 · 04-23-2008, 18:35 PM

Quote:

Originally Posted by gunnut

I have a simple way of increasing the corporate share of the federal revenue. Cut personal income taxes for the top 3 tier from 33%/28%/25% to 25%/21%/18% and you will see a dramatic rise in corporate taxes as a share of federal revenue.

No you won't. The corporations will give campaign donations to any congressman that asks to ensure they don't have to pay more.

It's what always happens.

ba1025 · 04-23-2008, 19:04 PM

Quote:

Originally Posted by gunnut

Bush did cut back on discretionary spending from an annual increase of 7% to 5%. In government jargon, that's a cut.

Cut taxes. Take a chainsaw and mince the spending programs.

Hard to believe, but here's the original Reaganomics, or "voodoo economics" as described by all socialists: YouTube - Income Tax Cut. JFK Hopes To Spur Economy 1962/08/13 (1962)

Funny how all the liberal democrat socialists in this country today, even those in other countries, gush over JFK without knowing what the man was really about.

jfk cut taxes after a surplus not in a time of record deficits
Reagans VOODOO economics was that the revenue from taxing the increased growth would be greater than the deficits it created. It didn't happen.
non defense discretionary spending rose at a faster rate under Bush than Clinton or Carter... that's before we even talk about the welfare for pharma prescriotion drug plan.

If you read about real socialists you'd realize for the most part in this country we either run it left of center or right of center rarely does it tilt hard either way.

ba1025 · 04-23-2008, 19:13 PM

Quote:

Originally Posted by gunnut

That's the problem. Politicians since FDR have used government programs to buy votes, democrats more than the republicans. After 70 years of "entitlement" mentality, it's nearly impossible to get people off this addiction. Coccaine is easier to quit than this.

I always thought we should gut the federal department of education and move all the responsibilities to the states. After all, why should a bureaucracy 3000 miles away tell me how best to educate kids over here?

Get rid of HUD (housing and urban development). Of course Jesse Jackson and Co. will scream racism.

There are too many things we should get rid of in our $3.1 trillion budget. The one with the least amount political ramification is military. Of course the military is what allows us to have all this crap in the government. No security, no pork.

Actually wasn't the lions share of the federal debt created under Republicans the last 30 years. yeah this is where you throw out GDP mumbo jumbo. The bottomline is republicans have a history of borrowing against our future and cutting taxes not reducing spending or deficits. That way of thinking went out with Goldwater. Who gave us wage and price controls???? President NIXON, May I point to GWB and the Republican Congress of 2000-2006. Well, along with record deficits they gave us record earmarks. Why should i trust then again? They rraised non defense discretionary spending faster than Clinton and cut taxes. Which political theory has you raise non defense spending, go to war, create the largest new entitlement in 40 years and cut taxes? Would that be the Albatross theory of governance?

The only thing I hate worse than taxes is borrowing money form the CCP

ba1025 · 04-23-2008, 19:17 PM

Quote:

Originally Posted by gunnut

I have a simple way of increasing the corporate share of the federal revenue. Cut personal income taxes for the top 3 tier from 33%/28%/25% to 25%/21%/18% and you will see a dramatic rise in corporate taxes as a share of federal revenue.

The CCP would be glad to loan us the difference

ba1025 · 04-23-2008, 19:29 PM

Quote:

Originally Posted by kmchugh

I agree with most, our government must cut spending. The government must go back to it's primary purpose, which is the provision of the common defense. That clearly means we cannot cut defense spending. To do so is to commit a constitutional violation of the first order.

I suggest that another area we could look at would be foreign spending, particularly foreign aid. Certain rules should be strictly applied, as follows:

1. If your government is hostile to the US, no bucks.
2. If your government provides safe haven for those who would seek to harm the US, no aid.
3. If your government provides any type of aid or funding for persons, groups, or people who seek to harm us, the money faucet is off.
4. If your government does not support the sovereignty of the US, or worse actively encourages violations of US sovereignty, look elsewhere for money.

These are just off the top of my head, and I’m sure others can add to the list. At first, it might be difficult, but in the end, we have to stop supporting those who seek to undermine our nation. #1 is obvious. #2 might piss off some of our erstwhile “allies,” but would in the end provide for greater US security (which, as I pointed out above, is the primary purpose of the federal government). #4 would certainly get Mexico’s attention, don’t your think?

KM

Quote:

In 2004, the U.S. budget for international assistance programs around the world was $17 billion, less than 1% of the federal budget overall

Where do people get the idea we give so much of our $ to foriegn aid? We spent more than the next 50 years worth in Iraq already. As a % of GDP our foreign aid numbers excluding Iraq ranks 22nd in the the world.

So thinking we are going to tackle the deficit by eliminating this is a falsity. i agree we shouldn't be aiding those who are our enemies but i don't think we are
I think the ones who you'd really get the attention of cutting off Mexican aid would be the narco terrorists who would be running the country if we weren't giving aid to fight them. Do you think with a govt run by narco terrorists the border would be watched closer????? I agree with the sentiment i just dont think it's realpolitik

ba1025 · 04-23-2008, 19:56 PM

Quote:

Originally Posted by Shek

Even after accounting for tax-incentive induced growth, the tax cuts we have seen do not pay for themselves. However, because of the dynamic nature of the response, what you don’t see over time is that a 25% cut in taxes results in a 25% decrease in tax revenues, ceteris paribus (this is the fancy Latin way of saying everything else held constant). The decrease in tax revenue is less than that because of tax-incentive induced growth.

This is not the opposite of what I’ve been stating, and it looks at the question/problem from the wrong angle.

First, in general (given a relatively small change), you’d probably see the opposite of what the tax-cuts saw. Most likely, there’d be an initial increase in revenues, but it’d tamp down growth and so you wouldn’t see a directly proportionally increase in tax revenues, but something less over time.

Second, this is really an empirical question where we must analyze behavior on the margin. Are we looking at Kennedy changing the top tax bracket from 90%, or Reagan from 70%, or Bush from 39.6%? A drop from 90 to 70 or 70 to 39.6 is going to change my behavior a great deal as opposed to 39.6 to 35 (or we can look at the opposite scenarios where you increase rates from 35 to 39.6, etc.). I could come up with equally silly scenarios on the extremes of both directions. If tax cuts are so good, why not drop the tax rates to 0%? If tax raises are so good, why not increase the rate to 100%? The point is that the magnitude of the impact of a change in taxes is not going to be same across all the potential rates so it be based on numbers to get the analysis correct.

Next, to explore the supply-side argument a little bit more in depth (warning, I use some basic terminology from econ 101, although it’s part that people love to hate the most), let’s think through the example of labor taxes, i.e., an income tax on your annual earnings. The supply-side argument is that if you tax at a lower rate, then people will substitute away from leisure time towards the now relatively cheaper work time. In other words, less taxes induce me to work more since I get to keep more of it. This is correct; however, it is only half of the story. Because the tax rate is less, my income actually increases without me working a single minute longer, and so I am richer. Thus, I may actually work even less.

It now becomes a matter of empirics, but it’s clear that while some may work more, there will also be some that work the same and some that work less. It will depend on whether a person’s goal is to make as much money as possible or to live a certain lifestyle.

The problem with this construction is that you’ve created a false dichotomy. In fact, you can use the conservative playbook, which is to lower taxes and cut spending. Unfortunately, we’ve seen the lower of taxes and an increase in spending. The real issue out there is the massive and looming deficits as a result of huge “mandatory” social programs passed under the FDR, LBJ, and Bush 43 Administrations, with the former two being the primary culprits.

I would agree. I think part of the problem in regard to entitlements was the nature of the Bush cut. it wasnt a stimulus package. Gas was poured onto the economy and when it heated up we didnt return to fiscal responsibility we jsut dug a deper hole. I agree supply side works but think the degree of revenue created is vastly overstated whenever a tax cut has been proposed. I think this has some truth to it

Quote:

The Hostage Economy

By PAUL KRUGMAN

George W. Bush's tax cut plan has never been distinctive for its content, which is standard-issue conservatism — big tax cuts for the rich, a few crumbs for middle-class families with children the right age, nothing for the poor. What is distinctive is the way the plan has been sold. I can't think of any precedent in the history of American economic policy. Has any previous administration been quite this shameless about misrepresenting the actual content of its own economic plan?

But it is starting to look as if maybe, just maybe, the cynicism of the sales effort is about to backfire. Mr. Bush now runs some risk of being hoist by his own pet argument.

The only way to understand the structure of the Bush plan is to see it as the creation of someone who believes in the trickle-down theory: make the rich richer, and a rising tide will lift all boats. Or more accurately, the plan can be seen as a device intended to reassure those who do believe in that theory that Mr. Bush is not his father. And it is no secret that the plan was originally concocted to ward off a feared challenge from Steve Forbes.

Now Mr. Bush could have tried to sell his plan in terms of the ideology that the plan actually reflects. But he has never done so. Instead, he has engaged in an elaborate disinformation campaign. Part of this effort involves an attempt to deny the plain fact that the tax cuts will mainly go to the very, very well off. But the campaign's most striking feature has been the attempt to sell the tax cut as a short-run stimulus to spending — as the answer to an economic slowdown that Mr. Bush has done his best to play up, and which his doomsday rhetoric may have worsened.

What's ironic is that the timing of the Bush tax plan makes it just about completely useless as a short-run stimulus package. In order to keep the headline numbers down, the plan delays the really big tax cuts far into the future, putting hardly any money into the hands of consumers this year and not much next year. And recently administration officials have begun to admit that if they are really serious about doing something for the economy now, they need to add an immediate tax cut onto the plan.

But then the question arises: why not adopt the add-on and forget about the original plan? Or better yet, why not implement one of the short-run stimulus plans proposed by Democratic senators, and discuss those huge long-term tax cuts for the rich at our leisure?

Of these alternatives, I'd vote for Joe Lieberman's suggestion that the Treasury simply send every taxpayer a $300 check. Not that I really think it's necessary: if I had to choose, I'd take another percentage point off the Fed funds rate any day. (Please, Mr. Greenspan?) But hey, why not? Mr. Lieberman's proposal (or the slightly different proposals being offered by other Democrats) would put money quickly into the hands of families that need it and would spend it, without busting the budget. And these proposals would also remove any sense of urgency about rushing through big tax cuts for people with seven-digit incomes.

What's going to happen, of course, is that Mr. Bush will try to take the economy hostage: he will insist that we can't have an immediate tax cut to provide economic stimulus unless we accept his whole plan. There's no logical reason why: Congress can easily give each ordinary family a few hundred dollars now without agreeing to give individuals with million-dollar incomes $50,000 tax breaks every year after 2006. But Mr. Bush and his allies will try to prevent Congress from taking any helpful short-run actions unless he gets it all — and will blame moderates for the delay.

The good news is that there are two ways this attempt at hostage- taking can fail. Public opinion may force Mr. Bush to stop playing games; or the Fed may do what is needed to turn the economy around, and the whole strategy of using a slowdown to bully Congress into passing the tax cut will miss its window of opportunity.

In either case, Mr. Bush would then be forced to sell his plan on its actual merits. And his cynical sales tactics show that he and his advisers have long since concluded that those actual merits, whatever they are, just won't cut it.

Now how did that tax cut work for working people lets look at how it impacted job creation Stimulus? Never mind - Paul Krugman - Op-Ed Columnist - New York Times Blog check the graph out

Quote:

Unfortunately, there is little evidence that high tax rates hinder economic growth and that low tax rates help it. Despite massive tax cuts, President Bush's first term had the second lowest average growth rate since the mid-1970s. Only his father did worse. In fact, economic growth accelerated in the 1990s after income taxes were raised by Presidents George Bush and Clinton. Also, numerous increases of the Social Security tax – the last one under President Reagan – did not impede growth in the U.S. in the 1980s or 1990s.

Regardless of who is right and I am sure we could wuote back and forth ad nausem. I think it's just wrong to cut taxes in time of war. It's our war if we believe the war on terror is worth fighting we should be willing to put our money where our mouth is

gunnut · 04-23-2008, 19:56 PM

Quote:

Originally Posted by rj1

No you won't. The corporations will give campaign donations to any congressman that asks to ensure they don't have to pay more.

It's what always happens.

WTF are you talking about?

They aren't paying more. The percentage of federal revenue derived from corporate taxes goes up if you decrease personal income taxes.

gunnut · 04-23-2008, 20:02 PM

Quote:

Originally Posted by ba1025

jfk cut taxes after a surplus not in a time of record deficits

So cut government programs to create that deficit. How hard is that?

Quote:

Originally Posted by ba1025

Reagans VOODOO economics was that the revenue from taxing the increased growth would be greater than the deficits it created. It didn't happen.

Are you saying tax revenue did not increase after Reagan's tax cut?

Quote:

Originally Posted by ba1025

non defense discretionary spending rose at a faster rate under Bush than Clinton or Carter... that's before we even talk about the welfare for pharma prescriotion drug plan.

How many times do I have to say I agree with you, Bush spent too much money. We need to cut spendings. The best way to cut spending is to starve government of the funds it needs to add more programs.

Quote:

Originally Posted by ba1025

If you read about real socialists you'd realize for the most part in this country we either run it left of center or right of center rarely does it tilt hard either way.

I agree. But more to the left than to the right of center over the last 80 years.

gunnut · 04-23-2008, 20:16 PM

Quote:

Originally Posted by ba1025

Actually wasn't the lions share of the federal debt created under Republicans the last 30 years. How many of those was the congress controlled by the republicans? yeah this is where you throw out GDP mumbo jumbo. Then your statement is without context and therefore meaningless The bottomline is republicans have a history of borrowing against our future and cutting taxes not reducing spending or deficits. And the democrats have a history of ever increasing taxes to fund more welfare programs. That way of thinking went out with Goldwater. Who gave us wage and price controls???? President NIXON, And he allowed federal employees to unionize. May I point to GWB and the Republican Congress of 2000-2006. How many times do I have to say I agree with you that Bush spends too much money? Well, along with record deficits they gave us record earmarks. Then why did Nanci Pelosi refuse to restrict earmarks just a few weeks ago? Why should i trust then again? They rraised non defense discretionary spending faster than Clinton and cut taxes. Which political theory has you raise non defense spending, go to war, create the largest new entitlement in 40 years and cut taxes? Would that be the Albatross theory of governance? Why do you think Bush has such a low rating? Because his base, the conservatives who favor a small government, is angry at him. But they know the alternative, be it Gore, Kerry, Clinton, or god forbid Obama, would increase the spending even faster and add taxes on top of that. If you think the current economic slow down is bad, wait until you get Obama in the White House with a congress controlled by the democrats.

The only thing I hate worse than taxes is borrowing money form the CCP

Fine. Then you should embrace a weak dollar. That decreases our buying power so we don't import too much consumer crap from China. In turn our export to them increases relatively, causing money to flow back here. The weak dollar also makes oil relatively more expensive so it would decrease our consumption, thereby reducing our reliance on terror states for oil. Expensive oil makes alternative energy more attractive, something you want.

Good. I'm glad you agree that a weak dollar is good for this country.

rj1 · 04-23-2008, 22:10 PM

Quote:

Originally Posted by gunnut

WTF are you talking about?

They aren't paying more. The percentage of federal revenue derived from corporate taxes goes up if you decrease personal income taxes.

My mistake. I thought you meant cut personal taxes and increase corporate taxes.

Quote:

Originally Posted by gunnut

Fine. Then you should embrace a weak dollar. That decreases our buying power so we don't import too much consumer crap from China. In turn our export to them increases relatively, causing money to flow back here.

I work for a major American manufacturer and the weak dollar is actually hurting us. Why? Cause we offshored a lot of our suppliers. Yeah, I'd prefer domestic too, but welcome to how corporations work, they have to continually look everywhere to improve profits otherwise Wall Street will look bad at our stock.

(That's why everything moved to Mexico for some industries, and the Mexican peso has gone up little to none versus the American dollar despite the American dollar's plunge, so that production's still not moving back.)

Anyway, we have one part for example we assemble that we offshored to India and it saved us $50 per one. We use one of these parts for one of our end units we sell to customers. We make roughly 600 units a day at my factory alone. Multiply that by 300 days' worth of production and we make 180,000 units per year. Multiply by that $50 savings per unit and it comes out to $9,000,000 yearly savings. That's not even counting our other half dozen factories in the United States.

Now, say the dollar goes lower and that original $50 saving per part is now only $40. We're not moving that production back to the United States cause we're saving $40 per part. But we lose $10 of our expected $50 savings per part per unit, which means that the $9,000,000 yearly savings is now only $7,200,000. So in this example, the lower dollar costs my company $1,800,000. This is not a hypothetical, I know this has happened.

We're not receiving any more production cause of the lower dollar either. As any good multinational Fortune 500 company does, we have plants overseas that make those engines, and those plants are responsible for end units in their respective geographic regions by contract.

Quote:

The weak dollar also makes oil relatively more expensive so it would decrease our consumption...

The price of a gallon of gasoline has tripled in eight years, has gasoline usage gone down any in that timeframe? I don't use oil or its resultant products cause I want to, it's cause I have to.

**Shek** · 04-23-2008, 22:39 PM

Quote:

Originally Posted by ba1025

The CCP would be glad to loan us the difference

Are you against saddling the Chinese with low yielding treasuries sitting around doing much of nothing for them?

Quote:

A dollar dump? Not likely - Pittsburgh Tribune-Review

Might Beijing's motive for acquiring large holdings of dollar assets be the sinister one of eventually dumping these assets simply to disrupt American economic growth? It's possible. But if so, the American economy enjoyed huge benefits to offset any problems springing from the later disruption.

During the time that the government in Beijing was accumulating dollar assets -- accumulating these assets by paying for them prices higher than they are really worth - Beijing transferred wealth to Americans.

To see why, suppose that an evil businessman seeks to disrupt the economic future of innocent Ms. Jones. This businessman reasons that if Ms. Jones unexpectedly is fired from her job, she will suffer. And she will suffer even more grievously if any new job that she finds pays her less than the job she lost. So Evil Businessman hires Ms. Jones at a salary well above her true market value. For several years Evil Businessman keeps paying Ms. Jones a salary much higher than she would command on a market not poisoned by the uneconomic motive of Evil Businessman.

And then one day, suddenly and unexpectedly, bam! Evil Businessman fires Ms. Jones, who then discovers that the best new job that she can get pays her an annual salary that is $100,000 less than she "earned" while employed by Evil Businessman.

Without doubting the disappointment and inconvenience Ms. Jones suffers when she is suddenly fired, we can nevertheless doubt that Evil Businessman really hurt Ms. Jones on net. During all the time that he employed her she earned more than she would otherwise have earned. And during this same time, Evil Businessman was paying the price for the later privilege of disrupting Ms. Jones' economic life by firing her.

Rather than "Evil Businessman," he really should be called "Stupid Businessman" -- and the U.S., like Ms. Jones, should count its blessings if it's really true that Beijing or any other wealthy entity consistently overpaid for American assets.

**Shek** · 04-23-2008, 22:46 PM

Quote:

Originally Posted by rj1

The price of a gallon of gasoline has tripled in eight years, has gasoline usage gone down any in that timeframe? I don't use oil or its resultant products cause I want to, it's cause I have to.

Petroleum usage is forecasted to decline this year, partly due to prices, and partly due to the economic slowdown. If prices continue to rise, I wouldn't be surprised if usage levels off as people over time shift to cars that get better mileage and if coal becomes more popular due to getting relatively cheaper and not being held hostage to it's location.

rj1 · 04-23-2008, 22:57 PM

Quote:

Originally Posted by Shek

Are you against saddling the Chinese with low yielding treasuries sitting around doing much of nothing for them?

Ah, but what happens when the Stupid Businessmen realize they're being stupid and the game stops? Will the U.S. government and its citizenry heavily decrease expenditures, heavily increase taxes, or both? It can't do what it's doing now, which is increase spending and decrease taxes. The Wizard of Oz can pull a few levers to fool people for awhile, but it can't keep Dorothy from looking over and seeing it's all just a little man playing smoke and mirrors.

American society by its very nature is very relative. We base on whether we are satisfied with our life or not based on our neighbors, "keeping up with the Joneses", as is conveniently named the lady in your quoted text.

Not to mention the idea of sacrifice and of saving for a greater tomorrow is completely foreign to the majority of people in this country. There are a lot of people in this country that would publicly say they are 100% behind the Iraq War, but if you asked them to sacrifice and help the country by going over to Iraq, they would be among the first ones to move up to Canada. Also, there are a lot of people that like to flaunt by buying a house that is too large or buying one too many luxury car, or in government's case voting for that new stadium for the pro basketball team, or voting to go war while not calling upon new money to actually pay for it.

Heck, my peers look at me weird because I treat debt as evil. I hate using credit cards, I use them occasionally by necessity, but I prefer paying in cash cause it sublimenally reminds me that this is money I earned working hard that I am giving up for this product. It's something my parents made sure they taught me cause when I was an infant my dad was an enlisted Marine during Reagan's presidency, worked 16 hours a day on Harriers and then A-4's, yet still qualified for welfare despite not applying or taking it just cause he abhorred the concept, and had to eat chicken liver cause it was all he could afford.

And no one in government has this point of view. They think things will always be good because they were good yesterday and they were good the day before. They have no semblance of long-term planning. And the voting public is just as ignorant. So I ask you, who's the stupid one in your quoted text, Evil/Stupid Businessman for eventually realizing that he is the one propping up Mrs. Jones, or Mrs. Jones for having no clue that she was overcompensated and not preparing beforehand incase hard times came?

**Shek** · 04-23-2008, 23:14 PM

RJ,

Stupid Businessman is the stupid one. The US has had its cake and eaten it too, while China has a bunch of low yield pieces of paper to show for it (they also saw a huge increase in their economy, so there was a mutually beneficial element to it).

The weakening dollar is part of adjustment process, and so while the metaphor talks about an abrupt transition, the reality is that the transition could be slow and steady. The lack of savings in the US is also a result of more than just cheap consumer goods - dissavings due to the retiring of the first wave of boomers as well as capital gains earned during the 90s by middle America. As long as SE Asia was willing to cover our government debt and the OECD nations were still pouring financial capital to cover some of our investment spending on capital goods, the good times for the consumer was funded.

The party's coming to an end, but rather than being fired at work, what is actually happening is that people are just going home and will have to return to normal life. There may be a slight hang over, but take two aspirin and everything will be fine in the morning.

7thsfsniper · 04-23-2008, 23:42 PM

I LOVE THIS! It seems everytime I find a new thread to check out, gunnut and ba1025 are going at it already. You guys rock!

Good arguments, I really enjoy reading them.

View Poll Results: Cut taxes or spending?
Cut taxes	4	11.76%
Cut spending	30	88.24%
Voters: 34. You may not vote on this poll

04-23-2008, 23:42 PM	#75 (permalink)
7thsfsniper DEVOUT BIKER *Military Professional* Join Date: 02-29-08 Location: Missouri, pron"misery" Posts: 480 Country:	I LOVE THIS! It seems everytime I find a new thread to check out, gunnut and ba1025 are going at it already. You guys rock! Good arguments, I really enjoy reading them. __________________ *Don't run, you'll only die tired!*

04-23-2008, 23:14 PM	#74 (permalink)
Shek Moderator Join Date: 02-23-05 Location: Krblachistan Posts: 7,253 Country:	RJ, Stupid Businessman is the stupid one. The US has had its cake and eaten it too, while China has a bunch of low yield pieces of paper to show for it (they also saw a huge increase in their economy, so there was a mutually beneficial element to it). The weakening dollar is part of adjustment process, and so while the metaphor talks about an abrupt transition, the reality is that the transition could be slow and steady. The lack of savings in the US is also a result of more than just cheap consumer goods - dissavings due to the retiring of the first wave of boomers as well as capital gains earned during the 90s by middle America. As long as SE Asia was willing to cover our government debt and the OECD nations were still pouring financial capital to cover some of our investment spending on capital goods, the good times for the consumer was funded. The party's coming to an end, but rather than being fired at work, what is actually happening is that people are just going home and will have to return to normal life. There may be a slight hang over, but take two aspirin and everything will be fine in the morning.

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)