Another Undeserved Tax Cut!

Off Topic Politics & World Issues
21

This latest tax cut is just another example of how one hand washes the other. When you are a big contributor to the Bush election campaign, you’re entitled to certain perks.

I would like to know how many new hires Hedo and Rainjack made, because of Bush’s tax cuts?

There’s no such thing as a tax CUT when spending is up at an all-time high, all you are doing is deferring taxes until later.

After Bush is out of office, eventually someone more responsible will become president, and he will almost certainly have to raise taxes on everybody.

I love the line about “it’s my money!”, because we are borrowing money from countries like China and Japan in order to give tax cuts to big oil companies and people like Donald Trump and Bill Gates. That is not smart.

22

[quote]Roy Batty wrote:
You know, I own a business as well, and I too aspire to be something bigger and better and wealthier. But listening to Mage and rainjack you would think that we would be better served in a complete anarchy. Problem then is, who would pay for the roads, schools, airports, hospitals, the military (that you so love). You think this stuff is free? [/quote]

Uh, do you even think before posting? When exactly did I promote anarchy? How can you take a little tax cut and blow it into such out of proportion crap?

I never said NO taxes. I am talking about reasonable taxation, and gradually getting there. I do think we need taxes, but not to the extent that it hurts the economy and growth. Just like I believe in pollution controls, but not at the destruction of the economy.

Now as far as your statement, “You think this stuff is free?” Uh no. That is the problem. Everybody wants free shit. A chicken in every pot, supplied by the government. (And that yummy government cheese.) Sure the government needs to have money to run, but why does it need to do so much? Why does it need to be so intrusive?

Hasn’t the government ever heard about a budget? Obviously you need to follow a budget in your business. The government needs to follow one also. A problem is not solved by throwing money at it, but the government seems to think so. [quote]

Right now, I don’t feel any tax relief. I am trying to juggle three separate corporations above water, and I am broke and still taxed to the gills. You are penalized for being a small business owner right and left. You know what though? As a business man who never knows from one month to the next whether or not I am going to survive I have made it for 11 years so far, and created a beautiful family, and learned that my wife meant every word of her oath to me when she stated “whether richer or poorer, for better or for worse” over 12 years ago. How do we do it? We make sacrifices. We live below our means. We don’t have cable, we don’t buy a lot of clothes or things, I have absolutely no credit card debt, and a low house payment on which I have personally done most of the renovations. Some people are meant to be entrepreneurs because they are willing to do live like this. I would be quite a viable contender if I were to enter the job market, but I don’t want that. I want to be the best, and I want to have material wealth, but money isn’t what drives me. It is just going to be a natural side effect of my business being successful. I resent the dis-incentives much more than anything, because clearly those with money have NO FUCKING CLUE how hard it is to start something from nothing. My family sure as hell didn’t have enough to help me out when I was getting started. [/quote]

This is what I am talking about. If your taxes were lower, things would be easier for you. Would you hire more people if your taxes were lower? Whatever you would do with that money would help the economy.

Now you also talked about scrimping and saving to make it. Wouldn’t it be great if our government did the same thing? [quote]

So the day I am able to pay myself over 200K I can honestly say that I will be okay paying a higher percentage of my share. I don’t like paying for the taxes, but they are what holds together this country right now. Like I said, I pay my fair share. I don’t like it, but I do it. I also like state parks, and sidewalks. And the money to build those streets… Guess what ? It needs more peole to work too? Hm… More jobs, more people having to pay tax.

I can understand not liking to see how they spend your tax money with the way they waste it, but that’s another thread. But why did the president feel it necessary to do it so unceremoniously? WHy not parade this one out like the rest of them? [/quote]

Ah yes. I have said repeatedly that I think Bush spends too much. I have said repeatedly that he is a liberal because he believes in larger government.

My hope is that his spending was only to stimulate the economy, and he will change course as things smooth out.

Yet historically tax cuts have counter-intuitively resulted in increased tax income. And there is a definite correlation between taxes going up, and the economy slowing, and taxes going down, and the economy improving.

You have to think deeper then 1+1. It is a mistake to only believe the surface argument that tax increases result in higher government revenue, and tax cuts result in lower revenue.

Tax cuts might cause a temporary drop, but the resulting improvement in the economy will more then make up for it.

And here is something most people don’t understand. The rich are rich because they already have money. High taxes are not affecting these people as much as keeping others from becoming rich. I don’t know about you, but I want more rich people in the world. I would like you to be one, I would like to be one, and I think everybody posting here would like to be one.

Oh yeah, good luck in your business. I mean it.

23

[quote]Lumpy wrote:
I would like to know how many new hires Hedo and Rainjack made, because of Bush’s tax cuts?

There’s no such thing as a tax CUT when spending is up at an all-time high, all you are doing is deferring taxes until later.

After Bush is out of office, eventually someone more responsible will become president, and he will almost certainly have to raise taxes on everybody.

I love the line about “it’s my money!”, because we are borrowing money from countries like China and Japan in order to give tax cuts to big oil companies and people like Donald Trump and Bill Gates. That is not smart.[/quote]

Roy - I am not an anarchist, far from it. Show me where I have ever espoused anarchy. Lower taxes = Anrchy? hardly.

Lumpy - I was able to hire one additional person with my unfair tax-cut - financed by the chinese.

Reagan cut taxes at a time when we were in far worse fiscal shape (inflation, unemployment and deficit). Because of his tax cuts, business boomed. You may not believe it, or be old enought to remember it, but his tax cuts was the beginning of the greatest economic boom in the history of the world.

Look in your wallet, Lumpy. If someone came to your house and stole what cash you had in your wallet, would they be robbing you, or the Chinese?

24

[quote]w2097 wrote:
The cuts were disproportionate, just read any damn fiscal report. Two thirds went to the richest people in the nation and 20% to corporations. These last years were of lowest revenue in many decades, creating huge deficits and weakening the economy.

And now these cuts have to be payed off so either someone’s got to do alot of shopping or someone’s going to get taxed up to their asshole.

Damn, the economy is going to shit and you guys are raising your hands “It benefitted me, it benefitted me!!”. Come on.[/quote]

Man, I go to New Orleans for a weekend and people are trying to revive socialism over here… =-)

Anyway, this is basic mathematics, not an attempt to transfer money to “the rich.”

The fact is, the “rich”, defined as the top two income brackets on which John Kerry would like to raise taxes, pay approximately 80% of all income taxes. So, if you cut the rate for everyone by the same exact amount, you will get a number that says the “rich” got all the benefits of a tax cut.

A small numerical example, with tax rates rounded for easier comprehension. Say you have someone making $1,000,000 per year being taxed at 40%, and someone making $50,000 per year taxed at 25%. Say you reduce the marginal rates from 40% to 35% and from 25% to 20% (in other words, lower the overall rates by 5% each). The rich guy was just allowed to keep $50,000 more of his own money, and the middle-class guy was just allowed to keep $2,500 more of his own money. The rich guy is still paying $350,000, and the middle-class guy is still paying $10,000 (and the poor guy is still paying $0).

Now, why do tax cuts not benefit “the poor”? If you were reading Mage’s posts, you would already know the answer to this, but it is because that in the net/net they pay no income taxes. If a person is paying 0%, you can cut that rate by 1,000,000% and they still will not benefit.

Now, it’s obviously more complicated than my simple numerical example due to deductions, credits and our incomprehensible tax code, but you get the general idea. In reality, the Bush tax cuts benefitted the middle class more than the above example because the package of cuts wasn’t simply an income-tax deduction – there were also some targeted, non-stimulative cuts.

See this article for stats on who most benefited from the tax cuts:

What that means is that because the rich were and are paying more, when you take less, an aspiring demagogue can take that and say “The rich got all the benefits!”

25

I forgot –

I wanted to make a little point about how people like to say that Bush wants to give all the money to “evil corporations.”

Aside from the fact this is balderdash, have you ever stopped to think about what a corporation is? It’s simply a legal fiction allowing for investors to pool their capital more efficiently. A tax cut to a corporation is simply a tax cut to that corporation’s investors, and they benefit from either a capital gain or from the corporation dividending out more profit.

That means the pension funds, 401(k)s, IRAs, etc. that represent over 50% of all invested capital in the stock markets benefited greatly from Bush’s corporate tax cut. That means fewer people will have to rely on social security checks because their investments will provide greater returns. In short, this is a good thing.

26

BTW, one small point from the Kerry camp statement in the article. I’m sure Kerry is very well aware of how Congress works, with individual congressmen adding their little pork projects as riders to large bills. I have no doubt there is unecessary pork in this bill. However, it was necessary to address the tax issue in question to avoid trade sanctions by Europe, which it was entitled to impose after the U.S. lost its case in front of the WTO.

Does Kerry really think people are stupid enough to think Bush himself was calling his favorite CEOs to find out what little riders they wanted, and then finding congressmen in their districts to add them on the bill? Bush isn’t big on vetoing bills anyway, but this bill was very important and in this case Bush should not have used the veto to try to cut a few million off the top.

Of course, perhaps Kerry has forgotten how the Congress works – I don’t think he’s been there in a while to cast votes on anything…

27

[quote]Lumpy wrote:
This latest tax cut is just another example of how one hand washes the other. When you are a big contributor to the Bush election campaign, you’re entitled to certain perks.

I would like to know how many new hires Hedo and Rainjack made, because of Bush’s tax cuts?

There’s no such thing as a tax CUT when spending is up at an all-time high, all you are doing is deferring taxes until later.

After Bush is out of office, eventually someone more responsible will become president, and he will almost certainly have to raise taxes on everybody.

I love the line about “it’s my money!”, because we are borrowing money from countries like China and Japan in order to give tax cuts to big oil companies and people like Donald Trump and Bill Gates. That is not smart.[/quote]

You liberals are all dumber than the next. This is not a tax cut by any means. The World Trade Organization ruled that american tax law was not in line with that of Europe and had to be changed, since that ruling the U.S has been at a competitive disadvantage with our trading partners. Go do a google serach on FSC-ETI and edcuate yourself. All this does is level the playing field with our european trading partners…and as such there is really no question about whether it will help the economy or our trade status at all.

Thanks,
me

28

w2097,

“The cuts were disproportionate, just read any damn fiscal report. Two thirds went to the richest people in the nation and 20% to corporations.”

Disproportionate? Percentage-wise or dollar-mount wise? If you want to argue dollar-amount wise - ie, most of the money went to the rich - then you have to explain why when the rich pay more in dollar-amount wise, that isn’t disproportionate. I don’t think you can do that.

If it were percentage-wise - ie, the rich got their tax rate cut 5% and the middle got 4% - I’d be unhappy as well.

Taxes are taken as a percentage of income, and basic math tells us 2% of $1 million is larger than 2% of $100k. If we get both get a tax cut of 2%, and you make the $1 million and I make the $100k, fairness was served - we both got the same deal, even though the dollar-amounts were different.

“These last years were of lowest revenue in many decades, creating huge deficits and weakening the economy.”

You really have no idea what you’re talking about, do you? Federal revenue has weakened because the capital gains take from the smoking stock market of the 90’s have collapsed. The economy also stalled - largely due to the excessive bubble of the 90’s - and revenue from commerce has diminshed as well.

“And now these cuts have to be payed off so either someone’s got to do alot of shopping or someone’s going to get taxed up to their asshole.”

Yes, they do have to be paid off. I hate deficits and I hate ridiculous government spending. Will Kery do better?

“Damn, the economy is going to shit and you guys are raising your hands “It benefitted me, it benefitted me!!”. Come on.”

The economy is going to shit? Do tell. The economics indicators don’t demonstrate that at all - you must know something paid professional economists and investment bankers don’t know.

What’s your source?

29

I hate him even more.

30

You conservatives are dumber than the next! Hmmm… who did a google search on FSC-ETI? Me! Why? Because you said we should educate ourselves and I thank you, however you might need to do that search yourself and become educated also.

“The American Jobs Creation Act of 2004 will repeal an export tax incentive (called ETI) that the World Trade Organization has ruled illegal. Yet the legislation also risks undermining the integrity of the U.S. tax system in important ways. While the bill is ostensibly aimed at promoting job creation and international competitiveness, the legislation is not an effective way to achieve these aims. As it stands, the main impact of the legislation will be to make the corporate income tax system more complex, less efficient, and less fair.”

http://www.urban.org/Template.cfm?NavMenuID=24&template=/TaggedContent/ViewPublication.cfm&PublicationID=9006

I have yet to read anything good out of the last 10 webpages I have looked at. You better check your shit buddy.

31

No one answered my question. If this tax cut is so damn good for the economy, why not make this a big public affair? Why the secrecy? Why the lack of their typical fanfare? Where’s MY fucking tax cut? I would gladly hire some more employees with the extra money, but I guess my business needs to be a multi-billion dollar business who contributes to the Bush campaign to receive any breaks or bail-outs.

Another thing that no one seems to address is, although tax-cuts do benefit our individual financial situations, our deficit situation makes a cut like he did seem irresponsible. We are racking up quite a credit card bill right now under president big-spender. Are we putting this off for our children and grandchildren to have to pay? Is it wise to attempt to “stimulate the economy” without consideration of the future recession that it will create?

Keep in mind on the above, I am not an economist, so maybe someone in here can explain it to me in a way that makes sense, but just doing the basic math it doesn’t appear that things add up.

32

[quote]Right Side Up wrote:
Many proponents of trickle down economics here, it seems. Here’s a very nice, neat article that explains why and how (with graphs and everything) trickle down economics fails at virtually everything it purports to do:

http://www.faireconomy.org/research/TrickleDown.html[/quote]

Interesting,

But see this article:

It will not precisely spell this out, but it provides an excellent summary of some new info on how income-tax cuts stimulate economic growth.

33

Roy,

“Another thing that no one seems to address is, although tax-cuts do benefit our individual financial situations, our deficit situation makes a cut like he did seem irresponsible.”

On some levels, I agree.

“We are racking up quite a credit card bill right now under president big-spender. Are we putting this off for our children and grandchildren to have to pay? Is it wise to attempt to “stimulate the economy” without consideration of the future recession that it will create?”

In times of national crisis, there’s nothing wrong with dipping on to the credit card. But you and I both share some similar concerns. More below.

“Keep in mind on the above, I am not an economist, so maybe someone in here can explain it to me in a way that makes sense, but just doing the basic math it doesn’t appear that things add up.”

Deficit spending pumps more money into the economy, which, hopefully, creates more velocity in the system. It’s been used since the New Deal to punch up a flagging economy.

Does it work? Generally yes, but there are costs.

As far as the math adding up, in theory deficit spending can be wiped out if the economy generates enough tax revenue to erase it. So, in theory, you want the deficit spending to stimulate the economy medium-term enough to at least ‘break even’.

Bush went double-barreled at trying to stave off the recession and the subsequent hangover of 9/11 - big government spending and tax cuts. The government spends a bunch of money in the system, and those with tax cuts spend a bunch of money in the system. Bush is basically pouring gasoline on a weak flame. FDR would be proud as a papa.

There are risks and costs - the worst, in my view, is the inability of government to limit its spending now that the cap is off. It is a concern, but with the mild recession behind us, I think most people know it could have been a hell of lot worse and are willing to tolerate short-term - repeat, short-term - fiscal lunacy to right the ship.

Of course, the problem is, for all the griping that the GOP has lost its fiscal conservatism, there’s no one offering an alternative. Kerry claims he is fiscally conservative, and that’s about as legitimate as me voting for him.

34

You just quoted something from the Urban Institute…you must be joking?

35

[quote]rainjack wrote:
Right Side Up wrote:
Many proponents of trickle down economics here, it seems. Here’s a very nice, neat article that explains why and how (with graphs and everything) trickle down economics fails at virtually everything it purports to do:

Faireconomy.org’s mission statement:

“United for a Fair Economy is a national, independent, nonpartisan, 501(c)(3) nonprofit organization. UFE raises awareness that concentrated wealth and power undermine the economy, corrupt democracy, deepen the racial divide, and tear communities apart. We support and help build social movements for greater equality.”

Real unbiased group your linking to, there RSU. About those pretty graphs? They say nothing about the source of their data.[/quote]

Let me ask you rainjack, who is considered the founder of TDE? Someone in Reagan’s camp, no? What was his name?

36

I’m not sure what your point is, RSU.

Reagan was a huge proponent of Supply-Side Economics (Reaganomics). It was never designed to “trickle-down” as many of the progressive ‘tax the rich’ folks want us to believe. It was designed to let business owners keep more of their money, rather than surrendering it to the gov’t for wealth redistribution.

A wonderful side benefit was that tax revenues grew exponentially - exceeded only by the spending spree of the 80’s. In so much that tax revenue increased at such a rate, Reaganomics worked.