Barack wants your money

[mraynrand]

The CBO put out a study as well that casts severe doubt on the benefits of a tax cut.

.

I've demonstrated several times already why that study you cite is totally misleading, and I'm tired of it. All four times taxes have been reduced - Collidge, Kennedy, Reagan and Bush, tax revenues have increased. GDP also went up dramatically, making it look as though, in some cases, tax receipts as easured against GDP went down, but that's a dodge. Kennedy understood the value of supporting business. He also believed that you should "Ask not what your contry can do for you, but ask what you can do for your country." It's stunning to see lefties like you so far from that ideal.

[mraynrand]

Som when Obama says he wants higher taxes on businesses (and doesn't even understand the Laffer curve - and when told how it works STILL wants to tax higher 'because it's fair') AND AT THE SAME TIME want to 'keep businesses here' by preventing any tax breaks on foreign stationed businesses, he is killing business from both ends. If he wants businesses to remain, you have to keep takes lower so that businesses can remain competitive.

I love how you present the laffer curve as if it is gravity. There are plenty of economists that deride and ridicule it. The U.S. treasury put out their study showing that government revenue decreased because of Kemp/roth tax cut.

The CBO put out a study as well that casts severe doubt on the benefits of a tax cut.

Of course, the laffer will have its supporters. I'm not advocating one way or the other...but, please, stop with presenting it as sound economics that everyone should buy into.

As for Tyrone, i find it troubling you would use a concept invented by a muslim. America doesn't need any of that type of stuff.

Muslims have contributed a lot. It's too bad they've been sold out historically by failed philosophers who essentially aborted scientific progress throughout their history. Fortunately, Christianity actually supported scientific progress in a way unknown to Muslims.

[Tyrone Bigguns]

The CBO put out a study as well that casts severe doubt on the benefits of a tax cut.

.

I've demonstrated several times already why that study you cite is totally misleading, and I'm tired of it. All four times taxes have been reduced - Collidge, Kennedy, Reagan and Bush, tax revenues have increased. GDP also went up dramatically, making it look as though, in some cases, tax receipts as easured against GDP went down, but that's a dodge. Kennedy understood the value of supporting business. He also believed that you should "Ask not what your contry can do for you, but ask what you can do for your country." It's stunning to see lefties like you so far from that ideal.

Of course you are. You are right, and we are wrong.

There is no valid criticism of the laffer curve, i apologize.

[MadScientist]

The flaw in what you say, MadScientist, is that the great majority of these top earners are NOT retired fat cats or spoiled trust fund brats or whatever bogus image of the rich you are trying to palm off. Rather, most of them are small business owners--entrepreneurs who generally will NOT slow down the velocity of money as you describe, but maximize that velocity by investing in their own business--increases in employees, equipment, and inventory. THAT is what the socialist, Obama either SEEKS to disrupt or ignorantly would disrupt as a consequence of his programs and policies.

If they are investing in their business, then it is a business expense that isn't taxed. The tax is on net, not gross, so your argument is totally invalid, as usual.

I've come to have a bit of respect for your ability to reason, MS--even leftist that you are. But this isn't even close to your usual standard.

As you said yourself, it's all about "velocity of money"--and my old favorite, the Keynesian Multiplier. The pittance of tax savings is irrelevant compared to the beneficial effect of the investing in the form of job creation, geometrically greater total income for many individuals, secondary, tertiary, etc. consumption, investment, etc.

Your argument is that Obama's policies will slow down small businesses investing in themselves because of the increase in income taxes on businesses. My point is that since internal investment is an expense, it comes out of the business' coffers before the taxes, so any increase in taxes makes no difference. If you are trying to say that taxing profits creates a disincentive to invest and grow the business, I disagree, as the growth will still increase profits.

If there is some other point you are trying to make, please clarify.

[mraynrand]

The CBO put out a study as well that casts severe doubt on the benefits of a tax cut.

.

I've demonstrated several times already why that study you cite is totally misleading, and I'm tired of it. All four times taxes have been reduced - Collidge, Kennedy, Reagan and Bush, tax revenues have increased. GDP also went up dramatically, making it look as though, in some cases, tax receipts as easured against GDP went down, but that's a dodge. Kennedy understood the value of supporting business. He also believed that you should "Ask not what your contry can do for you, but ask what you can do for your country." It's stunning to see lefties like you so far from that ideal.

Of course you are. You are right, and we are wrong.

There is no valid criticism of the laffer curve, i apologize.

Well, finally, you got something right! But seriously - I've seen exceptions and arguments against the Laffer curve that have merit (Other factors can shift the Laffer curve so that lowering tax rates may not be helpful, for example). But in general, it's been pretty consistent that lowering tax burdens on business spurs growth and results in increases tax revenues even at lower tax rates.

The world has changed a lot - there are tons of competitive countries out there with lower business tax rates. The U.S. has been competitive with such countries because we have had a huge advantage in infrastructure and logistics. That won't be true forever (and already is untrue in certain areas) as other countries catch up. It seems like basic logic that increasing business tax rates in a competitive world business environment is dangerous. Internal examples of states struggling with higher tax rates seems to support this idea. I don't want to give businesses a free pass - like mad scientist says, if there are loopholes for businesses to go overseas and avoid taxes, but still have access to markets, such loopholes are unfair. Still, I'm guessing you would get less of that if tax rates were much lower here.

[texaspackerbacker]

The flaw in what you say, MadScientist, is that the great majority of these top earners are NOT retired fat cats or spoiled trust fund brats or whatever bogus image of the rich you are trying to palm off. Rather, most of them are small business owners--entrepreneurs who generally will NOT slow down the velocity of money as you describe, but maximize that velocity by investing in their own business--increases in employees, equipment, and inventory. THAT is what the socialist, Obama either SEEKS to disrupt or ignorantly would disrupt as a consequence of his programs and policies.

If they are investing in their business, then it is a business expense that isn't taxed. The tax is on net, not gross, so your argument is totally invalid, as usual.

I've come to have a bit of respect for your ability to reason, MS--even leftist that you are. But this isn't even close to your usual standard.

As you said yourself, it's all about "velocity of money"--and my old favorite, the Keynesian Multiplier. The pittance of tax savings is irrelevant compared to the beneficial effect of the investing in the form of job creation, geometrically greater total income for many individuals, secondary, tertiary, etc. consumption, investment, etc.

Your argument is that Obama's policies will slow down small businesses investing in themselves because of the increase in income taxes on businesses. My point is that since internal investment is an expense, it comes out of the business' coffers before the taxes, so any increase in taxes makes no difference. If you are trying to say that taxing profits creates a disincentive to invest and grow the business, I disagree, as the growth will still increase profits.

If there is some other point you are trying to make, please clarify.

That's more like it. You're back on your game, MS.

The argument is that there will be a helluva lot less to invest internally as the IRS grabs a much bigger portion, although there is an element of the last thing you said too--less incentive to invest in more production or inventory if demand is likely to be less--as it inevitably would with Obama raising taxes. To be more precise, the horrendously leftist (and likely to get more that way) Congress will raise taxes, and unlike McCain, Obama would not lift a veto pen to prevent it.

The huge commitment toward this bail out thing is like an open invitation to the damned chronic tax increasers of the left to raise them. And if, as projected, rebounding real estate values bring some or all of that money back, then there is the golden opportunity for Obama to come across as a budget balancer--with the help of the spinners of the leftist mainstream media, of course.

It all ends up being a colossal wet blanket on the economy, combined with a pseudo-success for subordinating the free market to government solutions--which is the exact definition of liberalism.

[bobblehead]

Apropos of this thread….a few good nuggets in this article:

http://www.realclearmarkets.com/articles/2008/10/our_everyone_gets_a_trophy_eco.htm

……When it comes to taxes in general, Barack Obama has made it plain that he would raise the tax rate on the highest earners, while John McCain comforts his supporters with a promise that he would penalize the earnings of the rich at a lower rate. Both candidates miss the disincentivizing nature of taxation.

Realistically, taxes should be seen as a price or a penalty against effort. This is important because no matter how many times politicians tell us they’ll stimulate the economy through income redistribution, the fact remains that economic growth is always and everywhere a function of productive work effort.

Or, as Andrew Mellon (Treasury secretary under presidents Harding, Coolidge and Hoover) noted in Taxation: The People’s Business: “when a man’s initiative is crippled by legislation or by a tax system which denies him the right to receive a reasonable share of his earnings, then he will no longer exert himself and the country will be deprived of the energy on which its continued greatness depends.”

Both Obama and McCain miss Mellon’s point because in quibbling over the correct rate for the most productive taxpayers, they’re advocating that success should be penalized at a higher rate than lack of success. That the vital, productive few create enormous opportunities for every American seems to concern neither.

Good idea to quote Hoover's treasury secretary for relevancy in a time of economic crisis

Even if you buy into the concept of marginal rates impacting the desire to earn more, the rates in the early 20's were something like 70%. Do you really think there is that much difference in motivation for a person who pulls in $1 million weather he keeps $64000 or $50000 of his next $10000. I flat out dispute your assumptions with the rates we are talking about.

As for penalizing success, where does this success come from? The success of the rich is dependent on the success of the country as a whole. So what they pay is the price of doing business in the US. Its the cost of keeping the conditions that allow for their successes in tact. By putting your blinders on and looking at this only as a fairness for the rich issue, you are seriously missing the big picture. You are trying to set the US up to fail like the levees in NO, and lead the economy to collapse like the bridge in MN.

A progressive tax system is simply watered down socialism...I don't think you can dispute that. An attempt to equalize things. That being said you act as though it isn't a proven fact that capitalism is responsible for most of the wealth created in the world. Capitalism works....when an exceptional person comes along and renovates the way things are done it isn't he who is succeeding and dependent on the lower class, it is the lower class that is getting something of value.

When sam walton renovated delivery systems and big box stores he created value and wealth for every person in america (and becoming the world). His success was dependent on ONE thing...people were getting MORE value for their dollar than they were before he came along. I wish to encourage people like that to make my life easier and better...you wish to tax them to make your life better while thinking it won't cost jobs/production/wealth. Newsflash...the UAW thought the same thing about their oppressive employers.

[HowardRoark]

And another thing......my Dad always told me when I was a kid that life wasn't fair. I think maybe we need someone like him running for President. No trophies for everyone. Put a video on you-tube.....who cares, doesn't make you Steven frickin Spielberg. Life ain't fair.

So stop bitching about the taxes being raised on the rich.

I missed this one earlier today……

What we have here is a failure to communicate. I am not bitching about “fairness” when it comes to taxes. Trust me; I know by any definition it isn’t “fair” when it comes to the rich. I see people with 12,000 square foot homes on Lake Minnetonka who go to West Palm Beach to their 15,000 square foot home (when not staying at their mountain home in Montana). Fair Shmare. I don’t live in a 12,000 square foot home; but that’s not the point.

The point is that our system NEEDS rich people. We need the carrot of reward that will spur on the innovations that create superior products, jobs, and yes……wealth.

What would motivate innovation without reward? I don’t think beatings with a stick proved to be too fruitful.

[mraynrand]

Geezus Roark,

Don't you get it? It's WRONG to do things for self aggrandizement. It's WRONG to do things for self gain. You should only do things to help your fellow man. If you were born lucky in the game of genetic dice, with greater abilities and/or motivation, the results of your labor are due to sheer luck, and you should gratefully want to share them with everyone else. It's wrong to have a larger house than anyone else, or a bigger faster car. It's wrong to want a vacation home or a new TV, if the least of yor neighbors doesn't have one. That is the liberal ideal. That is why every liberal voluntarily lives as an equal to the poorest American, gleefully sacrificing all they have to live up to their ideal. Why wold you think that a 35% tax rate is arbitrary. It's NOT. It's just what's possible. Someday you'll understand that a 99% tax rate on a businessman earning 1,000,000 is only fair to the person who makes 10,000 dollars. Split up that 990,000 dollars equally, and you create a huge class of people ready to spend to buy your products! Everyone wins!

[MadScientist]

The point is that our system NEEDS rich people. We need the carrot of reward that will spur on the innovations that create superior products, jobs, and yes……wealth.

Have I argued otherwise? No.
Will the Obama proposals eliminate the rich? No.
Will the Obama proposals prevent people from getting rich? No.
At the very worst, the proposals will slightly slow down the speed at which people move from rich to really filthy rich. And even this is debatable, as it will be more dependent on the overall economy than marginal tax rates.

[mraynrand]

Which is more fair: A 42% marginal tax rate on 'the rich' (above 250K) or a 43% rate? If 42, why not 43? If 43 is fair, why not 44%? Why not 90%?

[HowardRoark]

The point is that our system NEEDS rich people. We need the carrot of reward that will spur on the innovations that create superior products, jobs, and yes……wealth.

Have I argued otherwise? No.
Will the Obama proposals eliminate the rich? No.
Will the Obama proposals prevent people from getting rich? No.
At the very worst, the proposals will slightly slow down the speed at which people move from rich to really filthy rich. And even this is debatable, as it will be more dependent on the overall economy than marginal tax rates.

Good. I’m glad we agree that this issue has absolutely nothing to do with fairness. Now we can move on to something else.

What do you think of a Regressive Tax Code? Maybe we should have marginal tax rates that phase out after $250,000. Maybe we can put in tax credits after your 1,000,001st dollar is earned.

Just an idea; but I bet you would see the overall GDP go up at a much higher rate.

[LL2]

This was posted on the Fast Company website. Obama is all about disguise and not showing the truth. It's interesting the article below points out that Obama's tax cuts are nothing more than "welfare" tax credits. McCain needs to point this out tonight.

October 14, 2008

Obama’s promise of a 95% tax cut for working families is nothing more than an illusion. - The Wall Street Journal

The Journal calls Obama's tax cut promise a "clever pitch because it lets him pose as a middle-class tax cutter while disguising that he's also proposing one of the largest tax increases ever on the other 5%."

Obama, according to them, has redefined the meaning of a tax cut. "For the Obama Democrats, a tax cut is no longer letting you keep more of what you earn. In their lexicon, a tax cut includes tens of billions of dollars in government handouts that are disguised by the phrase 'tax credit'… You can receive these checks even if you have no income-tax liability. In other words, they are an income transfer -- a federal check -- from taxpayers to nontaxpayers. Once upon a time we called this "welfare," or in George McGovern's 1972 campaign a "Demogrant." Mr. Obama's genius is to call it a tax cut… There's another catch: Because Mr. Obama's tax credits are phased out as incomes rise, they impose a huge "marginal" tax rate increase on low-income workers… Some families with an income of $40,000 could lose up to 40 cents in vanishing credits for every additional dollar earned from working overtime or taking a new job."

http://www.fastcompany.com/big-idea/obama-s-promise-95-tax-working-families-nothing-more-illusion?partner=rss

[texaspackerbacker]

My Fellow Conservatives:

There you go again--drifting in the wrong direction, politically and rhetorically, anyway. Don't you get it? When you whine and rant about unfair taxation of the rich, progressive taxation being watered down socialism, etc., You may be right as rain--you ARE right, as a matter of fact. But you AREN'T doing the cause any good.

Class warfare rhetoric/over-taxing the rich/redistributing wealth are WHAT RESONATES WITH THE GREAT MAJORITY OF THE PEOPLE. And that fact is accentuated by the fact that the leftist mainstream media unabashedly promotes the concept that bringing down the rich and doling out funds to the non-rich is a good thing.

Do NOT go off on another tangent about how I am a socialist or liberal or whatever, because I am with you guys in what you say. I'm just saying it does no good to say it.

Rather harping on the fairness thing, we need to emphasize that increasing taxes dampens the economy and harms everybody. We also need to emphasize that Obama's $250,000 threshhold for his redistribution scheme does NOT merely bring down the rich, but harms small business, the main job creating engine for the economy. We also need to emphasize that any business tax increase--which Obama's redistribution thing absolutely is, along with high corporate taxes--is passed along to consumers, harming the people he claims to seek to help. Furthermore, we need to emphasize the fact that these business taxes contribute severely to sending jobs overseas by making American companies at a competitive disadvantage.

So get off the fairness thing already. It plays right into the hand of Obama and his class warfare promoters.

[mraynrand]

Tex, your focus is correct, but it requires a bit of time to explain. I'd like McCain to make that argument - especially the idea that Obama wants to keep jobs in America, but is doing exactly the thing that will drive jobs away. If McCain can draw the parallel between what happened to jobs in Ohio and Michigan to Obama's plan for America (Obama will give us Michigan and Ohio nationwide), that might work. But I heard Rasmussen talking about the polling, and people are still choosing Obama, even those who understand Obama's tax proposals. 47% of Americans agree that the tax increase on those making 250K or more will be good for the economy. It will be very hard for McCain (who is terrible talking about the economy) to educate the American public in one debate, especially since 1) he is trying to compete with Obama on the entitlement front and 2) Obama is much better at sounding and appearing confident and authoritative on economic issues.

I think right now there is a very good chance we're going to get to see if Maxi and Bobble are right about re-energizing the conservatives with an Obama presidency, and a supermajority, fillibuster proof Democrat congress. Will an Obama presidency pull the country to the left, or will there be a strong pull back reaction? Should be a wild ride.