[mikemike]

I just thought of a good example to explain the phenomenon of tax breaks and jobs...

Think of it like an introductory offer for a service. Its half price for the first six months and you can cancel anytime. If 100 people sign up and use the service for the first six months. When the price goes up some of them will cancel the service. Those cancelers who want the service but only at the introductory price are who they are talking about when they say closing a tax loophole or break for a certain thing will eliminate jobs.

[normhead]

There have been so many bogus claims about why the rich shouldn't be taxed over the years, with not a shred of truth to any of them.

The rich, who own your newspapers, television and other media, promote the idea because they don't want to pay taxes for purely selfish reasons. They want every last dime they can get their hands on. Most of them believe they have a god given right to every cent they come by. I'd say earn but a lot of wealth is created by lobying for favourable economic policies that restrict competition and enforce monopolies.

The next problem is poor people don't donate huge amounts of money to political parties. In the US and Canada the only way you can run an election campaign of any significance is to have rich backers. The cons in Canada recieve more donations than the two opposition parties combined even though they get on 40% of the vote. They cater to rich folks, and those rich folks by them TV time , newspaper ads etc.

IN Canada where we have better health care, there is better production eficiency, based on less lost work days, particularly among lower income workers. There is so much data to show that taking care of people and making sure people have the resource to have productive lives, is better for society as a whole, more productive, creates more jobs, than having a few control the wealth it takes a majour propanda campaign to keep rich people controlling the regulatory processes, and there fore the large economy.

But on a small scale, in my house, i honestly don't give a frig if youi are rich. Bring your arrogance in to my house and I'll ask you to get off my property. If you don't I'll have you arrested. I don't believe our economy needs rich people. I don't believe they are 1/10th as important as they think they are. And I believe our economy would run just fine without them. It's good to have money for venture capital, there will always be some people with more money than others. Like 100-1 richest to poorest is more than adequate.

I'm so old school, I still believe that what determines how physically wealthy we are depends on how much stuff each person produces, and that you keep your economy in good shape by sharing what wealth you have with others who need it.

But really , who cares... over my working career, I probably paid the equivalent of a half million in taxes. I don't begrudge a penny of it. I was brought up to be a team player. These guys crying about themselves all the time...they aren't team players. They are "me" players.

Anyone can reverse the job - wages game. Force competing countries to pay American wages and American benefits to their employees. Call it the "Fair labor costs act." Americans can compete with anyone on a level playing field. Unfortunately, "me" people want to be rich so bad, they'll do anything to get that way. Including exploit foreign workers and pay them extremely low wages, so they can put more in their own pockets.

And that's the real cause of wealth. Because really, there is only one way to get rich. You have to pay the people who work for you, a lot less than what they earn for you. Or you have to charge people who buy from you a lot more than what it costs you to make the product. Both of those things are based on exploitation. Or you have to hire a bunch of bullies to extort money from your neighbours, the more traditional method. To get rich you have to exploit the labor of others. So why would anyone respect such people? Not in my house.

[Parallax]

I don't believe they [rich people] are 1/10th as important as they think they are.

I know an awful lot of "rich" (by my standard. Everybody's is different) people that won't spend 1 more dime than they absolutely have to. Personal experience has been that the more well-to-do someone is, the more likely they are to haggle over prices and try to squeeze out everything they can. We are told that they will re-invest those tax breaks in the economy, hire more workers, etc. BULL! Employers (other than the government) don't hire people they don't need.
The only direct link experience I have with how taxes affect how an employer pays, is just the opposite. At the small company I worked for several years ago, we all got an unexpected Christmas bonus, and the owners explanation was that he would have paid roughly 60 percent of what he gave in bonuses in taxes, so he figured it was a better investment in the company's future to give it to the employees instead of the government.
As far as the over inflated sense of self importance that normhead refers to: If we could buy them for what they're worth, and sell them for what they think they're worth, we'd all be rich.

[GeneV]

I know an awful lot of "rich" (by my standard. Everybody's is different) people that won't spend 1 more dime than they absolutely have to. Personal experience has been that the more well-to-do someone is, the more likely they are to haggle over prices and try to squeeze out everything they can. We are told that they will re-invest those tax breaks in the economy, hire more workers, etc. BULL! Employers (other than the government) don't hire people they don't need.
The only direct link experience I have with how taxes affect how an employer pays, is just the opposite. At the small company I worked for several years ago, we all got an unexpected Christmas bonus, and the owners explanation was that he would have paid roughly 60 percent of what he gave in bonuses in taxes, so he figured it was a better investment in the company's future to give it to the employees instead of the government.
As far as the over inflated sense of self importance that normhead refers to: If we could buy them for what they're worth, and sell them for what they think they're worth, we'd all be rich.

I think you've summed up one reason I'm not rich.

[jeffkrol]

I know an awful lot of "rich" (by my standard. Everybody's is different) people that won't spend 1 more dime than they absolutely have to. Personal experience has been that the more well-to-do someone is, the more likely they are to haggle over prices and try to squeeze out everything they can. We are told that they will re-invest those tax breaks in the economy, hire more workers, etc. BULL! Employers (other than the government) don't hire people they don't need.
The only direct link experience I have with how taxes affect how an employer pays, is just the opposite. At the small company I worked for several years ago, we all got an unexpected Christmas bonus, and the owners explanation was that he would have paid roughly 60 percent of what he gave in bonuses in taxes, so he figured it was a better investment in the company's future to give it to the employees instead of the government.
As far as the over inflated sense of self importance that normhead refers to: If we could buy them for what they're worth, and sell them for what they think they're worth, we'd all be rich.

I second that... as working in a high value luxury item industry has proven this to me.

[jolepp]

Maybe the simple cure-all principle is really spreading power as thin as possible: in a system where the state controls everything (USSR "real socialism") there is too much concentrated on the bureaucracy (state and the single ruling party, in a sense tax rate is 100% and all legitimate individual income is a government handout) whereas in a system where everything is private (anarchy, really, but 0% tax without a government to collect it) all power tends to be consolidated to a few if not a single holder(s). Of course, while the principle (*) is simple, its implementation is not as power in any form tends to be an instrument of obtaining more of the same .

(*) of spreading power thinly and uniformly - is this a definition of democracy in disguise?

[stevewig]

Never mind whose fault it is that the US is actually in this current economic crisis - right now that is irrelevant and the blame can be attributed after the crisis is over.

Right now it should be and must be clear to everyone and particularly the voting public that the TEA PARTY is behind the non resolution of the crisis. They are holding the strings that are pulling the Republican puppets this way and that way. They already hold critical power over the GOP and they hope to extend this power even to the Presidency (Michelle Bachmann) after the next election.

Tea party to GOP: We could make 'examples' of you over debt ceiling - CNN.com

"...........But over its 2½-year existence, the tea party movement has placed its banner of less government spending at the center of the national conversation. So many activists are watching who's voting on what, even their conservative supporters in Congress -- and especially putting the squeeze on moderate Republicans.

What they're saying around the country is, "Do not raise the debt ceiling. It's that simple. It's time for Congress to get its fiscal house in order," Tea Party Patriots co-founder Jenny Beth Martin told CNN. The group is the nation's largest tea party organization.
Can deal be found with debt clock ticking?
Obama: Bills must be paid

Martin explained that her group's supporters want a balanced-budget amendment, significant spending cuts and lower taxes. And they don't want the debt limit raised.

This week, Tea Party Patriots' members and supporters are intensely calling various lawmakers: establishment Republicans, so-called "Blue Dog" Democrats and those freshmen Republicans elected to the House with tea party support.

"I think that it's accurate to call it pressure," Martin said. "The other thing is, we're holding these ... freshmen accountable. A lot of these freshmen ran on the promise that they were not going to increase the debt ceiling. Now, they're in D.C. with all of their colleagues on the Hill. And they're buying into the company line, forgetting about the fact that the American people have elected them not to do that."

For those who vote to raise the debt limit, "The American people are going to watch what they did, watch what happens to the economy and next November, I think there will be consequences," Martin said.

Another major tea party booster echoed the sentiment.

Brendan Steinhauser, director of federal and state campaigns for the Washington-based FreedomWorks, explained that he and other activists understand the possible financial implications if the debt limit is not raised.

"I think if you don't get significant cuts, you don't get a balanced-budget amendment as part of it, and you're raising taxes -- I just think that it's, politically, ... you'll definitely face serious challenges for your re-election," Steinhauser said........"

[jeffkrol]

Historians will look back at 2011 and shake their heads at the suicidal bent of the Tea/Republicans and even the Democrats. The notion that federal deficit spending, which adds money to the economy, should be reduced at a time of economic starvation, is so unbelievably wrong-headed, future economists will say, ‘What were these fools thinking? At just the time they should have been adding money to the economy, they were searching for ways to bleed money out of the economy.

worth repeating here.......
–What is our priority: The recession and joblessness — or inflation? Monetary Sovereignty – Mitchell

[jolepp]

related: Laffer curve - Wikipedia, the free encyclopedia

[jeffkrol]

related: Laffer curve - Wikipedia, the free encyclopedia

The "Laffer Curve" is Laughable
The "Laffer Curve" is Laughable

The Laffer Curve is Wrong

The problem isn't that the Republicans or the Democrats are misinterpreting the Laffer Curve, but that the model itself is not right. The Laffer Curve assumes that there is a "magical" tax rate in which the government can maximize its revenues and which will allow the economy to grow organically. The problem is that as the government continues to pump billions of dollars of fiat money into the money supply, the maximum tax revenue number becomes a moving target. That makes the Curve itself impossible to quantify in actual dollar terms, and instead it becomes a concept or philosophy rather than an actual fiscal policy tool. As inflation grows and wages remain stagnant, the tax burden as a proportion to income will continue to grow for the middle class and the poor while the ultra-wealthy continue to benefit from billions in free money.

http://blogs.wsj.com/financial-adviser/2010/06/08/why-the-laffer-curve-might-be-wrong-here/
and
http://www.time.com/time/magazine/article/0,9171,1692027,00.html

If there's one thing that economists agree on, it's that these claims are false. We're not talking just ivory-tower lefties. Virtually every economics Ph.D. who has worked in a prominent role in the Bush Administration acknowledges that the tax cuts enacted during the past six years have not paid for themselves--and were never intended to. Harvard professor Greg Mankiw, chairman of Bush's Council of Economic Advisers from 2003 to 2005, even devotes a section of his best-selling economics textbook to debunking the claim that tax cuts increase revenues.

The yawning chasm between Republican rhetoric on taxes and even informed conservative opinion is maddening to those of wonkish bent. Pointing it out has become an opinion-column staple. But none of these screeds seem to have altered the political debate. So rather than write yet another, I decided to find out what Arthur Laffer thought.

Laffer is a bona fide economist with a doctorate from Stanford. He's also largely responsible for the Republican belief that tax cuts pay for themselves. Now 67, Laffer runs economic-consulting and money-management firms in Nashville. About the best I could get out of him on the question of whether the Bush tax cuts have paid for themselves was "I don't know." But that's only part of the story.........................nd how did things work out? Laffer is convinced that the reduction of the top tax rate from 70% to 28% during the Reagan years paid for itself--in part by encouraging the rich to stop finagling--and the evidence mostly backs him up. "You find these enormous responses in the upper brackets," Laffer says. "These guys fire their lawyers and accountants and actually pay their taxes. Yay! Isn't that what we want them to do?"

But Reagan's tax cuts for the nonrich were big money losers, and it took the fiscal discipline of Bill Clinton to mop up the resulting red ink. Laffer gushes with praise for Clinton, but he's also a fan of Clinton's successor. "What Clinton did was, he gave Bush the fiscal flexibility to do what was right," Laffer says. In the face of the recession and terrorist attacks of 2001, Bush "needed to stimulate the economy and spend for defense, and Clinton gave him the ability to do that."

In other words, the Bush tax cuts were meant to create big deficits. But Laffer's O.K. with that. "The Laffer Curve should not be the reason you raise or lower taxes," he says. Perhaps not, but it does make for great campaign promises.

http://www.citizeneconomists.com/blogs/2011/07/11/what-went-wrong-with-supply-side-economics/

First, the rise of the supply-side economics in the political economy began in early 1980s. But the intellectual influence of the supply-side economics should not be confined to the theoretical paradigm itself. The field of the political economy of taxation manifested itself as the intellectual triumph of supply-side economics. The original idea of the Laffer curve, the relationship between tax rate and tax revenues, was not disputable after all. In fact, if tax rates reached predatory levels, decreases in total tax burden would yield considerable gains, not only in total tax revenue but also in terms of higher level of productivity. However, when average and marginal tax rates were at moderate levels, it would be foolish to believe immense revenue gains would ensue by reducing the rates of taxation to bottom-levels, arguing for significant gains in terms of employment growth, productivity boost and total tax revenues. Even though cross-country empirical evidence does suggest an increase in tax revenues amid the decline in average tax rate, the pattern is confined to the episodes where average and marginal tax rates were very high, exceeding 70 percent threshold. Once tax rates were reduced, there is no evidence of higher revenue gains.

Laffer curve is worthless till you hit 70% tax rate apparently.. but continue on w/ your smoke and mirrors, while the economy continues to SLOWLY recover on it's own.. barring any major stupidity (I'm not holding my breath)

[jeffkrol]

The major peril of supply-side economics is the claim that tax reduction would boost the aggregate supply and stimulate productivity growth. On the other hand, the valuable contribution of supply-side economics is the notion that additional tax increases do not generate much higher revenue. One should not feel reluctant to recall the 1964 Kennedy-Johnson tax cut which decreased marginal tax rates substantially. Although supply-side economics has repeatedly blasted the intellectual heritage of Keynesian macroeconomics, the 1964 tax reform was itself a Keynesian prescription for the U.S recession in the years prior to Vietnam war. Back in early 1960s, Paul Samuelson wrote that “Congress could legislate, for example, a cut of three or four percentage points in the tax applicable to every income class, to take effect immediately under our withholding system in March or April, and to continue to the end of the year.” (link). Therefore, Samuelson’s mindful observation that additional spending would not automatically counteract the recession unless complemented by tax reductions, probably would not come due in the framework of supply-side economics. Moreover, what distinguished the supply-side economics from the framework of sound economic analysis taught in microeconomic and macroeconomic textbooks, was adverse propensity to enforce tax cuts for the rich while leaving the middle class and low-income households no pie from tax reductions. The striking features of income inequality in the U.S. suggest that from 1970s, median household income stagnated (link) while top 5 percent of households have received disproportionately windfall gains from tax reductions up the point where more than 85 percent of total income was earned by top 5 percent of households (link). Moreover, one should distinguish between patterns of good and bad inequality as Gary Becker recently suggested (link). It is inevitable that income inequality has some great value in the society when market outcomes lead to better overall health, less stress and higher standard of living and the evidence is yet inconclusive whether the narrowing of income inequality would return health improvements for the poor – since poor health outcomes of low-income households are mainly attributed to deteriorating dietary habits and dangerous lifestyle.

While bad inequality, especially rents from non-market outcomes, have precipitated the decline in good inequality in the last two decades, there is an overwhelming evidence that stagnation of median household income (despite moderate productivity improvements) caused a somehow lower quality of the U.S. labor force and a widening gap in educational achievements of American children. The drawbacks of widening inequality were largely ignored by supply-side economics or justified on the hands-off approach to the issues of the poor. It should not be forgotten that negative income tax, which favored low-income families, was suggested by Milton Friedman, whom supply-siders have taken for the intellectual father without a detailed knowledge of his precious contribution to economics.

Second, supply-side economics has been perhaps known for favoring the deregulation as the cure for social ills and staggering income growth. Despite substantial euphoria caused by the pioneers of deregulation of banking and financial sector, the regulatory framework eventually jeopardized sound regulation that could prevent hazardous outcomes as shown in the seminal work of George Akerlof and Joseph Stiglitz. In fact, deregulation of the banking sector, hailed by supply-side economics as the triumph of its own ideology, laid the basis for rigorous financial innovation by special investment vehicles (SIV) and shadow banking institutions.

In fact, deregulation of the banking and financial sector was not the central issue per se. The main systemic flaw was rather the adoption of unsound regulation that did not predict the perils of over-leveraged banking sector and especially the system-wide spillovers during the financial crisis. Moreover, the loosening of the monetary policy and the series of fiscal stimulus have notified two main drawbacks in the macroeconomic outlook. The first is the invariant postponement of taxation fueled by the mountain of government debt. And the second is the hidden explosive potential for inflation following the flood of money supply in the balance sheet of the banking sector.

Generally speaking, the intellectual adventure of supply-side economics has overlooked the possibility of pitfalls brought up by rigorous tax cuts to the wealthy and deregulation of banking and financial sector. It would not come due to label mainstream economic theory as a cataclysm which the financial crisis proved accordingly. It would be either insensible to tarnish the useful contribution of supply-side economics. In fact, tax cuts do generate systemic incentives, particularly in the response of the labor supply to tax reductions. However, the elusive quest for higher growth and job creation after reducing tax rates for the wealthy, is an important lesson we should learned from the unfortunate turn of supply-side economics in favoring deregulation without acknowledging the possibility of systemic banking collapse and the consequences carried over by society at large.
What went wrong with supply-side economics? Citizen Economists

you do realize that if a THEORY constantly needs patching the THEORY is generally in error..............The above has some gaping inaccuracies as far as I can tell mainly on INFLATION..

[stevewig]

Grover Norquist: The man who drew the GOP's 'line in the sand'

Grover Norquist: The man who drew the GOP's 'line in the sand' - CNN.com

A quotation:

"At the heart of the contentious talks between the White House and congressional Republicans on whether to raise the debt ceiling is a simple, one-sentence document many conservative lawmakers have signed, pledging not to increase taxes.

Ever.

"I _____ pledge to the taxpayers of the state of _____ and all the people of this state, that I will oppose and vote against all efforts to increase taxes," reads the version of the pledge signed by Republican lawmakers.

The driving force behind that pledge -- and perhaps the most powerful man in Washington that you've never heard about -- is a bearded, unassuming conservative activist who has never been elected to a public office.

Grover Norquist, president and founder of Americans for Tax Reform, is both respected and feared in the inner circles of Washington.
Norquist: 'I'm for tax reform'
Norquist: 'Obama to blame for spending'
The debt ceiling and you
Tempers flare during debt talks

He has worked under Ronald Reagan, is close friends with Karl Rove and has been connected to scandals involving onetime Christian Coalition chief Ralph Reed and convicted lobbyist Jack Abramoff.

His group, funded through both individual donations and major corporate dollars, has the grass-roots power -- and has used it -- to raise money, run TV ads and campaign against politicians who violate that pledge. He proudly points to trophies of those who have been brought down, defeated in subsequent elections after voting to raise taxes.

"These are people who voted for tax increases," he said, pointing to a poster hanging in his office, "and were defeated."

"In a black binder are the signed pledges from most of the Republican presidential candidates -- Mitt Romney, Herman Cain, Michele Bachmann, to name a few -- to not raise taxes.

Norquist also has secured the signatures of most congressional Republicans. It is those signatures, he contends, that hold the lawmakers accountable to voters."

[jeffkrol]

funny thing about Mr. Norquist is the complete lack of mentioning spending.. From an MMT standpoint he is right.. WE don't need to raise taxes now... but we don't need to cut spending either..

The Man Behind The GOP's No-Tax Pledge : NPR

Maybe it's inferred but certainly doesn't seem to be spoken........
Small gov. CAN spend as much as a large government. Just in fewer areas.
THEN AGAIN.......................

http://www.businessinsider.com/anti-tax-king-grover-norquist-wants-a-debt-de...s-taxes-2011-7

Grover Norquist — the head of Americans for Tax Reform and arguably the driving force behind Republican opposition to any and all new taxes — has given his stamp of approval to a deficit-reduction plan that would raise tax revenues.

The plan, which would fund long-term middle class tax relief with as much as $1 trillion in new revenues raised by closing tax loopholes, hasn't gained any GOP support — yet.

House Republicans have so far adamantly opposed any deal to reduce the deficit and raise the debt ceiling that includes new revenues. At the heart of their opposition is Norquist's pledge not to raise taxes, which has been signed by nearly every Republican in Congress.

Norquist said Thursday that his plan doesn't violate Americans for Tax Reform principles. Linking annual borrowing for a long-term middle class tax exemption with closed tax loopholes, his plan includes both tax reform and $700 billion in real deficit reduction, he said.

“You can’t trade a temporary tax cut for a permanent tax increase," Norquist told the National Journal. "But if they’re both permanent or they’re both temporary, that works.

fire them all, elect congress by lottery. Can't do ANY worse........

[jeffkrol]

Guest commentary: Grover Norquist, No new taxes hypnotist | MLive.com

At our 25th college reunion in 2003, Grover Norquist - the brain and able spokesman for the radical right - and I, along with other classmates who had been in public or political life, participated in a lively panel discussion about politics. During his presentation, Norquist explained why he believed that there would be a permanent Republican majority in America.

One person interrupted, as I recall, and said, “C’mon, Grover, surely one day a Democrat will win the White House.”

Norquist immediately replied: “We will make it so that a Democrat cannot govern as a Democrat.”

In a way, Republicans have accomplished that......................

I’d like to think that the most prosperous nation in human history can have both freedom and security. I think we have reached a point where my personal success is not threatened by a program to help our parents retire with dignity. Voters are smart enough to see that taxes are one of the ways we get those things. They are the price we pay for civilization. (The writer, a Democrat, is governor of Massachusetts. This first appeared in The Washington Post)

[Oso]

Funny factoids...

Eric Cantor is betting that we will default-his stock portfolio, like many others in and out of congress, are "selling short", going to make billions on the default...

Banks will raise interest rates, through the roof, using the default as the latest excuse. Credit cards at 54%...they win again.

Can't wait to see what the oil companies will do with the American Default as an excuse. The threat of a potential possibility of the chance of bad weather maybe happening somewhere near the region of the gulf is good for a dime a gallon, so this ought to be good. For them.

Members of congress are the only people allowed to use insider information in stock trading...not a crime for them. Funny how that works.

The stock market will sing along happily, since they use make believe money anyway, and the corporations will make billions, even if the USA defaults. It won't affect them. Just the rest of us, to live on in the banana republic of America.

Of course, the Saudis and the Chinese may gripe a bit, as they own most of our debt. Teach them to trust America.

But anyway, here is a link, getting back to the original post, which I saw the other day and thought I would share. I particularly enjoyed the links to the rand sites. Fun stuff, like Americas funniest videos; stupid people acting very publicly stupid.

Actually, "the Rich" Don't "Create Jobs," We Do | Truthout