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09-23-2012, 12:41 PM   #1
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Cutting top tax rates doesn’t grow the economy, it only grows income inequality

numbers are in...........

QuoteQuote:
Citizens for Tax Justice

A new study by the non-partisan Congres*sional Research Service (CRS) using data from the past 65 years found that there is no corre*lation (PDF) between top tax rates and economic growth. But it doesn’t stop there. The study also found that there is a corre*lation between the reduction in top tax rates and the increasing concen*tration of wealth toward the top of the income distri*b*ution. The report, Taxes and the Economy: An Economic Analysis of the Top Tax Rates Since 1945, is also clear that this is not only about tax rates on regular income, and points out (PDF) that “changes in capital gains and divi*dends were the largest contributor to the increase in income inequality since the mid-1990’s.”

This has to be just about the last nail in the tax-cutting, supply-side coffin. CRS is a bunch of smart people at the Library of Congress whose mission is “providing compre*hensive and reliable legislative research and analysis that are timely, objective, author*i*tative, and confi*dential
GalesburgPlanet.com - It's official: Cutting top tax rates doesn't grow the economy, it only grows income inequality

QuoteQuote:
The reduction in
the top tax rates appears to be uncorrelated with saving, investment, and productivity growth. The
top tax rates appear to have little or no relation to the size of the economic pie.
However, the top tax rate reductions appear to be associated with the increasing concentration of
income at the top of the income distribution. As measured by IRS data, the share of income
accruing to the top 0.1% of U.S. families increased from 4.2% in 1945 to 12.3% by 2007 before
falling to 9.2% due to the 2007-2009 recession. At the same time, the average tax rate paid by the
top 0.1% fell from over 50% in 1945 to about 25% in 2009. Tax policy could have a relation to
how the economic pie is sliced—lower top tax rates may be associated with greater income
disparities.
42
http://graphics8.nytimes.com/news/business/0915taxesandeconomy.pdf

Trickle down is a FAILURE.. always was, always will be.....................

09-23-2012, 05:52 PM   #2
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Finally, a word to describe our current political situation.

Ineptocracy (in-ep-toc'-ra-cy) - a system of government where the least capable to lead are elected by the least capable of producing, and where the members of society least likely to sustain themselves or succeed, are rewarded with goods and services paid for by the confiscated wealth of a
diminishing number of producers.

Last edited by arnold; 09-23-2012 at 06:11 PM. Reason: Formatting
09-23-2012, 06:54 PM   #3
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QuoteOriginally posted by arnold Quote
Finally, a word to describe our current political situation.

Ineptocracy (in-ep-toc'-ra-cy) - a system of government where the least capable to lead are elected by the least capable of producing, and where the members of society least likely to sustain themselves or succeed, are rewarded with goods and services paid for by the confiscated wealth of a
diminishing number of producers.
Fed doesn't need your money to spend.. As for the rest.. Take your "grievance" to the Tax Policy Center..

Facts are facts and that is all they are...........

QuoteQuote:
In his Boca Raton meeting with donors, however, Mr. Romney revealed his real plan, which is to rely on magic. “My own view is,” he declared, “if we win on November 6, there will be a great deal of optimism about the future of this country. We’ll see capital come back, and we’ll see — without actually doing anything — we’ll actually get a boost in the economy.”

Are you feeling reassured?

In fairness to Mr. Romney, his assertion that electing him would spontaneously spark an economic boom is consistent with his party’s current economic dogma. Republican leaders have long insisted that the main thing holding the economy back is the “uncertainty” created by President Obama’s statements — roughly speaking, that businesspeople aren’t investing because Mr. Obama has hurt their feelings. If you believe that, it makes sense to argue that changing presidents would, all by itself, cause an economic revival.

There is, however, no evidence supporting this dogma. Our protracted economic weakness isn’t a mystery, it’s what normally happens after a major financial crisis. Furthermore, business investment has actually recovered fairly strongly since the official recession ended. What’s holding us back is mainly the continued weakness of housing combined with a vast overhang of household debt, the legacy of the Bush-era housing bubble.

By the way, in saying that our prolonged slump was predictable, I’m not saying that it was necessary. We could and should have greatly reduced the pain by combining aggressive fiscal and monetary policies with effective relief for highly indebted homeowners; the fact that we didn’t reflects a combination of timidity on the part of both the Obama administration and the Federal Reserve, and scorched-earth opposition on the part of the G.O.P.
http://www.nytimes.com/2012/09/24/opinion/krugman-the-optimism-cure.html
guess you believe in "magic"...........
QuoteQuote:
Back to the optimism thing: It’s true that some studies suggest a secondary role for uncertainty in depressing the economy — and conservatives have seized on these studies, claiming vindication. But if you actually look at the measures of uncertainty involved, they’ve been driven not by fear of Mr. Obama but by events like the euro crisis and the standoff over the debt ceiling. (O.K., I guess you could argue that electing Mr. Romney might encourage businesses by promising an end to Republican economic sabotage.)

You should also know that efforts to base policy on speculations about business psychology have a track record — and it’s not a good one.
Back in 2010, as European nations began implementing savage austerity programs to placate bond markets, it was common for policy makers to deny that these programs would have a depressing effect. “The idea that austerity measures could trigger stagnation is incorrect,” insisted Jean-Claude Trichet, then the president of the European Central Bank. Why? Because these measures would “increase the confidence of households, firms and investors.”
At the time I ridiculed such claims as belief in the “confidence fairy.” And sure enough, austerity programs actually led to Depression-level economic downturns across much of Europe.

Yet here comes Mitt Romney, declaring, in effect, “I am the confidence fairy!”

Last edited by jeffkrol; 09-23-2012 at 07:25 PM.
09-23-2012, 08:37 PM   #4
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QuoteOriginally posted by jeffkrol Quote
Fed doesn't need your money to spend.. As for the rest.. Take your "grievance" to the Tax Policy Center..

Facts are facts and that is all they are...........


http://www.nytimes.com/2012/09/24/opinion/krugman-the-optimism-cure.html
guess you believe in "magic"...........
I will ask the question from the flip side. Instead of asking, "Does cutting taxes on the rich and wealthy stimulate the economy?" I ask, "Does increasing taxes on the rich and wealthy help stimulate the economy? I bet a question like this wouldn't even come into a liberals mind.

I think there are other factors in play rather than minor tax hikes and cuts. The major tax cut back in the 1980s was from 70% to 28% if I am not mistaken. This of course was much larger than the minor hikes and breaks within the past 20 years or so. I suspect economies react more to people who have faith in the possibility of positive future prospects of doing business in a fairly stable environment. It would be interesting to know the outlook of the rich and wealthy in this day and age.

Just some thoughts from a free thinker.

09-23-2012, 10:26 PM   #5
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QuoteOriginally posted by les3547 Quote

On the other side of the coin, it is no accident that people who like to share are also the happiest people.
Right, and if they like to share, there is no need to force them to do it is there? Unless you think most people are Grinches who need forcing. Statists assume while they 'care', there are so many others who lack their noble qualities, they need to be forced to do what they decide they should do. Private insurance, voluntary help and charity won't cut it for them.

To force others to do what they chose not to do voluntarily, is hardly benevolence towards others. Just to be clear here; the issue isn't whether or not one should give a beggar a dime, it's whether you have a right to decide this for yourself, and who owns your life.

Attacking someone's character because he wants to make his own choices, and calling him an unhappy Grinch doesn't address this issue. Additionally, the assumption, that someone who would prefer to make his own decisions about whom he wants to help, would never extend a helping hand, is disingenuous. The moral high ground does not belong to those who use force to get their way.
09-24-2012, 05:29 AM   #6
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Why the economy is weak.. in one picture:
09-24-2012, 05:35 AM   #7
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QuoteOriginally posted by arnold Quote
Right, and if they like to share, there is no need to force them to do it is there? Unless you think most people are Grinches who need forcing. Statists assume while they 'care', there are so many others who lack their noble qualities, they need to be forced to do what they decide they should do. Private insurance, voluntary help and charity won't cut it for them.
That is because it is proven NOT TO WORK ..

09-24-2012, 05:41 AM   #8
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QuoteOriginally posted by traderdrew Quote
I will ask the question from the flip side. Instead of asking, "Does cutting taxes on the rich and wealthy stimulate the economy?" I ask, "Does increasing taxes on the rich and wealthy help stimulate the economy? I bet a question like this wouldn't even come into a liberals mind.
Of course it occurs to every thinking person, liberal or conservative. It depends upon what you do with the money. (Yes, Jeff, assuming you need taxes at all) Taking money from middle class individuals cuts spending in the economy. Taking it from richer taxpayers cuts back on capital. At a given time, one or the other may be more harmful or helpful.

If there is available capital and too little demand, then money stowed away by the wealthy does nothing to stimulate the economy, while using the money to build infrastructure or even to keep others afloat will put money in the system.

In addition, it provides incentives for employment. If most of the money which is not paid in wages or other direct business investment would end up in taxes, then a wealthy person may have incentives to hire or invest and grow the business. Let's say in 1960, I'm making $200k (a princely sum for the time). I have 10 employees. We get by but there would be more capacity and more ease of work with another employee. Tax on income above $200k was 80%, so a $6k per year employee will cost me only $1,200 out of my pocket. I'd hire. Now it is flipped, with the wealthy paying as little as 15% and no more than 35%, and the equivalent $30k salary costs as much as $25,500 out of my pocket. It's a tougher call. I think we will make do and I'll put the $25k in the Caymans.

Last edited by GeneV; 09-24-2012 at 05:47 AM.
09-24-2012, 05:51 AM   #9
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QuoteOriginally posted by traderdrew Quote
I will ask the question from the flip side. Instead of asking, "Does cutting taxes on the rich and wealthy stimulate the economy?" I ask, "Does increasing taxes on the rich and wealthy help stimulate the economy? I bet a question like this wouldn't even come into a liberals mind.
Oh it comes to mind.. and the only reason your thought is in error is because we currently have 2 realities

1)CUT TAXES ON THE RICH, BROADEN THE INTAKE i.e taxes on EVERYONE else(and cut benfits too)
The fake reality is during these times we need to cut taxes to the rich and cut other means of injecting liquidity into the system.. i.e. gov. money in the form of spendable benefits..
Soo if the argument was cut taxes on the wealthy YET remove money from the economy in terms of new taxes "broadn the base" or cuts in gov. employment and aid AT BEST this is a zero sum game for economic liquidity (really tilts more to negative)
2)We need to cut taxes ESPECIALLY in the largest "spending class" i.e. poor middle class because the economy is choking from too few consumers.
AND we need to spend into the economy.. Otherwise surprise surprise.. recovery is slooooooooooow...
Increase programs intended to stimulate the economy. (from mortgage/debt forgiveness to increasing minimum wage/gov wage and even gov. employment.you would win... which brings us to the real reality INCREASE LIQUIDITY in the economy in any means possible starting w BOTTOM UP as that will grasese the wheels of capitalism MORE than any "upper income cuts" AS IS CLEARLY proven..

first thing would be to eliminate all Fed payroll taxes..........

UNTIL we realize that
QuoteQuote:
"Reagan proved deficits don't matter" (Dick Cheney)
AT THIS juncture ALL WE can hope for is a "pretend raise" on the upper class to avoid a GASH of money from being removed from the lower classes and or infastructure.

As raising taxes on the upper class affects the economy only slightly.... WELL these are your rules not mine.............

I'm all for not raising taxes on the "upper classes" IF you are all for spending on the lower classes.. Until you UNDERSTAND this is actually possible and fiscally sound this arguement will never end..
The fight is not to "raise taxes" but to prevent other cuts...........
09-24-2012, 06:09 AM   #10
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QuoteOriginally posted by GeneV Quote
. (Yes, Jeff, assuming you need taxes at all)

Well every engine needs a governor to keep it from over revving and destructing..

just hard to see the need for one when you are going 1MPH............

The main problem w/ "selling tax"es" on this level is who would want to pay taxes to slow the economy.. Much easier to sell them as "needed for defense"..and again "this system" we have now was really only fully placed in 1972.. It takes time..

Shifting the meme from "going broke" to "debasing currency" doesn't work so well for their side either..Everyone understands "broke" few care to understand "debasement of currency"..
09-24-2012, 06:17 AM   #11
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QuoteOriginally posted by jeffkrol Quote
Shifting the meme from "going broke" to "debasing currency" doesn't work so well for their side either..Everyone understands "broke" few care to understand "debasement of currency"..
A similar change would be true for talking about Medicare or SS. They will not go "broke" if required to live only from their trust funds, they would just have to cut back on benefits, which is the solution that the GOP propose for them anyway.
09-24-2012, 07:02 AM   #12
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QuoteOriginally posted by GeneV Quote
A similar change would be true for talking about Medicare or SS. They will not go "broke" if required to live only from their trust funds, they would just have to cut back on benefits, which is the solution that the GOP propose for them anyway.
Medicare an Soc Sec is generally "spent back" into the economy.. If anything benefits should increase at this juncture...but that won't happen.
One of my off the cuff "solutions" was to actually lower the retirement age to purge the system of workers and increase discretionary spending.. Yes it would be more complicated than that but... it is arguably a better idea than austerity for the economy...

We really have to move away from the idea that the FED finances needs to be "balanced"... it doesn't........... and i would harm everyone.. but the 1% who are "mobile" in finances..
09-24-2012, 07:06 AM   #13
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Mitt Romney admits he’ll need to raise taxes on the middle class
QuoteQuote:
So the study Romney is promoting — the one he says is the study you should be looking at — actually shows even under the most favorable assumptions possible, he’s going to have to raise taxes on the people he defines as the middle class. In saying that that study is credible, he has admitted he can’t make his tax promises add up. And yet he constantly, repeatedly says the opposite.

Romney has clearly calculated that there aren’t many people who read these analyses. If he just keeps saying his tax plan can cut taxes on the rich while cutting taxes on the middle class while not cutting taxes on the rich while not costing a dime, eventually, his version of this will come to be seen as the truth. And perhaps he’s right. But the numbers show what they show.
FAIL.......
09-25-2012, 07:04 AM   #14
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You can say what you want but the FACT is under W we had the largest intake of federal tax money.
09-25-2012, 07:11 AM   #15
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QuoteOriginally posted by JohnInIndy Quote
You can say what you want but the FACT is under W we had the largest intake of federal tax money.
and one of the largest outtakes...

and what are "intakes" without growth:

http://mediamatters.org/research/2012/07/11/fox-news-inflates-impact-of-bush-tax-cuts/187072
QuoteQuote:

Former Reagan Economist Bruce Bartlett: "The 2001 Tax Cut Did Nothing To Stimulate The Economy."
Bartlett: Bush Tax Cuts "Did Not" Increase Rate Of Economic Growth.
Center For American Progress: Under Bush Tax Policies, Jobs Growth Was "Anemic" And Economic Growth Was "Much Slower."
CBPP: Bush Economic Expansion "Was Sub-Par Overall."
Economic Policy Institute: After Bush Tax Cuts Were Enacted, Economy Experienced "The Worst Economic Expansion Of The Post-War Era."
Revenue As A Share Of The Economy Fell During Bush Administration And Never Recovered.
CBPP: "Congressional Budget Office Data Show That The Tax Cuts Have Been The Single Largest Contributor" To Budget Deficits.
CBPP: "Virtually The Entire Federal Budget Deficit Over The Next Ten Years" Is Due To Bush Policies, Economic Downturn
Believe in VOODOO Economics all you want.. will not change the facts.............

consider the "source" eh..
QuoteQuote:
Fox News anchor Jon Scott claimed the Bush tax cuts generated growth and substantially increased revenue. In fact, economists say the Bush tax cuts produced anemic growth at best while creating substantial budget deficits that persist to this day.
your FACT is not quite err "factual" taking the whole story. but a great little conservative "compartment" to live in..........

Last edited by jeffkrol; 09-25-2012 at 07:27 AM.
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