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Thread: In surprise move, GOP leaders admit defeat in payroll tax battle

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    Re: In surprise move, GOP leaders admit defeat in payroll tax battle

    Quote Originally Posted by BooRadley View Post
    In surprise move, GOP leaders admit defeat in payroll tax battle - CSMonitor.com

    GOP finally gave in to the Democrats and allowed a tax cut for the working class. I had expected them to fight against it harder than they did, but I guess it's a tight rope to walk when you're fighting against tax cuts for working people, and fighting against tax increases for super-rich people, especially when working people are having a very, very difficult time of it.

    It was fun to watch them fight against tax cuts during an election year, but it's good that they've finally capitulated and agreed to allow it.
    Republicans are fools for not wanting to increase taxes on people with incomes over $200,000 -- and raise the capital gains tax!!! They are out of touch with 90% of the American people. Right now, we need spending cuts and more revenue. Time to cut the bull****.

    (Sorry, Turtle.)
    The devil whispered in my ear, "You cannot withstand the storm." I whispered back, "I am ​the storm."

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    Re: In surprise move, GOP leaders admit defeat in payroll tax battle

    Quote Originally Posted by cpwill View Post
    no one is. we simply point out that thinking that one can raise revenue by seriously jacking up rates is historically exceedingly unlikely:



    if you want to raise revenue therefore, you have two options: 1. sell stuff (the US owns a lot of generally useless land) and 2. economic growth.


    now, Obama's plan is to continue to spend at about 24% of GDP. looking at the graph above, it should be pretty easy to see how well that is going to work.

    repealing the Bush tax cuts, in the meantime, will get us (according to a static scoring model, which is to say, if one takes the wildly optimistic option) an extra $80 billion. out of a deficit of about $1.3 Trillion. that's not even a rounding error.
    The graph is misleading due to the scale factor of the taxes line. In fact there is a huge difference in dollar terms between raising revenue at a rate of 17% of GDP and raising revenue at a rate of 20% of GDP. In 2010, for example, the difference would have been just shy of $500 billion. Projecting even that low-GDP year over ten years results in a deficit reduction of $5 trillion.

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    Re: In surprise move, GOP leaders admit defeat in payroll tax battle

    Quote Originally Posted by AdamT View Post
    I could make an equally falacious and opposite argument: cutting spending doesn't reduce deficits -- it just provides an exucse to cut taxes further.
    You are right, that is a fallacious argument.

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    Re: In surprise move, GOP leaders admit defeat in payroll tax battle

    Quote Originally Posted by AdamT View Post
    The graph is misleading due to the scale factor of the taxes line. In fact there is a huge difference in dollar terms between raising revenue at a rate of 17% of GDP and raising revenue at a rate of 20% of GDP.
    yes. just as there is an even huger difference in dollar terms between the average 20% of GDP that Bush spent, and the average 24.5% of GDP that Obama is spending.

    In 2010, for example, the difference would have been just shy of $500 billion. Projecting even that low-GDP year over ten years results in a deficit reduction of $5 trillion.
    indeed. so, now that we have agreed we prefer to collect in revenue closer to the 20% side than the 17% side... under which tax conditions do we historically see revenues coming in at closer to the 20% side? when marginal rates were higher? or lower?


    (i'll give you a hint - 1983 is sort of a big year).





    however, even that isn't as critical as it seems - because what the graph indicates is that revenues are not a direct function of tax rates. rates can fluctuate wildly without producing a comparable fluctuation in revenues - indicating that they are not controlling. but revenue does seem to generally be a direct function of GDP. If you want more revenue, therefore, you need economic growth. which you won't get by dramatically hiking marginal tax rates.
    Last edited by cpwill; 02-14-12 at 12:20 PM.

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    Re: In surprise move, GOP leaders admit defeat in payroll tax battle

    Quote Originally Posted by MaggieD View Post
    Republicans are fools for not wanting to increase taxes on people with incomes over $200,000 -- and raise the capital gains tax!!!
    ah. and at a time when we are desperately attempting to attract capital to invest in a struggling manufacturing renaissance in our shores... do you think that that will make people more likely to send their money here? or less likely to send our money here? when most small businesses that are left are surviving because they have balanced on a knife edge for three or more years now, do you think that increasing their costs while decreasing their available pool of investors will make them more likely to succeed and survive? or less likely to succeed and survive?
    Last edited by cpwill; 02-14-12 at 12:23 PM.

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    Re: In surprise move, GOP leaders admit defeat in payroll tax battle

    Quote Originally Posted by cpwill View Post
    yes. just as there is an even huger difference in dollar terms between the average 20% of GDP that Bush spent, and the average 24.5% of GDP that Obama is spending.



    indeed. so, now that we have agreed we prefer to collect in revenue closer to the 20% side than the 17% side... under which tax conditions do we historically see revenues coming in at closer to the 20% side? when marginal rates were higher? or lower?


    (i'll give you a hint - 1983 is sort of a big year).





    however, even that isn't as critical as it seems - because what the graph indicates is that revenues are not a direct function of tax rates. rates can fluctuate wildly without producing a comparable fluctuation in revenues - indicating that they are not controlling. but revenue does seem to generally be a direct function of GDP. If you want more revenue, therefore, you need economic growth. which you won't get by dramatically hiking marginal tax rates.
    Again, you really can't tell much from that graph because of the scale used for the tax line. Here's a better view:



    So in fact revenue as a percentage of GDP plunged in '83 as a result of the Reagan tax cuts. Then it gradually rose in the 90s as a result of the Clinton tax hikes, and it plunged again in the 00s due to Bush's tax cuts. Obviously other factors also play a part. There has to be a balance in tax rates keep the economy strong while maximizing revenue (Laffer curve). Presently, taxation is at a low not seen since the 1950s. It is too low.

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    Re: In surprise move, GOP leaders admit defeat in payroll tax battle

    I benefit from this tax cut.

    I don't want it. Not at the expense of further deficit issues for the longterm health of this country.

    Just my typical "greedy republican" self I guess. I don't want a payroll tax deduction, i don't want a ****ing right to birth control, I want government to CUT ITS OWN GODDAMN SPENDING.

    Is that so much to ask? Stop telling me that government is going to "live within its means" and then go out and try and buy votes with empty temporary cash giveaways or attempt to "live within your means" by not changing how YOU (the government) live at all but rather just by taking more means from everyone else.

    When a family has to "live within its means" it doesn't magically grant itself an additional job or a pay raise...IT STOPS SPENDING SO MUCH. How about you stop with the idiotic rhetoric that you understand the American people wants the government to live within its means like American families do and actually...I don't know...DO IT.

    It's sad to see the Republicans caved on this for political pressure. Taxes, right now, are secondary...both cutting and raising. Cut the ****ing gluttony of government, then deal with this kind of stuff.

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    Re: In surprise move, GOP leaders admit defeat in payroll tax battle

    Quote Originally Posted by Zyphlin View Post
    I benefit from this tax cut.

    I don't want it. Not at the expense of further deficit issues for the longterm health of this country.

    Just my typical "greedy republican" self I guess. I don't want a payroll tax deduction, i don't want a ****ing right to birth control, I want government to CUT ITS OWN GODDAMN SPENDING.

    Is that so much to ask? Stop telling me that government is going to "live within its means" and then go out and try and buy votes with empty temporary cash giveaways or attempt to "live within your means" by not changing how YOU (the government) live at all but rather just by taking more means from everyone else.

    When a family has to "live within its means" it doesn't magically grant itself an additional job or a pay raise...IT STOPS SPENDING SO MUCH. How about you stop with the idiotic rhetoric that you understand the American people wants the government to live within its means like American families do and actually...I don't know...DO IT.

    It's sad to see the Republicans caved on this for political pressure. Taxes, right now, are secondary...both cutting and raising. Cut the ****ing gluttony of government, then deal with this kind of stuff.
    One thing is clear, and that is that is that recessions cause deficits to rise due to lower revenue and increased safety net spending. It is sensible from a fiscal standpoint to provide short-term stimulus in order to avoid a double-dip recession, or a prolonged period of stagnation. For obvious reasons, the only form of stimulus presently available is a tax cut. Clearly we will have to cut spending and raise taxes in the mid to long term.

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    Re: In surprise move, GOP leaders admit defeat in payroll tax battle

    Quote Originally Posted by AdamT View Post
    One thing is clear, and that is that is that recessions cause deficits to rise due to lower revenue and increased safety net spending. It is sensible from a fiscal standpoint to provide short-term stimulus in order to avoid a double-dip recession, or a prolonged period of stagnation. For obvious reasons, the only form of stimulus presently available is a tax cut. Clearly we will have to cut spending and raise taxes in the mid to long term.
    Even if we accept all of that as true, here is the problem. We are now almost three years out from the end of the last recession. It is quite possible that were are closer to the next recession than we are from the last one. I know you support Obama, but you have to realize that he not only has not addressed the deficit, but he has no real plan to do so. That should trouble you. He can and should, at the minimum, embrace the findings of the debt commission that he, himself, set up. The guy should lead on the issue. He is, after all, president.

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    Re: In surprise move, GOP leaders admit defeat in payroll tax battle

    Quote Originally Posted by Fletch View Post
    Even if we accept all of that as true, here is the problem. We are now almost three years out from the end of the last recession. It is quite possible that were are closer to the next recession than we are from the last one. I know you support Obama, but you have to realize that he not only has not addressed the deficit, but he has no real plan to do so. That should trouble you. He can and should, at the minimum, embrace the findings of the debt commission that he, himself, set up. The guy should lead on the issue. He is, after all, president.
    His plan calls for gradually lower deficits, but I agree that it's too little. In my opinion all of the Bush tax cuts should be phased out over the next 3-5 years and we desperately need major Medicare reform.

    OTOH, Obama's plan is a model of sanity compared to any of the plans proposed by the GOP candidates. If you look at what Romney has proposed, it would require an across-the-board spending cut of about 36%, which would clearly cripple the government and send the economy plummeting back into recession or worse.

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