Re: Dem vs Rep Tax Cut Plan in Graph form!
Fifty-one pages and youo guy really haven't gotten anywhere on this issue. You're about as bad as Congress!
Seriously though, I'm not an economist nor am I an accountant. I usually stay out of these types of discussions most of the time because the priciples behind the "economic slight-of-hand" always confuse the hell outta me. So, I tend to be content watching Conservative duke it out with everyone else. :mrgreen: It gets quit commical after a while. (And that includes everyone who contributes when the discussion gets...
personal.) But when I think I have something positive to contribute or a question to ask, that's when I chime in. Such as the case now...
My brief take on the matter: IT'S GONNA TAKE A WHILE - LONGER THAN THE NATION SEEMS WILLING TO GIVE THE DEMOCRATICALLY HELD CONGRESS - TO FIX THIS NATION'S ECONOMY AND NO SINGLE WAY IS THE BE-ALL/END-ALL RIGHT WAY!!! But I think Alan Greenspan and FilmFestGuy (FFG for short) are closer to having the right ideas moreso than most for the times we currently find ourselves in.
First, Greenspan: On Meet the Press a few weeks ago, he said (and I paraphrase), "Issuing tax-cuts using borrowed money will not decrease the deficit; it will only add to it." In today's economy, I'd say he's 100% correct! There's no way we can afford to issue tax-cuts on the wealthiest wage earners in this country right now and expect to decrease the deficit while also expecting to turn our nation's economy around in short order. It's just not going to happen. Why? IMO, it's exactly as FFG points out here:
Here's why: the rich don't spend when given stimulus because they already make significantly more than they spend. Giving them more money doesn't make them spend more. They hoard it (my edit...i.e., bank it, invest it) and gain the interest from it.
Further, tax cuts [that benefit the top wage earners the most] don't create jobs. Were it the case, then the Bush tax rates (which we currently have) would be putting people back to work. It's not happening. And it didn't really happen in the mid-2000s either. The "boom" of the Bush recovery was almost exclusively given to the top 10% of earners. The remaining 90% of wage-earners only collectively shared 12% of the mid-2000s growth. If your (Conservative) philosophy of giving tax cuts to the wealthy to assist the middle class were accurate, then the growth would have been more evenly spread throughout all levels of wage-earners instead of being so specifically clumped up at the top.
The opposite is true if you lower taxes for the bottom 60% of earners. They are much more likely to spend on home improvements, electronics, clothing, and other things that will drive up demand - and increase income for the top earners.
The 2000s are the prime example of how poorly structured tax cuts can hurt the economy. They were the exact equivalent of Hoover's foolish tax cuts right before the Great Depression.
As a result, new policies need to be developed that give true incentives ONLY for hiring. You cannot give the tax cut up front, it must only be collected after hiring.
The only thing that will grow jobs is increased demand for products. You don't increase demand for products by cutting taxes for the wealthy. You cut taxes for the working and middle classes - who will then spend the money, which will then make the rich, richer (through natural market forces - not through unnecessary tax cuts).
We can agree that spending must be reigned in. But tax cuts do not solve anything if they're not properly targeted.
Additionally, who uses the nation's infrastructure more? The organic farmer or Wal-Mart? Who uses highways more? Who uses the electric grid more? Who requires more police and fire protection? Giant corporations and the wealthy use a much greater share of our government-provided infrastructure than do simple wage-earners and small businesses, and thus progressive rates are appropriate.
I'll echo one critical point FFG was attempting to make, "
properly targetted tax cuts". Now, where should some of those tax cut be? IMO...:
* Small businesses, specifically in health care cost (which I think the healthcare bill tries to do - I'll have to read up on it more...still reading it actually, but took a break from it due to personal issues in the household), equipment, payroll taxes...these things will help drive down the net operating cost of small businesses and help them to hire employees.
* Capital Gains Tax to give more people incentive to invest w/o the fear of being heavily penalized for their investment earnings.
* Earned Income Credit - while not a tax cut, it could be increased alittle on a short-term basis to provide a cushion for parents as a means to put money back in their pockets.
Again, I'm not claiming that my ideas are the best. I know I'm out of my league when it comes to these types of issues, but hey...this is an opinion-based forum, right? Where everyone is entitled to their points of view, right, wrong or indifferent.
Target tax cuts where they can be the most effective no matter how paintful they might be. If they will incentivise (small) businesses while also reducing the deficit and creating jobs, I'm all for it!