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JEC: Ryan/Romney would raise middle class taxes

Gimmesometruth said:
NO NO NO NO NO.......the cuts will pay for themselves.....besides, deficits don't matter.
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Rate cuts that increase growth do pay for themselves. Over time.

However, we have reached the point of diminishing returns with that one. The lower-hanging-fruit now is in tax code simplification; with nominal rate reductions to match, keeping effective rates the same. Everyone (broadly, across income brackets) sends the same amount of money to Uncle Sam, but the massive amounts of money that we spend in tax compliance is no longer being wasted in the paperwork. That's why the President's Debt Reduction Commission suggested such a thing, and it's why Congressional Republicans (and now their Presidential Candidate) rely on a similar plan to spur growth.
 
I found an interesting bit on the issue:


max-income-tax-rate-and-federal-tax-receipts-1946-2014.jpg

What we find in looking at the lower chart is that the federal government's tax collections from both personal income taxes and all sources of tax revenue are remarkably stable over time as a percentage share of annual GDP, regardless of the level to which marginal personal income tax rates have been set.

We also find that both total and personal income tax receipts appear to follow a normal distribution with respect to time. We calculate that personal income tax collections as a percentage share of GDP from 1946 through 2006 has a mean of 8.0%, with a standard deviation of 0.8%, which we've indicated by the horizontal orange band on the chart. We would expect that annual personal income tax collections would fall within the range indicated by the orange band some 68.2% of the time. We've also indicated upper and lower limits for personal income tax receipts, which correspond to the mean value we observe plus or minus three standard deviations, as we would expect personal income tax collections in any given year to fall within this range some 99.6% of the time.

Likewise, we see a similar pattern in total tax receipts. Here, we observe that total tax collections as a percentage share of annual GDP over the historic and forecast period have a mean value of 17.8% with a standard deviation of 1.2%.
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Read More.
 
Redress said:
Quick look I see that the US GDP is 14.5 trillion(that may be off, I made just a quick look). Therefore a 1 % change is 145 billion dollars. Over the last 12 years, it has gone from a high of ~21 to a low of about ~15 percent. Using my GDP number(which will admittedly exaggerate the number somewhat) that is a 870 billion dollar difference. We spent less than that in 2010(most recent numbers I found in a fast look) on the military. Stop and let that sink in. That is well over half of the deficit in 2011.
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1. The DOD budget for FY2011 was $526 Bn.

2. The FY2011 Deficit was $1.3 Trillion.

3. Federal Revenue for FY2011 was $2.3 Trillion

4. Interest Payments were $230 Bn

5. So what does that mean? :)
 
AdamT said:
A new report by the Joint Economic Committee analyzed the Paul Ryan tax plan, which has been endorsed by Mitt Romney. Bottom line, and no surprise: tax hikes for the middle class and huge tax cuts for the rich.

Awesome.
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The report, prepared by Senate Democrats
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Nuff said!
 
AdamT said:
A new report by the Joint Economic Committee analyzed the Paul Ryan tax plan, which has been endorsed by Mitt Romney. Bottom line, and no surprise: tax hikes for the middle class and huge tax cuts for the rich.



Awesome.
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I don't see this as necessarily being a bad thing. It'll probably work out great for the economy, as a matter of fact. All that extra money not being siphoned off of the rich will help spur the economy, and tax increases for the middle class will awaken them to the fact that they actually have to take responsibility too for all the government spending that happens. If anything, it'll help cut the size of government down to a more reasonable level.
 
The brackets really mean absolutely nothing. Effective rate on the other hand bears discussion regarding effects on growth, gdp, and revenue. My reading tells me the effective rate of top earners has always averaged somewhere between 16% and 22%, so all this hype about how much taxes on the wealthy has changed and how it has affected the economy is largely BS. If anyone has one of those nice neat charts that represents changes in effective rates, I'd like to see that one. It seems that effective rate data is a little tougher to come by, though.

Clearly it hasn't worked very well since 2008.

Meanwhile, the 2010 Economic Report of the President included a table that showed "that the effective tax rates that applied to high-income taxpayers reached their lowest levels in at least half a century in 2008." The table (labeled table 5-8) had data running back to 1960 and for both taxpayers earning at least $250,000 and taxpayers earning over $2 million. The table mirrors the Piketty-Saez data in that the 2008 levels are at or near lows for the period, with only the early 1990s coming close.
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PolitiFact | Barack Obama says tax rates are lowest since 1950s for CEOs, hedge fund managers
 
Joe51 said:
The brackets really mean absolutely nothing. Effective rate on the other hand bears discussion regarding effects on growth, gdp, and revenue. My reading tells me the effective rate of top earners has always averaged somewhere between 16% and 22%, so all this hype about how much taxes on the wealthy has changed and how it has affected the economy is largely BS. If anyone has one of those nice neat charts that represents changes in effective rates, I'd like to see that one. It seems that effective rate data is a little tougher to come by, though.

Clearly it hasn't worked very well since 2008.



PolitiFact | Barack Obama says tax rates are lowest since 1950s for CEOs, hedge fund managers
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You need to do some more reading. While its true that the effective rate hasn't changed much for the middle class, it is about HALF what it was for the richest Americans in the 50s and 60s. http://elsa.berkeley.edu/~saez/piketty-saezJEP07taxprog.pdf

Article is a bit dated, though. Now I think the wealthiest pay about 1/3 what they used to pay.
 
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AdamT said:
You need to do some more reading.
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Such is always the case... If I could find a way to get paid for trying to dig through the BS, I expect I would be a wealthy man. It's hard to see anything but what they want you to see.

Thanks for the source. I look forward to seeing what these gentlemen compiled. I don't know that I'll get through it until mid next week, but your effort is appreciated, as is everyone else's here. November's coming fast! I'd hate to be on the wrong side of history.
 
cpwill said:
Rate cuts that increase growth do pay for themselves. Over time.
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By your own data and admittance, Bush's did not. That was the point.....that you avoided...again.
 
AdamT said:
You need to do some more reading. While its true that the effective rate hasn't changed much for the middle class, it is about HALF what it was for the richest Americans in the 50s and 60s. http://elsa.berkeley.edu/~saez/piketty-saezJEP07taxprog.pdf

Article is a bit dated, though. Now I think the wealthiest pay about 1/3 what they used to pay.
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So you are saying that someone in the 35% bracket is paying a third of what he/she used to pay. Without taking into account another nearly 10% in NY and california. So you can show use where the top bracket was 105% FIT, and where state taxes in NY and Calif were 30%?
 
washunut said:
So you are saying that someone in the 35% bracket is paying a third of what he/she used to pay. Without taking into account another nearly 10% in NY and california. So you can show use where the top bracket was 105% FIT, and where state taxes in NY and Calif were 30%?
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No, that's not what I'm saying. Learn the difference between marginal and effective tax rates.
 
cpwill said:
I don't think you understand what you are talking about. Hauser, as near as I can tell, does not magically ascribe a number without drivers. He simply points out that nominal tax rates are nothing close to being the most powerful drivers, and attempts to dramatically increase revenue through hiking rates are therefore exceedingly unlikely to succeed. This is a claim that the experience of the several states repeatedly bears out - as tax hike attempts have failed dramatically in Maryland, New York, Oregon, Illinois, California...
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This is Hauser's Law as put forth by Hauser himself: "No matter what the tax rates have been, in postwar America tax revenues have remained at about 19.5% of GDP"

He does put forth a magical number.



Hausers Law does not say that revenue will be 19%. It says that it has always been about 19%. You continue to fail to take into account the fact that Hausers Law allows for a range - and one which includes recent revenue collection. Consider the year 1948:

2010NationalRightToWorkLuntzUnionMemberSurvey.pdf


We have been down to 15% and a bit below before. We have also been above 19% before.

Plenty of factors effect revenue. Hausers' Law simply points out that Tax Rates clearly isn't the critical or even a major driver. Hauser gives the broad range, other factors tend to push it around within that range. In raw dollars the largest determinant of Revenue is demonstrated to be GDP. Within the range of GDP the largest determinant of Revenue appears to be relative size of government which is generally also connected to growth (a rapidly growing private sector outpacing a public one). This means that dollars cut may actually have the multiplier effect that Keynesian's have been claiming (and failing to demonstrate) for dollars spent.
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No one is claiming he did not put forth a range. In fact that is the important thing. That range is broad. As the data shows, tax rates in fact do have an effect, and it can be significant. No one is claiming it is the only effect, but that the downplaying of that effect by those who reference Hauser's law is inaccurate.

What massive tax cut happened in 2009 that was able to drive revenue down to 15% of GDP, and why did even larger tax cuts in the 1980's not produce a larger effect?
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Who claimed "massive"?

What a fascinating claim given that you rigorously oppose applying that standard to Keynesian Stimulus Theory most especially in the example of the 2009 Stimulus Package.
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What the hell are you even talking about?

Actually what he did was look at tax rates in a vacuum. As I've pointed out to you - the relative size of government is huge. Within the impact of rates, for example, the 90's income tax hikes are counteracted not a little by the growth effects of the capital gains rates cuts, but are counteracted quite a bit by the relative shrink in the size of government, which had a strongly positive effect on Revenue as a % of GDP. However, he is also correct to point out that tax cuts are more stimulative. It's worth noting that he actually underscores this effect by not also running a comparison against spending hikes.
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Thank you Captain Obvious. Yes, he looked at tax rates in a vacuum. You will note I made it a point to use the word "may" in there. The problem is that when isolating out any variable it looks at it in a vacuum. What his numbers show is that things may be much more complex than cut taxes, grow the economy.
 
What Conservatives continue to gloss over with more and more bs is the simple fact that their policies of cutting taxes, cutting government and cutting regulations have not produced the benefits they've told the poor and middle class it would produce. It's only benefitted the very top of earner in our society. Republicans have been in charge for most of the past 50 years and yet we have a massive deficit, a crumbling infrastructure and a shrinking middle class.

It's not working. The solution you Conservatives are once again advocating is... more tax cutting, more government cutting and more cutting of regulations. What part of it's not working do you not get?
 
cpwill said:
Rate cuts that increase growth do pay for themselves. Over time.
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I suspect this to be true. The question is over what time frame, and if it is the most efficient way to grow the economy. Tax cuts that pay for themselves over, say, 50 years, are not very efficient and it is hard to describe them as anything other than a reduction in revenue.

However, we have reached the point of diminishing returns with that one. The lower-hanging-fruit now is in tax code simplification; with nominal rate reductions to match, keeping effective rates the same. Everyone (broadly, across income brackets) sends the same amount of money to Uncle Sam, but the massive amounts of money that we spend in tax compliance is no longer being wasted in the paperwork. That's why the President's Debt Reduction Commission suggested such a thing, and it's why Congressional Republicans (and now their Presidential Candidate) rely on a similar plan to spur growth.
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I agree with your first sentence. Any gains from cutting taxes at this point is going to be negligible. However, I feel that this is exactly the wrong time to be making any major changes to the tax code. Any such changes will inevitable have unforeseen ramifications and while the economy is shaky is the wrong time to be rolling dice. I also thing that the Ryan plan is the wrong way to go about it, and would have to see all the details, not a "pass it to find out what is in it" type plan before I could even marginally support it.
 
AdamT said:
No, that's not what I'm saying. Learn the difference between marginal and effective tax rates.
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I understand the difference. I also understand that the tax reform of 1986 lower the amount of deductions materially thus while the marginal rate came down a lot the effective rate not so much.

My sense is that you also know that so any comparison between rates today and back in the 50s or 60s is meant to deceive, some would say lie. You also know that state and local taxes have increased dramatically since that time as did payroll taxes both rate and income limit. You also know that taxes on the lower end other than payroll taxes have been essentially wiped out and that includes state taxes.

I wish you could be a bit more honest and we could really debate issues. Half truths and soundbites is great for gotcha politics but not sure your type of campaign can sway any thoughts as it is one campaign slogan after another.
 
Tettsuo said:
What Conservatives continue to gloss over with more and more bs is the simple fact that their policies of cutting taxes, cutting government and cutting regulations have not produced the benefits they've told the poor and middle class it would produce. It's only benefitted the very top of earner in our society. Republicans have been in charge for most of the past 50 years and yet we have a massive deficit, a crumbling infrastructure and a shrinking middle class.

It's not working. The solution you Conservatives are once again advocating is... more tax cutting, more government cutting and more cutting of regulations. What part of it's not working do you not get?
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Embarrassed that this is the best we can get from someone in Brooklyn!?

I am a democrat but I find it silly to blame one party or the other for the mess we are in. Also never in the last 50 years has the republican party controlled the senate,house and the presidency.

We are in a mess because both parties have failed us. Not sure what the answer is, but blindly attacking one side is what got us in this mess. We have tried that for the last decade. How has that worked for you?
 
washunut said:
I understand the difference. I also understand that the tax reform of 1986 lower the amount of deductions materially thus while the marginal rate came down a lot the effective rate not so much.

My sense is that you also know that so any comparison between rates today and back in the 50s or 60s is meant to deceive, some would say lie. You also know that state and local taxes have increased dramatically since that time as did payroll taxes both rate and income limit. You also know that taxes on the lower end other than payroll taxes have been essentially wiped out and that includes state taxes.

I wish you could be a bit more honest and we could really debate issues. Half truths and soundbites is great for gotcha politics but not sure your type of campaign can sway any thoughts as it is one campaign slogan after another.
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Well, I suggest you read the article I linked to above. The effective tax rate that the wealthiest Americans pay today is AT LEAST half what it was in 1960.

So please stop throwing around completely unsupported accusations about honesty. You really have no room to speak.
 
washunut said:
Embarrassed that this is the best we can get from someone in Brooklyn!?

I am a democrat but I find it silly to blame one party or the other for the mess we are in. Also never in the last 50 years has the republican party controlled the senate,house and the presidency.

We are in a mess because both parties have failed us. Not sure what the answer is, but blindly attacking one side is what got us in this mess. We have tried that for the last decade. How has that worked for you?
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OMG, WTF are you talkinga about? The Republicans controlled the WH and both houses of Congress for most of W's presidency. :lol:

"I wish you could be a bit more honest and we could really debate issues."
 
washunut said:
Embarrassed that this is the best we can get from someone in Brooklyn!?

I am a democrat but I find it silly to blame one party or the other for the mess we are in. Also never in the last 50 years has the republican party controlled the senate,house and the presidency.

We are in a mess because both parties have failed us. Not sure what the answer is, but blindly attacking one side is what got us in this mess. We have tried that for the last decade. How has that worked for you?
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The whole both "parties are bad, so vote Republican because we hate the government too" is tiresome and ignores the facts. BTW, Republican is a party, Conservative is an ideology. I'm addressing Conservatism as it's seen in today's politics. Conservatism advocates lower taxes, cutting regulations and cutting government (but only programs that benefit the poor and middle class). This approach has not worked. It has not produced a balance budget and certainly didn't produce the prosperity for all it's proponents love to claim.

Now Conservatives want to say that Romney will give us prosperity by implementing his agenda. But, when we actually look at which presidents actually helped to bring down the deficit and improve the poor and middle class (and thus all as these are the classes that spend the most and create the most jobs), it's not under Conservative presidents but Progressive ones.
 
Tettsuo said:
The whole both "parties are bad, so vote Republican because we hate the government too" is tiresome and ignores the facts. BTW, Republican is a party, Conservative is an ideology. I'm addressing Conservatism as it's seen in today's politics. Conservatism advocates lower taxes, cutting regulations and cutting government (but only programs that benefit the poor and middle class). This approach has not worked. It has not produced a balance budget and certainly didn't produce the prosperity for all it's proponents love to claim.

Now Conservatives want to say that Romney will give us prosperity by implementing his agenda. But, when we actually look at which presidents actually helped to bring down the deficit and improve the poor and middle class (and thus all as these are the classes that spend the most and create the most jobs), it's not under Conservative presidents but Progressive ones.
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I thought your skills embarrassed Brooklyn before. I should have waited for this one. Where do I say or intimate vote republican, we hate government too.

Hopefully before you graduate high school, your reading comprehension will improve.
 
AdamT said:
Well, I suggest you read the article I linked to above. The effective tax rate that the wealthiest Americans pay today is AT LEAST half what it was in 1960.

So please stop throwing around completely unsupported accusations about honesty. You really have no room to speak.
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We live in a materially different world than 1960. Even your deity, President Obama would not advocate anything that would get us to a 70% effective tax rate.
 
washunut said:
I thought your skills embarrassed Brooklyn before. I should have waited for this one. Where do I say or intimate vote republican, we hate government too.

Hopefully before you graduate high school, your reading comprehension will improve.
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Awesome! You've added nothing and attempted an insult all in the same post. Typical Conservative move. Thanks for living up to the hype.
 
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