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Obama: No Deal Without Tax Hikes

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Taylor said:
The green line is wishful thinking. Without the military spending of the 80s, the fall of the USSR is questionable. Trade would have been much more restricted, and Clinton would not have balanced the budget without the slashes in military funding.
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Perhaps we will become capable of learning from history one day. :sun
 
Boo Radley said:
This would be what we were talkng about:

Florida has the fifth lowest corporate income tax rate in the country at 5.5 percent, trailing only South Dakota, Alaska, Wyoming and Nevada — states hardly in Florida's league. Yet Florida's unemployment rate remains far higher than the 9.1 percent national average. Recently, both a Tax Foundation study and University of Central Florida economist Sean Snaith have argued that reducing taxes has no discernible impact on job growth.

It's not hard to find evidence to support such a view. Other states with much higher corporate tax rates — Connecticut, New York, Illinois, Massachusetts, New York and New Jersey — all enjoy significantly lower jobless numbers, as well as hosting the corporate headquarters of many more Fortune 500 companies per capita.

Tax cuts don't create jobs - St. Petersburg Times

There's a lot on this. It is about the mistaken notion that tax cuts create jobs and that tax increases lose jobs. There's no evidence to support that.

is switching the subject yet another tactic of yours? :coffeepap
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Not only is there no evidence to that effect, it defies logic.... jobs are created as a result of a demand for a product or service, or a perceived demand for a product or service (a company gearing up.) Cutting taxes does not create demand. You are not going to cut anyone's taxes and expect that people hire. That is lunacy.

Sorry, but cutting expenditures is a much bigger threat to an economy than adjusting taxes. Putting money into an economy has very real, measureable results (at least at the primary tiers). The idea that cutting taxes somehow benefits an economy is hypothetical at best. I am still challenging people to explain exactly how it works (and no one has, because no one on this board really knows how it works). It is just silliness.

Government Expenditure effect on the economy:

Let's say the government contracts a building maintenance service. It pays the service $1000 for a month's work. Let's say the owner makes a 20% pre-tax on the business and the rest is paid to the workers that actually do the cleaning (we will leave supplies out here for simplicity)... The owner has a $200 profit. It is taxed at 30%... $60 back to the government. The worker earns $800. Payroll taxes on that are $62 to the worker and $62 to the employer... we are now up to $184 back to the government. The worker has a $800 income... after deductions, lets call it $700. That at 30% is $210.... now the government has $390 of its $1000 back. The worker, as a lower wager earner, saves nothing and consumes everything (the remaining $590 is spent).... if they paid $100 to a plumber, he pays $30 in taxes. They buy groceries with the other $494... that store has a 20% pre-tax profit, so another $30 to the government....plus the store has workers and supplies.... so the $1000 paid by the government is a $1000 in revenue to the cleaning company, $100 in revenue to the plumber, $490 in revenue to the grocery store.... and $454 (45%) in tax receipts. This is just a two tier look, it assumes everyone pays 30% to the federal government and does not consider other state and local taxes... but it is the way the system works. it is why stimulus spending works. Of course, you need an economy to continue to move money through it.

Spending money does not fix the deficit other than it stimulates the revenue flow to the government... that will fix the deficit. $400B of revenue disappeared because the economy headed south. As my example shows you, cutting the $1000 from the government cleaning bill will have revenue consequences. it is not a $1000 saved.

Tax cut effect on the economy:

?????????? (Bueller, anyone, anyone.....)
 
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upsideguy said:
Not only is there no evidence to that effect, it defies logic.... jobs are created as a result of a demand for a product or service, or a perceived demand for a product or service (a company gearing up.) Cutting taxes does not create demand. You are not going to cut anyone's taxes and expect that people hire. That is lunacy.
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It defies logic? We instituted a "luxury tax" on things like cars and boats over a certain price. The tax didn't last long because of the negative effect it had on those items. People were laid off. The tax was cut and people were hired.

Sorry, but cutting expenditures is a much bigger threat to an economy than adjusting taxes. Putting money into an economy has very real, measureable results (at least at the primary tiers). The idea that cutting taxes somehow benefits an economy is hypothetical at best. I am still challenging people to explain exactly how it works (and no one has, because no one on this board really knows how it works). It is just silliness.
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It certainly wasn't to those working in those industries.
 
Catawba said:
I think it is a hoot that you always number your personal opinions that you offer up in your lame attempts to "refute" someone else's documented facts! :sun
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I love your rants about the rich and how everyone more industrious than you should pay more taxes
 
Catawba said:
Perhaps we will become capable of learning from history one day. :sun
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Some people certainly are. And some people certainly are not. Sadly, we have entered a period of political discourse where a persons belief system - a self imposed belief system - pretty much rules the intellectual process for far too many people. We have lots of folks on the right who believe what they believe because they want to believe it. To them, political discussion is no different than faith or religion.

Such people present very high obstacles in learning because so much of what they accept as truth or normalcy is merely a self imposed belief.
 
I love the rants about the rich, the more industrious and the government owe people a living.
 
sangha said:
CHART: Lower Taxes On The Rich Don’t Lead To Job Growth | ThinkProgress

jobsvtaxeschart0628.jpg
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If you are going to use such figures as a means to negate my comment, the least you could do is take into consideration the other factors that your chart does not recognize.

Your chart ranges from 1950-2010; let's examine the labor market from 1944 - 1950 for some background work.

The labor force came off of record low unemployment in 1944 (1.2%) and by October 1949 a minor recession pushed unemployment up to 7.9%, yet by November 1950 labor markets had stabilized (4.2% unemployment). All the while, the top marginal tax rate was roughly 88.4%!

You are probably thinking, "see, high taxes on the rich do not discourage employment growth!". What you are not taking into consideration is the composition of the said tax rates. Prior to 1942, the top marginal tax rate applied for people making over $5,000,000.00 annually (via income) which if we were to factor for inflation using the CPI it would be equivalent to around $66,000,000.00 or via the GDP deflator it would be approximately $55,300,000.00 in terms of 2010 dollars.

Following WWII, the top bracket fell to $200,000.00 (about $2,250,000 in 2010 dollars) which brings me to effective taxation.

Because i am totally unwilling to mine for effective tax data pre 1979 (of which the top rate was 70%), the numbers will not apply to the '40's '50's, 60's up to 1979, but the logic is identical and so it makes very little difference.

The effective tax rate measuring all quintiles in 1979 was only 22%, while the effective rate for the top 1% of income earners was 37.4%. How can this be? Marginal tax rates work through brackets. Let's assume there were only two brackets, 25% and 50% for incomes over $100,000.00 and $1,000,000.00 respectively. Anyone earning less than $100k pays zero in taxes. Anyone earning between $100k and $999k pays only 25% and a person earning exactly $1 million pays only 25.000005%. An income of $10,000,000.00 (in this scenario) only pays 47.5% which would be their effective tax rate. The more the brackets and closer the partitions, the lower all effective tax rates become.

Which is why there is a difference between marginal rates and effective (what you pay) rates.

========================================================

How does your chart prove that raising taxes when unemployment is @ 9.2% will be labor market neutral?

Answer: It does not!
 
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Boo Radley said:
This would be what we were talkng about:

Florida has the fifth lowest corporate income tax rate in the country at 5.5 percent, trailing only South Dakota, Alaska, Wyoming and Nevada — states hardly in Florida's league. Yet Florida's unemployment rate remains far higher than the 9.1 percent national average. Recently, both a Tax Foundation study and University of Central Florida economist Sean Snaith have argued that reducing taxes has no discernible impact on job growth.

It's not hard to find evidence to support such a view. Other states with much higher corporate tax rates — Connecticut, New York, Illinois, Massachusetts, New York and New Jersey — all enjoy significantly lower jobless numbers, as well as hosting the corporate headquarters of many more Fortune 500 companies per capita.

Tax cuts don't create jobs - St. Petersburg Times

There's a lot on this. It is about the mistaken notion that tax cuts create jobs and that tax increases lose jobs. There's no evidence to support that.

is switching the subject yet another tactic of yours? :coffeepap
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In 5/11, Fla had an unemployment rate of 10,6%
 
Goldenboy219 said:
How does your chart prove that raising taxes when unemployment is @ 9.2% will be labor market neutral?

Answer: It does not!
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Which is why I never said that. You are arguing with a phantom. My chart merely rebuts the notion that tax cuts create jobs. Your comments about all the other factors that affect job growth indicates to me that you agree with this.
 
sangha said:
Which is why I never said that. You are arguing with a phantom. My chart merely rebuts the notion that tax cuts create jobs. Your comments about all the other factors that affect job growth indicates to me that you agree with this.
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As in all answers to economic problems.... it depends. If labor markets are in a funk, raising taxes is detrimental to job creation. However; if labor markets are at (or even near) their full employment potential, tax increases for those who have a low marginal propensity to consume domestic goods will be "somewhat" employment neutral.

Raising taxes now would be a full on disaster!
 
Goldenboy219 said:
As in all answers to economic problems.... it depends. If labor markets are in a funk, raising taxes is detrimental to job creation. However; if labor markets are at (or even near) their full employment potential, tax increases for those who have a low marginal propensity to consume domestic goods will be "somewhat" employment neutral.

Raising taxes now would be a full on disaster!
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We're talking about increasing taxes on the wealthy, who have a high marginal propensity to consume domestic goods. Your own argument contradicts your own conclusion
 
sangha said:
We're talking about increasing taxes on the wealthy, who have a high marginal propensity to consume domestic goods. Your own argument contradicts your own conclusion
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The wealthy have a low marginal propensity to consume domestic goods which can be observed via savings rates throughout all income quintiles. People with negative to zero savings rates consume at 100%.

The super wealthy do not (investment ≠ consumption).
 
Goldenboy219 said:
The wealthy have a low marginal propensity to consume domestic goods which can be observed via savings rates throughout all income quintiles. People with negative to zero savings rates consume at 100%.

The super wealthy do not (investment ≠ consumption).
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You are talking percentages, not actual $$$. Taxing the wealthy does not affect their propensity to spend when their income is increasing faster than the tax they pay on that income.
 
sangha said:
You are talking percentages, not actual $$$. Taxing the wealthy does not affect their propensity to spend when their income is increasing faster than the tax they pay on that income.
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This has nothing to do with my statement. Economic uncertainty alone is enough to cut high income consumption; tax increases along with said uncertainty only makes it worse....
 
sangha said:
We're talking about increasing taxes on the wealthy, who have a high marginal propensity to consume domestic goods. Your own argument contradicts your own conclusion
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Most wealthy people aren't big spenders. That's why they're wealthy.
 
Boo Radley said:
No, you posted an Op-ed piece
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says the fella whose next post is a link to a st pete times editorial

LOL!

you really don't know how to play this game at all, do you
 
Taylor said:
Most wealthy people aren't big spenders. That's why they're wealthy.
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Which is true when considering consumption as a % of total disposable. The flip side of the coin is because they are not big spenders, increasing taxes on high income earners during (near) full employment is not a negative because their consumption pattern(s) will not change drastically.
 
june 10:

Some 37% of all net new American jobs since the recovery began were created in Texas.

Using Bureau of Labor Statistics (BLS) data, Dallas Fed economists looked at state-by-state employment changes since June 2009, when the recession ended. Texas added 265,300 net jobs, out of the 722,200 nationwide, and by far outpaced every other state. New York was second with 98,200, Pennsylvania added 93,000, and it falls off from there. Nine states created fewer than 10,000 jobs, while Maine, Hawaii, Delaware and Wyoming created fewer than 1,000. Eighteen states have lost jobs since the recovery began.
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Review & Outlook: The Lone Star Jobs Surge - WSJ.com
 
Taylor said:
A loss to Clinton in 1992.
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Where taxes were increased again and revenues increased again with job growth and a lower deficit. Tragic indeed! :sun
 
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