Re: U.S. Economy Shrinks By Most Since Great Recession in 1Q
You really are hopeless, try to understand that the deficit is made up of two parts, public debt and intergovt. holdings which includes SS and Medicare....
Read the Fact Check. Both including and excluding SS, there was a surplus in the Clinton years. Nor did Bush 43 change the accounting methods at all. No matter how you slice it, Bush 43 wound up generating higher deficits than Clinton.
I am still waiting for you to explain to me how you keeping more of what you earn is an expense to the govt?
I never said it was an "expense." To oversimplify, the government has REVENUES and EXPENDITURES. When you cut taxes, then revenues fall. When there's a recession and aggregate income falls, then revenues fall.
Can you explain to me how in 2007 with the Bush tax cuts in place that we had record income tax revenue?
Sure. We were in a huge financial and real estate bubble, which generated lots of income. When the bubble burst -- as the Bush administration should have known, though I do accept that it would have been extremely difficult and politically painful for them to do much about it -- revenues fell through the floor.
Can you explain to me how during the Bush years, we had record income tax revenue, and the deficits shot through the roof? It's not like Bush 43 radically changed the way Social Security was managed.
Only in the liberal world is human behavior ignored.
On the contrary, at least a few progressives recognize the importance of behavioral economics, and the limits (and strengths) of classical economics.
You seem to think that the economy would continue to create jobs in spite of tax policy and that the revenue generated by the tax cuts would have happened without them. Prove it?
It depends on the tax cut.
Let's say the President passes a tax cut that makes you pay an extra $2500 per year to hire someone. That's going to influence your hiring practices. In fact, it's going to influence you
more than getting an annual $2500 tax credit for hiring that same employee.
Or, let's say you increase taxes for low income earners. In addition to making life difficult for those low earners, they're going to spend less, which (due to the multiplier effect) means less economic activity in the broader sense. That might affect hiring.
But not all tax cuts work the same way. Higher earners have increasingly marginal effects for a tax cut. If you earn $25,000 a year and you have to pay an extra $2500 in taxes, it's going to hurt. If you earn $250,000 a year and you have to pay an extra $2500, you won't be happy but it won't make you homeless. If you earn $2,500,000 a year, you won't even notice -- especially if your $250/hour accountant can escape that tax obligation.
High earners are also individuals are already earning far more than any reasonable needs, and their surplus funds are mostly being hoarded -- e.g. as stock holdings, maybe in real estate. Some of those funds will also leave the US. The effects on investment for raising capital gains, or by increasing the top marginal tax rate by 5%, are going to be
very small.
Now, if we were at top marginal tax rates of 80%, and the President says "I'd like another 5% of that kthx,"
then that's a big problem, because you're basically at Laffer Curve territory. Those wealthy people will start taking action, and maybe that will have an effect. A 35% top marginal tax rate, however, is nowhere near Laffer Curve territory. It's not going to raise revenues much, but it also isn't going to "kill jobs."
