Tax Cuts Are An Expense To The Federal Government

[Mycroft]

Tax Cuts have the common sense effect on the federal register. The lower the rate, the lower the revenue.

~snipped the rest~

I read your thread title and those first two sentences and immediately knew that reading the rest of your screed would be a waste of time.

1. Definition of expense:

Money spent or cost incurred in an organization's efforts to generate revenue, representing the cost of doing business.

Read more: What is an expense? definition and meaning - BusinessDictionary.com

Taxes are a revenue...that is, money acquired. Reducing that tax is not "money spent or cost incurred". Reducing that tax is simply reducing the tax rate which may or may not result in lowering or increasing revenue.

2. Tax cuts do not have the effect you stated...necessarily. It is established fact that tax cuts very well may have the effect of INCREASING revenue.

Here is an article that speaks to that point: Three times revenue increased after tax cuts

 

[MTAtech]

you are being dishonest now. Kennedy proved my point and you change the goal posts. we get the fact that you want to punish the wealthy and that you want to grow the government. I do not. And I really don't care if tax cuts "cost" the government money. The government is far far bloated beyond its borders and needs to be starved rather severely. Those who have become addicted to sucking from the public tits need to go on a diet. Your existence is not a just claim on the wealth, work or enterprise of others.

On the contrary, it is you who are being dishonest. We had this discussion before that there is a maximum rate that economists believe that if higher will result in lower revenue. You want to assume that there is a blanket rule that lowering taxes reduces revenue. This is where it was discussed before:
https://www.debatepolitics.com/gove...axes-rates-post1065058481.html#post1065058481

 

[jimbo]

not true. sometimes a lower rate means more revenue for the government. you pretend that tax raises or decreases have no other impact on the economy. Thus you are wrong

Government has a habit of cutting off its nose to spite its face then complaining about the results of their actions. Make it more costly to do business in the US than elsewhere and the only alternative for business is to go elsewhere.

 

[Winston]

What you are not taking into account is that the tax code affects people's behavior.

I'm well aware of human nature. Billionaires make political campaign contributions, because they have a vested interest in lower taxes.

Make the tax code and/or regulation/mandates too expensive for the rich and they take their businesses, investments, commerce, and industry along with the jobs they generate to more tax/regulation friendly places. The rich don't get rich by managing their resources unwisely. Does them being encouraged to take their money elsewhere help us out here in the USA? I think not.

So, what do you favor? Ammending NAFTA? Passing protectionist tariffs? America is still a major world consumer. We are transitioning into a service based economy. And I look forward to the strides made in the energy field, over the course of my lifetime. I'm failing to see the incentive for someone to leave the country to avoid being taxed at a higher rate. I believe this to be right wing spin. Warren Buffet has contradicted conventional wisdom regarding investments. To paraphrase Mr. Buffet, he basically said, that in his 60 years in investment banking he's never seen anyone shy away from a sensible investment for fear of a tax on the potential gain. Wanting a tax system similar to what we had pre-Reagan is not a radical idea.

Take away attractive deductions from people who benefit from them and they may not feel like they can afford to help fund that museum exhibit or the new hospital wing or it makes more sense or it is more affordable to rent a place than buy one which lowers housing values and eliminates countless jobs for millions.

I think we should take deductions on a case by case basis. What is the net benefit to society? Are we hurting society, so the individual can benefit? If this is the case, get rid of that specific deduction. As for housing prices, IMO, interest rates have far more to do with mortgage lending than tax codes. The people that tax cuts are aimed at probably own 3 different places.

To assume that if you change the tax code to benefit the government, that everything else will stay the same is not at all the way to look at it.

Agreed. You have to observe complex interactions within society. Unfortunately, I'm pretty immovable on the tax code. We need to tax high income earners more, finagle corporations into paying into the society that allowed them to become so successful. If we are to succeed, we need to allow people a shot at an education and guarantee them health care, no matter the situation they are born into. They need to have upward mobility. Right now, we are giving away revenue to high income earners, increasing spending, and telling people that low taxing produces revenue. We need to reform our tax policy, to scoop the revenue we are missing on high income earners, cut spending on defense, and the war on drugs, and use the revenue to offer state-paid tuition. My argument hinges on using revenue for state-paid tuition. A more educated population gets better jobs, that pay more in taxes. Under the European system, they have a different idea of welfare. I'm taking this directly from an economist named Mark Blyth. If you want to understand how a progressive thinks of economics, look no further than Mark Blyth. Under the European model of welfare, they pay for their citizen's educations because they acknowledge, that once the student is finished, they will get a better jobs, that will pay for the elder's health care. It's a dance of cooperation, that is alien to Americans.

 

[ecofarm]

Trump promised Mexico would pay for the "Wall" he's demanding congress allocate tax money for.

That doesn't mean one can pick and choose among the tax promises to create a misleading scenario. As the OP as acquiesced, if we're gonna "what if" the proposal, let's include the whole thing.

 

[jonny5]

Interesting...but that ratio has got to be mostly for people I consider 'comfortable', not 'rich'.

To me, rich is you never have to work again and just on the interest you live on, you still lead a wealthy lifestyle...probably about $20-$25 million net worth minimum (at least a $1,000,000 per year AFTER taxes/fees/inflation).

The super rich earn 36% of their income as capital gains, so its still not the majority of their income. And they probably paid tens of millions in taxes on the wages they used to build those capital gains in the first place. So whats the point in taxing them more?

 

[Absentglare]

of all the silly posts you have made this might be the winner. a tax cut is not a pay raise any more than a thief taking less of your money is a raise.

this sort of idiotic attitude is based on the disgusting view that all wealth belongs to the government

If you work from the assumption that, "i, a rich person, deserve more free money," it should be no surprise when your "conclusion" confirms your assumption.

 

[Absentglare]

Hmm... calling a sales tax an income tax makes it OK.

The way taxes work is that any financial transaction may be subject to a tax.

When you earn money as income, that is one transaction that is taxed. When you spend that money on capital, that is a separate transaction. When you then sell that capital you bought, it is a third transaction.

Double taxation is when a single transaction is taxed more than once, and i fail to see why "double" is an effective argument with respect to tax code in either case.

In the past 50 years, there has never been a rich person who didn't have any money.

 

[TurtleDude]

If you work from the assumption that, "i, a rich person, deserve more free money," it should be no surprise when your "conclusion" confirms your assumption.

see that proves my point. You think taking less by force-from someone is giving them something. You buy into the idiocy that the government creates and owns all wealth and tax cuts are exactly the same as handouts to people whose only value to the politicians is how they vote

 

[TurtleDude]

The super rich earn 36% of their income as capital gains, so its still not the majority of their income. And they probably paid tens of millions in taxes on the wages they used to build those capital gains in the first place. So whats the point in taxing them more?

the green-eyed monster and politicians pandering to that beast

 

[Absentglare]

see that proves my point. You think taking less by force-from someone is giving them something. You buy into the idiocy that the government creates and owns all wealth and tax cuts are exactly the same as handouts to people whose only value to the politicians is how they vote

You keep reducing reality to suit your desired conclusion.

What system determines how much income people make? Is that system fair?

You don't understand that income doesn't occur in a vacuum. US dollars are worthless on Mars, for example, because there aren't businesses selling goods and services for US dollars there. Wonder why that is? Turns out money is only meaningful because of the rest of society. Who knew? Well, basically everyone, but especially economists.

 

[TurtleDude]

You keep reducing reality to suit your desired conclusion.

What system determines how much income people make? Is that system fair?

You don't understand that income doesn't occur in a vacuum. US dollars are worthless on Mars, for example, because there aren't businesses selling goods and services for US dollars there. Wonder why that is? Turns out money is only meaningful because of the rest of society. Who knew? Well, basically everyone, but especially economists.

that's really stupid and has no relevance in trying to justify taking more from the group that already subsidizes much of society. The only reason why the current system exists is that representation occurs without taxation and pandering to the many is the way to win elections rather than appealing to the majority of the tax base

 

[Absentglare]

that's really stupid and has no relevance in trying to justify taking more from the group that already subsidizes much of society. The only reason why the current system exists is that representation occurs without taxation and pandering to the many is the way to win elections rather than appealing to the majority of the tax base

Actually, you missed the point entirely. The society, through the use of tokens known as 'currency', subsidizes the lavish lifestyles of the rich. That's what being rich means, being subsidized by the rest of us who actually do the actual work.

 

[<alt>doxygen]

Tax Cuts have the common sense effect on the federal register. The lower the rate, the lower the revenue. Any burst of consumption seen on the lower end, by a relaxation of the tax burden, is rendered beyond negligible by missed revenue on high income earners. In order to maximize the government's available resources, we need to reform our tax policy. I'm open to ideas, as long as they include raising taxes on the rich and raising capital gains.

Trump is set to propose some new tax policy anytime. All the old worn out talking points will be dusted off. They are going to lie boldly, unapologetic, and knowingly right to your face. "Tax cuts create jobs" "Tax cuts boost revenue" They are going to credit tax cuts for growth, that would have existed independent of the tax cut. When the top percentiles get even more money than they need, they do not reinvest it or spend it. They save it, which has no broader impact on the economy, it has an insular impact on the lucky bank account.

Some ideas floated by Trump regarding tax policy in the past...

Ending the Estate Tax...
3 tax brackets...
Lower taxes for everyone...
Lower business taxes...

We know from history that the strategy that conservatives use to sell tax cuts to the general milieu, is that tax cuts are reinvested into the economy. History has told us this is a lie. Massive tax cuts are about transferring money to the top. High income earners don't need the extra money and they save it. A massive tax cut results in the top percentiles of income earners, keeping large chunks of money, while the lowest of percentiles keep crumbs. Allow me to demonstrate.

Let's use the top marginal tax rate of 39% for income earners of $450,000... in this small sample:
(.39)(450,000)=$175,500

We know this hypothetical person actually pays a lower effective rate than 39% through deductions available to people who can afford savvy accountants.

Let's use the same tax rate on someone who made $2,000,000. I'm going to use two million because it is a large amount of money, that will illustrate my point later on, but, it is by no means even in the ballpark of what some Wall St. and silicon valley gurus make.

(.39)(2,000,000)=$780,000, once again we should note, that this hypothetical person pays a far lower effective rate after their accountant is through.

Let's look at how much someone in the middle class pays in taxes. Median income in the United States is $51,000. The current middle class tax bracket is 25%.

(.25)(51,000)=$12,750

Let's run a hypothetical.. Let's say legislation is introduced, like Trump has proposed in the past.. which lowers the tax rate across the board. Let's say everyone gets 5 points lobbed off their marginal rate.

That brings our middle class wage earner down to 20% and our twice times millionaire down to 34%.

(.2)(51,000)=$10,200. Not bad, a 5 point reduction in his rate saved him $2,550. That's a starter car for a son or daughter, or a nice family vacation. But, let's look at how much revenue the government loses when we knock 5 points off the $2,000,000.

(.34)(2,000,000)=$680,000.. 780,000-680,000= $100,000 That's a $100,000 dollar break, on an income of $2,000,000. The sheer size of those numbers compels me to favor, giving up my extra $2,550 dollars per year, if it means we have to sacrifice that much revenue.

When you see the numbers illustrated for you, can you understand the lie? Extra consumption in the middle class can be beneficial. However, excusing the absence of important federal revenue, in the name of the middle class, is a lie as plain as day. The truth is tax cuts give extra money to people who don't need it, at the expense of deficits which reinforce the conservative favorite: cutting spending. Tax cuts are a brainchild of the right, because they disrupt the government's books, which they can then use to manufacture a debt crisis, to cut programs they disagree with ideologically, and then call Democratic programs failures. If people are genuinely for cutting taxes. They must also be for cutting spending. This includes the DoD.

So, when Donald Trump and the rest of them, tell you that they are cutting taxes for you, you'll know they are lying to you. They're cutting taxes for the rich. That is who benefits here. The Republican never introduces legislation that does not include a major win for high income earners. That is a requisite of every piece of legislation. Look at the AHCA. They outright lied to you about the AHCA and disguised tax cuts for the rich, in warm and fuzzy language, like "access" and "choice".

The unquantifiable/unprovable stimulus the tax cuts will cause will offset the revenue loss. It's never worked in the past, but hey, these guys don't know many tricks.

 

[Mach]

The super rich earn 36% of their income as capital gains, so its still not the majority of their income.

Were are you getting your information?
http://www.cnbc.com/2015/04/09/where-the-rich-make-their-income.html


FYI, top 1% is not "super rich".

 

[AlbqOwl]

I'm well aware of human nature. Billionaires make political campaign contributions, because they have a vested interest in lower taxes.



So, what do you favor? Ammending NAFTA? Passing protectionist tariffs? America is still a major world consumer. We are transitioning into a service based economy. And I look forward to the strides made in the energy field, over the course of my lifetime. I'm failing to see the incentive for someone to leave the country to avoid being taxed at a higher rate. I believe this to be right wing spin. Warren Buffet has contradicted conventional wisdom regarding investments. To paraphrase Mr. Buffet, he basically said, that in his 60 years in investment banking he's never seen anyone shy away from a sensible investment for fear of a tax on the potential gain. Wanting a tax system similar to what we had pre-Reagan is not a radical idea.



I think we should take deductions on a case by case basis. What is the net benefit to society? Are we hurting society, so the individual can benefit? If this is the case, get rid of that specific deduction. As for housing prices, IMO, interest rates have far more to do with mortgage lending than tax codes. The people that tax cuts are aimed at probably own 3 different places.



Agreed. You have to observe complex interactions within society. Unfortunately, I'm pretty immovable on the tax code. We need to tax high income earners more, finagle corporations into paying into the society that allowed them to become so successful. If we are to succeed, we need to allow people a shot at an education and guarantee them health care, no matter the situation they are born into. They need to have upward mobility. Right now, we are giving away revenue to high income earners, increasing spending, and telling people that low taxing produces revenue. We need to reform our tax policy, to scoop the revenue we are missing on high income earners, cut spending on defense, and the war on drugs, and use the revenue to offer state-paid tuition. My argument hinges on using revenue for state-paid tuition. A more educated population gets better jobs, that pay more in taxes. Under the European system, they have a different idea of welfare. I'm taking this directly from an economist named Mark Blyth. If you want to understand how a progressive thinks of economics, look no further than Mark Blyth. Under the European model of welfare, they pay for their citizen's educations because they acknowledge, that once the student is finished, they will get a better jobs, that will pay for the elder's health care. It's a dance of cooperation, that is alien to Americans.

How about the government doing no more than the government HAS to do in order to provide the common defense, promote the general welfare, and keep the states working together as one country? And allow the people themselves decide what is best for them and how they should live their lives?

 

[MTAtech]

How about the government doing no more than the government HAS to do in order to provide the common defense, promote the general welfare, and keep the states working together as one country? And allow the people themselves decide what is best for them and how they should live their lives?

The above is stunningly simplistic. We have the government that we have because the people demanded government address real problems that were not being solved.

We have an EPA because we recognized in the 1970s that the states were ill equipped to handle the level of air and water pollution that existed. We have a FDA because of the failures that allowed dangerous foods and drugs to make it to market. The same is true for the rest.

 

[jonny5]

Were are you getting your information?
http://www.cnbc.com/2015/04/09/where-the-rich-make-their-income.html
View attachment 67216730

FYI, top 1% is not "super rich".

FYI, thats just, like, your opinion, man. And I linked the source in my post.

 

[Spartacus FPV]

The above is stunningly simplistic. We have the government that we have because the people demanded government address real problems that were not being solved.

We have an EPA because we recognized in the 1970s that the states were ill equipped to handle the level of air and water pollution that existed. We have a FDA because of the failures that allowed dangerous foods and drugs to make it to market. The same is true for the rest.

So everything Government does is justified? And you dare call his position stunningly simplistic? :lamo

 

[MTAtech]

So everything Government does is justified? And you dare call his position stunningly simplistic? :lamo

That's an example of a reductio ad absurdum argument. While I can't justify "everything" because there are surely something out there worthy of cuts, the areas in which your federal government spends most of your money there is a rational argument for doing so. Back over ten years ago, it was uncovered that Alaska Senator Ted Stevens had proposed a multi-million dollar allocation to build the Gravina Island Bridge to serve 50 residents living on the island. Surely, that was wasteful spending but fortunately it isn't anything that your federal government does with any scale. As I have said many times, the vast amount of federal spending is in five areas: Social Security, Medicare, Medicaid, Defense and interest on the debt. Everything else can be eliminated and we'd still have a deficit. So, if one wants smaller government, you're either talking about cutting the big five or you don't know what you are talking about.

What is stunningly simplistic is thinking that the world today is not exponentially more complicated than the world was in the 1700s and we can be a successful nation by only having the federal government with the limited scope mentioned in post #91.

 

[Mach]

FYI, thats just, like, your opinion, man. And I linked the source in my post.

1% is the ultra-rich? Oh its not my opinion, I'm asking you to clarify your position. Ultimately if you're going to insist the top 1% is ultra-rich, I won't need to respond at all, your absurdity will be on display for anyone to see.

 

[jonny5]

1% is the ultra-rich? Oh its not my opinion, I'm asking you to clarify your position. Ultimately if you're going to insist the top 1% is ultra-rich, I won't need to respond at all, your absurdity will be on display for anyone to see.

No need to respond if youre going to be condescending.

 

[AlbqOwl]

The above is stunningly simplistic. We have the government that we have because the people demanded government address real problems that were not being solved.

We have an EPA because we recognized in the 1970s that the states were ill equipped to handle the level of air and water pollution that existed. We have a FDA because of the failures that allowed dangerous foods and drugs to make it to market. The same is true for the rest.

Sorry but I just don't buy the liberal line that everything the government does is noble and necessary and honest or their really idiotic notion that any cuts in the budget will remove necessary regulation.

 

[MTAtech]

Sorry but I just don't buy the liberal line that everything the government does is noble and necessary and honest or their really idiotic notion that any cuts in the budget will remove necessary regulation.

A) Reading comprehension is a needed skill. Liberals were not making the statement that you attribute to them.
B) Reality doesn't care whether you believe in it or not.

 

[Moderate Right]

Tax Cuts have the common sense effect on the federal register. The lower the rate, the lower the revenue. Any burst of consumption seen on the lower end, by a relaxation of the tax burden, is rendered beyond negligible by missed revenue on high income earners. In order to maximize the government's available resources, we need to reform our tax policy. I'm open to ideas, as long as they include raising taxes on the rich and raising capital gains.

Trump is set to propose some new tax policy anytime. All the old worn out talking points will be dusted off. They are going to lie boldly, unapologetic, and knowingly right to your face. "Tax cuts create jobs" "Tax cuts boost revenue" They are going to credit tax cuts for growth, that would have existed independent of the tax cut. When the top percentiles get even more money than they need, they do not reinvest it or spend it. They save it, which has no broader impact on the economy, it has an insular impact on the lucky bank account.

Some ideas floated by Trump regarding tax policy in the past...

Ending the Estate Tax...
3 tax brackets...
Lower taxes for everyone...
Lower business taxes...

We know from history that the strategy that conservatives use to sell tax cuts to the general milieu, is that tax cuts are reinvested into the economy. History has told us this is a lie. Massive tax cuts are about transferring money to the top. High income earners don't need the extra money and they save it. A massive tax cut results in the top percentiles of income earners, keeping large chunks of money, while the lowest of percentiles keep crumbs. Allow me to demonstrate.

Let's use the top marginal tax rate of 39% for income earners of $450,000... in this small sample:
(.39)(450,000)=$175,500

We know this hypothetical person actually pays a lower effective rate than 39% through deductions available to people who can afford savvy accountants.

Let's use the same tax rate on someone who made $2,000,000. I'm going to use two million because it is a large amount of money, that will illustrate my point later on, but, it is by no means even in the ballpark of what some Wall St. and silicon valley gurus make.

(.39)(2,000,000)=$780,000, once again we should note, that this hypothetical person pays a far lower effective rate after their accountant is through.

Let's look at how much someone in the middle class pays in taxes. Median income in the United States is $51,000. The current middle class tax bracket is 25%.

(.25)(51,000)=$12,750

Let's run a hypothetical.. Let's say legislation is introduced, like Trump has proposed in the past.. which lowers the tax rate across the board. Let's say everyone gets 5 points lobbed off their marginal rate.

That brings our middle class wage earner down to 20% and our twice times millionaire down to 34%.

(.2)(51,000)=$10,200. Not bad, a 5 point reduction in his rate saved him $2,550. That's a starter car for a son or daughter, or a nice family vacation. But, let's look at how much revenue the government loses when we knock 5 points off the $2,000,000.

(.34)(2,000,000)=$680,000.. 780,000-680,000= $100,000 That's a $100,000 dollar break, on an income of $2,000,000. The sheer size of those numbers compels me to favor, giving up my extra $2,550 dollars per year, if it means we have to sacrifice that much revenue.

When you see the numbers illustrated for you, can you understand the lie? Extra consumption in the middle class can be beneficial. However, excusing the absence of important federal revenue, in the name of the middle class, is a lie as plain as day. The truth is tax cuts give extra money to people who don't need it, at the expense of deficits which reinforce the conservative favorite: cutting spending. Tax cuts are a brainchild of the right, because they disrupt the government's books, which they can then use to manufacture a debt crisis, to cut programs they disagree with ideologically, and then call Democratic programs failures. If people are genuinely for cutting taxes. They must also be for cutting spending. This includes the DoD.

So, when Donald Trump and the rest of them, tell you that they are cutting taxes for you, you'll know they are lying to you. They're cutting taxes for the rich. That is who benefits here. The Republican never introduces legislation that does not include a major win for high income earners. That is a requisite of every piece of legislation. Look at the AHCA. They outright lied to you about the AHCA and disguised tax cuts for the rich, in warm and fuzzy language, like "access" and "choice".

So, you want to have an honest discussion about taxes as long as it is on liberal terms?