Tax Cuts Are An Expense To The Federal Government

[Winston]

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

There's nothing dishonest about stating this simple fact: lower taxes means less revenue.

 

[TurtleDude]

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.

that's BS-you pretend that the middle class is being overtaxed to subsidize the rich? LOL

class warfare idiocy

 

[TurtleDude]

There's nothing dishonest about stating this simple fact: lower taxes means less revenue.

taking less stuff from the people who own it means they have more revenue to spend as they see fit. I tend to favor those who earn the revenue over those who take it to buy votes

 

[Winston]

taking less stuff from the people who own it means they have more revenue to spend as they see fit. I tend to favor those who earn the revenue over those who take it to buy votes

This is a topic that you and I are fated to disagree on. We interpret the Constitution differently. Where you see a mandate for limited government and a violation of the 10th ammendment, I see the general welfare clause allowing for big government programs. If we are to have the programs then we need revenue.

I don't believe that Democrats use other people's money to buy elections. I just agree on a human level, that part of the luxury of being born in the United States, is the compassion of our system. From our abundance comes a guarantee of a basic level quality of life for everyone. Using the popularity of a Democratic position to shame the Democrats with accusations of vote-buying is a cynical play. It's not the Democrats fault that the conservative position is callous and unpopular.

 

[Absentglare]

that's BS-you pretend that the middle class is being overtaxed to subsidize the rich? LOL

class warfare idiocy

No, apparently you are ignorant of our economic system. The wealthy hold the most tokens, where the tokens represent societal resources. If the wealthy selfishly and stupidly hoard the resources for themselves (which they've been doing since President Reagan), that makes society less productive, prosperous, wealthy, and happy, overall.

 

[TurtleDude]

No, apparently you are ignorant of our economic system. The wealthy hold the most tokens, where the tokens represent societal resources. If the wealthy selfishly and stupidly hoard the resources for themselves (which they've been doing since President Reagan), that makes society less productive, prosperous, wealthy, and happy, overall.

the wealthy engage in activity that derives them wealth. You seem to think they just somehow accumulated those "tokens" just by some good luck

complete crap and the typical zero sum gain-the pie is only a limited size-nonsense

 

[countryboy]

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 actual data would seem to indicate otherwise. Throughout history, lower tax rates have increased revenue. Stop with the lying propaganda already.

 

[TurtleDude]

This is a topic that you and I are fated to disagree on. We interpret the Constitution differently. Where you see a mandate for limited government and a violation of the 10th ammendment, I see the general welfare clause allowing for big government programs. If we are to have the programs then we need revenue.

I don't believe that Democrats use other people's money to buy elections. I just agree on a human level, that part of the luxury of being born in the United States, is the compassion of our system. From our abundance comes a guarantee of a basic level quality of life for everyone. Using the popularity of a Democratic position to shame the Democrats with accusations of vote-buying is a cynical play. It's not the Democrats fault that the conservative position is callous and unpopular.

the general welfare provision does not allow powers that were not given to the federal government

 

[Winston]

The actual data would seem to indicate otherwise. Throughout history, lower tax rates have increased revenue. Stop with the lying propaganda already.

Revenue as a % of GDP was lower under Reagan than under Clinton.

It took Reagan raising taxes when revenue did not match expectations, to help combat his deficits and lower revenue performance. Voodoo economics doesn't work. Sorry :shrug:

 

[Winston]

the general welfare provision does not allow powers that were not given to the federal government

https://en.wikipedia.org/wiki/Helvering_v._Davis

Helvering v. Davis, 301 U.S. 619 (1937), was a decision by the United States Supreme Court, which held that Social Security was constitutionally permissible as an exercise of the federal power to spend for the general welfare, and did not contravene the 10th Amendment. The Court's 7-2 decision defended the constitutionality of the Social Security Act of 1935, requiring only that welfare spending be for the common benefit as distinguished from some mere local purpose. It affirmed a District Court decree that held that the tax upon employees was not properly at issue, and that the tax upon employers was constitutional.

I know you know this. But, how can you explain it? How do you justify the existence of SSC?

 

[TurtleDude]

https://en.wikipedia.org/wiki/Helvering_v._Davis



I know you know this. But, how can you explain it? How do you justify the existence of SSC?

If you read my other posts I noted that the USSC -after the 1936 re-election of FDR-completely turned from 100 years of jurisprudence and started ignoring the tenth amendment.

 

[ThoughtEx.]

The only thing taxes do is poorly attempt to curb inflation. The Federal Government is not funded by our taxes. In fact new money is created, from nothing, to pay the bills. All of our tax dollars go to the Federal Reserve, All of em. The fact is the only reason high taxes on the rich are considered a good thing by economists, is because it takes more money out of our inflated economy. Stuff really shouldn't cost this much... "Back in my day soda used to cost a nickel."- every old person ever. Why does it cost 2.50 now? Did the process get more expensive? No, it got cheaper. I keep hearing class warfare, class warfare. Class warfare is when you setup a system that allows fractional reserve banking to freely create new money. Use that funny money to soak real wealth out of the middle class, and keep them in personal debt to you for generations. And then start a phony argument about taxes and national debt to distract from what your doing. That's class warfare.

It doesn't matter what the tax rate on anyone is, you can do away with all taxes for all I care. It's a strawman argument they want you to fight over, while they are happily ****ing you, causing the dollar in your pocket to be worth less year after year. A dollar today will be worth 50 cents in a couple year. Makes no difference to a millionaire whose sheer amount of wealth generation in interest on their investments keeps him ahead of inflation, but someone making 40 grand a year? Cuts em down to 20 grand a year effectively. Cheap labor... You want to make things better? Dismantle the Federal Reserve and give sole power of money creation back to the Treasury. Slow down the economy, and destroy approximately 45 percent of the money in circulation, from the top. But they would have less money you think to yourself that's stealing. They would have less money in the sense of numbers, but the money left over would be worth more. Way more. I would rather have 10,000 dollars that can buy a house outright, than 100,000 dollars I put down for a 200,000 dollar loan on the same house.

Arguing over tax rates is falling for the ruse.

 

[Winston]

If you read my other posts I noted that the USSC -after the 1936 re-election of FDR-completely turned from 100 years of jurisprudence and started ignoring the tenth amendment.

I've seen as much...

But, my argument is this, if public health and general welfare is a reserved power, then so is law enforcement. So, the FBI is unconstituitonal and needs to be disbanded?

 

[TurtleDude]

I've seen as much...

But, my argument is this, if public health and general welfare is a reserved power, then so is law enforcement. So, the FBI is unconstituitonal and needs to be disbanded?

that's not the issue. the issue is that the government does not have some sort of unlimited power to spend money on anything called "general welfare"

 

[Winston]

that's not the issue. the issue is that the government does not have some sort of unlimited power to spend money on anything called "general welfare"

But, if your argument is valid, then the same argument can be applied to force law enforcement to return it to the states.

If it's a purely ideological stand you're taking against the unconstitutionality of social security, because it's a power reserved to the states, then in order to remain consistent, all violations of states rights must be returned to the states, including law enforcment.

"The FBI is a bloated government agency, with unlimited spending power, that violates a states rights to law enforcement." - said no conservative ever.

I'm not advocating for government provided Mercedes Benz, because all the cool kids have them around town, and the poor will feel left out.

I'm advocating for a basic standard of living for everyone based upon American citizenship, participation in taxing, and setting policy that maximizes the benefits of a pooled revenue. SSC is one of them, that by the way, has a multiplier that stimulates local economies.

 

[TurtleDude]

But, if your argument is valid, then the same argument can be applied to force law enforcement to return it to the states.

If it's a purely ideological stand you're taking against the unconstitutionality of social security, because it's a power reserved to the states, then in order to remain consistent, all violations of states rights must be returned to the states, including law enforcment.

"The FBI is a bloated government agency, with unlimited spending power, that violates a states rights to law enforcement." - said no conservative ever.

I'm not advocating for government provided Mercedes Benz, because all the cool kids have them around town, and the poor will feel left out.

I'm advocating for a basic standard of living for everyone based upon American citizenship, participation in taxing, and setting policy that maximizes the benefits of a pooled revenue. SSC is one of them, that by the way, has a multiplier that stimulates local economies.

do you believe that there is any constitutional limit on the growth of government-you seem to argue that if the government determines that something is "good" that is enough to pass constitutional muster

 

[Winston]

do you believe that there is any constitutional limit on the growth of government-you seem to argue that if the government determines that something is "good" that is enough to pass constitutional muster

I believe government power should be tied to external reality. For example, if automation phases out 20% of our workforce, then we may need to do some Keynesian spending to avoid economic ruin. And I don't think there's anything standing in the way of that.

Another good example is the FAA. Nowhere in the Ennumerated Powers is there any mention of airplanes. But, the FAA is necessary due to external reality. The constitutionality of its federal funding, comes from where? I don't know but, I know airplanes and aviation need to be regulated.

 

[Perotista]

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.

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.


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".

Perhaps the question is, does tax cuts increase or decrease federal revenue. The Reagan tax cuts of 1981 produced the following revenues. Below are federal revenues only, state and local revenues not include.
1980 517 billion pre 1981 Reagan tax cuts
1981 599 billion
1982 618 billion
1983 601 billion
1984 666 billion
1985 734 billion
1986 769 billion
The Reagan tax cuts didn't produce a drop in Federal revenue, federal revenue increased each year with the exception of 1983. What cause the deficit or national debt to increase tremendously wasn't the tax cuts, it was the spending accomplished under Democratic Speaker Tip O'Neil and President Reagan.

What about the Bush tax cuts of 2001 and 2003? Again federal revenue only.
2000 2.025 trillion pre-tax cuts
2001 1.991 trillion
2002 1.853 trillion
2003 1.782 trillion
2004 1.880 trillion
2005 2.154 trillion
2006 2.407 trillion

Just looking at the numbers, the tax cut of 2001 caused a big drop in federal revenues while the 2003 tax cut caused an increase. But once again, it was the spending side of the ledger from 2004 onward that caused the huge deficits and increase in the national debt as federal revenues increased from 2004 forward. But the 2001 tax cuts caused a big decrease in the federal revenues.

It seems if tax cuts cause the economy to grow and grow at a fast pace, the tax cuts produce additional revenues. If the tax cuts don't, like the 2001 tax cuts, then revenues decrease. The numbers show a mixed bag, some work, some don't. But these are the most famous tax cuts in recent history. The bottom line I would say that if the economy responds positive to the tax cuts, we get increase federal revenues, if the economy doesn't, those revenues fall sharply. Which side of the ledger Trump's proposed tax cuts will fall on, I haven't the slightest idea.

 

[Winston]

Perhaps the question is, does tax cuts increase or decrease federal revenue. The Reagan tax cuts of 1981 produced the following revenues. Below are federal revenues only, state and local revenues not include.
1980 517 billion pre 1981 Reagan tax cuts
1981 599 billion
1982 618 billion
1983 601 billion
1984 666 billion
1985 734 billion
1986 769 billion
The Reagan tax cuts didn't produce a drop in Federal revenue, federal revenue increased each year with the exception of 1983. What cause the deficit or national debt to increase tremendously wasn't the tax cuts, it was the spending accomplished under Democratic Speaker Tip O'Neil and President Reagan.

What about the Bush tax cuts of 2001 and 2003? Again federal revenue only.
2000 2.025 trillion pre-tax cuts
2001 1.991 trillion
2002 1.853 trillion
2003 1.782 trillion
2004 1.880 trillion
2005 2.154 trillion
2006 2.407 trillion

Just looking at the numbers, the tax cut of 2001 caused a big drop in federal revenues while the 2003 tax cut caused an increase. But once again, it was the spending side of the ledger from 2004 onward that caused the huge deficits and increase in the national debt as federal revenues increased from 2004 forward. But the 2001 tax cuts caused a big decrease in the federal revenues.

It seems if tax cuts cause the economy to grow and grow at a fast pace, the tax cuts produce additional revenues. If the tax cuts don't, like the 2001 tax cuts, then revenues decrease. The numbers show a mixed bag, some work, some don't. But these are the most famous tax cuts in recent history. The bottom line I would say that if the economy responds positive to the tax cuts, we get increase federal revenues, if the economy doesn't, those revenues fall sharply. Which side of the ledger Trump's proposed tax cuts will fall on, I haven't the slightest idea.

Hey, the economic growth of the 1980's can also be attributed to the Fed lowering interest rates during that time period. And Reagan's revenue as a % of GDP underperformed Clinton's. Clinton had a higher revenue as a % of GDP under a higher tax policy. I agree that spending is also something worth looking at.



Thanks for contributing to the discussion, your input is always valued.

 

[Perotista]

Hey, the economic growth of the 1980's can also be attributed to the Fed lowering interest rates during that time period. And Reagan's revenue as a % of GDP underperformed Clinton's. Clinton had a higher revenue as a % of GDP under a higher tax policy. I agree that spending is also something worth looking at.

View attachment 67216945

Thanks for contributing to the discussion, your input is always valued.

I'm no financial guru. I just check numbers that make sense to me. If one wants to reign in the national debt or deficit, most look at both sides of the equation. Spending and revenues. A fiscal responsible administration in my view will try to make the two match or closely match. How one gets there depends on the circumstances and situation. Sometimes it may take cuts in spending or at other times an increase in taxes if that equates to increased revenues. Sometimes it may take both spending cuts and and increased taxes.

I think with a 20 trillion dollar debt and rising, we have long ago passed the one or the other choice. I think we are left with the both choice. We have got to where we are by providing all sorts or programs, benefits, etc. to the people without paying for them. We put them all on the credit card. Someday that credit card payment will come due. When it does, it may make the great depression look like a walk in the park.

I have always been for a balanced budget amendment, the way our government operates that is the only way to get them to stop spending, spending on credit and on the backs of future generations. It's almost like we don't give a darn about our kids, grand kids and the unborn as long as we live the good life now.

I think one way to get the deficit and to start to bring down the national debt would be a ten year freeze in spending. However much we are spending now, 4 trillion, no budget or federal spending could ever go over that figure until the deficit is done away with. then spending could only increase at half the amount revenues increase in order to start paying that national debt down. Whether that would work or not, I don't know. I am not as I stated a financial guru.

As to what programs or departments must make cuts or no additional increase in their budget or spending, let congress decide along with the administration. That is what we send them to Washington and pay them for. To make hard decisions. Am I crazy to think as such?

 

[fmw]

I'm open to ideas, as long as they include raising taxes on the rich and raising capital gains.

And as long as they don't involve reduced government spending.

 

[Winston]

And as long as they don't involve reduced government spending.

I would like to reduce DoD spending. But, as a rule, austerity is as much a failure as large-scale socialism.

 

[fmw]

I would like to reduce DoD spending. But, as a rule, austerity is as much a failure as large-scale socialism.

I'm not talking about austerity. I'm talking about reducing the size of government. Getting rid of things that don't belong in federal government and moving them elsewhere.

 

[Winston]

I'm not talking about austerity. I'm talking about reducing the size of government. Getting rid of things that don't belong in federal government and moving them elsewhere.

DoD, SSC, Medicare, VA, and interest is already 70% of Federal spending. Where would you make the cuts?

 

[Hawkeye10]

DoD, SSC, Medicare, VA, and interest is already 70% of Federal spending. Where would you make the cuts?

You are right, which is why if the government can not gain taxing power and use it eventually it runs out of options other than printing more money. The idea that we will prime the economy and it will rev up and toss off money has been tried for almost 40 years, it has not worked, though it has built income inequality, bubbles and corruption.

It is sad watching Trump go back to that failed well.