Trump’s treasury secretary: The tax cut ‘will pay for itself’

[MTAtech]

I was not talking about Obama. I was talking about John from Cleveland. I think everyone over the poverty level should pay their fair share of federal income taxes. Since the poverty level is around 15% then 15% should be paying zero federal income taxes. Everyone else should be paying their fair share and a fair share is not zero and payroll taxes don't count because not only do the working poor pay those but businesses also pay payroll taxes as well. Most of the rich already pay more than their fair share. The fact that they are rich doesn't mean they should be paying more than their fair share. Profitable companies and richer individuals should all be paying their fair share, unless they have losses carried forward, such as Trump does. If you have to pay taxes on income then you shouldn't have to pay taxes when you have losses.

So, let me understand your argument, because it's hard for me to wrap my head around it. It goes like this: Those people who are above the 15% lower bound of income such as seniors living only on Social Security or low-income workers, who basically live hand-to-mouth, should pay more income tax -- that will squeeze their spending for things like medicine and food -- so that the wealthy, who have no difficulty paying their bills and who have taken the lion's share of national wealth over the last four decades, should pay less income tax. Got it!

 

[Moderate Right]

You only say that payroll taxes don't count because the FACT that all workers pay those taxes makes your "most people don't pay taxes" mantra look stupid. And make no mistake, it is a stupid argument. Take away all the stupid arguments, and you would be left with nothing to say.

But businesses pay payroll taxes too! They cross each other out. Individuals pay payroll taxes on themselves but businesses pay payroll taxes on the individuals. Businesses pay half of each employee's social security and medicare taxes, therefore businesses are funding half of their employees' social security and future health insurance costs, not to mention paying a salary and whatever other benefits the company provides in the present. Therefore, payroll taxes don't count as paying anything toward the country's expenses and social programs for either the employee or for the company.

 

[Moderate Right]

So, let me understand your argument, because it's hard for me to wrap my head around it. It goes like this: Those people who are above the 15% lower bound of income such as seniors living only on Social Security or low-income workers, who basically live hand-to-mouth, should pay more income tax -- that will squeeze their spending for things like medicine and food -- so that the wealthy, who have no difficulty paying their bills and who have taken the lion's share of national wealth over the last four decades, should pay less income tax. Got it!

I'm saying that they should be paying something, even if only $100 per year. I'm for a minimum tax for certain income levels, no matter how many deductions, exemptions, and credits you have. I'm also against taxing social security. Where did I say that the wealthy should pay less income tax? I am not for tax cuts for the wealthy, other than reducing the corporate tax rate some so that we are more competitive worldwide. This will stimulate more jobs and actually increase tax revenues from both employers and employees. I'm not for taxing the rich more because they are already paying the lion's share of federal income taxes.

 

[JohnfrmClevelan]

But businesses pay payroll taxes too! They cross each other out. Individuals pay payroll taxes on themselves but businesses pay payroll taxes on the individuals. Businesses pay half of each employee's social security and medicare taxes, therefore businesses are funding half of their employees' social security and future health insurance costs, not to mention paying a salary and whatever other benefits the company provides in the present. Therefore, payroll taxes don't count as paying anything toward the country's expenses and social programs for either the employee or for the company.

So what? It's no different than if the company paid nothing and workers paid the whole 15%. Workers earned the whole thing either way.

Yet another stupid argument tossed in without thinking it through.

 

[Moderate Right]

So what? It's no different than if the company paid nothing and workers paid the whole 15%. Workers earned the whole thing either way.

Yet another stupid argument tossed in without thinking it through.

Employees didn't earn payroll taxes. That's a stupid liberal argument. They earned their gross pay. Everything else is just either taxes or benefits. But, if you want to say that employees earned their payroll taxes and their benefits, then they are already making $15 per hour. No need for wage increases.

 

[JasperL]

I was not talking about Obama. I was talking about John from Cleveland. I think everyone over the poverty level should pay their fair share of federal income taxes. Since the poverty level is around 15% then 15% should be paying zero federal income taxes. Everyone else should be paying their fair share and a fair share is not zero and payroll taxes don't count because not only do the working poor pay those but businesses also pay payroll taxes as well. Most of the rich already pay more than their fair share. The fact that they are rich doesn't mean they should be paying more than their fair share. Profitable companies and richer individuals should all be paying their fair share, unless they have losses carried forward, such as Trump does. If you have to pay taxes on income then you shouldn't have to pay taxes when you have losses.

I have to admit I just don't understand this sentiment. We pay a lot of taxes, and it would be nice if those were lower, but I don't ever look around at some lady waiting tables with her kids waiting on her to get done with work and think SHE is the person who ought to be made poorer so my tax bill can go down a bit, or some guy clearing $8 an hour at Walmart whose annual is $14k. I just don't see those folks as 'lucky duckies' in life because they don't have to pay federal INCOME tax but pay sales, excise, payroll, and other taxes.

 

[JohnfrmClevelan]

Employees didn't earn payroll taxes. That's a stupid liberal argument. They earned their gross pay. Everything else is just either taxes or benefits. But, if you want to say that employees earned their payroll taxes and their benefits, then they are already making $15 per hour. No need for wage increases.

Employees have a total cost to their employer - (wages + taxes + benefits + insurance). If they don't earn their employer at least that much, then they won't have a job. Business 101. That's the educated argument. (Which is why you are losing all of the arguments.)

 

[JasperL]

Employees didn't earn payroll taxes. That's a stupid liberal argument. They earned their gross pay. Everything else is just either taxes or benefits.

Well, no, it's common sense and it's backed by data in several studies. Employers, unless they are morons, when considering hiring a new employee will require that the employee "earn" all the direct costs and unavoidable indirect costs of hiring that person, and salary is just one of them, the others being payroll taxes and any benefits they're required to pay.

And I love how you label conclusions about the incidence of payroll taxes and benefits backed up by multiple studies, and the common sense of the arrangement, as "stupid liberal arguments."

But, if you want to say that employees earned their payroll taxes and their benefits, then they are already making $15 per hour. No need for wage increases.

LOL, you're being ridiculous at this point.

 

[Moderate Right]

I have to admit I just don't understand this sentiment. We pay a lot of taxes, and it would be nice if those were lower, but I don't ever look around at some lady waiting tables with her kids waiting on her to get done with work and think SHE is the person who ought to be made poorer so my tax bill can go down a bit, or some guy clearing $8 an hour at Walmart whose annual is $14k. I just don't see those folks as 'lucky duckies' in life because they don't have to pay federal INCOME tax but pay sales, excise, payroll, and other taxes.

If she isn't in poverty she can pay $100 per year. If in that 15% she pays zero.

 

[Moderate Right]

Employees have a total cost to their employer - (wages + taxes + benefits + insurance). If they don't earn their employer at least that much, then they won't have a job. Business 101. That's the educated argument. (Which is why you are losing all of the arguments.)

Since they're making all that money then there is no need for wage increases.

 

[Moderate Right]

Well, no, it's common sense and it's backed by data in several studies. Employers, unless they are morons, when considering hiring a new employee will require that the employee "earn" all the direct costs and unavoidable indirect costs of hiring that person, and salary is just one of them, the others being payroll taxes and any benefits they're required to pay.

And I love how you label conclusions about the incidence of payroll taxes and benefits backed up by multiple studies, and the common sense of the arrangement, as "stupid liberal arguments."



LOL, you're being ridiculous at this point.

As I said, if they're making all that money then there is no need for wage increases. They're already earning $15 per hour.

 

[ttwtt78640]

Employees didn't earn payroll taxes. That's a stupid liberal argument. They earned their gross pay. Everything else is just either taxes or benefits. But, if you want to say that employees earned their payroll taxes and their benefits, then they are already making $15 per hour. No need for wage increases.

Nope, it is all a labor (related?) cost to the employer for having that employee. The employee's cost to the employer doesn't exclude those taxes and benefits just becuase they are paid to another entity.

 

[JohnfrmClevelan]

Since they're making all that money then there is no need for wage increases.

So you're going to stick with your losing argument, eh? Add stubborn to the long list of your faults.

 

[MTAtech]

Back to the topic (The Treas. Secretary's absurd assertion that tax-cuts pay for themselves.)

....

 

[JasperL]

If she isn't in poverty she can pay $100 per year. If in that 15% she pays zero.

Sure, but that doesn't accomplish anything except maybe make some people feel a little better that the poor are made to suffer just a little bit more than they were previously. Besides, to get there, you'd have to eliminate EITC and other credits related to children, and for a lot of families, the tax increase would be several $1,000, not $100. I just don't look around the country and think, "You know, one of our big problems is the poor just aren't paying enough in income taxes! Bunch of moochers! We need to raise THEIR taxes!" The problem, at its core, is we have an economy that leaves so many workers trying hard to do the right thing at or just above poverty. Solve THAT problem and the tax bill takes care of itself.

 

[JasperL]

As I said, if they're making all that money then there is no need for wage increases. They're already earning $15 per hour.

Great response. You totally ignore the first part of the comment because you're obviously wrong. And on the second, you're doubling down on the stupid.... Employees can't use payroll taxes paid to IRS to feed their family or pay rent or for health care.

 

[MTAtech]

Today's Krugman Column: https://www.nytimes.com/2017/04/24/opinion/zombies-of-voodoo-economics.html
Zombies of Voodoo Economics

 

[sear]

M #167

 

[Moderate Right]

Nope, it is all a labor (related?) cost to the employer for having that employee. The employee's cost to the employer doesn't exclude those taxes and benefits just becuase they are paid to another entity.

Just because it is a labor related cost doesn't mean it is the employee's pay. As I said, if you want to claim all this stuff is employee pay then there is no need to raise the minimum wage. It is already at $15 per hour.

 

[Moderate Right]

So you're going to stick with your losing argument, eh? Add stubborn to the long list of your faults.

As I said, if you are going to count all that stuff as employee pay then there is no need to raise the minimum wage because it is already at $15 per hour. You can't have it both ways. Hence, it is your losing argument. Since you're making a big deal about this issue I commend you for giving up on your MMT nonsense, and admitting that you lost that argument so now you have moved on to a new argument of which you will lose yet again. Not surprising though, considering you are nothing but an economic hobbyist.

 

[ttwtt78640]

Just because it is a labor related cost doesn't mean it is the employee's pay. As I said, if you want to claim all this stuff is employee pay then there is no need to raise the minimum wage. It is already at $15 per hour.

IMHO, the federal MW should be indexed to the CPI just like social security retirement benefits are. That takes the politics out of it yet still allows any state or local government to raise it further if they feel special.

 

[jonny5]

I'm not pretending everything was static. I'm in fact explicitly acknowledging the positive effects of lower tax rates on jobs and economic growth - "the state of the economy has a big influence on tax revenues, and tax policy does influence growth, jobs, etc." So you'll have to be more specific with your argument.

And I'm not making a political jab at anyone. We are talking about the impact of tax rate changes on tax revenue. If you favor lower tax rates that I do, that's fine. If you're making an honest argument, you'll happily acknowledge that lower tax rates mean lower spending and smaller government. And if/when I argue for bigger government, I have to acknowledge that more spending means higher tax rates. That's the only real point I'm making in this thread.

My only argument was tax cuts dont necessarily reduce revenue. The OP posts as if economic is scientific fact.

 

[jonny5]

M #167

View attachment 67216717

Case in point. Political jabs over rational debate.

 

[Moderate Right]

Sure, but that doesn't accomplish anything except maybe make some people feel a little better that the poor are made to suffer just a little bit more than they were previously. Besides, to get there, you'd have to eliminate EITC and other credits related to children, and for a lot of families, the tax increase would be several $1,000, not $100. I just don't look around the country and think, "You know, one of our big problems is the poor just aren't paying enough in income taxes! Bunch of moochers! We need to raise THEIR taxes!" The problem, at its core, is we have an economy that leaves so many workers trying hard to do the right thing at or just above poverty. Solve THAT problem and the tax bill takes care of itself.

The rich are already paying the huge majority of the taxes now. What do you want to do, run them out of the country and pay zero taxes? The 35% who pay zero taxes can pay $100. It's not the rich's responsibility to take care of the moochers.

 

[MTAtech]

The rich are already paying the huge majority of the taxes now. What do you want to do, run them out of the country and pay zero taxes? The 35% who pay zero taxes can pay $100. It's not the rich's responsibility to take care of the moochers.

The argument that we need to coddle the rich with low tax-rates out of fear that if we didn't, they'd pick up and move to Zimbabwe, is just grabbing at straws, when there is no rational arguments left.

The U.S. has one of the lowest marginal tax-rates in the modern world. Somehow, I don't think the rich want to pick up and move to the third world to escape taxation. The rich are willing to spend more on homes and automobiles because they perceive the value. They aren't going to move away from a well-protected democracy that affords amenities not found in low-tax countries merely to escape taxes, which are a cost of living.

I don't know what's with the conservative view that paying taxes is the worst thing in the world.