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More Democrats call to extend Bush tax cuts





MYP415
http://online.wsj.com/article/SB10001424052748703954804575381501862552246.html

Let's hope it happens. Tax cuts are the real "stimulus".
deanhills
Tax cuts on its own would be a great stimulus, but on top of a very enormous stimulus package, what is going to happen when it is payback time, or will there never be a payback time? This party is going to continue forever?
Bikerman
Tax cuts that advantage the wealthy disproportionately are not what the US needs. A person earning $20,000 gets 200 dollars from a 1% change. A person earning $2 million gets $20,000 for the same change (obviously depending on excactly which rate is lowered).
Whilst this may sound OK, in fact it is the average earners you want to 'stimulate' - the millionaires don't generally change their spending pattern very much either way, and when they do it is often into either offshore, or other long-term investment which won't show any effect on the economy for years. The blue and white collar workers spend their extra dosh almost immediately, thus it filters into the economy quickly and has the desired effect.
(This is all supposing, of course, you believe that tax cuts are a good idea).
handfleisch
MYP415 wrote:

Tax cuts are the real "stimulus".

Tax cuts for the wealthy are not a stimulus. That's a Big Lie that Reagan started.

But the Repub new logic on this one is pretty entertaining.
Extending unemployment benefits for the struggling? Republicans say we can't increase the deficit.
Tax cuts for the wealthy that will increase the deficit? Republicans say the deficit doesn't matter.
deanhills
handfleisch wrote:
Tax cuts for the wealthy that will increase the deficit? Republicans say the deficit doesn't matter.
I thought that policy came from the Republicans any way. How come it is all of a sudden dished up as an Obama idea?
silverdown
I say tax the rich but they might just take some of the cut for preocessing fees leaving us nothing to use..... tipical govy, Laughing
ocalhoun
Bikerman wrote:
Tax cuts that advantage the wealthy disproportionately are not what the US needs.

What about tax cuts that affect the wealthy proportionately, by reducing all tax rates equally?
Bikerman
ocalhoun wrote:
Bikerman wrote:
Tax cuts that advantage the wealthy disproportionately are not what the US needs.

What about tax cuts that affect the wealthy proportionately, by reducing all tax rates equally?
That isn't proportionate.
Eg.
Someone on top rate is paying about 40cents in the dollar yes? (I don't know your exact figure but it will be somewhere around that - ours is). Say they earn 1m per year
Someone on low rate is paying about 20ish cents in the dollar at a guess...and you probably have a tax allowance of 5-10K before you start paying....is that close? Say they earn 20K per year
Anyway - cut 1p on basic rate the Rich person gets 1p on the first 50k (guessing the tax change boundary - adjust to suit). so 500 dollars.
The poor person gets 20K-10K = 10K = 100 dollars.
The person not paying tax gets nothing of course.
Income tax is a progressive tax in some ways, but for cuts, obviously the person paying the most tax will get the most from any cut - and I would argue you want the opposite in this situation.
ocalhoun
Bikerman wrote:

Income tax is a progressive tax in some ways, but for cuts, obviously the person paying the most tax will get the most from any cut - and I would argue you want the opposite in this situation.

This unfairness is simply a symptom of the unfairness built into the system by a progressively higher tax rate.

In order for proportionate tax cuts to be fair, the tax system would have to be fair to start with, which it is not.

But, if you must, how about something like: "Everyone gets to pay 10% less taxes than they otherwise would have paid."
That seems pretty fair and equitable to me.
Bikerman
Fair is subjective - it is progressive - it taxes more from those who have more.
so 10% of the rich guy is going to be about 15K, and 10% of the poor guy is going to be around 250 dollars (since the poor guy only pays 2,500 dollars total tax on his 10+10.

Here's a better way,,,,you raise the personal allowance.
Say it is currently 10K - put it up 1 or 2K. Then everyone gets 1 or 2K in their pocket, the poor people have a compatatively big wad which will give them confidence and keep them spending. The rich have a token - but still a real discount, and it takes the very poorest out of tax altogether - triple whammy.
ocalhoun
Bikerman wrote:

Here's a better way,,,,you raise the personal allowance.

Personal allowance, hm?
The current US tax system has no such thing... But the system I advocate -- Fairtax -- does.


You do hit upon one of my biggest gripes about progressives though.
For some reason, they insist that treating everyone equally is unfair.
Bikerman
ocalhoun wrote:
Bikerman wrote:

Here's a better way,,,,you raise the personal allowance.

Personal allowance, hm?
The current US tax system has no such thing... But the system I advocate -- Fairtax -- does.


You do hit upon one of my biggest gripes about progressives though.
For some reason, they insist that treating everyone equally is unfair.

Well, why do you assume that people come by what they have fairly. The fact that one person has $1 billion and another has $1 is not fair either. You can't justify the disparity in terms of ability, hard-work, long hours. Sure those all form a part of the picture, but the differences are still hugely disproportionate. A capitalist economy simply cannot pay any more than a tiny elite huge amounts of money because the poor saps who actually make things and do things can only produce and buy so much before they 'crash', so the people earning the gazillions, who need the saps to make their money for them, have to keep them in order.

The tax system is designed to put a tiny little opposite slant on this massively unfair situation by not taking even more off the saps and taking a bit more from the elites. Speaking as a sap, that sounds OK to me.
ocalhoun
Bikerman wrote:

The tax system is designed to put a tiny little opposite slant on this massively unfair situation by not taking even more off the saps and taking a bit more from the elites.

Yes, I realize this, but I think social engineering should be beyond the scope of government.

(And besides, even an across-the-board flat percentage still takes more from the rich than from the poor.)
Bikerman
ocalhoun wrote:
Bikerman wrote:

The tax system is designed to put a tiny little opposite slant on this massively unfair situation by not taking even more off the saps and taking a bit more from the elites.

Yes, I realize this, but I think social engineering should be beyond the scope of government.

(And besides, even an across-the-board flat percentage still takes more from the rich than from the poor.)

But social engineering is what government does simply by maintaining the status quo.
Yes, flat rate takes more from the rich but think about it this way: there is an amount of money you need to live. Many people don't have that. Then there is a larger amount you require to be relatively comfortable and indulge in a few luxuries. A majority probably have that. Then there is enough money so that any reasonable whim can be indulged - a small percentage have that, and finally there is so much money that you would need to be very imaginative to spend it.
Personally I think that the latter two groups cannot morally be justified whilst group 1 exists. Society decides whether these groups exist or not - it is not something genetic or an immutable law of physics. I think any civilised society that allows group 1 to exist (and I only include people who are willing to work in this group, since there has to be individual responsibility to match social responsibility) and at the same time creates group 4 looses the right to the name civilised.
Then we have the issue of those who cannot work for whatever reason. Again I think that any society that wishes to call itself civilised must ensure that those people are at least in group 2.
The tax system is the only mechanism (outside philanthropy) that enables this to happen, and let us destroy the myth that Americans are particularly philanthropic - they aren't.
liljp617
Article from David Stockman (pretty prominent figure in regards to "Reaganomics") calling for an end to Bush tax cuts and more. I thought it was a good read...

http://www.nytimes.com/2010/08/01/opinion/01stockman.html?_r=2&pagewanted=1&sq=david%20stockman&st=cse&scp=1
ocalhoun
Bikerman wrote:
I think any civilised society that allows group 1 to exist (and I only include people who are willing to work in this group, since there has to be individual responsibility to match social responsibility) and at the same time creates group 4 looses the right to the name civilised.
Then we have the issue of those who cannot work for whatever reason. Again I think that any society that wishes to call itself civilised must ensure that those people are at least in group 2.
The tax system is the only mechanism (outside philanthropy) that enables this to happen,

No, it really isn't.
There are programs to help the poor, such as welfare...
(Government-run philanthropy, so to speak.)
And in fact, actually supporting these people would be much more beneficial to them in the short term than simply not taking any money away.
(Though it does raise long-term dependency problems.)

Now, I do agree with you that it would be wrong to take money away from those who can hardly afford to live already.
(The Fairtax gives a prebate equal to the taxes paid on poverty level spending to everyone, so those below poverty level actually make money off of it, those at poverty level pay no taxes, and those near poverty level pay very little taxes. Yet, it is still equal for all, because even the rich receive the exact same prebate, though for them is isn't very significant.)

But, I think that the tax rate should level off at a much lower level- There's no (fair) reason to take disproportionately more from someone making $1,000,000/yr than from someone making $100,000/yr. Both of them can afford to proportionately give their due support to society.
Bikerman
Err...where does the money for the 'government programs' come from? The government doesn't have any money - it comes from taxation.
socceraggie
I think it is easy to sit back and through ideas at our elected officials. I do not for a second think they are infallible or that they do not have selfish motives; however, they have been elected by the people and if you have a good idea, send it to them. Run for office yourself. In the end there is not simple solution to this problem. Our government requires money to operate and that money has to come from the people and companies living and operating in this country. I know I do not have what I would consider the perfect solution. Of course I do not need to as I'm not standing up right now saying I can fix this.
ocalhoun
Bikerman wrote:
Err...where does the money for the 'government programs' come from? The government doesn't have any money - it comes from taxation.


Yes, I'm very aware of this.
I was just pointing out that the government has other means of social engineering besides tax rate changes. (To put it basically, they can affect changes by changing both the collecting and spending of money, not to mention policy and law changes.)

socceraggie wrote:
I think it is easy to sit back and through ideas at our elected officials. I do not for a second think they are infallible or that they do not have selfish motives; however, they have been elected by the people and if you have a good idea, send it to them.

They don't listen... Especially if your advice might threaten their own corruption.
Quote:
Run for office yourself.

I would... I really would, but,
A- A real chance of winning would require too much money.
B- A real chance of winning would require me to sell out to a major party, and make concessions for their endorsement.
C- Somebody digging for dirt would find out I'm a zoophile, turning all the money and effort invested into a waste.

(So, I'll just stay here, vote for third parties, and try to get people to see beyond the 'us vs. them' mentality that makes them blind to the abuses of the 'us' side.)
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