View Full Version : High taxes are bad for the economy?
rickrock305
02-08-10, 15:15
Trickle down economics? Right :rolleyes:
http://baselinescenario.com/2010/02/04/taxes/#more-6264
http://baselinescenario.files.wordpress.com/2010/02/us-marginal-taxes1.jpg
http://baselinescenario.files.wordpress.com/2010/02/taxes-and-unemployment.jpg
Source of this information apart from the obvious 'I'm a guy with a blog acting like I know about taxes'?
ForTehNguyen
02-08-10, 15:41
lets just tax 100%, govt will make untold amounts of money , therefore the economy will be good right?
All you need to look at is how businesses are getting the hell out of places like CA and NY and getting settled into states with much lower taxes. GDP is a poor indicator of how well the economy is doing regardless.
Belmont31R
02-08-10, 15:50
So you're going to take ONE data point, and come to a conclusion?
The top tier pay zero taxes, and the bottom tier pay zero taxes (actually usually they're a negative on the tax side)
It's why you need a fair simplified tax system, a minimum of 15% or so for all, things like EITC are BS and simply a form of welfare. And are tax laws are should fit onto a single page, this is the reason the super rich can go with out paying taxes because the laws a written to allow it.
And no I don't consider social security and medicare welfare, as long as you've paid into the system, if you're 19 collecting social security because you hurt your back riding an atv, well than you're just a welfare recipient.
ForTehNguyen
02-08-10, 15:52
sales tax system would be better than income taxes. Govt should not have the right to take from someone's work. Sales tax is voluntary and truly taxes everyone. Even an illegal immigrant and drug dealer who makes black market income still has to buy stuff to eat.
By the way those graphs don't make a strong argument.
sales tax system would be better than income taxes. Govt should not have the right to take from someone's work. Sales tax is voluntary and truly taxes everyone. Even an illegal immigrant and drug dealer who makes black market income still has to buy stuff to eat.
Agree, accept for things that are required to sustain life, food, water etc.
the Bamster
02-08-10, 15:59
lets just tax 100%, govt will make untold amounts of money , therefore the economy will be good right?
All you need to look at is how businesses are getting the hell out of places like CA and NY and getting settled into states with much lower taxes. GDP is a poor indicator of how well the economy is doing regardless.
Thats a HELL of an idea, I,ll run it buy Nancy.
4177
rickrock305
02-08-10, 16:02
So you're going to take ONE data point, and come to a conclusion?
Did i come to a conclusion? No. Just thought the charts were mildly interesting
Preferred User
02-08-10, 16:03
In philosophy what you provided is an example of slippery slope logic. You failed to provide the "whole" picture.
From Truth and Politics.org (http://www.truthandpolitics.org/top-rates.php)
Top US Marginal Income Tax Rates, 1913--2003
Introduction
This is a table of the top marginal tax rate faced by married couples for most of the last century in the US.
Note that these are top marginal rates only, not average effective rates. That is,
the rate is not an average rate (total tax paid divided by total income), but a marginal rate (the rate paid on dollars of income over the "top bracket," listed below as "Taxable income over--");
the rate does not take into account all possible exemptions and deductions, so taxes actually paid may have been lower than these nominal rates indicate.
The table is limited to married couples merely to make the presentation simpler.
So thanks for starting with misleading information.
Maybe some facts?:
From The Joint Economic Committee, Congress of the United States, April 1996
The economic benefits of the Economic Recovery Tax Act (ERTA) of 1981 were summarized by President Clinton's Council of Economic Advisers in 1994: "It is undeniable that the sharp reduction in taxes in the early 1980s was a strong impetus to economic growth." Unfortunately, the Council could not bring itself to acknowledge the counterproductive effects high marginal tax rates can have upon taxpayer behavior and tax avoidance activities.
Also feel free to read the following:
In 2007, the top 1 percent of tax returns paid 40.4 percent of all federal individual income taxes and earned 22.8 percent of adjusted gross income. Both of those figures—share of income and share of taxes paid—are significantly higher than they were in 2004 when the top 1 percent earned 19 percent of adjusted gross income (AGI) and paid 36.9 percent of federal individual income taxes.
Summary of Latest Federal Individual Income Tax Data (http://www.taxfoundation.org/news/show/250.html)
The wealthiest 1 percent of the population earn 19 percent of the income but pay 37 percent of the income tax. The top 10 percent pay 68 percent of the tab.
Guess Who Really Pays the Taxes (http://www.american.com/archive/2007/november-december-magazine-contents/guess-who-really-pays-the-taxes)
US Treasury report on 2007 Bush Budget presented by Robert Carroll, Deputy Assistant Secretary for Tax Analysis:
Lesson No. 1: Lower tax rates lead to a more prosperous economy.
According to the Treasury analysis, a permanent extension of the recent tax cuts leads to a long-run increase in the capital stock of 2.3%, and a long-run increase in GNP of 0.7%. In today's economy, such a GNP expansion would mean an extra $90 billion a year that the nation can spend on consumer goods to raise living standards, or capital goods to maintain prosperity. More than two-thirds of this expansion occurs within 10 years.
Lesson No 2: Not all taxes are created equal for purposes of promoting growth.
Some tax rate reductions have a profound impact on incentives and economic growth, while others have minimal or even adverse effects. The Treasury staff reports particularly large bang-for-the-buck from the reductions in dividends and capital-gains taxes. Even though these tax cuts account for less than 20% of the static revenue loss from permanent tax relief, they produce more than half of the long-run growth.
At the opposite end of the spectrum are the tax reductions from the 10% bracket, child credit and marriage-penalty relief. These tax cuts put money in people's pockets when, during the recent recession, the economy needed a short-run boost to aggregate demand. They also fulfill other objectives, such as making the tax system more progressive. But they illustrate that not all tax cuts promote long-run growth. Treasury estimates that without the tax reductions from the 10% bracket, child credit and marriage-penalty relief, the long-run increase in GNP would be larger -- 1.1% rather than 0.7%.
Lesson No 3: How tax relief is financed is crucial for its economic impact.
Like all of us, the government eventually has to pay its bills. In technical terms, the government faces an intertemporal budget constraint that ties the present value of government spending to the present value of tax revenue. This means that when taxes are cut, other offsetting adjustments are required to make the numbers add up.
The Treasury's main analysis assumes that lower tax revenue will over time be accompanied by reduced spending on government consumption. But the report also shows what happens if spending cuts are not forthcoming. In this alternative scenario, a permanent extension of recent tax relief is assumed to lead to an eventual increase in income taxes.
The results are strikingly different. Instead of increasing by 0.7% in the long run, GNP now falls by 0.9%. Tax relief is good for growth, but only if the tax reductions are financed by spending restraint. One exception: Lower taxes on dividends and capital gains promote growth, even if they require higher income taxes.
These Treasury results are sure to spark debate and further research. While the Treasury report is not the last word on dynamic analysis, it is a big step toward a more realistic view of tax policy.
Feel free to throw up some additional incomplete information or partial charts.
Belmont31R
02-08-10, 16:05
Did i come to a conclusion? No. Just thought the charts were mildly interesting
Yes. I believe you did....
Trickle down economics? Right :rolleyes:
rickrock305
02-08-10, 16:06
Thats your idea of a conclusion? Whatever you want to read into i guess.
Belmont31R
02-08-10, 16:29
Thats your idea of a conclusion? Whatever you want to read into i guess.
You posed a question (thread topic). Provided data (graphs). Came to a conclusion (Trickle down economics? Right :rolleyes:).
Anyways whats the point of this thread if not? Is the point not to somehow show top income rates falling doesn't lead to economic growth? You thought they were interesting? Then say so instead of coming off like you're trying to make a point and come to some sort of conclusion to fit your progressive ideology of extremely high taxes on the rich.
I've seen this same argument by leftists countless times. As to somehow justify high taxation. What your chart doesn't provide any data for is the general increase in taxes in that same time period. What were the state income taxes 50 years ago? Sales tax? Property tax? SS & Medicare? All the nickle and dime taxes we pay now? Did anybody really pay 90% or were there more deductions back then than now? If someone was a top income earner in 1950 what total percentage of their income went to taxes vs. 2010? With all the extra taxes that didn't exist back then as they do today what about middle income earners? What percentage of their income went to taxes in 1950 vs. 2010?
ooooo, a couple of chart's that promote higher tax rates! And I though economics was really hard. How about we operate on the principle that we shouldn't steal from our rich neighbor's to fund grossly dubious gov't projects.
Did i come to a conclusion? No. Just thought the charts were mildly interesting
They're not even mildly interesting. It looks like Congress came up with those...
I should close this thread for trolling but I think I'll let these guys hammer home the facts.
ForTehNguyen
02-08-10, 16:54
http://www.samizdata.net/blog/~pdeh/piratesarecool4.gif
rickrock305
02-08-10, 18:43
Anyways whats the point of this thread if not? Is the point not to somehow show top income rates falling doesn't lead to economic growth? You thought they were interesting? Then say so instead of coming off like you're trying to make a point and come to some sort of conclusion to fit your progressive ideology of extremely high taxes on the rich.
you really don't know a thing about my idealogy, please don't pretend to. i know it makes it much easier for you, but i just don't fit in your little box.
I've seen this same argument by leftists countless times. As to somehow justify high taxation. What your chart doesn't provide any data for is the general increase in taxes in that same time period. What were the state income taxes 50 years ago? Sales tax? Property tax? SS & Medicare? All the nickle and dime taxes we pay now? Did anybody really pay 90% or were there more deductions back then than now? If someone was a top income earner in 1950 what total percentage of their income went to taxes vs. 2010? With all the extra taxes that didn't exist back then as they do today what about middle income earners? What percentage of their income went to taxes in 1950 vs. 2010?
now you're getting the point of the thread! all great questions that bear looking into. its about discussion. its not about winning or losing, right vs left, or any of that small minded BS.
rickrock305
02-08-10, 18:44
ooooo, a couple of chart's that promote higher tax rates! And I though economics was really hard. How about we operate on the principle that we shouldn't steal from our rich neighbor's to fund grossly dubious gov't projects.
apparently you didn't read the link. that was exactly the point, that economics is more than a one sentence slogan, like low taxes=growth or high taxes=greater revenue. its a combination of many factors. and i fail to see how the charts promote higher tax rates.
I fail to understand how you feel there is any amount of credibility in the charts you are referring to or the claimed economical knowledge of the blog poster you linked to.
Belmont31R
02-08-10, 19:02
apparently you didn't read the link. that was exactly the point, that economics is more than a one sentence slogan, like low taxes=growth or high taxes=greater revenue. its a combination of many factors. and i fail to see how the charts promote higher tax rates.
Its an attempt to say that higher taxes dont hurt the economy (GDP) so therefore higher taxes are ok, and does not retard growth.
I've seen the same basic thing argued by liberals countless times.
And yes taxes and the economy is more than a sentence of argument. People spend their whole lives studying this and still cannot make accurate predictions.
http://www.samizdata.net/blog/~pdeh/piratesarecool4.gif
This illustrates the EXACT principle I was going to explain in words...
The two data points are not a function of one another, and therefore any comparison needs to be much better defined than either of the original graphs shows.
CRAP!!! Don't even get me started on Pirates...
Heavy Metal
02-08-10, 19:59
Did i come to a conclusion? No. Just thought the charts were mildly interesting
Correlation does not equal casuation.
I have a magic rock that keeps my neighborhood safe from Tigers. Since I started carrying it, there have been no tiger attacks.
Coincidence? I think not.
Tell us Rickrock305. Who did you vote for last Presidential election?
Heavy Metal
02-08-10, 20:00
This illustrates the EXACT principle I was going to explain in words...
The two data points are not a function of one another, and therefore any comparison needs to be much better defined than either of the original graphs shows.
You realize it started getting colder just after the Somali Pirate attacks started?
Coincidence? I think not.
Yet again, a complete lack of understanding for correlation and causation.
edit-CURSES, guess I should have read to the end, I see heavymetal beat me to it when it posted.
I have a magic rock that keeps my neighborhood safe from Tigers.
Until now I was absolutely positive I was the only one who had one of these handy. Aren't they fantastic?
Heavy Metal
02-08-10, 20:29
Until now I was absolutely positive I was the only one who had one of these handy. Aren't they fantastic?
Bubba, it's the bees knees!:D
apparently you didn't read the link. that was exactly the point, that economics is more than a one sentence slogan, like low taxes=growth or high taxes=greater revenue. its a combination of many factors. and i fail to see how the charts promote higher tax rates.
And you fail to get my point.......people use statistics, dubious cost/benefit analysis, cooked correlation, and charts to justify stealing from their neighbor. If the first chart doesn't promote higher marginal tax rates, what does it promote, nothing? It looks like just another case of swag (scientific wild ass guess).
This country has gotten far from the principle of "Thou shalt not steal".
you really don't know a thing about my idealogy, please don't pretend to. i know it makes it much easier for you, but i just don't fit in your little box.
Perhaps if you answered the questions posed you might be able to correct any misconceptions about your ideology.
Did i come to a conclusion? No. Just thought the charts were mildly interesting
Thats your idea of a conclusion? Whatever you want to read into i guess.
now you're getting the point of the thread! all great questions that bear looking into. its about discussion. its not about winning or losing, right vs left, or any of that small minded BS.
Right. It's about discussion. Sorry, but one look at the OP and I get the impression that you aren't trying to have a discussion. You pose a rhetorical question, make a cynical retort that makes it clear you think "trickle down economics" is hogwash, and post a link and couple of graphs from some blog that don't really appear to show much of anything (with absolutely no discussion from you on the substance of those graphs or anything written on the blog).
But yeah, it's about discussion.
Allowing the discussion on the merits of any given tax or tax rate to be framed in the context of if it is “good for the economy” or not is missing the point. Point is, the government should only be taxing the people to the extent that they have sufficient funds to function in accordance with the Constitution within their scope of authority. In practice the government is nothing more than an intermediary that is generally entropic in nature.
And you fail to get my point.......people use statistics, dubious cost/benefit analysis, cooked correlation, and charts to justify stealing from their neighbor. If the first chart doesn't promote higher marginal tax rates, what does it promote, nothing? It looks like just another case of swag (scientific wild ass guess).
This country has gotten far from the principle of "Thou shalt not steal".
Exactly.
"...a wise and frugal government, which shall restrain men from injuring one another, which shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government." -Jefferson
Forgive me, rickrock305, for creating a little one-liner to sum up taxation but the bottom line is the government had better have a damn good reason for every dime it takes from anyone (and robbing Peter to bribe Paul doesn’t qualify as a damn good reason).
Correlation does not equal casuation.
999,997 out of 1,000,000 expectant mothers drank a diet coke in the preceding nine months before getting pregnant.
Therefore, if you want to get pregnant, you should also drink a diet coke.
:cool:
Trickle down economics? Right :rolleyes:
No society has ever taxed themselves to prosperity. The opposite is however not true.
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