Why do repugs want tax cuts for the rich?

[Brucey]

What is the motivation for Bush constantly pushing tax cuts for wealthy people? To us, it seems to be (1) to loot the national treasury for his friends and supporters, and (2) to increase the federal deficit to the point where cuts will have to be made in Social Security, Medicare, and other social programs.

What do repugs think that Bush's motives are? They don't seriously buy the idea that it will improve the economy, create jobs, etc. do they? Do they think that rich people aren't spending because they don't have the money, and that if we just give them some more they will then become big spenders, and the money will spur the economy? If they think that, why are they against us just spending the money and skipping the middle man?

[durutti]

1. A Few of Them Sincerely Believe

They think (wrongly) that by giving the rich more money, it will encourage them to invest.

[eileen_d]

2. Yes - And

if the rich have more money, they will have more to donate to the Republicans. That's what I think when I read about Bush/Cheney fundraising dinners.

[Lindacooks]

4. Exactly

It's a form of money-laundering. The chimp raids the Treasury for his friends, who give the money to him for 'campaigning' (i.e. more lies). It's just one step removed from raiding the Treasury for himself.

[QuestioningStudent]

6. Actually...

A market liberal would phrase it this way:

"I think that if you take less money from the rich, it will encourage them to invest and/or spend more."

To a market liberal, there is a large distinction between the phrases "giving the rich more money" and "taking less money from the rich." The first implies some form of transfer payment, where the second does not--and it is this adherence to a more essentially capitalist system, with a minimum of confiscatory taxes, that a market liberal would argue will impel economic growth.

My $0.01.

[PurityOfEssence]

12. Taxation is billing for services; you advocate subsidizing the rich

That's the point nobody seems to be able to make. Taxation is not some intrusive punishment and thievery from those who are more perfect creatures by the yardstick of Social Darwinism, it is an attempt to get all members of society to pay for the services they receive. Why should a poor person pay for the FDIC, FSLIC, SEC, Overseas Business Guarantees and U.S. military operations to defend Occidental Petroleum's piplines in Columbia? Why did our Secretary of State go to India to shake down the government for $3.2 Billion for their friends at Enron? What other issues on the table was he willing to trade to get their compliance? Rich people also tend to degrade the roadways more, use more resources, pollute more, benefit more from the FCC by using more frequencies, and on and on. Besides all that, the stability provided by a government like this gives them the peace necessary to make gigantic heaps of money from which to sneer at the drones; they should at least look at it as protection money to keep the rabble from tearing them limb from limb.

So it's not a question of "taking less money from the rich", it's really a question of whether we subsidize their activities, forgive their wear and tear on the system and shift the burden of their maintenance onto those less fortunate. Someone has to--and does--pay for these thing; call me old-fashioned, but I think that the people who benefit from them should, especially when they have the means to do so.

Conservatism is about ME; liberalism is about US. The truth that most conservatives can't grasp is that we're interdependent and that they benefit greatly from a system that punishes others so they can have it even better. The conservative idea that these people are living gods from whom all jobs flow is a heap of crap: without people willing and able to do the work, there's also nothing. Which is more important?

[QuestioningStudent]

22. eh...

At no point do I claim any of the following ideas as my own, keep that in mind, please.
----------------------------------------------------

Nobody would argue that taxation, in and of itself, necessarily constitutes "intrusive punishment and thievery," at least nobody of the market liberal persuasion with a firm grounding in that economic philosophy's theories. However, while there is an accepted rationale for taxation, the market liberal argues that there is a point past which government provision of services, and _corresponding taxation to pay for said services_, become both economically impractical and (generally included along with that) immoral.

When one advances the argument that tax payments should be in proportion to the amount of benefit one receives from the government, one advances an argument that few people will disagree with--even market liberals. However, the structure of the tax system will still be debated. A very common argument from the m.l. side of the aisle is that the income tax, in and of itself, is quite destructive economically, and is morally disgusting; Neal Boortz is a great example of that attitude: his argument generally goes, "Who owns you? If you don't entirely own yourself, how much of you does someone else own? How much of your labor are they entitled to?" People of the philosophy that income taxation is not the ideal system will usually accompany their arguments with a recommendation to move toward a national sales tax instead of a national income tax, the theory being, briefly, that when one pays sales tax one is paying a tax on the market-determined value of the good/service you consume, and not on a theoretical maximum level of value you MAY derive from consuming (your total income). Whether this is a VALID argument is subject to debate. Usually loud, violent, antagonistic debate.

Finally, market liberals argue that their system of essentially laissez-faire capitalism secures the freedoms and securities of all people equally, recognizing that the value of and fair payment for services rendered and products provided is best determined by the market and individual choice, not through government intervention. If a corporation that pays its ceo hundreds or thousands of times more than its rank-and-file employee is repugnant to the average consumer, those consumers won't support that company. They'll drive it out of business by redirecting their purchasing power towards a more preferrable producer. Same argument is made as regards the environment--if people care about the environment, they'll support greener companies. In an attempt to gain more market share, and increase revenue, companies will adopt greener technologies if that is what the consuming public desires. Etc, etc.
-------------------------------------------------------
I desired to make two points with this post: the first is that the objections you raise are not entirely appropriate to the market liberal model, and the second is that a market liberal does not perceive their arguments as beneficial towards any one sector of society, nor as prejuidicial towards any one sector of society--save, perhaps, that portion of society, if any, that refuses to be productive. The market liberal has no less a respect for life than does the adherent of any other economic theory, although their methodology for the advancement of that respect may differ significantly from others. I recognize a difference between conservatism and market liberalism; I am advancing the arguments of the latter to provide a contrast with the thoughts presented here and spur debate. After all, what better way to keep one's mental dagger sharp than to hone it against opposing arguments?

[PurityOfEssence]

48. Interesting points

Well, there was a certain amount of offense meant, so I truly can't feign complete innocence here, but it wasn't meant as an indictment of you. I would argue your contention that market liberals don't consider one type of person "superior" to others; they absolutely do. This isn't so scurrilous; just about everyone has a "virtue hierarchy" whether they know or admit it.

There are many ways of raising revenue to sustain the system, and there are many ways of defining the system. When Junior says he represents the interest of America, to a great degree, he's being honest; it's just that his definition of "America" is vastly different than mine. His definition is skewed for the rich, the mega-rich, the beyond-rich and corporations. His definition of sustaining the system disregards safety nets and has a selective vision. Many people have different core assumptions, and that's where the problem often lies.

We could have a flat tax on income. We could have no income tax, but a straight sales tax. We could have net-worth tax (hahahahaha) or any of these in combination. Regardless, defining what the government seeks to do and how it seeks to do it always needs to be agreed upon, as does the liability for this. One of the enduring lies of our society is that passive wealth has no costs to the rest of us. This is simply false, yet to mention it is heresy. If one inherits a big pile of money and just keeps it in a bank, there are still many costs that someone has to pay for that, not to mention some tribute to the systems that allow the safety of it.

There is a morality behind various theories, and much of it is cynical and disgustingly tilted against people without money.

Don't take it personally, and I'm sorry if it came off that way, but to say that spiritual and ethical issues aren't at play just isn't true.

As for the libertarian argument of voting with one's wallet by not doing business with one that's paying its CEO too much and screwing its employees, that holds less and less water when monopolies consolidate their hold as they're doing right now. It also necessitates a "wrong" having to happen before the correction. This has always been my problem with libertarianism: if the product's unsafe, it won't survive; unfortunately, the process by which we determine it's hazards is in the deaths of a dozen teenage girls and other innocents. This is too high a price to pay for a "nimble" and "responsive" business environment; I'd rather suffer under some stodgy and stultifying regulation, maybe delay some progress and eat a cheaper cut of meat, and not have any dead bodies or dismembered victims.

There is undeniable ethical and moral underpinning to all economic theory, ONCE APPLIED. We can sit around and theorize about eugenics and slavery and many other methods of societal organization, but once we attempt to implement them, we are showing our preferences.

Brain scientists have been discovering that logic and emotions are intertwined; this isn't surprising: "dispassionate" anaylsis is an attempt to judge in an objective way, but it's not fully achievable.

[QuestioningStudent]

64. Brief analysis of market liberalism.

Market Liberal ideas:
1. M.l. theory is based on a conception of the individual as the basis for society, with a recognition that one only has the inherent right to consume as much as one produces, and no more. The value of one's time is determined by the products and/or services one provides, the value of such products/services determined by: the aggregate demand for the provided good, and one's competitive ability in relation to other suppliers of said good. With a market that allows only for voluntary transactions, the only transactions that will be pursued are those that allow a mutual benefit for all involved in the transaction. This forces individuals to move into those fields of work where they are most competitive--in other words, into those fields where they are most the productive in relation to as many other providers in as many available fields of work as possible--in order to maximize their ability to consume, inasmuch as they desire to continue increasing such consumptive capacity. Government, in the m.l. view, at least economically, is supposed to ensure that the market is a home only to voluntary transactions; neither force nor fraud nor welfare of any variety (ESPECIALLY corporate welfare!) are permitted in a market liberal economy, as they distort the information carried by prices, as well as the role of choice.

Okay, talk about run-on sentences. That's rough. That's sketchy. I'm sorry. I'm _very_ tired, and probably shouldn't be allowed near a keyboard right now. Oh well.

Anyhow.

The basic values enshrined in market liberal theory, as far as I can tell, are a demand that consumption=(at most)production, and a belief that all values derive from the action of individuals.

Thoughts? Flaws in that analysis? Critiques of the theory, as I've presented it, assuming I've done so in a tolerably adequate fashion?

[quaker bill]

68. No flaws in your general recitation

The theory is consistent with neo-conservatism.

It also does not work in reality. It only works in textbooks and lecture halls.

When the market was allowed to do its thing, sans government intervention, the rivers would catch on fire. The business cycle had large swings from boom to depression. People and the planet suffered.

Pristine idea on paper seriously flawed in reality.

[QuestioningStudent]

69. To be completely fair

An economy that actually follows the rules of market liberalism has never, to my knowledge, actually existed. Common examples of supposedly m.l. economies typically include early America; however, even in the 18th and 19th centuries, government intervention in the form of corporate subisides (land grants for railroads, etc.) were actually fairly common. Admittedly, even though that time period did not conform to m.l. ideals, it was probably one of the closest approximations we'll find, and it is interesting to note that one of the fastest periods of overall economic growth and quality-of-life improvements happened during that time period. That implies that, regardless of whether or not the theory has flaws, it's not worthless. To say that the idea is "seriously flawed" overlooks its accomplishments. Could that time period have been better? Hell yes. Can the theory be so easily dismissed? I'm afraid not.

Incidentally, and this is more an aside than anything else, many of the quality of life issues that people mention from 18th-19th century America--pollution, etc.--were either 1)while bad, not considered as to many people at the time as doing without industry and manufacture would have been, and 2)under improvement by industry itself, in many areas. Note, that almost every reduction in pollution has derived from some new method of recovering resources or increasing the efficiency with which resources are utilized.

This is not meant as a defense, per se, of market liberalism, but an acknowledgement that, whatever its moral/ethical flaws may be, it is not _completely_ without merit, and critiques of m.l. theory need to be a little more precise whenever possible.

[AP]

14. There's a curve representing a fair tax burden at increasing inc. levels

If your effective tax rate is below that line, you're giving money to that person. If your effective tax rate is above that line, your paying a confiscatory tax rate.

The middle and working class are paying more in taxes than their fair share. The rich are paying below their fair share.

We do not collect income tax in a progressive manner in America. It's highly regressive. For some, it's a free ride. For others it's theft. The money that's collected above the curve (at the bottom end of the income scale) is transferred to the people at the top end of the income scale. That's the transfer of wealth from working class/midddle class to rich.

[BikeDeck]

19. define

The middle and working class are paying more in taxes than their fair share. The rich are paying below their fair share.

Define "fair share" in definitive and exacting words.

Example. And these numbers are made up for ease and quick typing. If the group of people earing $80,000 to $100,000 account for 20% of earned income in America, would their fair share of the income tax burden be 20%? Or would their fair share be more or less, and what would the number be?

[AP]

26. Fair share is this:

You have a certain amount of money you need to run the government. You take that totall sum and you spread the burden of paying it fairly among everyone.

Fair means you take in out in proportion to the benefits people reap form society, and you recognize that the wealthier you are, the lower your marginal valuation of an additional dollar is.

If you live below the poverty level, you're not reapoing much benefit from American society. In a world with so much wealth, it's a shame that we can't spread some down among those who suffer the most. So, 0 rate on those people, and maybe even an EIC. It's fair, and it makes economic sense to give people a safety net so they can take some chances to get out of poverty. Also, don't make their kids suffer for their failings.

Now, as you move up the income scale, the more you make, the easier it is to make more money in terms of labor expended and chances you have to take, so you have to have gradually increasing rates at higher and higher income levels.

If you tax people at a rate that's higher than that fair rate, and someone else at a level lower than that rate, you're burdening the former, and unburdening the latter. In society today, the former group is the working and middle class. The latter group is the super wealthy. They former is subsidizing the latter and transferring their hard earned wealth to them.

[BikeDeck]

27. How about some numbers

Now, as you move up the income scale, the more you make, the easier it is to make more money in terms of labor expended and chances you have to take, so you have to have gradually increasing rates at higher and higher income levels.

What is the rate you think would be fair to tax someone earning $300,000 a year and why?

$500,000?

$1,000,000?

$50,000,000?

[AP]

30. Without having a team of economists crunching numbers, I can only

guess. And my guess would be useless in terms of debating this. But, hypothetically, perhaps,

Earned Income (corps & individuals) all numbers in Ks
0-50--0%
50-120 -- 12%
120-200 -- 18%
200-500 -- 22%
500-1000 -- 25%
1000-2500 -- 30%
2500 - 5000 -- 33%
5000 - 10000 -- 35%
100000-20000 -- 35.5%

(and on an on to infinity, increasing at maybe .1% every 20000)

You'd really need to spend a couple days with economists and tons of data to figure out what a fair tax burden is.

I can tell you one thing though. What we have deiefinitely isn't fair.

Why? Because a doctor or lawyer who makes another 10,000 taking a huge risk practicising his profession to earn that money, shouldn't be paying 3,500 iin taxes on that 10,000, whil Richard Grasso sells stock options that he got for being a friend to the rich, and which create no risk at all and he only has to pay 1,500 for an extra 10000.

It isn't fair that a secretary making 25K would have to take a second job and work another 20 hours a week to make 15,000 bucks a year, for which she pays an effective tax of maybe 4,000, while her boss pays 4,000 on added income of maybe 12,000 that he gets from maybe putting two extra weekends in the office the entire year.

[Hammie]

51. Risk/Reward

AP, I couldn't agree more that the tax system that we have now is unfair. However, I disagree with your example of who takes more risk the doctor or Richard Grasso (I don't know who is Richard Grasso, but it probably isn't relevent to my argument).

The doctor who wants to earn more money at his profession, merely has to work more hours, within reason. A doctor is essentially a well paid piece worker and the longer he works, the more he will make.

The person who sells stock options to generate income takes no risk at the time they are exercised. On the other hand, there is tremendous risk at the time that they are awarded. Generally when options are awarded, they are priced at market value. i.e. if you exercise them, you get nothing. Plus, they often have a vesting period, which means you can't do any thing with them for some fixed period of time. If the stock goes up, some time in the future when you are vested you might make some "easy" money. On the other hand, if the stock declines, you get nothing. You are especially vulnerable if you go for the lowest tax rate, which requires you to exercise your shares (buy them at the option price) and then hold them for a year. If you are subject to AMT and the stock tanks you could end up losing your shirt. Often, but not always, when you terminate your relationship with the company that awarded the options, you loose any unexercised shares and you get nothing.

My wife, for example, works at a cash poor start up company and her compensation is entirely in stock options. If the company takes off, she stands to be compensated at hundreds of dollars an hour for her time. Most likely, this will not happen and the company will suffer the fate of most startups and just sort of disappear, in which case she will get nothing. Given your hypothesis, people should be lined up to work there. Strangely, that isn't the case, recruiting and retaining people is a big problem.

If your contention is that higher risk should result in lower taxes on a similar outcome, then the person who is compensated in stock options definitely deserves a lower tax rate than the person who is compensated in cash.

So how about it, are you going to ask your company to stop paying you in that risky cash and pay you with those sure-fire stock options instead, just to save some taxes?

[stevebreeze]

54. more money for more risk?

Then taxi drivers, construction workers and farmers should be the highest paid. The only risk the welathy make in investing is if they loose all their money they might have to work for a living like the rest of us.
:kick:

[Hammie]

61. Fiancial Risk

AP's hypothesis appeared to be that those that take a greater finacial risk should be eligible for a lower tax rate. I was merely attemting to illustrate that what he considered to be a low risk form of compensation (stock options) were nothing of the sort, and under his hypothesis, it is perfectly reasonable to subject income thus derived to a lower tax rate.

Of course, you are intentionally misunderstanding my point.

BTW you forgot pilot, stewardess (stewardperson?), lumberjack, and, at the very top of the heap, fishermen in the list of physically dangerous professions.

[AP]

66. Not just risk. The more passive the investment, as less effort is required

to earn that money, in terms of time committment (for example) than the higher the tax rate should be relative to someone busting her ass, giving up lots of time, and actually putting something serious on the line to get that income.

One of the reasons stock options are so popular is becuase it means people can potentially get income taxed at LTCG or CG rates rather than earned income rates. There are lots of crazy angles to it too. In the late 90s, they weren't really an otion for the janitors. They still had their income taxed at higher rates than the poepe getting the options. Now they're used because these companies have no money and, in a poor employment market, you can force people to work for low wages in exchenge for dream of making it big. In a better economy, these people would have mor choices.

[stevebreeze]

56. If tax shares are fair you would find all income growing in unison

That is the top 1%'s increase in income over time would be about the same % as other income groups. This is far from what has happened in the last 25 years. In the 25 years before that however income did all grow together.

Check this study by the Center for Budget and Policy Priorities out.
http://www.cbpp.org/9-23-03tax.htm

The average hourly wage according to the Bureau of Labor Statistics has dropped for $8.52 in 1975 to $8.33 in inflation adjusted 1982 dollars. Productivity has increased more then 50% in that time. If the moeny went equaly to labor and capital you would expect a consderable raise in wages. When you consider that it has in fact moved down you get some idea of how much the middle class has been bled dry for the benefit of the rich and the corporate.
:kick:

[Bandit]

16. Either way the rich get richer and poor get poorer

And the market is not stimulated or employment increased. The way the Republicans sell their tax cuts is by saying everyone gets a tax cut not just the rich. They could be correct in that except the overwhelming largess of the cuts go to the upper 5% of the people. It is saying to the people hey vote for me and I'll see you get free money. Who wouldn't be for that? They leave out the fact that most government services will have to be cut.

[BikeDeck]

20. Largess

They could be correct in that except the overwhelming largess of the cuts go to the upper 5% of the people.

Isn't this true because an overwhelming percentage of the income taxes paid are paid by the top 5%?


They leave out the fact that most government services will have to be cut.

What services have been cut? And I mean actual cuts, a real reduction in dollars received. NOT reductions in projected increases.

[Bandit]

29. In my local area many have been cut.

You can say those are state or local concerns but they used to receive federal funds that are no longer available. Most social programs have had major hits and education funding is down considerably. In fact our teachers are on strike because they have not received a cost of living increase in five years. Cuts are a fact.

[BikeDeck]

35. Education funding

Most social programs have had major hits and education funding is down considerably.

That is demonstrably false. The Education Departments budget has exploded over the past couple of years.

[ShimokitaJer]

38. Then why are most school district budgets declining?

Is the money not being spent wisely? Is too much of it going to the bureaucracy? Are resources being allocated poorly or diverted to schools who don't need them?

If it is demonstrably false, then please demonstrate it with a link.

[AP]

47. What are they spending it on? Buying standardized test programs

that private companies (like Neil Bush's) sell.

The education budget is being used to transfer money to private education companies. It's not being spent on anything that's going to reap any kind of return for society.

In fact, they're trying to kill public eduation in the US in order to create an underclass that's willing to sow soccer balls for europeans for 1 dollar an hour.

[AP]

32. The top 5% pay a way lower proportion of their wealth in taxes than the

proportion of wealth they control, and the higher you got up the income ladder, the more disproporionat theat relationship becomes.

In the last 12 years, the top 1% of Americans got 150% wealthier, while their tax burden dropped by 50%. (That's from memory.) For everyone else, the tax burden has remaine the same or increased. That's why we're having so many problems today with this economy. We have as much wealth disparty today than America had just before the Great Depression, and those two facts are very causally connected.

[BikeDeck]

37. Wealth is irrelevant

The top 5% pay a way lower proportion of their wealth in taxes than the proportion of wealth they control, and the higher you got up the income ladder, the more disproporionat theat relationship becomes.

We do not have a wealth tax, so a persons wealth is irrelevant to a discussion on INCOME tax. There are people, especially elderly people who have a vast amount of wealth, but not a large income.


In the last 12 years, the top 1% of Americans got 150% wealthier, while their tax burden dropped by 50%.

Has the amount, in actual dollars, that the top 1% pay in income taxes dropped by 50%? No. It has risen quite a bit.

For everyone else, the tax burden has remaine the same or increased.

No. The % of income taxes paid by the bottom 50% of wage earners has continually declined.

[AP]

42. Spreading the burden of taxation fairly is critical to a competitive...

...economy.

Tax should have a neutral impact on economic behavior. It doesn't. There was an accountant here who wrote about how his small business client would turn down business because, after taxes, the profit margin wasn't big enough. He decided he had better ways to spend his time than taking a risk of accepting the added business AFTER HE CONSIDERED THE TAX IMPACT.

You know who took that business? Some big company who could get a little closer to monopoly pricing, and who could further consolidate their wealth thanks to the lower relative tax burden do to an difference in WEALTH (which makes a huge difference).

From where are you going to get price competion and innovative business models if the small businessman is going to have to pass on business because the US Tax code DOESN NOT HAVE A NEUTRAL IMPACT ON BEHAVIOR.

Even if you break those numbers down by income, there's a huge disparity.

If you're making 150% more, and you're paying an effective tax rate that's half the rate you paid ten years ago you're reaping huge benefits. Compare that to people who are making less or the same and are seing their effective tax rate (and the amount the pay in taxes in many cases) increase. You're saying that's fair?

You either don't understand math and economics, or you do and you should be ashamed.

[tom_paine]

33. Have you ever heard of "The Declining Marginal Utility of Currency"?

http://www.sas.upenn.edu/~baron/jg.htm

There is a reason for progressive taxation.

And as to what services have been cut, my troller, let's start with veterans...

http://www.prospect.org/print-friendly/webfeatures/2003/03/kuttner-r-03-27.html

Although I suppose those commie librul scummy veterans don't deserve their stinkin' communist handouts, do they?

Perhaps if you read a book or two rather than spewing out the lies that Rush and O'Reichly and the other members of Goebbels v2.0, you might understand more (of course I know that actual education is anathema to you people, far below in worth to Bushevik misinformation and Bushevik propaganda).

Oh, and by the way, I noticed that you (coincidentally, this is what a Dittohead who didn't know any better would say) fail to include payroll taxes in that category.

Aren't they taxes?

Your Masters would be upset with you this day, I think. You haven't been Fair and Balanced enough.

[BikeDeck]

39. Payroll taxes

When the discussion is about INCOME Taxes, to include payroll taxes is wrong.

[AP]

43. The wingers can only argue this by narrowing the focus (and even then they

don't have logic on their side).

We shouldn't be weeding out taxes in order to discuss this. We should be talking about all the taxes people pay at every level of gov't and about all the fees people pay, and the way states now have to make up in shortfalls of Fed money.

We are shifting the burden on to the poor and middle class, even though the headlines say "income taxes lowered". It's too painfully obvious. BikeDeck, you're fighting a battle for the right wing which they've already lost. We've have had this debate dozens of times here at DU and your philosophical brothers have always scurried off with their tails between their legs.

This tax debate is way beyond easy to manipulate nuances like "we're not talking about payroll taxes". People know the score by now. You're not going to win this.

[Bandit]

50. Isn't this true because an overwhelming percentage of the income taxes pai

The overwhelming use of public resources is by those 5% so they need to pay their fair share. I realize to the robber barons that shouldn't be the case but if one loves the country they live in they should not object to contributing to the well being of that country. It is funny how all the huge right-wing corporations have moved off-shore to evade taxes while still benenfitting from government expenses, such as military and police and fire protection and street maintenance etc.etc.etc. Your attitude is me me me me and screw everyone else. That attitude doesn't set well here.

[NoMoreRedInk]

59. Actually, their only choice is to invest it, spend it, or give it away....

What else is there?

Hey, I'm for progressive income taxes as much as anybody here, but I don't think you had thought through your post.

[WhoCountsTheVotes]

3. right on both counts

"to loot the national treasury for his friends and supporters" - yes

"to increase the federal deficit to the point where cuts will have to be made in Social Security, Medicare, and other social programs" - yes

They are pretty open about it too.

[sangh0]

5. Because they agree with the Dems

They think that tax cuts for the wealthy will

1) Loot the national treasury for them
2) Increase the federal deficit to the point where cuts will have to be made in Social Security, Medicare, and other social programs.

[mrgorth]

7. All of the above

and they consider taxation theft.

[DBoon]

8. Because they deserve it

The rich are better - smarter, harder working, taking more risks - than the rest of us.

They deserve their superior position.

They earned their money even more so than we do, so they should get to keep more of it.

Without the wealthy to lead us, we would be back in the stone age.

Basically, take the left wing argument about capitalism being about the exploitation of the workers, and turn it upside down.


Kind of like in the 17th century, when some folks believed that kings ruled on the authority of god.

[JewelDigger]

9. Because even the 'good' ones

will stay quiet about the corrupt Executive branch. And if they are enticed to become complicit with the corruption, then they will definitely stay quiet otherwise they will have to convict themselves.

On edit:

adding this link to a thread started by another poster which directly brings attention to SOME of the corruption of the Executive Branch to which I refer

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=104&topic_id=572213

[HereSince1628]

10. It's the default answer to What would Reagan Do?

The GOP worship of their reconstructed hero demands it.

There used to something called the Laffer curve(more or less bell-shaped) that the voodoo-economists referred to. The idea was that there was an optimal (middling) tax rate that generated the greatest revenue.

The reagonomists are still convinced that the US is on the "over-taxed" side of the curve. And everyone bitches about too many taxes...so the myth continues.

It does allow the rich to get richer.
The rich do invest (what else do you do with all that money?)...but the investments are overseas, hence we export jobs rather than goods
It will cripple the government's ability to continue programs (but as stated above, those "socialist" programs are hated anyway. And as
we killed socialism with the fall of the Soviets it's about time to get rid of these vestiges in post-industial USA.

[BikeDeck]

21. Laffer Curve

The Laffer Curve is dead on true. That is not debateable. What is debatable is what the "optimum rate" is. And that debate will never be settled.

[ShimokitaJer]

24. The Laffer Curve is true ONLY if...

you assume that the goal of taxation is to maximize profits for the US. Most of us here believe the role of the government should be to use what money it has to improve the quality of life for the greatest number of Americans and taxation is valid only if they further that goal.

The US government is not a corporation in which we are all investors. If it were, it would be natural for it to ignore its small investors in order to cater to its big shareholders. It's the blind redefining of government on a business model that has created the kind of divide between labor and management we're seeing today.

[BikeDeck]

25. maximization

One of the primary goals of taxation should be to raise the largest amount of revenue possible so as to have the funds neccessary to the function of the government.

Should the government collect less revenue and tax ceratin people and activities more heavily, or should it maximize its revenue abilities with a lesser tax on those people and activities?

If the money is needed for the function of government you described above, the later part of my question would be the proper course of action.

[ShimokitaJer]

36. The goal of the US government is NOT to maximize profits

I repeat: the US government is not a corporation and the American people are not shareholders. Those who pay more taxes are not entitled to more votes, greater police protection, or more favorable laws. And it's not an option for the government to point to those with very little money and say "we don't want those customers anyway" or "they can't afford our product so we won't do anything for them."

The Laffer curve argument only works if maximization of profits is the ONLY goal. Because profit is not the only concern, and the welfare of the people is dependent on more than how much money can be pulled out of them, the government needs to pay attention to both the profits and the damage done to the "customer" by taking those profits. Therefore, yes, the government should impose a greater tax on those who can afford it, even if it means collecting less total revenue, if that is for the good (which is more than simply wealth) of the nation as a whole.

[Hammie]

60. What profits

Our government does not have profits. Profits are the result of some sort of business activity.

The government has revenues (taxes) and expenditures (services that it provides). If you premise is that the government should provide the maximum possible amount of service possible, and there would be few on this board that would disput that, then the goverment has a strong motivation to maximize its revenue. Who will be the beneficiary of the services is not important, only the desire to provide a maximum amount of services.

Now, each person has an optimal tax rate. If you tax any individual at 100%, they will do nothing and you revenue will be zero. If you tax an individual at 0%, they will do plenty, but you will still get zero. Logically then, there is some tax rate between 0 and 100% that will maximize the revenue realized from each individual. The optimal tax rate will vary from individual to individual. There will also be an average tax rate for everyone, that maximizes the total revenue to the government.

If the tax rate is non-optimal, the government will receive less revenue. The tax rate can be non-optimal by being too low, or by being too high. Further more, if you believe that taxes retard economic growth, the optimum tax rate shifts to a lower value if you take into account the present value of future tax revenues.

The obvious problem is how does one determine the optimum tax rate? I couldn't even begin to guess, but denying that one exists isn't it.

If you understand that there is a real optimum tax rate, it will also likely dawn on you that there is a real fundamental limit to govt revenues and thus a fundamental limit to how much service government can provide.

[AP]

11. Repub gov'ts are wealth-protection societies.

Ideally, to get wealthy, one should have to work hard, and create something of such value to society that people are willing to buy it. Once many people get wealthy, they want to be able to stay wealthy without having to work to keep that wealth. That's where Republicans step in.

One of the most effective tools to create a permanent class of wealthy and a permanent class of middle and working class is through the tax code.

The tax code is always creating incenctives and rewards. By loading up the tax burden on people who work for a living (by taxing earned income at the highest rates) and unloading the burden from the wealthy (by taxing unearned income at the lowest rates), the gov't creates a society in which the ALREADY wealthy get wealthier without having to work or create any new value for society, and the people who work have to work so hard just to tread water that they'll never threaten the hegemony.

This is the consequence of being able to convert monetary wealth into political power so easily in the US. The wealthy have purchased themself a wealth-protection society, and it's making society poorer and it's slowing down innovation and progress. Europe went through the same thing at the end of the monarchies. Those societies rewarded wealth, loaded the burden up on the middle class, the middle class emmigrated to countries where they could reap the rewards of their labor, and those new societies forced the monarchies to convert to democracies are risk being pushed to the margins.

The US is trying to use its military and subterfuge to prevent having to abandon the wealth-protection model of society becuase they know it's uncompetitive.

[prolesunited]

13. Read this excellent essay by Bill Moyers on this

The whole article is wonderful, but this sums up what you are talking about quite well.

As a citizen I don't like the consequences of this crusade, but you have to respect the conservatives for their successful strategy in gaining control of the national agenda. Their stated and open aim is to change how America is governed - to strip from government all its functions except those that reward their rich and privileged benefactors. They are quite candid about it, even acknowledging their mean spirit in accomplishing it. Their leading strategist in Washington - the same Grover Norquist – has famously said he wants to shrink the government down to the size that it could be drowned in a bathtub. More recently, in commenting on the fiscal crisis in the states and its affect on schools and poor people, Norquist said, "I hope one of them" – one of the states – "goes bankrupt." So much for compassionate conservatism. But at least Norquist says what he means and means what he says. The White House pursues the same homicidal dream without saying so. Instead of shrinking down the government, they're filling the bathtub with so much debt that it floods the house, water-logs the economy, and washes away services for decades that have lifted millions of Americans out of destitution and into the middle-class. And what happens once the public's property has been flooded? Privatize it. Sell it at a discounted rate to the corporations.

http://www.commondreams.org/views03/0610-11.htm

[leftofthedial]

15. I long ago gave up caring what repugs think.

they are living in la la land. they are dogmatic ideologues who substitute rhetoric for reason and don't even see that their party has been taken over by criminals who are screwing repugs just as much as they are screwing the rest of us.

[Cat Atomic]

17. Because they think *they* are rich.

I've met several Republicans who make between 50-70k per year who claim to be in the top 1% of wage earners.

I think it comes from this line of argument (you hear it alot on the radio):

1. The top 1% in this country pays 60% of the taxes!

followed closely by...

2. The IRS classifies a family of 4 that makes 90k per year "wealthy". So if you and your spouse both make 45k per year, you're officially wealthy!

The implication is, of coure, that people making 45k per year are the top 1% of wage earners, and all those minimum wagers are just coasting along on your hard work. It's pretty sad.

[alcuno]

55. Ding, ding, ding, ding, ding! This is the correct answer.

There was a study out at the beginning of this year that showed that 19% of Americans believe they are in the top 1% tax bracket. They apparently have no idea that the top 1% requires an income greater than 300,000 dollars annually.

In a nation of around 350 million people, only 1 to 1.5 million are actually in that tax bracket. 20+ million people apparently think they are so that when tax cuts for the "wealthy" are brought up, these people think they are talking about them.

[corporalclegg9]

18. Let me defend Free Market Repubs here

I'm going to defend the Free Market Repubs. This defense does not imply that those politicians in office today are not corrupt, or that they necessarily agree with Free Market Repubs. I am simply stating the premise behind tax cuts the way SINCERE Free Market believers would probably want it stated.

Lots of people complain how those of the opposite party mislead the public with phrases that skew people towards a particular view. This thread asks justification for "tax cuts for the rich". This, of course, is skewed language. A traditional Free Market supporter would say that whoever levied the tax to begin with was TAXING the rich, and that they are just undoing an injustice. The problem is, there's no base point from which we can define a "tax hike" or a "tax break". That's why we have politics. :-)

Free Marketers believe that the lower the tax rate, the more incentive people have to work harder, and thus produce more for society. This obviously makes sense on some level (i.e. the Laffer Curve, where if taxes are at 100%, nobody would bother working and we would collect no taxes).

In addition, Free Marketers would say that by lowering taxes, we free up money to be invested. Even though we're taking away money that the gov't could be spending, Free Marketers would say that private industry can spend it better.

Anyway, I'm a relatively nice guy, and I tend to think that most humans aren't generally nasty and out to stick it to everyone else, which is why I'm presenting this defense in the name of TRUE, traditional supporters of the free market. This is not to say that Bush and those in power don't skew this theory to their own benefit, I just think that it needs to be stated that not all proponents of "tax cuts for the rich" are really trying to stick it to the poor. Many of them do believe the theory.

[ShimokitaJer]

23. Thanks for playing the devil's advocate

It's all too common on DU to get only one side of an issue. Ihope you don't get shouted down, but rather get some civil responses.

I fully agree with the need to regulate taxes to create incentive. However, there several problems I see with it.

First, we need to distinguish between income from labor and income from interest. Yes, we need to encourage investment as well as labor, but it is ridiculous that we tax both at the same rate, when there is an effective physical limit on how much labor you can do, but no practical limit to the amount you can earn through investment, and I tend to agree with Teddy Roosevelt on the threat the unrestricted growth of personal wealth poses to freedom.

Next, if the true motivation of Republicans was to encourage investment and labor for the good of the nation, then they would not be in favor of international trade deregulation, which exports jobs and investments to the most lucrative market regardless of whether or not it is within the US.

Finally, Republican pet peeves like the estate tax, etc. have nothing to do with encouraging growth and everything to do with concentrating wealth.

I'll admit that your analysis is how the ideals of "conservatism" should work, but our current batch of Republicans is far from ideal.

[Brucey]

31. The other part that I don't understand about the conservative

philosophy, is why the need for the middle man? If the GOAL of giving money to wealthy people is investment or trickle-down or job creation or anything else, then why do they have to do it? Why not skip the middle man (the rich) and use the treasury to accomplish those objectives.

The other problem I have is understanding how reducing taxes on the wealthy will cause them to spend more. Don't they already buy everything they need or want?

Wouldn't spending or investing by people who are not rich obtain the same objectives? Why are the rich selected out as the ones who should be in charge of deciding what to buy and invest in?

Who owns the resources of the earth?

[WhoCountsTheVotes]

28. but they don't believe it

and everytime they put their policies into action, it's a miserable failure. So either they are stupid, or they don't really believe it. I don't think they're stupid.

[corporalclegg9]

40. I think that they DO believe it...

And the reason that I think so is because I used to believe it 100%, and I also think that it's easy to pass off failed attempts as improper execution rather than a failure of the whole theory.

However, I also don't think that they're stupid. I think it's possible to be a very smart person and to believe in a theory that other people disagree with. I think that that is an honest disagreement of opinion.

The problem occurs when people push policies under the GUISE of supporting a theory, when in fact they are pushing policies for personal gain. I respect anyone who supports a policy that they believe in, and I know many people who truly believe that free markets are best. I may disagree, but I respect them.

How's this analogy?

Why do we have engineers? Well, scientists (very brilliant people, by most accounts), have for ages come up with theories that (in theory... :-) ) have all sorts of great benefits to society. However, they've always had trouble applying these theories in a way that the majority of people benefit from their theory.

This is because scientists develop theories under controlled conditions and they make assumptions that don't always exist in the real world. This doesn't make the scientist stupid. Idealistic, perhaps, but not stupid. So, engineers come along and say alright, good idea, now how can I tweak this thing so that it actually does some good in a world where I can't guarantee optimal conditions for the theory to hold true? However, just because a theory requires tweaking in order to be useful doesn't make it a bad theory.

This is how I view free market theory. Supporters (TRUE, honest supporters) are not stupid, they simply fail to understand that their theory needs to be tweaked to account for the lack of the underlying optimal conditions that are necessary for their theory to bear fruit.

Again, anyone who is in political office for personal gain is another story entirely. This is a matter of corruption, not a matter of free market theory as believed by honest people.

[Brucey]

53. There is no place in the world where markets are totally free,

and nearly everyone agrees that that's a good thing. The question really is how many restrictions and where to apply them. Even the US has a number of reasonable restrictions on free markets (pollution, monopoly, etc.). When Eastern Europe began opening markets they had great difficulties, many of which continue, because they didn't set up judicial systems to check crime and other problems that quickly developed. Anyway, this thread is not so much about free markets, but more about why it is desirable for the wealthy people in a society to be given free reign to save, invest, or spend. Shouldn't the wealthy contribute taxes that are spent by the masses or by various groups? Why is it advantageous for the rich to be in charge of all the decisions regarding economics?

[QuestioningStudent]

67. There is a difference...

between the quality of the government regulation of the market under a market liberal (m.l.) or free market system, and the quality of the government regulation present in mixed economies like those present in pretty much all nations today. M.l. system government intervention exists only to: secure physical property rights; secure intellectual property rights; ensure all transactions are voluntary, and punish those that are not; provide courts to adjudicate disputes arising out of either alledged force/fraud in a transaction, or out of the disputed terms of a voluntary transaction; and--this is debated depending upon the m.l. enthusiast you're talking to--provide for the minimum economic needs of those individuals in society who are unable, through some circumstance--be it a profound mental or physical handicap, youth, senility, etc.--to provide for themselves. That last point is endorsed by such m.l. luminaries as Smith and Friedman, while being attacked by Rand, and, in the past, Greenspan.

Every government intervention in the market, the m.l. argument goes, beyond those basics listed above, which are necessary to ensure the existence of a liberal market, will damage the ability of the marketplace to determine income according to each individual actor's adherence to the incentive of following that old economic maxim "buy low, sell high." If each actor has the information flowing to and from him in the form of prices obfuscated or altered by intervention in the market by the government, whether such alteration be by the implemenation of a minimum wage, price cap, business subisidies, the existenc of protected unions, government restricted entry into a business field, or anything remotely similiar, the m.l. system begins to break down, and become less effective.

So, really, the argument that reducing the tax rate on the rich WORKS can only effectively be made in an economy that is essentially m.l. in nature; if the economy is not, the signals transmitted in the economy through prices, and the incentives thereby provided, will not serve effectively to stimulate the economy to growth. Therefore, any discussion that attempts to explain why reducing or altering tax rates will stimulate the economy must also venture onto the grounds of explaining a m.l. system.

Right or wrong, that's how a market liberal thinks. Incidentally, I use the phrase market liberal to isolate just the relevant economic philosophy, and distinguish it from any political or social philosophies, such as libertarianism--which purports to believe strongly in this model, or conservatism--which believes, albeit to a lesser degree than libertarianism, in market liberalism.

[SoCalDem]

34. Money is "wasted" on poor/middle class people

Rich people know how to spend money.. They deserve it all..

It's hard work driving a big desk in the penthouse office..

They got their money the old fashioned way...they probably stole it or inherited it..

[ShimokitaJer]

41. Besides, rich people need more money...

because they buy more expensive things. Makes sense to me.

[GOPBasher]

44. I know the answers.

A few of them actually believe in supply-side economics. Although it hasn't worked before, they like to keep trying things. As for the rest of Republicans, they just want the deficit to spin so far out of control that they then get to say, "See, the gov't is wayyy too big!" At that point, they can take a hack saw to all of the excellent federal programs that keep the economy healthy and spread the wealth better.

[indypaul]

45. Pure and simple

GREED. Don't tax you, don't tax me. Tax the guy behind the tree.

[ComerPerro]

46. Three kinds of Republicans on this issue

Those who are very wealthy, and will receive direct and substantial benifits from this.

Those who actually believe the bullshit that the rich are taxed too much. They think that if the rich were given tax rebates, they would be so generous that they would spend, at which point the generous corporations (you know, the one that pays $6 an hour and whos CEO makes $6 million a year) will take the new profits and use them to pay all their workers more and give them better benifits. Yes, its a fantasy world

And finally, there are those who are not rich and know that the cuts won't help anyone but the rich, but they are certain that they will be rich someday soon.

[Sesquipedalian]

49. Did you catch Norquist on NPR?

He seriously believes that progressive taxation is comparable to the Holocaust (he seriously said this) in the way it's predicated on "hate and jealousy".

They think rich people need a civil rights movement or something. It's quite insane and it would be funny if these people weren't so earnest.

[mkregel]

52. Three Words:

Cheap Labor Conservatives

They want the rich to have more wealth, the average Joe to have less, so that we are desparate for whatever work we can get, and they can pay us whatever they feel. Spam and toilet paper, I think, is their goal for a minimum wage.

[Hammie]

57. Capitalism

Two reasons:

1) The rich pay most of the taxes. If you cut taxes, the rich will always get the most relief in absolute dollars even if you contrive to make their percent relief lower.

2) The belief that capital is what drives economic growth. I am no student of economics so I am merely reporting this view point and am in no position to defend, or criticize, it. If you cut the taxes to rich people, they will have more income, since they generally have all their physical needs met, as well as plenty of toys, the extra money becomes capital, a.k.a. idle wealth. I may not get the details right, but the theory supposes that the rich people being the greedy blood suckers that they are, just can't stand to see this money sitting around doing nothing so they invest it either directly in plants and equipment, or indirectly by loaning it to someone else who needs plants and equipment. In theory, this has two benefits, people are required to build the plants and equipment (in the end nothing gets done without people doing it) and the plants and equipment generally improve productivity, which it is supposed drives up wages.

Does the world really work this way? Like I said, I'm not qualified to have an opinion. Some well respected economists believe it, others don't.

The point is that people of good faith, do believe that cutting the tax rates, particularly on the rich, will grow the economy to the benefit of everyone. They are probably wrong, we are much better off with the govt. investing our hard earned dollars in social welfare programs, but they are not disingenuous. Well, some probably are, but plenty aren't

[SoCalDem]

58. "...cutting the tax rates, particularly on the rich, will grow the ..."

bank accounts and slush funds of the rich :)

[durutti]

63. The Problem w/ This Theory

Well, there are a few problems...

First, it assumes that the rich will invest in something productive. They often don't. Instead, they invest in things like real estate, art, classic cars, etc.

Another often faulty assumption is that they'll actually invest in the U.S., and not overseas, where they can exploit the cheap labor.

But the biggest error is in assuming the rich will invest their money at all. But they won't invest if there's no demand, and there won't be any demand if workers' earning are taking a beating.

A better policy would be to cut taxes for lower and middle income families. Unlike the rich, they tend to spend most of their money, rather than save it. This will generate demand, which will generate profits.

Another alternative is simply to have the government invest the money in schools, health care, and public works, which will create jobs.

It's also worth noting that there's absolutely no historical evidence that Bush-style tax cuts help the economy. There's just no correlation.

[Hammie]

65. Good points

I have one question though, like I said I'm no economist.

You claim that the biggest error is that the rich won't invest their money. Which may be true, but for the life of me I can't figure out what else they will do with it. In the very next paragraph, you say that they won't spend it, since only the middle class and poor spend all their money. Do they hoard a bunch of cash (actual paper money), gold coins? I only am personally aquainted with one rich person, and he is an uncle in-law (we're not close), so I'm quite curious. What do you do with money if you don't invest it and you don't spend it?

[Deja Q]

62. Precisely, oh a tangled web they weave...

They hate social programs and they hate people who need help. They want people to be able to support themselves or else die.

While some of their motives are not bad (there's nothing wrong with being able to support one's self, but when you've got a bunch of kids there are times when you need help), they combine those motives with others which are contradictary (they claim to be for small business, but they then deregulate big businesses which in turn buy out all the small ones.)

Their idea of "help" is to mainly create new solutions for problems, rather than fixing the causes of the problems. It's an irrational, stupid form of thinking except it allows their status quo to continue unmolested, and it creates a new industry to make more predatory elements rich beyond the dreams of avarice. (the need for mental health would drop considerably if we had a flexible society where people didn't have to work 2 or more jobs (with CEOs getting $26 mil severance packages and Lord knows how much they make as their regular salary, they sure as hell can pay the people who do the actual work more $$$ which in turn would make them happier and more productive), didn't have to work strict 8-5 shifts (why not 10-6 if you're not an early morning person? Feeling well rested improves productivity...)

Conservatives also get voted in because they harp on the base ideals people LOVE :lvoeya: to hear. But they keep their true motives silent. Dems should notice this and fight back accordingly.

Of course, with more of them shifting jobs overseas because their bottom line is more important than our society AS a society, I'm happier than a turkey who survived thanksgiving to tell them to "sit and spin on my middle digit".

I'd also be more compassionate toward the concept of capitalism if these bastards hadn't taken such disgusting advantage of the concept. Again, repukes giving them the goldmine and giving us the shaft.

We need to tell it on the mountain and never stop. And under no circumstance do we cave in to the pukes. If Time magazine could spell out how that $87 million for Iraq was a gigantic case of fuzzy math, our Dems should have enough balls to (click on BEHIND THE PRICE) NOT vote for the package until they saw ACCURATE details as to where the money is going and SAY AS MUCH ON THE FLOOR! Nothing less is acceptable, and our Dems in power are still the equivalent of mincing emasculated mice for not ASKING VALID, RELEVANT QUESTIONS.

Per the clickable article above:


$1 BILLION
To train Iraqi police and fire fighters
The Complaint: The Administration fought a $200 million increase for America's police and fire fighters

$400 MILLION
For two new jails
The Complaint: With a proposed 4,000 beds in each prison, the U.S. would be spending $50,000 per inmate

$100 MILLION
For a witness-protection program for 100 Iraqis and their families who would testify against former regime officials or suspected terrorists
The Complaint: The U.S. federal witness-protection program took in about 250 witnesses and their families last year at a total cost of $31.5 million

$5.7 BILLION
On electricity, including $1 billion to rehabilitate and replace the power infrastructure over several years
The Complaint: Compare spending $255 on electricity generation for every Iraqi with 71¢ a person spent on federally funded electricity work here at home


$2.1 BILLION
To import petroleum products and invest in oil infrastructure
The Complaint: It doesn't make sense for the world's second largest oil-producing country to import the stuff

$303 MILLION
To repair railroads and rehabilitate three major airports as well as the port of Umm Qasr near the Kuwaiti border
The Complaint: The port is already functioning

$150 MILLION
For a new children's hospital in the southern city of Basra
The Complaint: The total cost could reach $700 million

$20 MILLION
For executive job training
The Complaint: A four-week management class would cost $10,000 a person

$1 MILLION
To build a museum documenting atrocities by Saddam Hussein
The Complaint: Is this really necessary?



Time did it. Of course, I've been out of the loop - but upon hearing most of the Dems voted for this fleecing of America, my anger toward the party is beginning to resurface, please don't blame me.