Raising taxes = stronger economy

[eridani]

Reducing them leads to flat growth, and reducing them mainly for the rich leads to bubbles and financial panics.

http://www.alternet.org/workplace/119048/?page=entire

You have certainly heard, several thousand times, that tax cuts lead to economic growth.
That's not true.

Moderate tax cuts lead to a flat economy. (The Johnson tax cuts, usually misnamed the Kennedy tax cuts, lead to 16 years of virtually no growth.)

Large tax cuts are followed by a boom in the financial sector, a bubble, and a crash. Then a recession or depression with massive bank failures. This has happened three times, in the 1920s, under Reagan, and under George W. Bush.

During a depression or recession, the point where taxes are increased marks the point when the economy begins its recovery: 1932 under Hoover, Roosevelt's second round of tax hikes in 1940, the first president Bush's tax hike, followed by the Clinton tax hike. (There's one exception. Roosevelt's tax hike of 1936, which was accompanied by cuts in government spending.)

US economic growth has been strongest when our taxes have been high. During World War II, then under Truman, Eisenhower, and Kennedy, our upper marginal tax rates were between 88-92%. Read those numbers again. They are astonishingly high. Those were our strongest growth years.

The next time we experienced strong growth -- not just in the fiscal sector, across the entire economy -- was after the Clinton tax hikes.

[jmg257]

1. SO how much more do you want to pay? nt

[eridani]

2. Depends on what my income turns out to be.

Needless to say, income taxes should be steeply progressive, thus cutting the sting for 95% of us.

[notesdev]

6. So what you really mean is

taxes should be raised but someone else should bear the burden of actually paying them.

Here's an alternative that makes more sense: eliminate the labyrinth of tax breaks that pay people to engage in financial manipulation, and costs average folks billions in tax preparation and accounting fees.

[jmg257]

7. "taxes should be raised but someone else should bear the burden of actually paying them."

LOVE this - thanks!

;)

[Romulox]

9. You're also against progressive taxation? Jeesh. nt

[jmg257]

11. I just like that phrase. The OP never mentioned progressive taxes

just "raising taxes".

Personally, I would prefer to pay less taxes.

edit: expansion

[Romulox]

12. Right. But the poster you are responding to is using all the rightwing buzz words.

To whit: "Here's an alternative that makes more sense: eliminate the labyrinth of tax breaks that pay people to engage in financial manipulation, and costs average folks billions in tax preparation and accounting fees."

This is the same cant the rightwinger "flat tax" boosters use. Scratch the surface, and the poster you are responding to will admit to being "intrigued" by such a concept.

[jmg257]

13. Ahh - got you. My mistake then - I didn't pay enough attention. nt

[Romulox]

8. That those who can afford to should pay more is a foundational concept of "progressive" politics

Take your "tax protesting" to that other site, k? :hi:

And please don't tell me you are shilling for a regressive "flat tax" as an alternative to progressive taxation.

[notesdev]

17. But that's not what's happening

Those who can afford more are actually paying less as a percent of income because of the innumerable number of exemptions and deductions that are written into the tax code. And as a result of that, people who are not all that well off need to spend more money on top of their tax burden simply to figure out what exactly they do owe in taxes.

This system inures to the benefit of those who can afford high-priced accountants and lawyers. There's nothing progressive about it.

[Romulox]

19. You've specified the ill, but your "cure" sounds unlikely to solve it.

The solution to regressive tax loop holes is not to abandon the concept of progressive taxation.

[notesdev]

20. and I didn't

Nobody is talking about abandoning progressive taxation, it is a sensible and fair way to see that those who get the most material benefits from the current state of affairs are the ones to bear most of its cost.

However, progressive taxation does not require 10,000 pages' worth of tax code. It's not the people on the bottom who get the benefits of the tax code being written in such a way that even the IRS can't explain it in a consistent manner.

To help the people on the bottom, a good idea is also to eliminate entirely taxes on food, clothing, and shelter. The basics of life ought to be as available and inexpensive as possible. Get rid of lotteries too, they are a cruel trick on the least educated among us, and the government ought not to be playing them for marks.

[Hannah Bell]

24. No, it's not. The top 20% of the income distribution still pays most of the income

tax, according to every analysis out there.

[eridani]

15. Lower income people should bear a lesser percent of the total burden.

Not objecting to eliminating complexity at all, though. Also, just rehiring all the auditors that used to go after the high flyers would be a good move.

Last year I was working and could take a fairly substantial hit without too much pain. After being forced into early retirement, income is down, and my tax rate would also go down. Not sure how much yet--haven't done the calculations.

[Igel]

21. Within reason.

One of the dirty secrets is that during a recession, upper income households have a larger dollar hit to their wallet, on average. There's more to hit.

The result: If you have a sharply progressive income tax, come a recession you have a sharply "progressive" budget crunch as the sheer amount of upper-class money to be taxed takes a nosedive. Sometimes it's because stock options aren't being cashed; or because those $200k bonuses vanish. But it happens, and it happens fairly regularly in places like NY and CA.

It's worse if your upper-income households are concentrated in a few businesses, of course.

[provis99]

3. I want you to pay more!

Admit it, you love taxes.

[jmg257]

5. I know - I want them to take more! More! I can't give up enough of my money!

Especially if it helps the economy. What the hell do I need it for anyway? I will probably just selfishly buy food, or gas, or send my kids to college with it anyway.

:)

[RandomThoughts]

4. How is

Paying taxes because of a governmental system voted for by the people,

Any different then getting paid money 'more then the amount of work that is done', by an economic system, a system like supply and demand capitalism?

A football player, movie star, or CEO, gets most of their pay, not from what they do, but from the relative scarcity of their particular skills. And sometimes just because the system is geared to pay certain groups more.

Sports player is an easy one. There is only 40 or so really popular people that can be quarterbacks, so the uniqueness of that skill, makes them more valuable because of scarcity of supply, not because they work harder, but because the supply of quarterbacks, and the demand are in a extreme ratio.

The system rewards most of their pay, the actual work they do is not 10,000 times harder then lets say a police officer or fireman. And they don't work 10,000 times harder.

Supply and demand is a good system, but it has a top heavy extreme side, the many people of representative government adjust for this with progressive taxation.


Here is another example to make it clearer, The woman with the longest beard gets paid the most at a freak show, because she is a rarity. See what I mean. Did she earn it? Or was she rare enough for an imbalance of supply to the demand of people that pay to watch those things to give her a large wage?

[Romulox]

10. Some of the responses up thread courtesy of a worm hole from Free Republic.com. nt

[closeupready]

16. I think so, too.

n/t

[SammyWinstonJack]

23. .

:spray: :thumbsup:

[zbdent]

14. Clinton's terms represented one of the few times a President didn't have a recession

during his term(s) ...

[eridani]

18. Because, per the OP, he raised taxes n/t

[Igel]

22. Obviously, per the OP, without any kind of speculative bubble.

Oh, wait ...

[Hannah Bell]

25. Speculative bubbles are quashed by more taxation of wealth. The

Clinton bubble was pumped by regulatory changes; his tax increases would reduce the size of the deregulatory bubble.

[.... callchet ....]

26. It's a Club, It's that Simple !

It is as simple as if you don't pay the bills the club falls to pieces. You have to have the caretakers that work in the club to keep it up and

you have to have other people work outside the club to earn money to pay the caretakers and the clubs bills.