For those who are listening to the liberals propagating the fallacy that everything is "Bush's Fault", think about this: January 3rd, 2007 was the day the Democrats took over the Senate and the Congress: AT THAT TIME: The DOW Jones closed at 12,621.77 The GDP for the previous quarter was 3.5% The Unemployment rate was 4.6% George Bush's Economic policies SET A RECORD of 52 STRAIGHT MONTHS of JOB CREATION ! Remember the day... January 3rd, 2007 was the day that Barney Frank took over the House Financial Services Committee and Chris Dodd took over the Senate Banking. And that is when the politically correct sub-zero lending began to people who could not possibly keep up with their mortgage payments. Which was the MAIN cause of the meltdown.
Obama - What is your opinion so far on his Presidency
- Thread starter Goober
- Start date
Yes I know. That's why the simplistic explanation for tax cuts for the wealthy and trickle down economics fail. If there is a better opportunity outside of the country, then that's likely where the money goes. So it makes very little sense to try to stimulate a national economy if that money is leaving the country. Cutting tax on those who spend their money in that economy makes much more sense.
And taxed at a lower rate. The point is it has little effect on the home economy.
Tax rates were higher under Reagan than they are now, and the growth rate in the economy was higher. The American economy is already developed. The return for investors is higher on start-ups than it is for existing businesses. And the number of start-ups is much higher elsewhere.
Revisionist bull $hit. The main cause of the meltdown was the packaging of bad debt, and selling it to investors as a safe investment. If there is no appetite for bad debt, then you don't have so many bad loans, and people who can't make mortgage payments.
Oops..
As far as the trickle-down theory is concerned, all one must do to observe the benefits is to review the GDP and economic growth in those regions where the money fled to... Take a look at the evolution of the middle class in India or China. There is no question that it does have a positive effect.
Increasing tax rates on those with the cash will have an effect of suppressing the economy further.
What allowed the bad debt to be incurred in the first place?
Fannie Mae and Freddie Mac were developed by gvt in the '30's and '70's respectively. Ultimately they were privatized, but they still acted (and treated as) as pseudo-gvt agencies... They are at the root of the problem.
Lastly, the fact that the SEC and regulators allowed for the repackaged debt to be an existing practice is not the fault of private industry... The banks didn't create the bad debt particularly in that Carter developed the notion that all Americans should be able to own their own home regardless of an ability to assume that debt.
As far as the trickle-down theory is concerned, all one must do to observe the benefits is to review the GDP and economic growth in those regions where the money fled to... Take a look at the evolution of the middle class in India or China. There is no question that it does have a positive effect.
Increasing tax rates on those with the cash will have an effect of suppressing the economy further.
What allowed the bad debt to be incurred in the first place?
Fannie Mae and Freddie Mac were developed by gvt in the '30's and '70's respectively. Ultimately they were privatized, but they still acted (and treated as) as pseudo-gvt agencies... They are at the root of the problem.
Lastly, the fact that the SEC and regulators allowed for the repackaged debt to be an existing practice is not the fault of private industry... The banks didn't create the bad debt particularly in that Carter developed the notion that all Americans should be able to own their own home regardless of an ability to assume that debt.
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Yes, but let's be clear, who was out there pressing the button, that the taxes on the rich in America need to be cut, so that it can trickle down to the middle class in India and China?
The income inequality in America is now as great as it was during the early 20th century:
The wealth is not trickling down, it is flowing up.
From 1980-2005, 80% of the total increase in American income went to the top 1%! That is a staggeringly high figure.
What about after the bush tax cuts? Well, productivity did rise. But what did that do for the middle class? Not very much. The trending gap in wealth has simply continued:
Yes, I know. But it's industry that fights hardest to prevent any kind of regulation that prevents such practices which ignore risk.
Do you honestly believe that increasing taxes on wealthy corps and individuals will result in higher rates of investment in that tax-punitive nation?
Take a look around and really look at where the manufacturing of non-capital consumer goods is occurring, it sure as hell ain't in Canada or the US... Increase the tax burden on those with the cash and you provide them with even more reasons to invest elsewhere in the globe.
Lastly, as much as you don't want to admit it, the trickle-down effect has resulted in the (very) rapid development of those communities in India and China (as well as Indonesia, the Philippines, Vietnam, Korea, etc.)... Guess what all these jurisdictions have in common?
You don't honestly believe that this is happening because Bush cut taxes on that group.
Fact is, the global economy was booming and there were tremendous opportunities to invest in undervalued economies (at a risk and cost)... The risk payed-off and the wealth was accumulated by those that were willing to assume the risk.
Anyone who wants a piece of the pie can do so by putting their money where their mouth is.
... So, what you're saying is that the Bush tax cuts were successful in encouraging more domestic investment but not enough to impact the middle class?
Do you think that the solution is to eliminate that investment with more taxes?
"Industry" didn't hold a gun to the head of anyone and force them to assume a mortgage that was unrealistic.
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No, that's not even close to what my argument was. Go back and re-read what I said initially. I'll give you a hint...budget. My point that follows from that is that the economic benefit that was claimed as the impetus for the Bush tax cuts is too simplistic, and is a failure if the money is leaving the country.
I don't really care about what happens elsewhere. If I'm a tax payer, and you're telling me that the tax burden is shifting more onto myself, because you're decreasing taxes on the wealthy, and this is supposed to create more jobs here, and more trickle down wealth, why the hell are you calling it a success when the trickle down is for other citizens in a different country? How does that square with the intended purpose of those tax cuts?
No matter how much you want to admit it, it doesn't.
Hmm, I don't recall saying that...I believe I was talking about a continuance in the income gap. The income is not trickling down, it's flowing up... You need to take your time and read more carefully. It slows discussion down having to routinely correct what you think I said or believe.
That's not what I'm saying, that's what the data supports.
No, the solution is to cut the taxes to a greater extent on those who have very little to no disposable income to spare. They don't have extra money to invest or save. The US economy is still dependent on domestic consumption, so if the purchasing power of the largest group of US citizens is stronger, the economy should be stronger. Their money isn't going to leave the country.
They were willing partners in the scam. They drove immense profits and were rewarded for it, until the risk caught up with the greed.
Now they fight regulations to prevent them from doing the same thing.
Then what is your point?... No one should get a tax increase and the lower incomes should get a tax reduction? Hell, I've heard estimates that up to 35% of the US population doesn't lay federal income tax, what are you going to do for them and how do you pay for it?
Further, assessing "success" of that system based on money leaving the nation or how much money is ludicrous... Money will flow between borders for many reasons, in fact, it is one of the biggest components in growing a domestic economy these days.
This was about how trickle-down theory does work.. If you choose to ignore those realities of how it has worked (spectacularly) elsewhere is your problem. The fact is, it works in those economies because those financial environments encourage investment and don't gouge the risk capital solely because they made a profit.
so.. Again, what's your point then?
You focus your entire diatribe on Bush's mistakes and the tax breaks to the wealthy and later bemoan the state of the economy... As it stands today, the income is fleeing based on many factors, one of which is Obama's actions and threats to increase (punitively) tax those with the cash.
Want a look into the future, in the event that Obama keeps hanging BP out to dry, excusing Haliburton & Transocean and ignoring the role of the federal regulators and their actual responsibility in the Gulf mess, you'll see more oil/gas companies flee US jurisdiction.
Chevron is already liquidating many US (and Canadian) assets and redeploying the money elsewhere. Industry and individuals can act quickly and it takes a very long time to coax those groups back.
That's what your proposed solution will get you.
Sure, cut taxes on that demographic(s), but you still have to fund and fuel your economy. As I mentioned earlier, tehre is a huge # of people that don't pay fed taxes, so what are you going to do to put more cash in their jeans and therefore disposable income?
Why not work to generate more jobs in the US and support the economy from the bottom up. Provide the incentives for people/groups to directly invest in the development of opportunities that will (should) result in companies expanding or developing.
The products for consumption are being produced outside the US. The bulk of the benefit of the transaction is occuring in the nation where the product is made and the raw materials are sourced. As it stands, based on what I have suggested above, the only money that remains in the country are any profits that are repatriated by the "ownership" of the company that produced the product (if in fact it is US ownership) and the revenues associated with the delivery of teh product (retail outlet, logistics, etc).
.. And the consumer is teh other 1/2 of teh equation, right? They assumed (willingly) the risk associated with it and were the ones that stood to benefit the most. They should be assuming their fair share of the responsibiloity for the poor decision.
So what.
That the Bush tax cuts failed their stated premise. Wealth has not been trickling down.
Are you even paying attention?
You really aren't paying attention are you? If the money from tax cuts is staying in the economy, rather than leaving, it creates actual growth. That leads to real jobs in that economy. That leads to better wages.
It's not just the poorest, the middle quintile after-tax income is the lowest it's been in the period from 1979 to now.
That exactly what addressing the income gap does...
So what?! They contribute vast quantities of money to the re-election campaigns of the politicians who should be tightening the regulation. If they are fighting against the type of regulation that makes this kind of risk much more difficult to operate under, then that's a huge problem for those whose jobs will be lost, whose savings will be sliced.
So what is like saying so what if Pharmaceuticals are fighting against regulations to prevent the kind of fraud that happened when Pfizer misbranded drugs with the intent to defraud and mislead.
So they are part of the problem, and they're fighting progress.
They failed did they? Except for when you stated:
What was that you mentioned about paying attention?
Let's be clear, you are suggesting tax cuts to lower and middle incomes. You have clearly stated that those demographics currently have little/no disposable income or savings. Further, you have made a big deal about the spending power of the aforementioned group(s). That said, your proposed arrangement creates more spending... That is vastly different from investment and direct investment is what is needed for the creation of jobs.
What you have spelled-out is a arrangement that injects undirected money into the system that supports the status quo including the income gap differences. The benefit expires within a few transactions and you are left with the same problem as before.
Lobbies contributing to re-election? That's your answer. Here's the 411 for ya, those lobbies have made no difference in Obama tightening-up the rules so your suggestion has no legs at all.
The stated purpose for those tax cuts was not productivity gains. It was trickle down economics. If you quoted the full exerpt of mine above, it's explicitly clear that although productivity increased ( that can arise when fewer jobs are needed to do the same thing) there was no more moeny trickling down than before, in fact wages stayed flat, while the wages for the rich grew.
So yes, it failed.
That you have a problem. You can't seem to keep multiple points in your mind at the same time. You have to deal with things one parameter at a time, and then you fall off the tracks.
I'm suggesting addressing the growing wage gap. This idea of tax cuts for the rich has failed.
Right, most families have a hard time, and are living from pay cheque to pay cheque.
Does slowing it down like this and repeating what I've said help you?
Yup, kinda the point.
Firms hire more people when revenues/business activity are increasing...
Non-sequitur. In fact what I have spelled out is directed. The tax cuts are directed, so how can the liquidity be undirected? That doesn't follow. And it directly goes to the income gap, by increasing after tax earnings for the lowest earning majority of the country.
The problems faced by the Obama administration are staggering. The Bush Administration, left the treasury in deficit, they destroyed the economy and
made America hated everywhere. The only solution the Republicans could
come up with, was to give everyone six hundred dollars to go shopping.
The trade imbalances, unemployment, and stagnant economy all belongs to
Bush. Obama, was handed a landmines on every front. The melt down happened
because of the financial houses engaging in speculation on markets without the
safeguards required to keep everyone honest.
Derivatives or leveraged funds reached a staggering 900 trillion plus, and if they
didn't step in to save companies and institutions the whole nation would have
collapsed like a deck of cards.
The people of America, had better understand if they go back to the lower taxes, and
allow speculation to run wild, there will be nothing left but bones for future generations to pick over. Can you imagine there are some simple minds out there
that would actually want to put Sarah Palin in the White house. After that the people
of America would be praying for a size ten quake. to take their mind off that disaster.
made America hated everywhere. The only solution the Republicans could
come up with, was to give everyone six hundred dollars to go shopping.
The trade imbalances, unemployment, and stagnant economy all belongs to
Bush. Obama, was handed a landmines on every front. The melt down happened
because of the financial houses engaging in speculation on markets without the
safeguards required to keep everyone honest.
Derivatives or leveraged funds reached a staggering 900 trillion plus, and if they
didn't step in to save companies and institutions the whole nation would have
collapsed like a deck of cards.
The people of America, had better understand if they go back to the lower taxes, and
allow speculation to run wild, there will be nothing left but bones for future generations to pick over. Can you imagine there are some simple minds out there
that would actually want to put Sarah Palin in the White house. After that the people
of America would be praying for a size ten quake. to take their mind off that disaster.
Here is what happens when the Government taxes too much........
Tax System Explained In Beer:lol:
Suppose that every day, ten men go out for beer and the bill for all ten comes to $100.
If they paid their bill the way we pay our taxes, it would go something like this:
The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.
So, that's what they decided to do.
The ten men drank in the bar every day and seemed quite happy with the arrangement,
until one day, the owner threw them a curve.
'Since you are all such good customers,' he said, 'I'm going to reduce the cost of your
daily beer by $20.' Drinks for the ten now cost just $80.
The group still wanted to pay their bill the way we pay our taxes. So the first four men
were unaffected. They would still drink for free. But what about the other six men? The
paying customers?
How could they divide the $20 windfall so that everyone would get his 'fair share?'
They realized that $20 divided by six is $3.33. But if they subtracted that from
everybody's share, then the fifth man and the sixth man would each end up being paid to
drink his beer.
So, the bar owner suggested that it would be fair to reduce each man's bill by roughly the
same amount, and he proceeded to work out the amounts each should pay.
And so the fifth man, like the first four, now paid nothing (100% savings)
The sixth now paid $2 instead of $3 (33% savings).
The seventh now pay $5 instead of $7 (28% savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 ( 22% savings).
The tenth now paid $49 instead of $59 (16% savings).
Each of the six was better off than before. And the first four continued to drink for free.
But once outside the restaurant, the men began to compare their savings.
'I only got a dollar out of the $ 20,' declared the sixth man. He pointed to the tenth man,'
but he got $10!'
'Yeah, that's right,' exclaimed the fifth man. 'I only saved a Dollar, too. It's unfair that he
got ten times more than I!'
'That's true!!' shouted the seventh man. 'Why should he get $10 back when I got only
two? The wealthy get all the breaks!'
'Wait a minute,' yelled the first four men in unison. 'We didn't get anything at all. The
system exploits the poor!'
The nine men surrounded the tenth and beat him up.
The next night the tenth man didn't show up for drinks, so the nine sat down and had
beers without him. But when it came time to pay the bill, they discovered something
important. They didn't have enough money between all of them for even half of the bill!
And that, boys and girls, journalists and college professors, this is how our tax system
works.
The people who pay the highest taxes get the most benefit from a tax reduction.
Tax them too much, attack them for being wealthy, and they just may not show up
anymore.
In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.
David R. Kamerschen, Ph.D.
Professor of Economics
Tax System Explained In Beer:lol:
Suppose that every day, ten men go out for beer and the bill for all ten comes to $100.
If they paid their bill the way we pay our taxes, it would go something like this:
The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.
So, that's what they decided to do.
The ten men drank in the bar every day and seemed quite happy with the arrangement,
until one day, the owner threw them a curve.
'Since you are all such good customers,' he said, 'I'm going to reduce the cost of your
daily beer by $20.' Drinks for the ten now cost just $80.
The group still wanted to pay their bill the way we pay our taxes. So the first four men
were unaffected. They would still drink for free. But what about the other six men? The
paying customers?
How could they divide the $20 windfall so that everyone would get his 'fair share?'
They realized that $20 divided by six is $3.33. But if they subtracted that from
everybody's share, then the fifth man and the sixth man would each end up being paid to
drink his beer.
So, the bar owner suggested that it would be fair to reduce each man's bill by roughly the
same amount, and he proceeded to work out the amounts each should pay.
And so the fifth man, like the first four, now paid nothing (100% savings)
The sixth now paid $2 instead of $3 (33% savings).
The seventh now pay $5 instead of $7 (28% savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 ( 22% savings).
The tenth now paid $49 instead of $59 (16% savings).
Each of the six was better off than before. And the first four continued to drink for free.
But once outside the restaurant, the men began to compare their savings.
'I only got a dollar out of the $ 20,' declared the sixth man. He pointed to the tenth man,'
but he got $10!'
'Yeah, that's right,' exclaimed the fifth man. 'I only saved a Dollar, too. It's unfair that he
got ten times more than I!'
'That's true!!' shouted the seventh man. 'Why should he get $10 back when I got only
two? The wealthy get all the breaks!'
'Wait a minute,' yelled the first four men in unison. 'We didn't get anything at all. The
system exploits the poor!'
The nine men surrounded the tenth and beat him up.
The next night the tenth man didn't show up for drinks, so the nine sat down and had
beers without him. But when it came time to pay the bill, they discovered something
important. They didn't have enough money between all of them for even half of the bill!
And that, boys and girls, journalists and college professors, this is how our tax system
works.
The people who pay the highest taxes get the most benefit from a tax reduction.
Tax them too much, attack them for being wealthy, and they just may not show up
anymore.
In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.
David R. Kamerschen, Ph.D.
Professor of Economics
America is in the position where they have to pay their bills. and that will take a lot more than they have at the moment. One look around demonstrates they have been
into the low tax business to the point where their infrastructure is in a shambles and
their society is on its knees. As for the private sector being wiser, I understand that,
I mean America is in such wonderful shape since they turned the economy over to
institutions like Enron, and the brokerage houses that paid themselves at the expense
of the average guy and shareholders. Americans are better off after the companies
that got bailed out, got huge tax breaks and used the money for the benefit of the
Board of Directors. I think its time for American Business and corporations in
general to pay their fair share of taxes like everyone else. These parasites take their
business to the third world, exploit workers, do an end around the environmental
laws, labour laws, trade laws and tax laws. Then they present themselves
as the environmental leaders in our communities. Our governments make a big
deal about pushing for human rights, in places like China, and our good ole
companies rush right in to cooperate with tyrannical governments for the love of
a profit margin. How does this relate to us? That is the climate that is fostered.
Money in the individual pockets, does not always provide the best bang for the
buck. I agree that in many cases its not the amount of tax dollars collected its how
they are spent, and in many cases, it could be spent more wisely, and priorities
could be different. However the problems facing America means the people of
waste, will have to belly up to the bar, and pay up individuals and companies
alike and that will mean government collecting and paying the debt.
into the low tax business to the point where their infrastructure is in a shambles and
their society is on its knees. As for the private sector being wiser, I understand that,
I mean America is in such wonderful shape since they turned the economy over to
institutions like Enron, and the brokerage houses that paid themselves at the expense
of the average guy and shareholders. Americans are better off after the companies
that got bailed out, got huge tax breaks and used the money for the benefit of the
Board of Directors. I think its time for American Business and corporations in
general to pay their fair share of taxes like everyone else. These parasites take their
business to the third world, exploit workers, do an end around the environmental
laws, labour laws, trade laws and tax laws. Then they present themselves
as the environmental leaders in our communities. Our governments make a big
deal about pushing for human rights, in places like China, and our good ole
companies rush right in to cooperate with tyrannical governments for the love of
a profit margin. How does this relate to us? That is the climate that is fostered.
Money in the individual pockets, does not always provide the best bang for the
buck. I agree that in many cases its not the amount of tax dollars collected its how
they are spent, and in many cases, it could be spent more wisely, and priorities
could be different. However the problems facing America means the people of
waste, will have to belly up to the bar, and pay up individuals and companies
alike and that will mean government collecting and paying the debt.
Wow.. This is by far and away the biggest crock of sh*t that I've ever come across... Although (in your mind) the "stated" purpose for the tax cuts were not for "productivity gains", they were (apparently) very effective in providing such... Yet, somehow, you twist your ideology to confirm that they had nothing to do with the policy despite that economic theory demands otherwise.
There is absolutely nothing that I can say that will make any difference to one that is this stuck in their ways. Your inability to even consider analyzing the benefits of trickle-own in any region other than your own is astounding, particularly in light that you state it doesn't work.
Don't waste anymore of my time looking to get schooled.
Good luck.. You'll damn well need it
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What do ya say to everyone (corps incl) pay, say 15% of earnings.. Right across the board, doesn't matter if you make $1000/yr or $10 billion/yr.
The same tax rate for all would be "fair", right?
Fair maybe, but it would probably put the $1000 a year guy out of business. :smile: