POL - You're doing a heckuva job, Bushie

[Galaxy]

Originally Posted by -Mojo Jojo-

So you think we are held hostage from doing what we fiscally need to do because rich people might leave? Let the bloody turncoats go. We need to do what we need to do, waiting doesn't make the problem go away. It will only get worse. And rich people who want to fuck this country over for their own monetary benefit can leave any time. I'll buy 'em a ticket.

No, but the wealthy provide an extremely large tax revenue. And most of them control/own businesses. What's going to stop them from taking that with them, along with potential jobs and tax revenue?

[JPhillips]

No way enough rich folks leave the US to matter unless the marginal rate tops 50%. Going back to the rate during the nineties will make no difference in who calls the US home.

[ISiddiqui]

The problem with Gingrich is that he never moved away from the 'minority' mindset, and by that I mean he undermined his policies (which I thought were pretty good and would LOVE to have him in the House right now, where I'm sure he'd but heads with the Prez, because, well, he's Newt) by his negative attacks. It was his undoing. So while the Dems demonized him (most likely because they were stung by his personal politics), the people didn't like his style either... and it consumed him so much that he went after impeaching Clinton (which was highly unpopular) instead of working out policy that cost his party seats... and him the Speakership.

[MrBigglesworth]

Originally Posted by Galaxy

No, but the wealthy provide an extremely large tax revenue. And most of them control/own businesses. What's going to stop them from taking that with them, along with potential jobs and tax revenue?

Let's think about this logically. You own a business. Your business is making a tremendous profit, let's say $10 million a year. Which means you net something like $7 million a year.

Now, you are trying to tell me that these people, with supposedly good business sense, are going to take those companies giving them $7 million a year, close them down, and open them up somewhere else? That doesn't make any sense.

[Glengoyne]

Originally Posted by chinaski

woah, wait up a sec. How in the heck do you call the Downing St memo the "opinion of a single individual"? What are you talking about?

Read it.

It was essentially an individual's meeting(s) summary dissemenated to a slew of other people. It wasn't some sort of official document that gave careful analysis of the meeting's(s') content, it was this guy's opinion of what was discussed. His assessment that he shared with others.

[MrBigglesworth]

Originally Posted by Glengoyne

Read it.

It was essentially an individual's meeting(s) summary dissemenated to a slew of other people. It wasn't some sort of official document that gave careful analysis of the meeting's(s') content, it was this guy's opinion of what was discussed. His assessment that he shared with others.

No official sources, British or American, have denied it's accuracy, nor said that it was an incorrect representation of the meeting. Of course, it is entirely possible that what this individual thought was:

C reported on his recent talks in Washington. There was a perceptible shift in attitude. Military action was now seen as inevitable. Bush wanted to remove Saddam, through military action, justified by the conjunction of terrorism and WMD. But the intelligence and facts were being fixed around the policy. The NSC had no patience with the UN route, and no enthusiasm for publishing material on the Iraqi regime's record. There was little discussion in Washington of the aftermath after military action.

...was really the complete opposite of what really happened at the meeting. That is probably the more likely scenario, that things were exactly the opposite of what he thought they were. All this guy was was the minutes keeper of top secret meetings at the highest level of the British government. That's probably an entry level position. Most likely a high school drop-out earning minimum wage.

[Glengoyne]

Originally Posted by MrBigglesworth

... All this guy was was the minutes keeper of top secret meetings at the highest level of the British government. That's probably an entry level position. Most likely a high school drop-out earning minimum wage.

He wasn't the official anything except attendee. This was HIS summary of the meetings. HIS opinion. They reflect nothing more than that. These aren't the official meeting minutes for anyone.

[Solecismic]

Originally Posted by MrBigglesworth

Let's think about this logically. You own a business. Your business is making a tremendous profit, let's say $10 million a year. Which means you net something like $7 million a year.

Now, you are trying to tell me that these people, with supposedly good business sense, are going to take those companies giving them $7 million a year, close them down, and open them up somewhere else? That doesn't make any sense.

Let's put it this way. Would you rather invest in the government's clumsy, inefficient and nonsensical business, or would you rather invest in a business that needs to make money in order to survive?

Let's say you raise taxes on a business owner by $100k. It either comes out of his pocket or he reduces his work force by three jobs. A certain percentage will go one way, a certain percentage another. Let's call it 50/50.

So, are three jobs worth $200k in extra tax revenue? A welfare state enthusiast would say yes, a "teach a horse to drink" enthusiast would say no.

I side with the latter.

1) The government is inefficient. That extra $200k is not going to buy much.

2) If you aren't constantly creating jobs in the private sector, your economy will stagnate. Just look at France.

3) If you increase the public dole, you will create a higher crime rate. People don't steal out of necessity, they steal out of boredom and a feeling of disenfranchisement. Nothing enhances that more than a stagnant job market where business owners have little incentive to expand. This is a vicious circle. Ever wonder why Wal-Mart never puts a store in an urban area with zero growth?

4) We shouldn't punish the same people who are driving economic growth.

5) You shouldn't whine about someone "not paying his fair share" when he pays ten times the taxes you pay for the same services.

6) Any tax increase on the rich invariably nails the middle class squarely in the forehead. Rich people have good accountants.

[MrBigglesworth]

Originally Posted by Glengoyne

He wasn't the official anything except attendee. This was HIS summary of the meetings. HIS opinion. They reflect nothing more than that. These aren't the official meeting minutes for anyone.

Glen, c'mon now. You have to keep it real, and this isn't keeping it real. Your basic premise is that even though not a single person denies the authenticity of the memo, that it is completely the opposite of what the meeting really was. Your position is that the person, Matthew Rycroft, Tony Blair's private secretary on foreign affairs, got it completely wrong. That this memo, which was distributed to David Manning, the British Ambassador to the United States, and "Defence Secretary, Foreign Secretary, Attorney-General, Sir Richard Wilson, John Scarlett, Francis Richards, CDS, C, Jonathan Powell, Sally Morgan, Alastair Campbell", marked "SECRET AND STRICTLY PERSONAL - UK EYES ONLY", deserves no more weight than the doodles on a note pad. Furthermore, it is your contention that this memo, being completely wrong on the issues surrounding the most important aspect of Blair's government's tenure, was sent to all these people that were all at the meeting and not ever corrected.

C'mon Glen, keep it real. That's ludicrous. You're entering Dutch territory.

[MrBigglesworth]

Originally Posted by Solecismic

Let's put it this way. Would you rather invest in the government's clumsy, inefficient and nonsensical business, or would you rather invest in a business that needs to make money in order to survive?

Let's say you raise taxes on a business owner by $100k. It either comes out of his pocket or he reduces his work force by three jobs. A certain percentage will go one way, a certain percentage another. Let's call it 50/50.

So, are three jobs worth $200k in extra tax revenue? A welfare state enthusiast would say yes, a "teach a horse to drink" enthusiast would say no.

I side with the latter.

1) The government is inefficient. That extra $200k is not going to buy much.

2) If you aren't constantly creating jobs in the private sector, your economy will stagnate. Just look at France.

3) If you increase the public dole, you will create a higher crime rate. People don't steal out of necessity, they steal out of boredom and a feeling of disenfranchisement. Nothing enhances that more than a stagnant job market where business owners have little incentive to expand. This is a vicious circle. Ever wonder why Wal-Mart never puts a store in an urban area with zero growth?

4) We shouldn't punish the same people who are driving economic growth.

5) You shouldn't whine about someone "not paying his fair share" when he pays ten times the taxes you pay for the same services.

6) Any tax increase on the rich invariably nails the middle class squarely in the forehead. Rich people have good accountants.

I don't think this addresses the point I made at all about business owners not closing shop in the US and running away. I have not argued for or against higher tax rates. I'm moderate when it comes to fiscal issues, but I want to comment on this:

Originally Posted by Solecismic

Let's put it this way. Would you rather invest in the government's clumsy, inefficient and nonsensical business, or would you rather invest in a business that needs to make money in order to survive?

That's a dumb argument, because if you answer B the logical conclusion is that we don't ever collect any taxes. We both agree that businesses should be taxed, an area we may disagree on is to what extent.

Originally Posted by Solecismic

Let's say you raise taxes on a business owner by $100k. It either comes out of his pocket or he reduces his work force by three jobs. A certain percentage will go one way, a certain percentage another. Let's call it 50/50.

Taxes are usually percentages, so let's say it is raised two percentage pts, like what flere was talking about earlier. That means to increase his tax burden by $100k, that his total income is somewhere around $5 million.

Now, assuming he is a good businessperson, each of his workforce generates a profit, let's say 10%. So he cuts three jobs, profit goes down $10k. Now his total income is $4.99 million. So why does he cut the jobs? If the jobs are not generating profit, they should be cut anyway. If they are generating profit, they won't be cut because of a higher tax rate.

It also doesn't keep people from investing in their business. In fact, higher tax rates encourage investment in the business, because money put back into the business is tax free.

[JPhillips]

Jim: I hope you aren't working on Front Office Economist.

1) Do you have any proof that government is less efficient than the average private company? If you mean that money gets spent poorly due to laws I'll agree, but having worked in private industry I have a hard time believing the average company operates more efficiently than the average government agency.

2) We had higher taxes during the nineties and higher job growth. AFAIK job creation will generall only decline if taxes are clearly punitive. A couple of percentage points higher than the current level is unlikely to make any difference.

3) I won't even get into this, but do you have any evidence to back your claim?

4) Raising marginal tax rates a couple of percenatge points is hardly punishment and as Biggles says, why tax at allif this is true?

5) We can have an honest disagreement here. I believe that like insurance rates those with more should pay more for the protection of their assets. Also, according to recent studies the overall tax burden is almost flat across all income levels. (in percentage terms of course)

6) Here I agree wholeheartedly.

[Solecismic]

What's interesting is that both people who replied resorted to ad hominems right off the bat.

Once a business reaches a certain size, it can no longer tie its work force directly to output. When costs rise, layoffs result. That's how it works in real life, we've all seen it happen. Most recently in response to astronomical rises in health care costs.

Raise taxes on business and you'll be able to watch the results if you stake out the unemployment office the following Monday.

On the efficiency of government: there's absolutely no pressure on government to run itself properly. It's layer after layer of bureaucracy, often with France-like job security. It's often said that private industry can do things better.

On crime rates. Pretty easy to show that it peaks with males in their late teens. Yet this group is the least likely to suffer from the effects of poverty (they often still are supported by a parent) and least likely to take responsibility for children of their own. Yet they are among the most affected by unemployment and lack of educational opportunities. They're bored. Crime rates dropped both with lower unemployment and with demographic chance - the baby boom ended. Now, the population of teens is rising, and it would be disasterous to do anything that would increase unemployment.

I'm not sure businesses should be taxed at all. To me, at least, the fairest solution would be a sales tax on non-essentials (everything but food, clothing and health care). Get rid of all business and income taxes. Money is just paper until you purchase something with it.

The top 50% of wage earners pay 96% of the taxes. The marginal tax rate increases the more you make. The curve of % paid in taxes to income is not flat - not until you get pretty high up. The bottom %s pay no taxes at all.

I'm not sure I get this "insurance" concept. Should the police, then, pay more attention to crimes that involve rich people? They tend to live in lower-crime areas, so you'd think they'd need less attention.

[Glengoyne]

Originally Posted by MrBigglesworth

Glen, c'mon now. You have to keep it real, and this isn't keeping it real. Your basic premise is that even though not a single person denies the authenticity of the memo, that it is completely the opposite of what the meeting really was. Your position is that the person, Matthew Rycroft, Tony Blair's private secretary on foreign affairs, got it completely wrong. That this memo, which was distributed to David Manning, the British Ambassador to the United States, and "Defence Secretary, Foreign Secretary, Attorney-General, Sir Richard Wilson, John Scarlett, Francis Richards, CDS, C, Jonathan Powell, Sally Morgan, Alastair Campbell", marked "SECRET AND STRICTLY PERSONAL - UK EYES ONLY", deserves no more weight than the doodles on a note pad. Furthermore, it is your contention that this memo, being completely wrong on the issues surrounding the most important aspect of Blair's government's tenure, was sent to all these people that were all at the meeting and not ever corrected.

C'mon Glen, keep it real. That's ludicrous. You're entering Dutch territory.

Well now you are taking what I'm saying and stretching it to the extreme. I'm saying that the infamous Downing Street Memo isn't the smoking gun that people claim it is. If you really honestly read it, it is this guy's opinion. It isn't some official government document declaring that the UK felt that "the intelligence was fixed around policy". It was the author's opinion. It was an actual document. It was marked as top secret. There is no point in denying those things. It is what it is. What it isn't, is an official finding by a government declaring that intelligence findings were being skewed. It is a summary of a meeting or meetings, written by one individual.

[MrBigglesworth]

Originally Posted by Solecismic

What's interesting is that both people who replied resorted to ad hominems right off the bat.

Jim, I read again what I wrote, and then read it again. Nary a personal attack was to be found. I have no idea what you are talking about. And this is the second time that you have accused me of 'attacking' you, when I have done nothing of the sort. I don't know where that is coming from.

Originally Posted by Solecismic

Once a business reaches a certain size, it can no longer tie its work force directly to output. When costs rise, layoffs result. That's how it works in real life, we've all seen it happen. Most recently in response to astronomical rises in health care costs.

Raise taxes on business and you'll be able to watch the results if you stake out the unemployment office the following Monday.

You are confusing two issues. What you are talking about are the effects of a direct tax on a business, such as the sales tax that you reccommend later in your post, or a flat monetary tax on a business. Adding costs like that increase the cost of doing business, which decreases profitability. Income taxes have no effect on profitability. The former effects businesses because in all industries there are less successful businesses that operate with razor thin profit margins. But an increase in the income tax does not effect these businesses that are just making it, because if they are just making it they don't have much profit, and if they don't have much profit the extra couple of percentage pts don't matter much, if at all if the increases are only in the higher brackets. You can look at Britian, Scandanavia, and even the USA in the '70's and '90's as places with good growth with higher income tax brackets than we have now. And the long term capital gains tax was cut by 5% pts a couple of years ago and the job and wage market has been terrible.

What you are talking about has an effect at the extremes, but not on the 5-10% increase range. Again though, I'm not sure if it's a good move to raise taxes like that, but it wouldn't have the drastic effects that you are implying.

[MrBigglesworth]

Originally Posted by Glengoyne

Well now you are taking what I'm saying and stretching it to the extreme. I'm saying that the infamous Downing Street Memo isn't the smoking gun that people claim it is. If you really honestly read it, it is this guy's opinion. It isn't some official government document declaring that the UK felt that "the intelligence was fixed around policy". It was the author's opinion. It was an actual document. It was marked as top secret. There is no point in denying those things. It is what it is. What it isn't, is an official finding by a government declaring that intelligence findings were being skewed. It is a summary of a meeting or meetings, written by one individual.

Actually it wasn't the author's opinion, it was the opinion of the head of MI6, Britain's CIA, which was probably also then the opinion of the British government. You could argue that the British were wrong, at the very least you have to admit that it is a strong piece of evidence if our biggest ally was saying this at the time, not after the fact when the meme started to gain steam.

[Vinatieri for Prez]

Originally Posted by TroyF

This is insane. It's the type of attitude I can't stand.

We WILL NOT stop terrorist attacks with anything less than pulling our support for Israel. That's the big rub with the Muslim terrorists. They can state all of the other reasons, the main reason is we support the Jewish people.

Am I willing to throw away the support for Israel because I'm scared of Al-Queda? NO.

Let me repeat that just in case you missed it. NO.

So we support Israel. They hate our guts. Got it. Understand it. Don't give a DAMN.

France, a country who voted in an anti-semite, do I care about what they think? NO. NO. NO.

Again, I don't care if France likes us or doesn't.

Do I care about some countries and their opinion of us? To a point. But not overly. We cannot ever get to a point where our decisions are based soley on if someone else or ANYONE else likes who we are. We can compromise a little bit, we can negotiate, we can talk. But we can't just bend over to the rest of the world because, well, we just want people to LIKE us.

As I said above. I can't live my life that way. I sure as hell don't want my country to live that way.

You're missing the point, but I will give up after this. My post had nothing to do with wanting people to like the U.S. because that would just be nice and sweet. Nor was I referring to wanting some Muslim terrorist to like the U.S. Nor was my point that by acting differently that it would eliminate terrorist attempted attacks. Nor was my point that we should stop supporting Israel. No my point was pretty clear. Caring about what other countries think about the U.S. means that we ensure other western countries (and yes, that includes France) will cooperate in the war on terror by sharing intelligence, and soldiers, and money. You should care what other countries think because it is in the U.S.'s direct interests to care. Unfortunately, I cant' stand the shortsighted attitude you share with the Bush administration. I am afraid you are sadly mistaken if you believe the U.S. can go it alone in the "war on terror" by not caring about those who can directly help in that war think. Not too mention helping in all other areas of diplomatic issues that are directly important to U.S. interests, whether its trade negotiations, etc.

[Glengoyne]

Originally Posted by MrBigglesworth

Actually it wasn't the author's opinion, it was the opinion of the head of MI6, Britain's CIA, which was probably also then the opinion of the British government. You could argue that the British were wrong, at the very least you have to admit that it is a strong piece of evidence if our biggest ally was saying this at the time, not after the fact when the meme started to gain steam.

I just went back and re-read the text of the memo, because it has been some time since I arrived at my assessment of it.

The "intelligence fixed on policy" tidbit is either the opinion of the individual referred to as "C", almost certainly Dearlove(as you described), or the opinion of the author I still don't believe this represents the "smoking gun" that the anti Bush admin folks claim it is.

[JPhillips]

Jim: Well I had bunch of things, but I lost the post. Suffice it to say that I think you tend to state thigs as facts without presenting the evidence that they are facts. I also don't think a joke based on your products is really an attack.

I did find the chart that shows that the overall tax burden for all Americans is pretty close to flat.

[IwasHere]

I think as soon as the President completes his promise to fire that Bush guy for leaking classified material to the Press, everything will be fine.

[Solecismic]

In this case, to the two dissenters, I was not using the word attack. I was using the milder term ad hominem, which indicates that both were making irrelevant personal remarks.

I was an economics major in college, among other majors, so I'm not completely ignorant to factors affecting the economy. I cringe every time idiots like John Edwards open their mouths. While I am a social liberal and want to support the Democrats, every time I listen to them I hear this populist gobbledygook that makes me want to vomit.

Your chart ignores quite a few important factors, such as employee health care benefits and government benefits, while cherry-picking specific taxes on booze and cigarettes, which poorer people tend to spend more on per capita.

Eight percent of all income is transfered from the middle and upper classes to the poor through government programs only half represented in your chart (money goes out). That has a huge effect on the numbers.

In addition, the chart does not count anything for the benefit of having your children educated at taxpayer expense. Dollar bills alone do not tell the entire story. Suffice it to say, I don't think you're looking at the big picture here.

Originally Posted by Heritage Foundation

The Census income distribution figures are the foundation of most class-warfare rhetoric. On the surface, these figures show a high level of inequality: The top fifth of households have $14.30 of income for every $1.00 at the bottom.

However, these figures are flawed by the exclusion of taxes and social safety net spending and by the fact that the "fifths" do not contain equal numbers of people. Adjustment for these factors radically alters the picture of income distribution: The top fifth of the population has $4.21 of income for every $1.00 at the bottom.

The remaining inequality in society is heavily influenced by the lack of work at the bottom. If working-age adults in the lower quintiles worked as much as their higher-income counterparts, the income disparity of the top to the bottom quintiles would fall to $2.91 to $1.00.

Still, the top fifth of U.S. households (with incomes above $84,000) remain perennial targets of class-warfare enmity. These families, however, perform a third of all labor in the economy. They contain the best educated and most productive workers, and they provide a disproportionate share of the investment needed to create jobs and spur economic growth. Nearly all are married-couple families, many with two or more earners. Far from shirking the tax burden, these families pay 82.5 percent of total federal income taxes and two-thirds of federal taxes overall. By contrast, the bottom quintile pays 1.1 percent of total federal taxes.12

In one sense, John Edwards is correct: There is one America that works a lot and pays a lot in taxes, and there is another America that works less and pays little. However, the reality is the opposite of what Edwards suggests. It is the higher-income families who work a lot and pay nearly all the taxes. Raising taxes even higher on hard-working families would be unfair and, by reducing future investments, would reduce economic growth, harming all Americans in the long run.

Obviously, the Heritage Foundation is a conservative think tank. But their analysis is sound here, aside from the editorializing about what's fair and what isn't. As someone who grew up in the middle class and hopes some day to leave it, I find populism - the Bart Simpson-Inspired Theory of Dragging Everyone Down to the Lowest Common Denominator - a bigger threat to American prosperity than anything.

[JPhillips]

I don't think the chart misrepresents anything. I wish it broke things down more than by 20% chunks, but its methodology is right there for everyone to see. The Heritage stuff you quote hides a good chunk of its methodology.

I'm very confused by the second paragraph of the Heritage piece. What does equal numbers of peoplehave to do with it and what exactly do they mean by "taxes and social safety net spending"? Knowing the picture they want to present, I'd like to see more about their methodology.

The third paragraph is a bit ridiculous. Since the unemployed are in the bottom quartile it seems to be saying, "If the unemployed weren't unemployed they would make more money." Without getting into any arguments on why people are unemployed, their statement is rather useless.

We can disagree on proper rates of taxation and still have an honest argument. What I can't let go unanswered are claims that there is a direct relationship between tax rates and employment/growth. There just isn't any evidence that they are directly related. As I've said before, if you can prove that a lower rate of tax will directly lead to higher employment please be sure to mention me in your Nobel acceptance speech.

[Oilers9911]

Originally Posted by Franklinnoble

Two ignore adds, and suddenly the thread gets a lot easier to read.

I suppose I'll miss some cute diagrams as a result, but on balance, I think I've improved my overall FOFC experience.

Ignoring and shooting down anyone who disagrees with you, sounds familiar.

[-Mojo Jojo-]

Originally Posted by Solecismic

On crime rates. Pretty easy to show that it peaks with males in their late teens. Yet this group is the least likely to suffer from the effects of poverty (they often still are supported by a parent) and least likely to take responsibility for children of their own.

That is a total non-sequitur. Living with one's parents has no impact on the likelihood of being in poverty. It only means that the relevant question is whether the parent is living in poverty..

And on the other hand, if you want me to start citing studies finding strong links between poverty and crime (and finding that poverty is, in fact, the best predictor of crime rates) I can list a bunch of them for you... Some people will dispute exactly how strong the correlation is or what the causal mechanism is, but no one doubts that there is a very definite correlation.

[MrBigglesworth]

Originally Posted by Solecismic

The top 50% of wage earners pay 96% of the taxes.

This is something that was pushed by Limbaugh, not the most reliable of sources. The bottom 50% of wage earners make less than $26k. That's it. They add up to 14% of income in the entire country. So, instead of saying "the top 50% of wage earners pay 96% of the taxes", you could just as easily say that "those that earn 86% of the income pay 96% of the taxes".

But that is before you take away the standard deduction. Of the taxable income, the top 50% of wage earners makes about 95% of the income. So, the "top 50% of wage earners pay 96% of the taxes" statement can be restated as, "those that earn 95% of the taxable income pay 96% of the taxes". Not really the inequity that you make it out to be.

And all of this is based off of "adjusted gross income", which means that the numbers are after the tax loopholes are already taken into account. As should be obvious, the tax code greatly benefits the more well-off.

[CraigSca]

Originally Posted by MrBigglesworth

Not really the inequity that you make it out to be.

I don't think Jim was saying this was an inequity. Others have said this, but only when taking the opposite viewpoint.

[Solecismic]

Originally Posted by -Mojo Jojo-

That is a total non-sequitur. Living with one's parents has no impact on the likelihood of being in poverty. It only means that the relevant question is whether the parent is living in poverty..

And on the other hand, if you want me to start citing studies finding strong links between poverty and crime (and finding that poverty is, in fact, the best predictor of crime rates) I can list a bunch of them for you... Some people will dispute exactly how strong the correlation is or what the causal mechanism is, but no one doubts that there is a very definite correlation.

I think you're missing my point, which is that kids in their late teens are least likely to have responsibility for supporting a family.

I would never question the link between poverty in an area and crime. I would, however, question anyone who says crime is directly caused by need in an individual. It's much more about whether or not the person feels connected to the community at large. Poverty creates disenfranchisement. Disenfranchisement creates crime.


Going back to other responses. Given my politics, invoking Rush Limbaugh is kind of like someone from the religious right confusing Joe Lieberman with Michael Moore.

This is the Heritage Foundation report from which I quoted:

http://www.heritage.org/Research/Taxes/bg1791.cfm

Again, they have their biases, but the research does point out why the common liberal misconstructions of census data don't fly.

It's a common belief that tax cuts spur jobs growth. After a minute of searching, I found one study from New York that talks about this. Of course, it was written in 1999 just as the tech bust was starting. There are other factors, completely unrelated to taxation, that affect the job market.

http://www.ny.gov/governor/press/99/may11_99.htm

Of course, New York remains the most overtaxed state in the country.

I think it's naive to assume that unemployment isn't related to taxation in any way. Businesses pass along their costs. There's no law that I know of that forces consumers to pay state sales tax. It's just accepted that businesses add that cost to your bill.

If a business has less cash, it will cut costs. That often means less hiring, as that's a very quick way to have an impact. No Nobel Prizes here, but I think this is pretty much a basic assumption among economists.

The Tax Foundation has their interesting annual report, which is just a good read on how taxes affect us.

http://www.taxfoundation.org/files/sr140.pdf

It's hard not to notice, looking at the charts in this report, the inverse relationship between Tax Freedom Day in a state and average income.

[Young Drachma]

I will say that I've truly appreciated my time living in states without state income taxes and it's really affecting the future decision of where I think I'll end up long term. I think there are some significant changes that need to be made across the board in terms of education, health care, etc., but it seems that pretty much everywhere people want neat answers to their choices or they simply want to make decisions based on what everyone else around the country is doing.

[Galaxy]

Originally Posted by MrBigglesworth

Jim, I read again what I wrote, and then read it again. Nary a personal attack was to be found. I have no idea what you are talking about. And this is the second time that you have accused me of 'attacking' you, when I have done nothing of the sort. I don't know where that is coming from.


You are confusing two issues. What you are talking about are the effects of a direct tax on a business, such as the sales tax that you reccommend later in your post, or a flat monetary tax on a business. Adding costs like that increase the cost of doing business, which decreases profitability. Income taxes have no effect on profitability. The former effects businesses because in all industries there are less successful businesses that operate with razor thin profit margins. But an increase in the income tax does not effect these businesses that are just making it, because if they are just making it they don't have much profit, and if they don't have much profit the extra couple of percentage pts don't matter much, if at all if the increases are only in the higher brackets. You can look at Britian, Scandanavia, and even the USA in the '70's and '90's as places with good growth with higher income tax brackets than we have now. And the long term capital gains tax was cut by 5% pts a couple of years ago and the job and wage market has been terrible.

What you are talking about has an effect at the extremes, but not on the 5-10% increase range. Again though, I'm not sure if it's a good move to raise taxes like that, but it wouldn't have the drastic effects that you are implying.

You don't think income taxes have a direct impact on what a business does? A higher income tax rate will reduce the capital on private businesses, and reduce investors flow to invest into public-traded corporations. As for companies moving out of the country, many companies incorporate in tax-friendly and legal-friendly companies. If a company has the ability to shift a workforce to a cheaper climate (outsourcing) with less government restrictions, they will. You may complain all you want about the ethical debate over outsourcing, but the reality is that Americans are still buying products from such companies.

As for Scandanavia, you cannot compare a country like Sweden vs. the US. The size, location, and culture are vastly differnet. I think a Sweden-type system in the US would be out-of-this-world costly and a huge failure. And remember, our growth from the economy came thanks to the .com boom. Did Clinton really reduce spending, or did he just have a big surge in taxable revenue? (Asking, not stating). The President is somewhat limited in what he can do in economic matters. Bush is a wreckless spender, I do agree with that.

Looking at this website, 50% of tax revenue comes from the top 5% (@$130,000+ in yearly income). http://www.taxfoundation.org/news/show/250.html

[JPhillips]

Jim: I'll freely admit that taxation is a factor in spending, but its not the only factor and its probably not even one of the most important factors. There has been a general trend each decade since the fifties, tax rates have declined and growth has also declined. I'm not saying the two are causal, but there just isn't much evidence that tax rates directly effect growth of business.

You also can't say taxation is always a net reduction for all business. What do the extra taxes get used for? Its possible that individual businesses or a whole category of businesses will come out ahead even if their taxes increase due to subsidies or improvements that benefit their bottom line.

Again, its just impossible to say a few points higher tax rate will lead to slower growth.

As for the Heritage report, I'd still like to see more of the methodology. Heritage has been known to fudge numbers in a way that sells their ideology.

Galaxy: Who cares if the top 5% pay 50%? What percentage of income does that top 5% have? They get taxed on income, not population.

[MrBigglesworth]

Originally Posted by Galaxy

You may complain all you want about the ethical debate over outsourcing, but the reality is that Americans are still buying products from such companies.

I don't complain about outsourcing. I think it's fine.

Originally Posted by Galaxy

Looking at this website, 50% of tax revenue comes from the top 5% (@$130,000+ in yearly income). http://www.taxfoundation.org/news/show/250.html

http://www.operationsports.com/fofc/...&postcount=125

[MrBigglesworth]

Originally Posted by JPhillips

Galaxy: Who cares if the top 5% pay 50%? What percentage of income does that top 5% have? They get taxed on income, not population.

http://www.operationsports.com/fofc/...&postcount=125

[flere-imsaho]

Originally Posted by Glengoyne

That the Downing Street memo is given as much weight as it is, still stuns me. It was the opinion of a single individual. This wasn't some document providing the careful analysis of facts, it is the opinion of a single critic of the war.

That's just simply untrue.

Interesting about you opposing action in Somalia and Bosnia. I was an ardent supporter of both. I guess we're about as far apart ideologically as I can imagine.

Let me clarify: I would have supported both Bosnia & Somalia if we went in with considerably more of a presence and more clear objectives. At the time, both operations seemed half-assed and wishy-washy to me.

To give examples, the half-assedness of the Somalia operation is what led directly to the events surrounding Blackhawk Down. Either go in with the proper amount of men and equipment to achieve your mission objectives, or don't. Clinton, so early in his Presidency, didn't want to commit so many troops - that was a mistake.

The wishy-washiness of the Bosnia operation(s) led directly to scenarios where genocide was happening under our noses and our troops either didn't have clearance to intervene, or weren't properly positioned to intervene.

I don't have a problem with Blix's opinion about wanting more time to do the inspections. In hindsight, I wish he had been given more time. Not because of anything found or not found In Iraq, but rather because I wish we had taken care of business in Afghanistan before dealing with Iraq.

I feel very much the same way. I supported our invasion of Afghanistan and think it's a real tragedy that because we've diverted so much to Iraq, we've essentially left the mission unfinished there.

[Dutch]

I feel very much the same way. I supported our invasion of Afghanistan and think it's a real tragedy that because we've diverted so much to Iraq, we've essentially left the mission unfinished there.

There's 21,000 soldiers in Afghanistan. There was never many more than that and by all accounts, things are going relatively well.

Do you suspect Al Qaeda still trains there? If so, then I would be more inclined to agree. But I don't think that's the case anymore.

[Galaxy]

Originally Posted by JPhillips

Jim: I'll freely admit that taxation is a factor in spending, but its not the only factor and its probably not even one of the most important factors. There has been a general trend each decade since the fifties, tax rates have declined and growth has also declined. I'm not saying the two are causal, but there just isn't much evidence that tax rates directly effect growth of business.

You also can't say taxation is always a net reduction for all business. What do the extra taxes get used for? Its possible that individual businesses or a whole category of businesses will come out ahead even if their taxes increase due to subsidies or improvements that benefit their bottom line.

Again, its just impossible to say a few points higher tax rate will lead to slower growth.

As for the Heritage report, I'd still like to see more of the methodology. Heritage has been known to fudge numbers in a way that sells their ideology.

Galaxy: Who cares if the top 5% pay 50%? What percentage of income does that top 5% have? They get taxed on income, not population.

Of course it has to do with the percentage of the population. The richest people in our country pay at least half our tax revenue. That seems fair? And you think they should pay more?

[-Mojo Jojo-]

Originally Posted by Galaxy

Of course it has to do with the percentage of the population. The richest people in our country pay at least half our tax revenue. That seems fair? And you think they should pay more?

According to the Federal Reserve's Survey of Consumer Finances from 2004, the top 10% income earners own 67.6% of the nation's wealth. I don't see what's so unfair about expecting them to pay a similar share of the taxes..

I've always thought that the income tax is used as a proxy for a wealth tax (which in certain respects would make more sense), and even though the tax is progressive with respect to incomes, it's actually regressive with respect to wealth.

[Galaxy]

Originally Posted by -Mojo Jojo-

According to the Federal Reserve's Survey of Consumer Finances from 2004, the top 10% income earners own 67.6% of the nation's wealth. I don't see what's so unfair about expecting them to pay a similar share of the taxes..

I've always thought that the income tax is used as a proxy for a wealth tax (which in certain respects would make more sense), and even though the tax is progressive with respect to incomes, it's actually regressive with respect to wealth.

Define "fair share".

[JPhillips]

Galaxy: By your reasoning every person should pay the same exact dollar amount of taxes? My bill and Bill Gates' bill should be dollar for dollar even?

[Galaxy]

Originally Posted by JPhillips

Galaxy: By your reasoning every person should pay the same exact dollar amount of taxes? My bill and Bill Gates' bill should be dollar for dollar even?

What? You mean you should pay the same exact dollar amount, or the same % rate? I would be for a flat % tax. Why should people who have worked hard and taken huge risks in most cases, be punished for higher taxes? It's not their fault that a corrupt government has a spending problem. They are contributing more to society in terms of donating/giving back, employement, and creating the services and products we need/want. However, I believe we need to cut our expenses to where the tax revenue is in the first place.

[JPhillips]

Well then population numbers don't mean anything. Even at a flat percentage the richest will still pay far more than an equal number of the poorest. And again I'll point out that when all tax revenue is taken into account we're almost at a flat rate.

As for balancing the budget, I don't think it can be done without a tax increase. Given that FICA taxes are a net positive right now where can you find 350 billion to cut?

[Galaxy]

Originally Posted by JPhillips

Well then population numbers don't mean anything. Even at a flat percentage the richest will still pay far more than an equal number of the poorest. And again I'll point out that when all tax revenue is taken into account we're almost at a flat rate.

As for balancing the budget, I don't think it can be done without a tax increase. Given that FICA taxes are a net positive right now where can you find 350 billion to cut?

Start with Iraq/defense, reforming welfare, social security and Medicare/Medicaid, and the pork that takes up a lot of money.

[Solecismic]

Originally Posted by JPhillips

again I'll point out that when all tax revenue is taken into account we're almost at a flat rate.

That's simply not true, unless you cherry-pick taxes and completely ignore welfare and other benefits.

[JPhillips]

You can't use SS or Medicare because as I stated FICA taxes are currently a net positive.

Iraq and Afghanistan will come in at under 100 billion, so lets say you cut 80 billion there. Welfare reform is maybe 20 billion tops. Where does the other 250 billion come from?

[JPhillips]

When you say I'm cherry picking taxes, what taxes will make it more progressive that aren't being used? Show me some real numbers that use the whole tax burden. The Heritage report hides the methodology, so I while I don't doubt the math, I don't know what numbers they are using for things such as social safety net spending.

[Solecismic]

Originally Posted by -Mojo Jojo-

According to the Federal Reserve's Survey of Consumer Finances from 2004, the top 10% income earners own 67.6% of the nation's wealth. I don't see what's so unfair about expecting them to pay a similar share of the taxes..

I've always thought that the income tax is used as a proxy for a wealth tax (which in certain respects would make more sense), and even though the tax is progressive with respect to incomes, it's actually regressive with respect to wealth.

That would be a huge mistake. It would discourage the middle and upper middle classes from saving for retirement, or for schooling for their children, or to upgrade their houses.

And with rich people, it would be incentive to stuff money in mattresses, leave the work force, and not invest in stock. That would greatly affect the stock market and would keep companies cash-poor, meaning much more unemployment.

I also think it's a bad idea to let the government poke into what we own. The IRS is a massive enough bureaucracy as it is.

[Solecismic]

Originally Posted by JPhillips

Jim: I'll freely admit that taxation is a factor in spending, but its not the only factor and its probably not even one of the most important factors. There has been a general trend each decade since the fifties, tax rates have declined and growth has also declined. I'm not saying the two are causal, but there just isn't much evidence that tax rates directly effect growth of business.

Again, its just impossible to say a few points higher tax rate will lead to slower growth.

That's just not true. Tax Freedom Day was never later than April 7 in the '50s, never later than April 12 until 1968. Taxes remained constant until Clinton took office, then rose sharply to a May 3 peak in 2000. Bush's cut set it back into the range we were in from 1968-1994.

If not for the tech boom, it's possible Clinton's tax increases could have been devastating. Bush has not been a great president by any means. His legacy will be the Iraq war, which is a monumental disaster. But I believe he helped stop what would have been a long recession stemming from the combination of higher taxes and the tech bust.

From everything I've read about the economy, shifts are gradual. A few points here will always lead to some form of readjustment. It's not like you can tax and tax and then a switch goes off saying you've gone too far.

[kcchief19]

I know these theories won't be popular with the partisans, but here me out.

As inefficient as our government may or may not be, the reality is that the contemporary form of American government taxation and spending policies are the best in the world at encouraging investment, protecting the wealthy and providing services to the poor. Could it be better? Yes, through some significant tweaks -- but that gets into politics.

The size of the federal budget and the role of monetary policy allows for the greatest protection against depressions and panics around. Since the advent of Keynesian policies in this country, we haven't had a single depression and few if any panics -- maybe Black Monday in '87 -- and relatively short and mild recessions compared to historical patterns. It's not simply a matter of globalization. Other countries have continued to have boom and busts economies around the world. But the size of our federal budget allows the government to keep pump primed when necessary and control policy in a way other countries haven't figured out how to do.

So, in essence, no matter how much either side wants to complain, the size of our government is a necessary evil to maintain a steady economic growth pattern that diminishes the risk for recessions and depressions. I think that's a fair trade off.

In regards to taxing policy, I think it's worth noting that progressive taxation is generally advocated by almost any serious economists of any political persuasion. They may disagree on the range, but progressive taxes are the only way the system works. You'll never hear me say anything about "the rich" paying their "fair share." It won't necessarily be fair. But it's the only way it works.

That said, I think we have some concerns. I think our deficit spending will choke us in 20-30 years when I'm nearing retirement and Social Security will be bankrupt. I'm saving and investing with the idea Social Security won't be there, but there are millions banking on Social Security and something will need to be done.

I would also like to see something done with tax policy, but unfortunately there are limits. I'll take to the streets if we ever get close to implenting a horribly regressive national sales tax. I'd like to see tax policy with less monkey shines -- I don't want to get rid of incentives for investment and savings like tax breaks on capital equipment, charitable donations or mortgage interest. But if you're in a 35 percent tax bracket, I don't think there should be anyway you can claim so many deductions that you're paying less percentage in taxes than someone in the 25 percent bracket.

[kcchief19]

Originally Posted by Solecismic

The IRS is a massive enough bureaucracy as it is.

This is the absolute biggest reason why I don't believe we will ever see meaningful or signficant tax reform in this country. Does anyone know how many millions of people are employed in the tax preparation field, from the IRS all the way through corporate CPAs and H&R Block? If we went to a flat tax, eliminated all tax loop holes aside from simple, dedicated deductions to encourage savings and investment, there would be millions out of work or displaced. H&R Block wouldn't exist.

The lobbyists won't let it happen, and even if they did it would cause a bubble that make the tech bubble look like a night at the ballpark.

[kcchief19]

Originally Posted by Solecismic

That's just not true. Tax Freedom Day was never later than April 7 in the '50s, never later than April 12 until 1968. Taxes remained constant until Clinton took office, then rose sharply to a May 3 peak in 2000. Bush's cut set it back into the range we were in from 1968-1994.

If not for the tech boom, it's possible Clinton's tax increases could have been devastating. Bush has not been a great president by any means. His legacy will be the Iraq war, which is a monumental disaster. But I believe he helped stop what would have been a long recession stemming from the combination of higher taxes and the tech bust.

From everything I've read about the economy, shifts are gradual. A few points here will always lead to some form of readjustment. It's not like you can tax and tax and then a switch goes off saying you've gone too far.

The thing I don't like about Tax Freedom Day is that doesn't really tell you what you think it tells you. My taxes from Bush to Clinton didn't change one iota. The biggest change is that the top tax bracket went from 39.6 to 35 percent. So the folks at the top of the chain got the big break. For them, Tax Freedom day changed, but not for me.

Personally, I think there ought to be a Budget Spending Day too, so we can see what the disconnect is between what we are spending and what we getting in taxes. I think Clinton's tax policy was the most responsible thing a president could do -- he raised taxes to try and maintain spending and whittle down the deficit. As you can probably tell, I'm not a propponent of supply-side economics. It made sense to a large degree in the 1980s when Reagan was cutting the top tax brackets from 70 to 33 percent, but when you're talking about yo-yoing from 33 to 39.6 percent, I don't think that amount makes any difference whatsoever in individual investment and spending decisions, but it makes a huge difference in deficit spending.

I agree with the last paragraph whole-heartedly. As much fine-tuning as we have with the economy, we still have not mastered how to apply the brakes and when to hit the gas. I think that lesson is particularly true when it comes to Fed policy. I think the Fed recently went overboard with rate hikes and probably went a little too fast too soon, especially in light of the energy crunch we're setting ourselves up for right now. The Fed wants to keep a lid on inflation, but at the same time while higher rates may slow inflation it will also slow investment.

[JPhillips]

Okay, so I do have to admit a mistake. In saying that taxes have gone down I was looking at only federal income taxes, the very thing I try to correct in others! From what I have found, the tax rate as a percentage of GDP has been around 18% for the past fifty years. When it gets too close to 20% there tend to be tax cuts and when it gets too close to 15% there tend to be tax increases.

The larger point of continued slower growth that isn't at all connected to tax rates remains, however.

[MrBigglesworth]

Originally Posted by Galaxy

Of course it has to do with the percentage of the population. The richest people in our country pay at least half our tax revenue. That seems fair? And you think they should pay more?

http://www.operationsports.com/fofc/...&postcount=125