Republicans and taxes: Is Bush fair to you ALL?

[johngalt1234]

First of all Income Tax is enslavement....because it doesnt gives the government the first right to your earnings and not you.

Bush is doing is no favor by saying I will take less.

A national consumption tax is a better idea because if you spend your money you get taxed and saving is a virtue because savings allows capital to be used for business..

Why wont a consumption tax come about...It is a dirty little secret called inflation
Inflation is a wonderful thing that allows you to buy today and pay less that you would for it tomorrow
You buy a house today and you repay with inflated dollars.
When you have a consumption tax...you are going to get deflation, because spending money causes you to be taxed. It will cause a shrinkage in demand.
The boom in housing is premised on this factor of inflation. Inflation is brought about by dollars being printed without anything to back it up like Gold...
I would bet that things remain as they are unless we get someone like Badnarik in the White house...
There are just too many problems with a consumption tax

[Blue Rectangle]

Reagan:
Big tax cuts
Increased spending
Good economy
Stable, small deficit

Bush 41:
Tax increases
Increased spending
Bad economy
Growing deficit

Clinton 1st term:
Tax increases
Increased spending
Mediocre economy
Small reductions in the deficit

Clinton 2nd term:
Minor tax cuts
Low growth of spending
Good economy (flattened in 2000)
Surpluses

Bush 43:
Big tax cuts
Big spending increases
Poor economy
Big deficits

Conclusions:
--Deficits are mostly closely tied to the economy
--Taxes and spending are secondary influences on deficits
--Tax cuts improve the economy, thus reducing deficits

[Fmr. Gov. NickG]

The Laffer curve is a joke...there is absolutely no evidence that it is true.  If it was, and we are "way past" the point where taxation reduces revenue, why did the Bush tax cuts explode the deficit?  

Bush's tax cuts are hardly the main reason for the deficit. The biggest reason is increased spending, particularly on wars. Another is reduced revenues from capital gains taxes because of what happened in the stock market over the past few years.

Although I'm not a supply-sider, my understanding is that the Laffer curve has quite a bit of truth to it.

The Laffer curve assumes that people will work harder if you reduce their taxes.  This just isn't true...people's work hours are set by social forces that have basically nothing to do with the tax rate.  In fact, most people will be forced to work harder to make ends meet if you reduce their effective income.  

And the decisions about capital investment SHOULDN'T be made by a handful of millionaires looking for something to throw money at.  They should be made by banks who are investing the money of ordinary middle class citizens, and the government looking out for public interests.

[johngalt1234]

Investing in a business is an individual endeavor. Banks are in the business of charging interest. All they have to see is whether they will get repaid.

Left to the banks we wouldnt have any enterprise....which is why we have Venture Capitalist....who provide seed money for an enterprise.

isnt it simple math...you give more money...you can expect more work?

[Fmr. Gov. NickG]

isnt it simple math...you give more money...you can expect more work?

At the most simplified level of economic theory, the labor market should work the same way as the market for any other good...as the price increase, supply will increase.

But it doesn't work this way...in reality, the result is more often the exact opposite.  There are a number of reasons for this.  The three most obvious:

1.) The market is not perfect...people cannot simply chose when and where to work based on the prices they are being offered.  In most full-time jobs, it is extremely difficult to vary your work hours; most people just work whatever the standard shift is for their profession.   Getting a raise or a pay cut won't alter this.  If anything, the will get a second job if their pay gets too low, or retire early if their pay gets very high.

2.) Unlike other goods, people don't sacrifice money to supply labor, they sacrifice time.  And time becomes more valuable when people have more money.  So there are conflicting trends.  As income increases, people may want to work harder to make more money, but more importantly, they want more free time to use their income.  

3.) I think people are basically conditioned to WANT to have a balance between work and free time.  People who are bored and unemployed will accept a job at almost any price, yet they won't work 16 hours a day, 7 days a week even for millions of dollars.   The natural supply and demand curves for labor and leisure just don't bend the same way as most normal goods.  

[classical liberal]

"Who wants to Win the Government Half a Million Dollars?" Call up ABC; it'll be a hit in the blue states.

The revenue/tax chart is more of an upside down U than a straight line. Government gets the most money when we're at the center. Past that, the burden actually lowers revenue--and we're far past it.

One of the funny things about Kerry talking about raising taxes on the rich is that those tax cuts gave the Feds more revenue, not less. We just spend too much.

Bush increased no one's taxes. Why don't the liberal states pass a tax increase to make up for the terrible affects?

The Laffer curve is a joke...there is absolutely no evidence that it is true.  If it was, and we are "way past" the point where taxation reduces revenue, why did the Bush tax cuts explode the deficit?  

Tax cuts didn't explode the deficit; increased spending did.

If the government had simply appropriated current services from FY2001 as advised by OMB, using actual revenue figures from 2001-2003 and the session estimate for 2004 yields a deficit of $132.9 billion over 4 years.

The actual deficit over those 4 years is $850.1 billion

The actual spending above 2001 projections for those 4 years is $617.2 billion.

Thus the taxcuts have created a temporary increase in the deficit of $100 billion over 4 years.  This is to be expected as taxcuts take time to kick in and unless spending is cut there is a temporary deficit.

The $132.9 billion baseline deficit plus the 2001 projection of a $674 billion surplus over the 4 year period is attributable to the downturn in the economy.

In short:

Of the $850.1 billion deficit, $617.2 billion is due to increased spending, $132.9 billion is due to the economy, and $100 billion is due to the lag between the taxcuts' enactment and the growth that they promote.

[classical liberal]

The Laffer curve is a joke...there is absolutely no evidence that it is true.  If it was, and we are "way past" the point where taxation reduces revenue, why did the Bush tax cuts explode the deficit?  

Bush's tax cuts are hardly the main reason for the deficit. The biggest reason is increased spending, particularly on wars. Another is reduced revenues from capital gains taxes because of what happened in the stock market over the past few years.

Although I'm not a supply-sider, my understanding is that the Laffer curve has quite a bit of truth to it.

The Laffer curve assumes that people will work harder if you reduce their taxes.  This just isn't true...people's work hours are set by social forces that have basically nothing to do with the tax rate.  In fact, most people will be forced to work harder to make ends meet if you reduce their effective income.  

Your point would be true if the growth in revenue that the Laffer curve predicts was attributable to people working more.  However, the increase in revenue is predicted as attributable to economic growth that results from an investment climate that allows most capital ventures to have an almost doubled current ratio upon initial analysis.

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Capital investment should be made by those who are actually investing their capital.  It is a violation of the fundamental right to property for someone else to interfere with an individual's decisions as to how they invest their capital.  In fact, if the interference comes from an individual it is considered "economic abuse".  Why should the government be allowed to tell people how to invest their money?

[classical liberal]

isnt it simple math...you give more money...you can expect more work?

At the most simplified level of economic theory, the labor market should work the same way as the market for any other good...as the price increase, supply will increase.

But it doesn't work this way...in reality, the result is more often the exact opposite.  There are a number of reasons for this.  The three most obvious:

1.) The market is not perfect...people cannot simply chose when and where to work based on the prices they are being offered.  In most full-time jobs, it is extremely difficult to vary your work hours; most people just work whatever the standard shift is for their profession.   Getting a raise or a pay cut won't alter this.  If anything, the will get a second job if their pay gets too low, or retire early if their pay gets very high.

2.) Unlike other goods, people don't sacrifice money to supply labor, they sacrifice time.  And time becomes more valuable when people have more money.  So there are conflicting trends.  As income increases, people may want to work harder to make more money, but more importantly, they want more free time to use their income.  

3.) I think people are basically conditioned to WANT to have a balance between work and free time.  People who are bored and unemployed will accept a job at almost any price, yet they won't work 16 hours a day, 7 days a week even for millions of dollars.   The natural supply and demand curves for labor and leisure just don't bend the same way as most normal goods.  

The idea is not that individuals will do more work; as you correctly pointed out there is a maximum limit to the amount of work that any given individual can prouce.  The idea is that there are more individuals doing work, as well as more forms of wor taking place.  Especially with the rise of computerization of tasks, there are many more options for companies to get more work out of an increased or even a constant number of people working 2000 hours/year each.

[Swing low, sweet chariot. Comin' for to carry me home.]

Bill Gates has paid a huge 15% tax over the last few years. While America has been fighting this war. Insteasd of paying 40% tax under Clinton. Bill Gates pays 15%.  

I'm still waiting to see Gates' income and tax figures.

[Fmr. Gov. NickG]

What it seems to come down to is that believers in supply-side economics seem to think that innovation would dry up if we didn't have a handful of billionaires willing to throw their money around in risky investments.

But having investment capital consolidated in a few wealthy individuals, rather than spread throughout society, is not the best way to allocated investment resources.  Sure, capital needs to be consolidated in some way in to be effective, but it an be just as easily be consolidates by the state or by a bank composed of many middle class investors.  We would have a fairer and more efficient economy if our decisions about capital formation were made by people who are accountable to the public.

[classical liberal]

What it seems to come down to is that believers in supply-side economics seem to think that innovation would dry up if we didn't have a handful of billionaires willing to throw their money around in risky investments.

But having investment capital consolidated in a few wealthy individuals, rather than spread throughout society, is not the best way to allocated investment resources.  Sure, capital needs to be consolidated in some way in to be effective, but it an be just as easily be consolidates by the state or by a bank composed of many middle class investors.  We would have a fairer and more efficient economy if our decisions about capital formation were made by people who are accountable to the public.

The nature of a bank makes it fundamentally opposed to the system that you advocate.  However in terms of accountability to the public, expansion of the SBA in scope and budgetary authority seems to be what you are advocating.

In that case, I somewhat agree with you, in that a larger SBA is good for the economy.  However, I disagree based on the principle that the federal government has no constitutional authority to create such a program.

FYI- Middle class people generally lack the resources to make preliminary venture capital investments.  Under the current system, the rich investor, individually or via a Hedge Fund setup, supplies seed capital and pre-IPO funds as they can afford the risk involved; the middle class investor bands with other middle class investors in placing their funds in a Mutual Fund which suplies capital once the company has gotten up and running and is ready to expand as he risk is reduced to a level that the SEC deems generally affordable.  To allow middle class investors, in groups or individually, to do what rich investors do would require the SEC to allow people of relatively modest means to invest an inordinate portion of their income in a high risk venture.

[stry_cat]

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Because Bush and the Republican Congress are spending like druken sailors.

On the issue of taxes... You don't get rich unless you do something that society values.  While I don't like Microsoft products, most of the world seems to love them.  Gates deserves every cent and shouldn't be punished for contributing to society.

[MODU]

I have a theory on this.  Though it rarely happens, every now and then we find a situation when one party controls the government (that is, the Executive and Legislative).  When that happens, the normal checks and balances of party-line struggles disappear, and legislation is able to be passed easier than it normally would.  However, one would think this is a good thing (and we have seen some good results from this), yet there is also a good chance for run-away government.  

A perfect example is the trasportation bill that went through Congress.  The President wanted a low-cost funding package to be passed, yet both sides of the Congress approved packages for millions more than the President wanted.  Now you would think that since the majorities in the Congress would try to support their Presidents wishes, yet they have their own political futures to worry about as well.  Throw in the fact that the opposing party also wanted their state funding (and possibly shafting the President) threw in their support for the packages as well, tying the Presidents hands.  As a result, millions more are being spent that what should have been.

What is best is to have one party in control of one side of the Congress, so it forces more negotiations and comprimises.  This would slowdown Federal spending, but also leads to the possibility of overall reduction in spending on government projects/programs.  This is how things worked under Clinton, with the Republicans holding power, leading towards reduced spending.

I don't think it is fair to call a particular party "big spenders," just because of recent activity.  The environment where one party is in power is the problem.  Fortunately, it looks like Bush is on the edge of winning the seat for another 4 years, and the Congress getting divided again.  Balance will return.

[stry_cat]

I don't think it is fair to call a particular party "big spenders," just because of recent activity.  

Politicians need to be held responsible for their actions. Bush signed the spending.  He's a big spender.  Every Representative and Senator who voted for the spending is a big spender.  It is worse with Republicans because they claim to be for the taxpayer and for smaller government.  At leastwith the Democrats you know thery're going to spend more.  Until out of control spending is punished by the voters we're not going to get smaller government.

[MODU]

Yes, but there have been a good number of items which the President couldn't block due to super-majority rules.  Anyways, I was referring to the charge that Republicans (in general) are big spenders.  It's the condition that exists currently which allows them to spend, since there is a lack of checks and balances.

[Fmr. Gov. NickG]

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Because Bush and the Republican Congress are spending like druken sailors.

On the issue of taxes... You don't get rich unless you do something that society values.  While I don't like Microsoft products, most of the world seems to love them.  Gates deserves every cent and shouldn't be punished for contributing to society.

It's true that the deficit is the product of many factors.  One is increased spending, but another is certainly the tax cuts.

As for doing something that society values...what about people who win the lottery?  What about people who inherit money?  What about people who own enough to live off interest and stock dividends?  And it is these taxes on this income that Republicans most want to get rid of, not the taxes that people actually pay on hard work!

[classical liberal]

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Because Bush and the Republican Congress are spending like druken sailors.

On the issue of taxes... You don't get rich unless you do something that society values.  While I don't like Microsoft products, most of the world seems to love them.  Gates deserves every cent and shouldn't be punished for contributing to society.

It's true that the deficit is the product of many factors.  One is increased spending, but another is certainly the tax cuts.

Only $100 billion of the $850 billion incurred in debt since Bush took office is due to taxcuts.  $617 billion is due to increased spending.  The remaining $133 billion plus the $674 billion we expected in surplus that never was collected is due to the downturn in the economy.

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You would punish people for being lucky, blessed wth wealthy relatives, or smart enough to know what to buy and hold versus what to sell?

[MODU]

That is the Democratic/Socialist way.  "How dare someone be more financially better off than someone else.  We need more wealth redistribution."  

[muon2]

As for doing something that society values...what about people who win the lottery?  What about people who inherit money?  What about people who own enough to live off interest and stock dividends?  And it is these taxes on this income that Republicans most want to get rid of, not the taxes that people actually pay on hard work!

You would punish people for being lucky, blessed wth wealthy relatives, or smart enough to know what to buy and hold versus what to sell?

One of the fundamental problems with income tax is how to define income. Is it only from hourly or salaried work? Does it include chance events like the lottery or inheritance? Are all investments income, and if so, what about appreciation that may or may not keep up with inflation? I don't think there is any straight-forward answer.

I think we should be looking at the consumption side, not the income side. Consumption is a better measure of the ability to pay than income is. Consider a family trying to save for certain future expenses, income doesn't take this into account. Consumption need not be regressive, since it is easy to set different rates of consumption tax for different items based on their necessity. With computerized point-of-sale this is no longer the obstacle to implementation that is was 20 years ago.

[classical liberal]

As for doing something that society values...what about people who win the lottery?  What about people who inherit money?  What about people who own enough to live off interest and stock dividends?  And it is these taxes on this income that Republicans most want to get rid of, not the taxes that people actually pay on hard work!

You would punish people for being lucky, blessed wth wealthy relatives, or smart enough to know what to buy and hold versus what to sell?

One of the fundamental problems with income tax is how to define income. Is it only from hourly or salaried work? Does it include chance events like the lottery or inheritance? Are all investments income, and if so, what about appreciation that may or may not keep up with inflation? I don't think there is any straight-forward answer.

I think we should be looking at the consumption side, not the income side. Consumption is a better measure of the ability to pay than income is. Consider a family trying to save for certain future expenses, income doesn't take this into account. Consumption need not be regressive, since it is easy to set different rates of consumption tax for different items based on their necessity. With computerized point-of-sale this is no longer the obstacle to implementation that is was 20 years ago.

That would require reform, ergo it is not going to happen.

[MODU]

I believe Hassert was discussing a US VAT tax just the other week, and Bush had hinted at being opened to such a change.  However, I doubt it would be something we could do "overnight."  It would probably require at least one year to do a full transition once the legislation was approved (which would probably take at least 2 years to iron out).  If Bush would be for such a change, and followed through on it, we might not see it in full effect until the end of his Presidency.

[The Vorlon]

The Facts

According to the US Treasury:

The Top 10% of the population pay 65% of all Federal Income taxes

The top 25% pay 83% of all income taxes.

The top 50% pay 96% of all income taxes.

The bottom 50% of the population only pays 4% of all taxes.

These are dead cold, hard facts.

http://www.irs.ustreas.gov/pub/irs-soi/01in01ts.xls

The notion that the "rich" don't pay their fair share is total Bullsh*t.

The poor & working class, when you factor in direct REFUNDABLE rebates, such as the EITC and various child care credits actually pay a NEGATIVE rate of Federal Income tax.

This of course makes great "class warfare" fodder for the left.  

The left harps away on the fact that many poor folks did not get a tax cut from the Bush tax package.  

This is true, but only because these people already paid no Federal Income  taxes.

These people got their tax break already - They benifited from the hundreds of billions of dollars of Federal spending on health, education, environment, roads & transportation, Unemployment insurance and welfare.  (in many cases to a greater degree than the general population) and they paid not a penny in federal Income taxes.  All their government was free to them, and paid for by somebody else.

A hell of a "tax break" - at least in my book.

When the left talks about tax "fairness" what they are really talking about is raising taxes, to take even more money away from the top 50%, so you can give even more money to the bottom 50% who already pay no income taxes anyway.

No rants please.  Just facts.

Are their any FACTS I have posted here that are not true...?

If so, which facts do you disagree with, and please provide a link to substantiate your disagreement.

If you want to agrue for MORE income re-distribution by the government, go ahead - but at least aknowledge that the "rich" (or even the semi-well off) already pay virtually all the taxes, and that what you advocate is that we take even more from the top so you can give even more to the bottom.

If you conceed this, I will at least aknowledge that you are intellectually honest, and we can have a discussion about taxes, anf how much additional tax you wish to extract.

But untill you do, I will regard everything you say as nothing more than class warfare political non-sense.

I am not rich, but I have done ok.

I have a pretty nice house, an nice car, and expect to have a nice retirement.  And I have paid a sh*tload of taxes in my life.

I have never cheated anybody, broken any rules, or exploited anybody to my knowledge.

I got where I am by working hard and following, not breaking, all the "rules".  I got an education, started a business, and did all the things a "good" citizen is supposed to do.

I am VERY tired of all these left wing folks suggesting that somehow I stole it all and that the difference between me and some down and out crackhead welfare "victim" is just pure luck.

Do the "rich" pay all the taxes? - Of course they do.  It has to work that way,

But instead of insulting me, calling me a "lazy fat cat" how about just saying "Thank-you for being a good citizen, we appreciate the many many thousands of Taxes you contribute to Society".. ?

[Filuwaúrdjan]

As far as "fair share" goes it depends how "fair share" is defined.

The Libertarian viewpoint is that as the top 10% pay 65% of federal income tax but are only 10% of the population, while the bottom 50% pay only 4%, the top 10% are paying more than their "fair share" while the bottom 50% are paying less than their "fair share".

A Socialist viewpoint is that the although the top 10% pay 65% of federal income taxes, while the bottom 50% pay 4% this doesn't mean that the top 10% are paying more than their "fair share" (or that the bottom 50% are paying less than their "fair share") because the top 10% have (a hell of a lot) more money than the bottom 50% and as a result should pay more than the bottom 50% do.
So a Socialist would define a "fair share" more by an ability to pay (and contribute to society/infastructure/whatever) than by x pays x so x should get x.
Naturally, re-distribution of wealth comes into this (a lot), as money raised in taxes is used on government programmes to reduce poverty, on infastructure and so on.

Which viewpoint is correct depends on peoples viewpoints.

P.S:

The Communist viewpoint is that the top 10% should be shot, and their property given to the top 10% of the Party who will administrate this "on behalf of the bottom 50%". The bottom 50% do not get to decide how this is spent, and if they question this ("whatever happend to making us all equal, eh?") they will be either shot, locked up in Gulags, or made to work in Uranium mines.

[Fmr. Gov. NickG]

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Because Bush and the Republican Congress are spending like druken sailors.

On the issue of taxes... You don't get rich unless you do something that society values.  While I don't like Microsoft products, most of the world seems to love them.  Gates deserves every cent and shouldn't be punished for contributing to society.

It's true that the deficit is the product of many factors.  One is increased spending, but another is certainly the tax cuts.

Only $100 billion of the $850 billion incurred in debt since Bush took office is due to taxcuts.  $617 billion is due to increased spending.  The remaining $133 billion plus the $674 billion we expected in surplus that never was collected is due to the downturn in the economy.

You must be logged in to read this quote.

You would punish people for being lucky, blessed wth wealthy relatives, or smart enough to know what to buy and hold versus what to sell?

I don't want to punish luck, I just don't want to reward it.

We shouldn't make a handful of people millionaires just because they were lucky enough to win the lottery or have wealthy parents.  This sort of incentive structure DISCOURAGES hardwork!  

In fact, we shouldn't be rewarding people who are lucky enough to be born with natural talent.  We should be teaching people that they can succeed by working hard, no matter the talents or status they are blessed with.

[Fmr. Gov. NickG]

The Facts

According to the US Treasury:

The Top 10% of the population pay 65% of all Federal Income taxes

The top 25% pay 83% of all income taxes.

The top 50% pay 96% of all income taxes.

The bottom 50% of the population only pays 4% of all taxes.

These are dead cold, hard facts.

http://www.irs.ustreas.gov/pub/irs-soi/01in01ts.xls

The notion that the "rich" don't pay their fair share is total Bullsh*t.

The poor & working class, when you factor in direct REFUNDABLE rebates, such as the EITC and various child care credits actually pay a NEGATIVE rate of Federal Income tax.

This of course makes great "class warfare" fodder for the left.  

The left harps away on the fact that many poor folks did not get a tax cut from the Bush tax package.  

This is true, but only because these people already paid no Federal Income  taxes.

These people got their tax break already - They benifited from the hundreds of billions of dollars of Federal spending on health, education, environment, roads & transportation, Unemployment insurance and welfare.  (in many cases to a greater degree than the general population) and they paid not a penny in federal Income taxes.  All their government was free to them, and paid for by somebody else.

A hell of a "tax break" - at least in my book.

When the left talks about tax "fairness" what they are really talking about is raising taxes, to take even more money away from the top 50%, so you can give even more money to the bottom 50% who already pay no income taxes anyway.

No rants please.  Just facts.

Are their any FACTS I have posted here that are not true...?

If so, which facts do you disagree with, and please provide a link to substantiate your disagreement.

If you want to agrue for MORE income re-distribution by the government, go ahead - but at least aknowledge that the "rich" (or even the semi-well off) already pay virtually all the taxes, and that what you advocate is that we take even more from the top so you can give even more to the bottom.

If you conceed this, I will at least aknowledge that you are intellectually honest, and we can have a discussion about taxes, anf how much additional tax you wish to extract.

But untill you do, I will regard everything you say as nothing more than class warfare political non-sense.

I am not rich, but I have done ok.

I have a pretty nice house, an nice car, and expect to have a nice retirement.  And I have paid a sh*tload of taxes in my life.

I have never cheated anybody, broken any rules, or exploited anybody to my knowledge.

I got where I am by working hard and following, not breaking, all the "rules".  I got an education, started a business, and did all the things a "good" citizen is supposed to do.

I am VERY tired of all these left wing folks suggesting that somehow I stole it all and that the difference between me and some down and out crackhead welfare "victim" is just pure luck.

Do the "rich" pay all the taxes? - Of course they do.  It has to work that way,

But instead of insulting me, calling me a "lazy fat cat" how about just saying "Thank-you for being a good citizen, we appreciate the many many thousands of Taxes you contribute to Society".. ?

Why don't you include all the other taxes people pay in your "facts"?  Three-quarters of American families pay more in payroll taxes than in federal income taxes.  And what about the regressive effects of excise, sales, and property taxes?  Why do conservatives convenients ignore all the taxes the working poor do pay when reciting "the facts" about taxes?

In terms of total taxes paid, all income groups pay a similar percentage of their income (I believe it ranges from 18-23%).  Any move away from the progressive income tax would make taxation in this country regressive overall.

But the rich absolutlely don't pay all of the taxes!