The problem is you cannot be sure that the rich use the money for domestic investments. Especially not if there isn´t given more money to/taken less money away from the-not-so-rich. The more poor the people given money are the more likely it is that its used for products produced domestically. Very roughly said: Poor people buy american made milk and bread and rich people buy swedish Volvos. When consumption on domestical produced products goes up investments are diverted toward the home marked.
One thing is even better: Government spendings especially in infrastructure. But I know thats an ideologic no-no.
Yeah that would be all good and well except that Ford owns Volvo.
Sure, that's all fine and dandy and should be fixed...however...
What is the purpose of the current tax cut? If it is meant to stimulate the economy, correcting the current disparity WILL NOT WORK. Those that will benefit the most from this economic stimuls tax cut already have the money to buy whatever the hell they want and are already stimulating the economy. IF THE TRUE PURPOSE OF THE TAX CUT IS TO STIMULATE THE ECONOMY, GIVE THE MIDDLE AND LOWER CLASSES THE MONEY FROM THIS TAX CUT SO THE MASSES CAN STIMULATE THE ECONOMY.
The purpose of the tax cut is to hopefully restore the stock market and likewise get the companies in the stock market focusing on what the true measure of their stock price should be and that is what they pay in dividends.
Right now people are buying stocks to speculate on the price. This was/is stupid because you can manipulate the price. You can fire workers, shift expenses, etc. You can do all sorts of things to generate false profit.
People would get all excited about these large profits, why? Well I don't know why because until they get handed to you it doesn't do you as the stock holder a damn bit of good. The naive investor though would say, "Wow, look at those profits, I'm going to buy." Except some profits were just paper profits, and a lot of companies, even with huge profits, NEVER paid a dividend (Microsoft being a great example)
Dividends are your share of the profits when you are a stock holder. A true asset puts money in your pocket. Most stocks are no longer assets in my books because they don't put money in your pocket.
Some people are doing this today with housing. This is my field so I watch the mistake makers carefully so I can buy their houses in a few years. They will buy a house much larger than they need also thinking it is an investment. Well their investment will eat them alive if they lose their job. Likewise they will buy an "investment" property that loses money every month saying "yeah but it is okay because it will appreciate." When it doesn't, they will walk away. (That is when I will be buying BTW)
I wouldn't even purchase a home for rental unless I was sure I could put $200-300 a month from the rents in my pocket TODAY.
As for giving the lower and middle classes the tax cut, the lower classes don't pay any taxes because they have no money. You can't give them back their social security yet. We don't have a national sales tax to lower or other regressive taxes. The middle class does need a tax cut but that means cutting the rate on the income tax. Their rate is already only 15% versus 34% for upper income earners. When the disparity becomes too wide the rich will call for the upper rate to drop.
Lastly the economy doesn't need just consumption, it needs investment and to that you need lots of money.
... Very roughly said: Poor people buy american made milk and bread...
And how many jobs does that produce? Zilch, none, nada. Food production in the U.S. doesn't need any stimulus. The government is already funneling too much money to farmers as it is.
Don't you realize the VAT targets the poor and reduces consumer spending?
How so? And even if that's how it works in practice, couldn't it be 'corrected' so it doesn't target the poor? Like, no value added to food, but lots of value added to a second car?
zaphod_beeblebrox and trumptman: I had hoped that you wouldn´t read volvos and food literally.
What I was trying to say was: In a normal economy* the more basic needs are more likely to be met from local production than not-so-basic needs. Thats an economical dogma especially in non-specialized economies.
*A non-normal economy in this case is that of say Burain where the economy is based on one special product and where food, craftsmen aso has to be imported.
How so? And even if that's how it works in practice, couldn't it be 'corrected' so it doesn't target the poor? Like, no value added to food, but lots of value added to a second car?
We had a big debate about this here in Australia a few years ago before the introduction of the GST (read: antipodean VAT). Such taxes are inherently deeply regressive because the less wealthy spend proportionately more of their income on consumption. Naturally, if you're only just making enough to survive, you spend everything you earn, right?
You can reduce the impact of a GST/VAT a bit by removing it from the items that poor households spend most on, particularly food. But if you exempt food and other things from the GST, it reduces the elegance of the system, reintroducing loopholes and complexity.
So in the austere world of economic theory, this kind of fiddling is frowned upon. But I think that if more economists had to live on minimum adult wages, then they might place a higher value on humanity than elegance.
You can reduce the impact of a GST/VAT a bit by removing it from the items that poor households spend most on, particularly food. But if you exempt food and other things from the GST, it reduces the elegance of the system, reintroducing loopholes and complexity.
Is VAT consistent for all products? In that case it's obviously not 'fair'. Here in the US of A we already have a system set up for sales tax though. It could easily be rearranged to accomodate a scale from taxless to taxed, but loopholes would spring up.
IF THE TRUE PURPOSE OF THE TAX CUT IS TO STIMULATE THE ECONOMY, GIVE THE MIDDLE AND LOWER CLASSES THE MONEY FROM THIS TAX CUT SO THE MASSES CAN STIMULATE THE ECONOMY.
....yes, but they aren't paying the taxes, the bottom 2 quintiles (the bottom 40%) only pay 5-6% of all income tax.
One of these days, Alice.......One of these days.....
Yep, that's just about the depth of thinking that Bush brings to the issue, except that I think he might get a little glassy-eyed seeing one of those '=' thingies, and worry that you're trying to get too fancy with him.
....yes, but they aren't paying the taxes, the bottom 2 quintiles (the bottom 40%) only pay 5-6% of all income tax.
One of these days, Alice.......One of these days.....
RIGHT TO THE MOON!!!:
Again with the slippery "they aren't paying the taxes" when you only refer to federal income tax. They have payroll taxes and sales taxes and state taxes, etc.
When you include all taxes paid, and compare that to total wealth (and not just income, which understates the wealth of the wealthy), I believe our overal tax system is regressive.
And all this is interesting, but my topic is about Bush's lies about economic matters. So, to bring this tax distribution issue back to the topic of Bush's lies, here's an article describing how Bush lies about who gets the benefits from his tax plan.
Quote:
Bush said: 92 million Americans will keep an average of $1,083 more of their own money when this tax plan goes through...
Data from the Urban Institute-Brookings Institution Tax Policy Center show that 80 percent of tax filers would receive less than the $1,083 average amount, while about half of tax filers would receive $100 or less._ The White House produced the $1,083 average figure by averaging together high-income people who would get massive tax cuts the average tax cut would be $90,000 for people who make more than $1 million per year with the much larger number of Americans who would get small tax cuts.
Thus, while $1,083 may be the average tax cut amount, it does not accurately reflect what an average American would receive. The Tax Policy Center data show that the average tax cut for those in the middle fifth of the income spectrum would be $256.
In other words, Bush uses the mean rather than the median to distort the effects of his plan.
The "average" income of me, two of my buddies, and Bill Gates is probably around $1 billion. Our median income is around $50,000. Quite a difference. Bush would say our average income is $1 billion. All honest economists would say it is $50,000.
In the same way, Bush basically takes a small number (e.g., $200) that almost everyone gets, and a very large number that a few people get (e.g., $100,000) and says the average is $1000.
If his tax plan is so fair, why does he have to distort the truth to make it sound more fair?
[edit: What's the deal with Safari and double quotes?]
Again with the slippery "they aren't paying the taxes" when you only refer to federal income tax. They have payroll taxes and sales taxes and state taxes, etc.
When you include all taxes paid, and compare that to total wealth (and not just income, which understates the wealth of the wealthy), I believe our overal tax system is regressive.
AHHHHHHHHHHHHHHHHHHHHHHHHHHHHH!!!!!!!!!
MY EYES!!!!! MY EYES!!!!!!!!! THE PAIN!!!!!!
AHHHHHHHHHHHHHHHHHHHHHHHHHHHH!!!!!!!!!!
Brussel you rascal, I just gave you all the dope on that on the last page!
Honest Injun, from that Havard proffesor's text, It is actually MORE progressive, when you through in the Payroll taxes, and transfer payments....
Quote:
---looked at some more stuff on TOTAL taxes and when all is said and done it is even MORE progressive than the Federal tax system, the effective rate for the bottom 20% is a NEGATIVE 30%. (as in their incomes are 30% higher than without the transfer payments.)
....also I went back and that chart says "Federal Taxes" so I'm thinking it means ALL taxes.
...but the quote from the book is fairly unambiguous even if the chart isn't.
The purpose of the tax cut is to hopefully restore the stock market and likewise get the companies in the stock market focusing on what the true measure of their stock price should be and that is what they pay in dividends.
Right now people are buying stocks to speculate on the price. This was/is stupid because you can manipulate the price. You can fire workers, shift expenses, etc. You can do all sorts of things to generate false profit.
People would get all excited about these large profits, why? Well I don't know why because until they get handed to you it doesn't do you as the stock holder a damn bit of good. The naive investor though would say, "Wow, look at those profits, I'm going to buy." Except some profits were just paper profits, and a lot of companies, even with huge profits, NEVER paid a dividend (Microsoft being a great example)
Dividends are your share of the profits when you are a stock holder. A true asset puts money in your pocket. Most stocks are no longer assets in my books because they don't put money in your pocket.
Some people are doing this today with housing. This is my field so I watch the mistake makers carefully so I can buy their houses in a few years. They will buy a house much larger than they need also thinking it is an investment. Well their investment will eat them alive if they lose their job. Likewise they will buy an "investment" property that loses money every month saying "yeah but it is okay because it will appreciate." When it doesn't, they will walk away. (That is when I will be buying BTW)
I wouldn't even purchase a home for rental unless I was sure I could put $200-300 a month from the rents in my pocket TODAY.
As for giving the lower and middle classes the tax cut, the lower classes don't pay any taxes because they have no money. You can't give them back their social security yet. We don't have a national sales tax to lower or other regressive taxes. The middle class does need a tax cut but that means cutting the rate on the income tax. Their rate is already only 15% versus 34% for upper income earners. When the disparity becomes too wide the rich will call for the upper rate to drop.
Lastly the economy doesn't need just consumption, it needs investment and to that you need lots of money.
Nick
Explain that to your president that says consumption is the answer.
....yes, but they aren't paying the taxes, the bottom 2 quintiles (the bottom 40%) only pay 5-6% of all income tax.
Right. Just give the money from the tax cut. Take the sum total and distribute it to the bottom 3 quintiles. That's of course if you believe that more consumption will stimulate the economy like Bushy Boy does.
Quote:
One of these days, Alice.......One of these days.....
RIGHT TO THE MOON!!!:
So that whole golden rule thing isn't built into christianity? Man, look at the way you treat people you asshole.
He said that? That the reason for the tax cuts is to stimulate the consumption?
During his big speech after 9/11 he didn't tell Americans to make sacrifices. He told us to get the country back on its feet we need to BUY THINGS. Our economy still isn't back on its feet and Bush hasn't changed his message.
Here we go...nice table with the effective (2001) tax rates by quintile for federal income tax, social insurance taxes, and all federal taxes.
In brief, income taxes (as we know) are mildly progressive, with the average rate increasing from 5% in the middle quintile to 22% for the top 1%. Social insurance taxes are regressive, with the 2nd-4th quintiles paying 10% and the top 1% paying 2%. Combined, the system is slightly progressive, with the middle quintile paying 17% and the top 1% paying 33%. ( I say "slightly" because you can easily argue that a third of a million dollars is much easier to part with than a sixth of $40,000.)
You know, in some ways a flat tax, done right, wouldn't be a bad idea. It certainly clarifies things. You can only adjust two things - the exemption, and the rate. Change the exemption, you affect the middle class. Change the rate, you affect the rich. Harder to spin, anyway. IIRC, the very first income tax during the civil war had an exemption equal to a year's pay for a laborer. Not such a bad idea.
Comments
Originally posted by Anders the White
The problem is you cannot be sure that the rich use the money for domestic investments. Especially not if there isn´t given more money to/taken less money away from the-not-so-rich. The more poor the people given money are the more likely it is that its used for products produced domestically. Very roughly said: Poor people buy american made milk and bread and rich people buy swedish Volvos. When consumption on domestical produced products goes up investments are diverted toward the home marked.
One thing is even better: Government spendings especially in infrastructure. But I know thats an ideologic no-no.
Yeah that would be all good and well except that Ford owns Volvo.
Ford buys Volvo
What makes you think all food production is domestic though?
Nick
Originally posted by BR
Sure, that's all fine and dandy and should be fixed...however...
What is the purpose of the current tax cut? If it is meant to stimulate the economy, correcting the current disparity WILL NOT WORK. Those that will benefit the most from this economic stimuls tax cut already have the money to buy whatever the hell they want and are already stimulating the economy. IF THE TRUE PURPOSE OF THE TAX CUT IS TO STIMULATE THE ECONOMY, GIVE THE MIDDLE AND LOWER CLASSES THE MONEY FROM THIS TAX CUT SO THE MASSES CAN STIMULATE THE ECONOMY.
The purpose of the tax cut is to hopefully restore the stock market and likewise get the companies in the stock market focusing on what the true measure of their stock price should be and that is what they pay in dividends.
Right now people are buying stocks to speculate on the price. This was/is stupid because you can manipulate the price. You can fire workers, shift expenses, etc. You can do all sorts of things to generate false profit.
People would get all excited about these large profits, why? Well I don't know why because until they get handed to you it doesn't do you as the stock holder a damn bit of good. The naive investor though would say, "Wow, look at those profits, I'm going to buy." Except some profits were just paper profits, and a lot of companies, even with huge profits, NEVER paid a dividend (Microsoft being a great example)
Dividends are your share of the profits when you are a stock holder. A true asset puts money in your pocket. Most stocks are no longer assets in my books because they don't put money in your pocket.
Some people are doing this today with housing. This is my field so I watch the mistake makers carefully so I can buy their houses in a few years. They will buy a house much larger than they need also thinking it is an investment. Well their investment will eat them alive if they lose their job. Likewise they will buy an "investment" property that loses money every month saying "yeah but it is okay because it will appreciate." When it doesn't, they will walk away. (That is when I will be buying BTW)
I wouldn't even purchase a home for rental unless I was sure I could put $200-300 a month from the rents in my pocket TODAY.
As for giving the lower and middle classes the tax cut, the lower classes don't pay any taxes because they have no money. You can't give them back their social security yet. We don't have a national sales tax to lower or other regressive taxes. The middle class does need a tax cut but that means cutting the rate on the income tax. Their rate is already only 15% versus 34% for upper income earners. When the disparity becomes too wide the rich will call for the upper rate to drop.
Lastly the economy doesn't need just consumption, it needs investment and to that you need lots of money.
Nick
Originally posted by Anders the White
... Very roughly said: Poor people buy american made milk and bread...
And how many jobs does that produce? Zilch, none, nada. Food production in the U.S. doesn't need any stimulus. The government is already funneling too much money to farmers as it is.
Originally posted by tonton
Don't you realize the VAT targets the poor and reduces consumer spending?
How so? And even if that's how it works in practice, couldn't it be 'corrected' so it doesn't target the poor? Like, no value added to food, but lots of value added to a second car?
What I was trying to say was: In a normal economy* the more basic needs are more likely to be met from local production than not-so-basic needs. Thats an economical dogma especially in non-specialized economies.
*A non-normal economy in this case is that of say Burain where the economy is based on one special product and where food, craftsmen aso has to be imported.
Originally posted by bunge
How so? And even if that's how it works in practice, couldn't it be 'corrected' so it doesn't target the poor? Like, no value added to food, but lots of value added to a second car?
We had a big debate about this here in Australia a few years ago before the introduction of the GST (read: antipodean VAT). Such taxes are inherently deeply regressive because the less wealthy spend proportionately more of their income on consumption. Naturally, if you're only just making enough to survive, you spend everything you earn, right?
You can reduce the impact of a GST/VAT a bit by removing it from the items that poor households spend most on, particularly food. But if you exempt food and other things from the GST, it reduces the elegance of the system, reintroducing loopholes and complexity.
So in the austere world of economic theory, this kind of fiddling is frowned upon. But I think that if more economists had to live on minimum adult wages, then they might place a higher value on humanity than elegance.
Originally posted by boy_analog
You can reduce the impact of a GST/VAT a bit by removing it from the items that poor households spend most on, particularly food. But if you exempt food and other things from the GST, it reduces the elegance of the system, reintroducing loopholes and complexity.
Is VAT consistent for all products? In that case it's obviously not 'fair'. Here in the US of A we already have a system set up for sales tax though. It could easily be rearranged to accomodate a scale from taxless to taxed, but loopholes would spring up.
There is no perfect way.
Originally posted by BR
IF THE TRUE PURPOSE OF THE TAX CUT IS TO STIMULATE THE ECONOMY, GIVE THE MIDDLE AND LOWER CLASSES THE MONEY FROM THIS TAX CUT SO THE MASSES CAN STIMULATE THE ECONOMY.
....yes, but they aren't paying the taxes, the bottom 2 quintiles (the bottom 40%) only pay 5-6% of all income tax.
One of these days, Alice.......One of these days.....
RIGHT TO THE MOON!!!:
Originally posted by Not Unlike Myself
Tax Cuts = Good.
Yep, that's just about the depth of thinking that Bush brings to the issue, except that I think he might get a little glassy-eyed seeing one of those '=' thingies, and worry that you're trying to get too fancy with him.
How about just "Tax cut Good, Iraq bad".
Originally posted by ena
....yes, but they aren't paying the taxes, the bottom 2 quintiles (the bottom 40%) only pay 5-6% of all income tax.
One of these days, Alice.......One of these days.....
RIGHT TO THE MOON!!!:
Again with the slippery "they aren't paying the taxes" when you only refer to federal income tax. They have payroll taxes and sales taxes and state taxes, etc.
When you include all taxes paid, and compare that to total wealth (and not just income, which understates the wealth of the wealthy), I believe our overal tax system is regressive.
And all this is interesting, but my topic is about Bush's lies about economic matters. So, to bring this tax distribution issue back to the topic of Bush's lies, here's an article describing how Bush lies about who gets the benefits from his tax plan.
Bush said: 92 million Americans will keep an average of $1,083 more of their own money when this tax plan goes through...
Data from the Urban Institute-Brookings Institution Tax Policy Center show that 80 percent of tax filers would receive less than the $1,083 average amount, while about half of tax filers would receive $100 or less._ The White House produced the $1,083 average figure by averaging together high-income people who would get massive tax cuts the average tax cut would be $90,000 for people who make more than $1 million per year with the much larger number of Americans who would get small tax cuts.
Thus, while $1,083 may be the average tax cut amount, it does not accurately reflect what an average American would receive. The Tax Policy Center data show that the average tax cut for those in the middle fifth of the income spectrum would be $256.
In other words, Bush uses the mean rather than the median to distort the effects of his plan.
The "average" income of me, two of my buddies, and Bill Gates is probably around $1 billion. Our median income is around $50,000. Quite a difference. Bush would say our average income is $1 billion. All honest economists would say it is $50,000.
In the same way, Bush basically takes a small number (e.g., $200) that almost everyone gets, and a very large number that a few people get (e.g., $100,000) and says the average is $1000.
If his tax plan is so fair, why does he have to distort the truth to make it sound more fair?
[edit: What's the deal with Safari and double quotes?]
Originally posted by BRussell
Again with the slippery "they aren't paying the taxes" when you only refer to federal income tax. They have payroll taxes and sales taxes and state taxes, etc.
When you include all taxes paid, and compare that to total wealth (and not just income, which understates the wealth of the wealthy), I believe our overal tax system is regressive.
AHHHHHHHHHHHHHHHHHHHHHHHHHHHHH!!!!!!!!!
MY EYES!!!!! MY EYES!!!!!!!!! THE PAIN!!!!!!
AHHHHHHHHHHHHHHHHHHHHHHHHHHHH!!!!!!!!!!
Brussel you rascal, I just gave you all the dope on that on the last page!
Honest Injun, from that Havard proffesor's text, It is actually MORE progressive, when you through in the Payroll taxes, and transfer payments....
---looked at some more stuff on TOTAL taxes and when all is said and done it is even MORE progressive than the Federal tax system, the effective rate for the bottom 20% is a NEGATIVE 30%. (as in their incomes are 30% higher than without the transfer payments.)
....also I went back and that chart says "Federal Taxes" so I'm thinking it means ALL taxes.
...but the quote from the book is fairly unambiguous even if the chart isn't.
*leaves thread before boss takes computer away*
Originally posted by ena
*leaves thread before boss takes computer away*
In that case please keep posting
Originally posted by trumptman
The purpose of the tax cut is to hopefully restore the stock market and likewise get the companies in the stock market focusing on what the true measure of their stock price should be and that is what they pay in dividends.
Right now people are buying stocks to speculate on the price. This was/is stupid because you can manipulate the price. You can fire workers, shift expenses, etc. You can do all sorts of things to generate false profit.
People would get all excited about these large profits, why? Well I don't know why because until they get handed to you it doesn't do you as the stock holder a damn bit of good. The naive investor though would say, "Wow, look at those profits, I'm going to buy." Except some profits were just paper profits, and a lot of companies, even with huge profits, NEVER paid a dividend (Microsoft being a great example)
Dividends are your share of the profits when you are a stock holder. A true asset puts money in your pocket. Most stocks are no longer assets in my books because they don't put money in your pocket.
Some people are doing this today with housing. This is my field so I watch the mistake makers carefully so I can buy their houses in a few years. They will buy a house much larger than they need also thinking it is an investment. Well their investment will eat them alive if they lose their job. Likewise they will buy an "investment" property that loses money every month saying "yeah but it is okay because it will appreciate." When it doesn't, they will walk away. (That is when I will be buying BTW)
I wouldn't even purchase a home for rental unless I was sure I could put $200-300 a month from the rents in my pocket TODAY.
As for giving the lower and middle classes the tax cut, the lower classes don't pay any taxes because they have no money. You can't give them back their social security yet. We don't have a national sales tax to lower or other regressive taxes. The middle class does need a tax cut but that means cutting the rate on the income tax. Their rate is already only 15% versus 34% for upper income earners. When the disparity becomes too wide the rich will call for the upper rate to drop.
Lastly the economy doesn't need just consumption, it needs investment and to that you need lots of money.
Nick
Explain that to your president that says consumption is the answer.
Originally posted by ena
....yes, but they aren't paying the taxes, the bottom 2 quintiles (the bottom 40%) only pay 5-6% of all income tax.
Right. Just give the money from the tax cut. Take the sum total and distribute it to the bottom 3 quintiles. That's of course if you believe that more consumption will stimulate the economy like Bushy Boy does.
Quote:
One of these days, Alice.......One of these days.....
RIGHT TO THE MOON!!!:
So that whole golden rule thing isn't built into christianity? Man, look at the way you treat people you asshole.
Originally posted by BR
Explain that to your president that says consumption is the answer.
He said that? That the reason for the tax cuts is to stimulate the consumption?
Originally posted by Anders the White
He said that? That the reason for the tax cuts is to stimulate the consumption?
During his big speech after 9/11 he didn't tell Americans to make sacrifices. He told us to get the country back on its feet we need to BUY THINGS. Our economy still isn't back on its feet and Bush hasn't changed his message.
In brief, income taxes (as we know) are mildly progressive, with the average rate increasing from 5% in the middle quintile to 22% for the top 1%. Social insurance taxes are regressive, with the 2nd-4th quintiles paying 10% and the top 1% paying 2%. Combined, the system is slightly progressive, with the middle quintile paying 17% and the top 1% paying 33%. ( I say "slightly" because you can easily argue that a third of a million dollars is much easier to part with than a sixth of $40,000.)
You know, in some ways a flat tax, done right, wouldn't be a bad idea. It certainly clarifies things. You can only adjust two things - the exemption, and the rate. Change the exemption, you affect the middle class. Change the rate, you affect the rich. Harder to spin, anyway. IIRC, the very first income tax during the civil war had an exemption equal to a year's pay for a laborer. Not such a bad idea.