The Clinton Surplus Myth...

I agree that the tax laws must be addressed and personally advocate abolishing income taxes and replacing them with a consumption tax with prebates. We also have a serious problem with Social Security because it's a welfare program which relies on tax and spending that reduces personal wealth as opposed to an retirement investment program that builds personal wealth making the welfare program unnecessary. That's not the point though because short term "prosperity" based upon borrowing doesn't work. A person that lives on a credit card can live the high life until they have to pay the bill and that's no different when we address our national economy. An economy based upon borrowing leads to short term prosperity but long term austerity.

If we don't pay for government expendatures then the ever increasing national debt drives down future GDP growth to the point that the US doesn't create enough jobs for those entering the job market which will drive down wages and the standard of living because of a surplus in the labor force. The wealthy don't suffer from this but middle and low income workers do whenever there are more people than jobs.

We must pay for the cost of government, period, and we're not doing that. Neither President Obama or Mitt Romney are addressing this simple problem because both are proposing never-ending deficit spending. Even allowing all of the temporary tax rate cuts from Bush and Obama won't balance the US budget but the additional $400-$500 billion in annual revenue would help. Add those revenues and actually reduce government expendatures until the budget balances and then work on going further to lower government expendatures even more so that the tax rates can be reduced. That is the only solution, period.

 

I agree that the tax laws must be addressed and personally advocate abolishing income taxes and replacing them with a consumption tax with prebates. We also have a serious problem with Social Security because it's a welfare program which relies on tax and spending that reduces personal wealth as opposed to an retirement investment program that builds personal wealth making the welfare program unnecessary. That's not the point though because short term "prosperity" based upon borrowing doesn't work. A person that lives on a credit card can live the high life until they have to pay the bill and that's no different when we address our national economy. An economy based upon borrowing leads to short term prosperity but long term austerity.

If we don't pay for government expendatures then the ever increasing national debt drives down future GDP growth to the point that the US doesn't create enough jobs for those entering the job market which will drive down wages and the standard of living because of a surplus in the labor force. The wealthy don't suffer from this but middle and low income workers do whenever there are more people than jobs.

We must pay for the cost of government, period, and we're not doing that. Neither President Obama or Mitt Romney are addressing this simple problem because both are proposing never-ending deficit spending. Even allowing all of the temporary tax rate cuts from Bush and Obama won't balance the US budget but the additional $400-$500 billion in annual revenue would help. Add those revenues and actually reduce government expendatures until the budget balances and then work on going further to lower government expendatures even more so that the tax rates can be reduced. That is the only solution, period.

 

If the federal government extracts another $10,000 in taxes from me, and they send that money to Israel to procure weapons, I can guarantee you that I will be spending $10,000 less into the local economy!

If paying more taxes is such a grand idea and will stimulate the economy, then why all the pissing and moaning from Americans and politicians about reversing the Obama tax cuts and the FICA holiday?

 

There are trillions sitting in offshore bank accounts. Someone has been getting a lot of extra month.

How can People/Business paying additional taxes...add 23 million new jobs, create a budget surplus, a decreasing debt, and rising incomes?

Same way they did in the 1990s.

You drink the Koolaid but just think about what you are saying!

 

Matbe you're different. For many 1%ers it will just mean $10k less in the offshore bank accounts.

 

Without a doubt, but even if we just take all this at face value, guess who the worlds leading distributor of weapons is? So, that $10k goes right back into the pocket of folks living and working here in the good ole US of A.

I made no such claim, my only claim is that it's hard (impossible) to establish a causal relationship between taxation and economic growth, you and Irie both make this mistake. You can make correlative arguments, but I've seen absolutely nothing from either side (other than the Laffer curve) that attempts to show any causation.

 

$10,000 taken in taxes. -$10,000.
$10,000 goes into the pocket of folks living and working here in the good ole USA. +$10,000

-$10,000+$10,000=0 Different pocket. But there will be some "shipping and handling charges by both the
US govt and the Israeli govt. So the real numbers would be more like -$10,000+$3,000=-$7.000

 

And also spending. The first guy will stick it in his offshore bank acount. The second guy will spending it.

So the "real numbers" will be something like -0- spent in the economy vs. $7,000.

 

It's useless napkin math riddled with baseless assumptions.

The underlying point to the entire discussion is that you nor anyone else in this thread is capable of establishing a causal relationship between marginal tax rates and changes in rates and growth.

 

I didn't think you would answer my question which says your position is political with zero substance.

Money in off-shore bank accounts will be taxed if ever brought into the USA...what's wrong with this?

Please explain how applying more taxation to all Americans/Business can create 23 million new jobs??

 

The example of buying weapons was just an example of cash leaving the USA. You don't know where Israel or any other US supported nation might buy their weapons? Sure some of it comes from the USA but not all of it.

Even if the $10K did come back into the US economy, it won't be $10K...it will be something much less.

I never said you made any claim?? I said 'Americans and politicians'.

Once again, here is your 'causal relationship'; If I must pay more in taxes then I will spend less in my local/state/national economy...might be a 1:1 ratio. If increased taxation is such a panacea or boon to the US economy, then why are Americans and politicians so unwilling to reverse the Obama tax cuts and the FICA holiday? Why were these programs perpetuated if the opposite program is more beneficial?

 

60% of GDP is personal consumption. For every single American who basically lives pay-check to pay-check, which is tens of millions of them, extracting more taxation from them will create less spending into the economy.

The growth of the economy has too many variables but it is logical that if you remove $150 a month of cash from typical wage earners that this is $150 that will not be spent into the local/state/national economy. The percentage of this cash which 'might' be spent by the government into the private economy might be 0% to 75%! Taxes used to pay down debt do nothing for the economy.

Which do you believe is more efficient spending in terms of the economy; personal spending or government spending?

Since all taxation of Business is passed onto the cost of goods, increasing taxation increases the cost of goods; how can this be a good thing?

 

I didn't say it can. It can however reduce the deficits like it did in the 1990s.

 

You cannot reduce the deficits until spending is under control. Where is a policy or legislation that specifies spending controls? I'm guessing of the $1.2 trillion deficit, that $500 billion of it can be attributed to less taxation stemming from the Obama tax cuts and the FICA holiday. However, there remains a $700 billion spending problem! What's the point in paying more taxation unless spending is reduced? How about for every dollar of new taxation one dollar of spending is reduced? If you were to raise taxes by $500 billion this would also force spending to reduce by $500 billion...leaving $200 billion to resolve...right? Or if Obama demands a $3.5 trillion government, then this requires $1.2 trillion in immediate new taxation from People and Business...

 

I just saw your idea on spending cuts and tax increases talked about on PBS last night. Obama has offered already to cut 2.5 dollars in spending for every dollar of tax increase but that just isn't going to happen. Reason is a lot of the republicans (especially the new tea party ones) have signed Grover Norquists pledge to not raise taxes under any circumstances.

 

Conservative propaganda. If the govt collected the same % of GDP in revenues as it did in 2000 revenues would be $750-800 billion greater and the deficits would be much reduced.

But spending is under control.

Closer to $800 billion.

Spending has actually been reduced in two out of the past three years, the first president in many decades to have done that.

Spending has also been relatively reduced during the past three years. Spending is now proportionately the same or lower than it in 4 of Reagan's years.

Your conservative propaganda sources didn't tell you thtat?

We don't need to actually cut spending, just control its growth. Clinton proved that in the 1990s when he inherited a record deficit and got it to a surplus, and never actually cut spending once.

 

The only thing I've seen on your Obama plan is this; For every $1 in new revenue from those making more than $250,000 per year and from closing corporate loopholes, the Budget has $2.50 in spending cuts including the deficit reduction enacted over the last year.

I don't personally have a problem with the Norquist tax pledge from this perspective. Too many of these politicians when running for office promise no new taxes then once in office vote for new taxes. IMO the Norquist pledge simply forces these politicians to keep their word.

However, it is really stupid to promise no new taxes under 'any circumstances'.

Lastly, there is no one holding a gun to anyone's head to sign the pledge. But since all politicians are political sheep, I suspect the R's will fall in line and sign it...

 

In BOLD above then the ONLY choice is a $1.2 trillion tax increase on all Americans. Why isn't Obama talking about a $1.2 trillion tax increase on People and Business? To use Obama's smoke and mirrors technique, which is to provide numbers which are 'actually' over ten years, this means a $12 trillion tax increase to People and Business...

 

I agree, we should be talking about a greater tax increase. But we have the Party of Grover Norquist out there ...

 

I agree, we should be talking about a greater tax increase. But we have the Party of Grover Norquist out there ...

 

does that mean "greater" revenue ?

can you tell men the functional relationship between revenues and tax rates ?

 

The Laffer Curve might be tantamount to Prohibition in the '20's; government prohibits alcohol manufacturing and sales yet consumption in many places actually increased. Government forces high tax rates and nearly every American/business will do whatever possible to minimize or avoid the taxation.

Whether it's prohibition or high tax rates, both greatly increase the illegal actions of people/business, and when this is done and impacts all people/businesses, it is not possible or cost effective for the federal government to enforce such extreme laws. The more people and business get away with cheating or violating laws, due to lack of enforcement, the more cheating and violation that will take place...

 

fixed

the laffer curve is a representation of simple two variable system in which all other variables are fixed. It represents change in I as the variable ET is varied. In this two dimensional system ne can study relative rates of change in Income as tax rate is varied, dI/dET assuming all other variables are held constant, the partial differential. This of course is folly, and the smooth Laffer curve as represented in standard economic text books can only be spoken of in a very limited fixed system, rendering the "revenue-maximizing rate" of the curve all but a useless theoretical construct, valid only over a fixed, undefinable set of conditions.

think about it again, you are mistaken. I am not a subscriber, and you don't remember it.
Secondly, only in a fixed system, if and only if you were able to define it under current conditions(which you have not), and you were additionally able to hold these conditions(variables) constant over time, generating the two dimensional plot of income v tax rates, could you begin to state whether or not revenues would increase or decrease from a given point on the curve(which you cannot presently quantify)

So, now that I have laid out the mathematical reality for you, get back to me when you have defined the system, the host of variables, the method to hold them constant over time, and have generated your personal fixed, limited version of the Laffer curve.
Then "if the Laffer curve is anything to go by", demonstrate your statement, "then yes,
increasing effective tax rates will lead to 'greater' revenues."

 

Increase the penalities for cheating.