There is one (of many) claims we hear the GOP repeat over and over that has always baffled me. And the fact that it keeps being repeated endlessly makes me wonder about the intelligence level of those who buy into this bogus claim so readily? Do they even bother to stop and think things through?
I refer to the GOP mantra that revenues go up when taxes go down.
Often you’ll hear them reference the Reagan presidency as proof positive of this belief? But they conveniently forget Reagan was our first massive deficit spender, by pumping billions of dollars of borrowed money into the military and missile production he created lots of additional tax revenues, but this increase was NOT due to tax cuts.
If cutting taxes really raised revenues, why do we have any taxes at all?
If, when Reagan cut taxes from 50 percent to 35 percent, it actually raised revenues as they claim, wouldn’t cutting taxes to zero absolutely flood our federal government with so much revenue they wouldn’t know where to put it all??
So following this same path of conservative logic, we would be stupid not to completely eliminate the personal income, corporate, capital gains, estate and gas taxes altogether, because we would never want for federal revenues ever again and our federal deficit would just magically disappear overnight. Right?
Next we’ll see Republicans invite Santa Claus and the Tooth Fairy to run for the White House in 2016!
Talk about American exceptionalism! Be sure to cast your votes early for this magical team!
Rod Livdahl
Mesa
Leon Ceniceros posted at 9:06 am on Sun, Mar 18, 2012.
Well, since our Letter Writer seems to have forgotten who is actually paying for all the Democrat ..."Give-Aways"...the Section-8 and HUD housing, the Food Stamps, the Welfare, the ...'NEVER-ENDING UN-EMPLOYMENT CHECKS' (Un-Employment Checks used to be allocated by "WEEKS"....then the Democrats made it "MONTHS" and now Obama and the Democrats in the Senate have made it...."YEARS".
OBAMA AND THE DEMOCRATS ARE BUY THE VOTES OF THE "NO-WORKERS, THE "NEVER WORKERS" AND THE "DON'T WANNA WORK, WHY SHOULD I, WORKERS".
50% OF WORKING AMERICANS PAY .......NO (ZERO).....INCOME TAX.
ANYONE THAT HAS A SINGLE OR COMBINED INCOME OF OVER $100,000.00........THE TOP 10%..............PAY FOR EVERYTHING.
BUT THE DEMOCRATS AND THE SOCIALISTS AND THE COMMIE/ANARCHIST WANNA-BE's, THE LIBERALS AND THE PROGRESSIVES DON'T WANT THAT MESSAGE TO GET OUT........SO THEY RANT AND RAIL AGAINST THE 1%.
OBAMA IS DOING THE SAME THING THAT CHINA'S MAO TSE DONG DID IN THE ..."CULTURAL REVOLUTION".......BLAMING THE RICH FOR CHINA'S MIS-MANAGED BUDGET AND TRILLION DOLLAR DEFICT.
mesateacher posted at 9:56 am on Sun, Mar 18, 2012.
Rod: are you an economist? A historian? What are your qualifications? Like your false god, Obama, you try to prove your point with silliness rather than facts. Here's one you may not like:
"JFK got congress to cut tax rates with the idea that this would provide incentives to change economic behavior in a way that would increase economic growth and individual incomes, and therefore lead to even more tax revenue coming into the treasury than had been the case under higher tax rates. And that's exactly what happened."
Look it up for yourself. Leftists are really rather stupid about real-world economics; you are no exception. Leon mentions something that you will never hear you beloved president talk about: nearly 50% of Americans pay NO Federal income tax. That should terrify every thinking person.
Arizona Willie posted at 11:05 am on Sun, Mar 18, 2012.
mesateacher --- you are onto something with the fact that 50% of Americans pay no Federal income tax.
But the reason you are wrong is the reason you think that is so bad.
Why thinking people should be terrified ( well alarmed might be a better word or actually incensed would be the best word ) is because 50% of Americans have income so low it has been judged they are too poor to be taxed!!!
50% OF AMERICANS ARE TOO POOR TO BE TAXED.
That means America is on the verge of becoming another India.
There are a couple of statistics that belong together especially when discussing issues like this.
1) The average American IQ is only 100.
2) 50% of Americans are too poor to be taxed.
There is a very strong correlation between the 50% of the people with IQ's at or below 100, and the 50% rate of people too poor to be taxed.
About 95% of those who earn enough to pay taxes are living paycheck to paycheck and could not financially survive 6 months without a paycheck.
There is no reason to be ANGRY with those who pay no Federal Income Taxes and it puzzles me why right wingers speak of them with so much hate. Especially considering how many of that bottom 50% are " born again " Christians who vote Republican.
We should pity them. I'm sure they would gladly trade places with those who do pay taxes.
Cerulean posted at 11:32 am on Sun, Mar 18, 2012.
Rod Livdahl, [thumbup][thumbup]
Cerulean posted at 11:33 am on Sun, Mar 18, 2012.
Arizona Willie, Very well said. [thumbup]
Rodini posted at 11:52 am on Sun, Mar 18, 2012.
Az Willie...thanks for the reminder of reality for these delusional repugnants!
The reason indeed that 49% of Americans pay no "INCOME TAXES" is simply because their wages have been kept so low they can barely pay for their food and a roof over their heads!
These clueless repugnants all seem to think everyone who is without a large savings account are all worthless scum who prefer to sit on their butts and cry for government aid to survive.
The reality is 95% of them are stuck in low-wage jobs with little hope of moving up a ladder missing the bottom rungs to climb up, much less able to afford a college education to better themselves!
These Repugnants all seem to believe that there are $60-100,000 jobs available for everyone who wants one...all they have to do is get off their lazy butts and find it!
And not one of these Repugnants ever uses their brains to imagine what the future would be like if they gained enough power to eliminate all the many facets of government aid; including, but never mentioned, all the tax subsidies and breaks given to large corporations who pay little or no taxes.
Imagine our streets littered with homeless and destitute people? Imagine having to walk by 40 families with kids camped outside your local grocery store begging for a handout or the same scenario at the gas station or movie theatre as you try to enjoy a night out?
Is this the vision of the richest nation on earth or of "American Exceptionalism?"
We already are lacking enough jobs for 9% of our population and we have watched as rich execs have sent millions of American jobs to China, India and Pakistan, not so we could make America stronger, but so these same rich execs could earn a larger salary and bonus and their stockholders (most of whom are among the 10%) could earn larger capital gains and pay next to nothing in taxes on the profits!
This is a formula for "American Devastation" not "American Exceptionalism!"
And then to hear the three Repugnant candidates for President all vow to eliminate the Dept of Education and call Obama a hypocrite for endorsing more money for schools to educate those who will be America's future one day, while all three have either MBA or PhD degrees is the ultimte in ignorant stupidity and true hypocrisy!
Face it America...Repugnants are trying to change what made America Great! By changing the rules of decency that once protected us from unfair business practices that led us into this Great Recession 4 yrs ago!
As Wall Street and the Big Banks got off scot-free, those of us among the 90% have been left to fend for ourselves. We didn't get bailed out, but they did!
Rodini posted at 12:14 pm on Sun, Mar 18, 2012.
Mesa Teacher, I sure hope you aren't teaching economics or history! And I'm glad my grown sons don't have you teaching them either!
Only 6 percent of President Kennedy's tax cut went to those earning $300,000 or more annually, that much-ballyhooed top 1 percent. President Bush's proposal is often said to give more than 40 percent of the tax cut to the top 1 percent, more than seven times as much. Even by the president's own estimates, the aggregate dollar amount going to the wealthiest taxpayers is much higher than what President Kennedy proposed.
And he eliminated many tax deductions as well!
And least we forget, he was dropping the top tax rate from a ridiculously high 91-70% !! Quite a differnce from dropping a 35% rate to a 9 or 15% flat tax rate.
Most of the benefits went to the middle class which of course stimulates economic growth by giving people more money to buy goods and services. Increasing wages to a living wage for those at the bottom would accomplish the same thing!
Targeting tax cuts toward those with million dollar incomes, as Bush did, does not stimulate growth in the same manner. All they do is send more savings to their bank accounts where it sits and does nothing, since banks aren't lending any money anyway, right?
The law of supply and demand is King! When 50% of Americans don't earn enough to pay "INCOME" taxes, it means they don't have enough to stimulate economic growth either!
Millionaires however do already have enough, and yet their massive increases in wealth are doing nothing to stimulate economic growth! Yet their desires to eliminate regulations protecting the rest of us from their greed are being broken down and attacked as they try desperately to grab an even bigger share for themselves and their privileged offspring alone!
sockratties posted at 12:19 pm on Sun, Mar 18, 2012.
[tongue] Leon – those earning over $100,000.00 do not represent the top 10%. Maybe in your neighborhood, but not in the country. Get back on your meds. And you were doing so well.
mesateacher – name calling rants are hardly the way to coalesce others to consider your viewpoint. I hope you do better with your students, of which 80% will not make it to college.
From 1992 thru 2007 the 400 taxpayers with the highest incomes had a 394% gain in their average income and a 37% decrease in their average tax rate.
Payroll taxes are mostly paid by the bottom 90% (social security, Medicare and unemployment) because the top 10% earn their incomes by other means. The bottom 90% are also the greater benefactors of these programs.
Average effective taxes paid are bottom 1/5= 4%, fourth 1/5th= 10%, middle 1/5th= 16%, second 1/5th= 20%, and top 1/5th= 22%. The top 10% pay just under 20% of their income in taxes.
Corporate taxes have dropped significantly over the past 50 years. While average individual income taxes have remained fairly constant and payroll taxes have increased 400%, corporate taxes dropped from just over 30% to around 8% in 2005.
Several studies have shown that there is an optimum point at which raising the tax rate results in an increase in government revenue until a certain point is reached. At this point investment and expansion is discouraged so reduced income results in a reduction in tax revenue. When taxes are below this level there is no indication that greater investment or expansion is encouraged. With a global economy it is difficult for a single country to effectively manipulate a tax structure to obtain optimum tax/revenue balance.
samkat posted at 12:44 pm on Sun, Mar 18, 2012.
Anyone with a knowledge of basic economics and accounting knows that you have to have assets that equals disbursements to stay afloat. The problem seems to be that nobody is doing anything to get the deadbeats off the dole. There are actually multigenerational welfare families in today's society. Give the freeloaders job training and a reasonable time to find a job after which they get the boot.
the system was established to take care of those who cannot fend for themselves and this should be the golden rule.
If our so called conservatives would actually take the time to review our current tax structure and pare down the number of tax giveaways, we might just get out of the hole. For starters, decrease the amount allowed for charitable deductions, to include church donations. Now, this will really strike fear into the heart and souls of our religious right brothers and sisters but if they truly believe in doing more with less, they should go for it hook, line and sinker. Those who really believe in charitable donations will continue to do so. Those who use it for a tax dodge will shudder in their tracks.
Dale Whiting posted at 6:04 pm on Sun, Mar 18, 2012.
Why do these tax cutting theories persist?
Since you asked, Rod, I'll tell you.
In theory the argument is based upon [and I'll be mispelling it] the Lauffer Curve. Lauffer was an economist who "theorized" that there was some point in the tax curve where raising taxes lead people to stop investing in business ventures, turning to safer less risky investments with lower returns, like government securities and bank notes. Lauffer speculated that the point was around 50% or so [if I recall correctly. And I got an "A" from the chief architect of Reaganomics]. Trouble is, no one was ever able to actually "measure" or test Lauffer's theory.
But the notion was that if taxes were lowered, more people would invest in business ventures, creating more domestic jobs, and employees would be paying more taxes, too. That was the "trickle down" theory, you know, that rising tide which lifted all boats. The assumption underlying all of this was two fold. First, we needn't worry about any trade deficites. Since the US dollar was the trading currency, if we "controlled" the money supply, trade deficites did not matter. Second, all boats were moored in US harbors and all trickling down flowed into those harbors.
Recently upon the announcement that Murray Wiedenbaum, the architect of Reaganomics was retiring, I sent him an e-mail asking him if his ideas for Reaganomics had changed, if he now recognized that his underlying assumptions had changed. Murray did not respond.
But where Reaganomics still meets with approval from the 1% who want their taxes cut, regardless of it becoming nonsense, it is hear to stay. Thanks to the US Supreme Court and Citizens United, we are stuck!
CSalafia posted at 8:06 pm on Sun, Mar 18, 2012.
I love how the brainless parrot the "50% pay no federal taxes" line, wielding it like some sort of weapon to justify....well, I don't know really.
I guess they believe that the elderly, the disabled, and minimum wage workers should kick in because, well, those groups make up something like 80% of those who don't owe any federal taxes.
Here's another point. If, as the GOP and the Tea Party often claim, that there's nothing better than cutting taxes, then they should be happy for those who don't owe federal taxes. Isn't that their ultimate goal?
Oh, it's that THEY don't want to pay taxes..... they don't actually care about anyone else, just what affects them personally.
Rodini posted at 8:29 am on Mon, Mar 19, 2012.
Thanks Dale, but it was a rhetorical question I'm sure....the Lauffer Curve or as I refer to it....the "Laughter Curve" was "high thinking" in it's day and worshipped by the Right.
30 years later it's still considered "high thinking" by the Left.....we just wonder if it's an alcohol induced high or some other drug of choice?
Rodini posted at 8:29 am on Mon, Mar 19, 2012.
[smile]
Slabside posted at 8:43 pm on Mon, Mar 19, 2012.
The National Debt has now increased more during President Obama's three years and two months in office than it did during 8 years of the George W. Bush presidency.
The Debt rose $4.899 trillion during the two terms of the Bush presidency. It has now gone up $4.939 trillion since President Obama took office.
The rich very much DO pay their fair share and then some. The poor and middle class get more poor because of liberal taxes against us (the middle class). Taxing the rich more is not going to get me or you more money. All it will do is give the government more money to waste. Lower middle class taxes and cut regulations so that companies don't run away overseas ( thus creating more jobs) and bring the middle and poor up. Bringing the rich down helps no one, it just makes those jealous of the rich feel better.
Rational Human posted at 9:18 am on Tue, Mar 20, 2012.
The Economic Recovery Tax Act (ERTA) of 1981 that is credited to President Reagan reduced personal tax rates by about 25 percent, while the Tax Reform Act of 1986 chopped them yet again. The criticism that the tax payments of the rich would fall under ERTA was based on a static conception of human behavior. As a 1982 JEC study pointed out, similar across-the-board tax cuts had been implemented in the 1920s as the Mellon tax cuts, and in the 1960s as the Kennedy tax cuts. In both cases the reduction of high marginal tax rates actually increased tax payments by "the rich," also increasing their share of total individual income taxes paid. Unfortunately, estimates of ERTA by the Democrat-controlled CBO continued to show falling tax payment by upper income taxpayers, even after actual IRS data had become available showing a surge of income tax payments by affluent taxpayers.
High marginal tax rates discourage work effort, saving, and investment, and promote tax avoidance and tax evasion. A reduction in high marginal tax rates boosted long term economic growth, and reduced the attractiveness of tax shelters and other forms of tax avoidance. The economic benefits of ERTA were summarized by President Clinton's Council of Economic Advisers in 1994: "It is undeniable that the sharp reduction in taxes in the early 1980s was a strong impetus to economic growth." The tax cuts initiated by Ronald Reagan were what made President Clinton's administration look so prosperous. Even Clinton was honest enough that he could see that.
Since 1984 the Joint Economic Committee (of congress) has provided factual information about the impact of the tax cuts of the 1980s. For example, for many years the JEC has published IRS data on federal tax payments of the top 1 percent, top 5 percent, top 10 percent, and other taxpayers. These data show that after the high marginal tax rates of 1981 were cut, tax payments and the share of the tax burden borne by the top 1 percent climbed sharply. For example, in 1981 the top 1 percent paid 17.6 percent of all personal income taxes, but by 1988 their share had jumped to 27.5 percent, a 10 percentage point increase. The share of the income tax burden borne by the top 10 percent of taxpayers increased from 48.0 percent in 1981 to 57.2 percent in 1988. Meanwhile, the share of income taxes paid by the bottom 50 percent of taxpayers dropped from 7.5 percent in 1981 to 5.7 percent in 1988. As the rich get richer and the poor get poorer, the rich pay a higher percentage of taxes and the poor pay less. This is no myth. It's historical fact anyone can look up.
Rational Human posted at 9:22 am on Tue, Mar 20, 2012.
The Reagan tax cuts, like similar measures enacted in the 1920s and 1960s, showed that reducing excessive tax rates stimulates growth, reduces tax avoidance, and can increase the amount and share of tax payments generated by the rich. High top tax rates can induce counterproductive behavior and suppress revenues, factors that are usually missed or understated in government static revenue analysis. Furthermore, the key assumption of static revenue analysis that economic growth is not affected by tax changes is disproved by the experience of previous tax reduction programs. There is little reason to expect static revenue analysis to evaluate the economic or distributional effects of current tax reform proposals much better than it evaluated the Reagan tax program 15 years ago. The US now tops the world with the highest corporate taxes. That wont spur economic growth and prosperity in America. All that is doing is to make us all poorer.
VofReason posted at 1:23 pm on Tue, Mar 20, 2012.
How can anyone refute such solid logic. Here let me try. Very simple, if your personal taxes go up, are you going to go out and buy a bigger TV? Make bigger investments? Take a vacation or better vacation with your family? Run your AC as high as you might otherwise? Well no. People who would take responsibility for themselves will tack back to what they can afford given their known tax debt. Right? Or doesn't that make sense?
VofReason posted at 1:24 pm on Tue, Mar 20, 2012.
Essentially slowing economic growth and reducing the pool to tax from.
Rich posted at 4:16 pm on Tue, Mar 20, 2012.
"50% OF AMERICANS ARE TOO POOR TO BE TAXED."
Essentially, if you are right, the society is not sustainable. Is that your point? That the system has failed? I'm not sure I don't agree with you, any such system is already, or is only a very thin line from anarchy, and when we start making laws about our dogs, we're there. The government can't really be the solution, they are the situation and a factor of the cause.
As far as economics, Reagan worked for about a quarter of century which is really close to or the best any single system has ever done. But nothing is forever and if anybody knows the answer, they haven't said yet. If they had it wouldn't be such a mess. It's rather obvious Obama doesn't know, because if he did he'd have done it. And I suppose that's the real mythology, believing things that, in your face, just aren't so.