US Budget

[johnsonma]

Are you arguing that a tax cut across the board for everyone who works and earns a paycheck caused the downturn in the economy starting in 2007?

I'm sorry johnsonma, but I can't take you seriously at all if you believe that narrative.

No and in the grand scheme of things it was insignificant. It does show how the economic policy of bush began though. Cut taxes and then start two wars, take away as much regulation as possible and let the banks have a hayday.

"The tax cuts had been largely opposed by American economists, including the Bush administration's own Economic Advisement Council. In 2003, 450 economists, including ten Nobel Prize laureate, signed the Economists' statement opposing the Bush tax cuts, sent to President Bush stating that "these tax cuts will worsen the long-term budget outlook... will reduce the capacity of the government to finance Social Security and Medicare benefits as well as investments in schools, health, infrastructure, and basic research... [and] generate further inequalities in after-tax income."

You don't have to take me seriously, but maybe you will take the men and women who are far more knowledgeable in the subject seriously.

 

[johnsonma]

Closing the loopholes doesn't accomplish anything. That's called a tax increase! Those loopholes were supposed to be there to encourage growth in certain economic sectors!

You essentially propose a tax increase. Here's how it works in the UK:

http://www.telegraph.co.uk/finance/personalfinance/consumertips/tax/9097219/50p-tax-rate-failing-to-boost-revenues.html

49.5% of Americans don't pay income tax. The top 10% pay *****70%***** of the US Federal Budget!

In fact, this year I don't think I'll end up paying a dime in taxes because I have a lot of write offs.

We are at a point where we need slash spending, bite the bullet, and in a few short years we'll be adjusted and capable of moving forward again.

I propose a return to pre-bush level taxes. Possibly stagger the installation of the tax increases for the middle class to help soften the blow it will have to consumer spending. Even then I would wait a while to enact the tax increases to everyone except the top earners. Won't have to worry about that though seeing as its an election year and everything gets put on hold for the pols.

http://www2.ucsc.edu/whorulesamerica/power/wealth.html

I wonder why they only pay 70%? Maybe its because they control 70% of the wealth of the country? When you figure in the inequality of wealth, the tax system makes much more sense.

 

[riser]

What you propose doesn't accomplish anything. You raise taxes on the middle class and the high income earners.

Why? What does it do? You might generate more money, you might generate less. Overall, insignificant to budget concerns. But the taxes on the middle class are now higher.

You've accomplished nothing positive while tightening the noose on the middle class.

 

[johnsonma]

What you propose doesn't accomplish anything. You raise taxes on the middle class and the high income earners.

Why? What does it do? You might generate more money, you might generate less. Overall, insignificant to budget concerns. But the taxes on the middle class are now higher.

You've accomplished nothing positive while tightening the noose on the middle class.

You have to wait to tax the middle class anymore and in the end I only think that returning to the pre-bush levels is acceptable. Like i said unemployment has to rebound and i would even wait for the housing market to return before even thinking the middle class could bear anymore of the burden (the few of us that are left anyways). Fortunately that's not really much of a tax increase since bush could not care less about them compared to the top 10%.

I am talking about undoing the entire tax policy of the previous administration.


The congressional Joint Committee on Taxation calculated a score, or revenue change, for each of the seven major tax cut bills passed during the Bush administration: their combined cost sums to over $2.0 trillion from 2001-17. Extending these tax cuts into the future would carry a similar cost: the Congressional Budget Office (CBO) recently estimated the cost of extending them through 2017 at $1.9 trillion, not counting the costs of debt service, and not counting the cost of indexing the alternative minimum tax (AMT) to inflation to prevent it from undoing much of the cuts...if one takes into account the direct effects of the tax cuts, extra interest payments, and the extra "interaction" cost of reforming the AMT while extending the Bush tax cuts, the combined cost of extending the tax cuts through 2017 adds up to $2.8 trillion.

It wont solve everything, but that looks like a pretty damn good start to me. Throw in some sensible budget cuts and the ending of two conventional wars and we will get a much clearer picture of where we stand.

 

[riser]

The tax cuts generated more income than with them. Look at the tax revenues for the first year that the tax cuts went in place. That dislodges your entire argument.

You can't cite the CBO either! Come on. The CBO is a joke for forecasting, they're only good at looking back.

If the tax cuts cost revenue, why did revenue go up? Because the tax cuts generated more money than what was being generated by the higher tax rate. This isn't something easily measured which is why the CBO is a joke when it forecasts.

So you throw out there $2.8 trillion in the next 5 years. $330 billion additional a year. But revenue went up higher when taxes were lowered. Your bucket doesn't hold water when faced with the reality of facts.

I don't understand how this argument is still around.

Look at the numbers:
http://www.usgovernmentrevenue.com/downchart_gr.php?year=2000_2010&view=1&expand=&units=k&fy=fy11&chart=F0-total&bar=0&stack=1&size=l&title=&state=US&color=c&local=s

Do you see how US revenue SPIKED when tax cuts went into play? Then you can see where the economy collasped under the housing market, all the write offs, the bail outs, extended unemployment, etc. The economy is still doing bad but we're already back to pre-Bush tax revenue generation! In 2003 the economy was doing pretty good considered the wars and 9/11 impact. Taxes lowered, economy took off. Very simple.

Those are the numbers. Please explain how raising taxes is the solution. By the numbers, the decrease in taxes caused a sharp increase in revenue. That cannot be disputed.

 

[johnsonma]

The tax cuts generated more income than with them. Look at the tax revenues for the first year that the tax cuts went in place. That dislodges your entire argument.

You can't cite the CBO either! Come on. The CBO is a joke for forecasting, they're only good at looking back.

If the tax cuts cost revenue, why did revenue go up? Because the tax cuts generated more money than what was being generated by the higher tax rate. This isn't something easily measured which is why the CBO is a joke when it forecasts.

So you throw out there $2.8 trillion in the next 5 years. $330 billion additional a year. But revenue went up higher when taxes were lowered. Your bucket doesn't hold water when faced with the reality of facts.

I don't understand how this argument is still around.

Look at the numbers:
http://www.usgovernmentrevenue.com/downchart_gr.php?year=2000_2010&view=1&expand=&units=k&fy=fy11&chart=F0-total&bar=0&stack=1&size=l&title=&state=US&color=c&local=s

Do you see how US revenue SPIKED when tax cuts went into play? Then you can see where the economy collasped under the housing market, all the write offs, the bail outs, extended unemployment, etc. The economy is still doing bad but we're already back to pre-Bush tax revenue generation! In 2003 the economy was doing pretty good considered the wars and 9/11 impact. Taxes lowered, economy took off. Very simple.

Those are the numbers. Please explain how raising taxes is the solution. By the numbers, the decrease in taxes caused a sharp increase in revenue. That cannot be disputed.

It can be disputed vigorously. I am not sure where you are pulling those numbers from but I'm guessing they are based around the housing bubble and the false prosperity it projected. But since it doesn't explain it, I guess we just have to take the word of Christopher Chantrill, the writer and conservative. We by no means are better off after all of the tax decreases. We just couldn't afford them and now they are adding to the problem. You dont trust the CBO? Fine, there are plenty of links from reputable sources that show exactly how much those tax cuts screwed us.

http://www.tax.com/taxcom/taxblog.nsf/Permalink/CHAS-89LPZ9

http://www.cbsnews.com/8301-505123_162-39741024/did-the-bush-tax-cuts-lead-to-economic-growth/

http://www.huffingtonpost.com/2011/05/04/small-business-owners-bush-tax-cuts-rich-repeal_n_857204.html

All of these show that the tax cuts were ineffective, harmful, and in the end did nothing to help us. The facts are the facts and those cannot be disputed.

 

[riser]

Yes riser, it's working so well for the UK.

http://www.telegraph.co.uk/finance/personalfinance/consumertips/tax/9097219/50p-tax-rate-failing-to-boost-revenues.html

You're getting old. Read up a few of my posts today. I already cited that link. haha

 

[riser]

Cite the numbers, not opinions or speculation by a guy who attended three different schools and never graduated, yet apparently is an expert of Economics.

http://www.tax.com/taxcom/taxblog.nsf/Permalink/CHAS-89LPZ9

Look at the table 1. He has to compare incomes in 2008, after the housing market collapse, to make his point. You notice that income was already on the decline in 2000 and stopped in 2003 - the Tax cuts - and incomes steadily increased until the housing market collapse.

By the numbers the tax cut helped. A major flaw in the argument you presented is that they like to take data from 2008. They all stray away from 2007 because they don't have an argument there. The housing market collapse is outside of the tax code, yet is significantly affected the economy. If you compare against 2007, with all things equal, the tax cuts helped. Bring in the housing market collapse and things change.

Revenue for the Federal government was still up more with the tax cuts. Again, look at the numbers. Do not look at people's opinions and cooked accounting numbers.

Further reading that same link where he only reports on Individual taxes.. YES, it will be lower because the tax rate is reduced. Factor in the increased spending by the consumer base, causing higher profits for companies, where the difference is made up. Why did this author stray away from looking at Capital Gains tax revenue or Corporate tax revenues? Because when he factors those numbers in he does not have an argument. The purpose of the tax cuts was to put more money into the consumer's hand to stimulate the economy. If I had more money, I would buy more items.

I moved to Tennessee because there is not state or city taxes. I have a higher sales tax. I have 5% more money per month to spend because of lower taxes than if I had continued to live in Ohio. That means I'm either going to save and invest, or spend that extra 5%. That money goes to local sales taxes and companies where I spend my money. They inturn would have higher revenues and would likely pay more money in taxes, negating the decrease in tax revenue from the individual.

I admit, understanding taxation, economics, micro/macro, and how they all combine into a single thing is hard. I don't expect many non-Business oriented people to half a solid grasp of the overall big picture.

 

[johnsonma]

Cite the numbers, not opinions or speculation by a guy who attended three different schools and never graduated, yet apparently is an expert of Economics.

http://www.tax.com/taxcom/taxblog.nsf/Permalink/CHAS-89LPZ9

Look at the table 1. He has to compare incomes in 2008, after the housing market collapse, to make his point. You notice that income was already on the decline in 2000 and stopped in 2003 - the Tax cuts - and incomes steadily increased until the housing market collapse.

By the numbers the tax cut helped. A major flaw in the argument you presented is that they like to take data from 2008. They all stray away from 2007 because they don't have an argument there. The housing market collapse is outside of the tax code, yet is significantly affected the economy. If you compare against 2007, with all things equal, the tax cuts helped. Bring in the housing market collapse and things change.

Revenue for the Federal government was still up more with the tax cuts. Again, look at the numbers. Do not look at people's opinions and cooked accounting numbers.

Further reading that same link where he only reports on Individual taxes.. YES, it will be lower because the tax rate is reduced. Factor in the increased spending by the consumer base, causing higher profits for companies, where the difference is made up. Why did this author stray away from looking at Capital Gains tax revenue or Corporate tax revenues? Because when he factors those numbers in he does not have an argument. The purpose of the tax cuts was to put more money into the consumer's hand to stimulate the economy. If I had more money, I would buy more items.

I moved to Tennessee because there is not state or city taxes. I have a higher sales tax. I have 5% more money per month to spend because of lower taxes than if I had continued to live in Ohio. That means I'm either going to save and invest, or spend that extra 5%. That money goes to local sales taxes and companies where I spend my money. They inturn would have higher revenues and would likely pay more money in taxes, negating the decrease in tax revenue from the individual.

I admit, understanding taxation, economics, micro/macro, and how they all combine into a single thing is hard. I don't expect many non-Business oriented people to half a solid grasp of the overall big picture.

You forgot to mention the other links I provided. You only singled one out because it was the weakest one and there are a hundred more where that came from, with plenty of facts. The rule that less taxes and more spending will create a healthy economy is a tried and true principle of economics, and that for the most part is right. You cannot however increase spending to the point that the lower taxes are unable to sustain the balance. Once that balance is gone its a whole different game and you can look at any recession or the great depression to see this. Learn from the mistakes of those that came before, not cloud ourselves in ignorance (aka the bubble).

I am not arguing that having taxes high long term is the way to prosperity. It most certainly is not. All i'm saying is that to balance the budget we need to remove the tax cuts to those who can AFFORD it to balance the budget, and then use the principle of less taxes and more spending to grow our economy. Also just making our tax code more efficient by closing loopholes and other flaws will make the whole thing cheaper and thus provide more money.

The tax cuts by the Bush administration were never meant to spurn growth.

http://www.npr.org/templates/story/story.php?storyId=129698198


The entire growth of our economy in 2007 was based on that perceived housing boom which resulted in the increase in revenue. The government gets revenue from other things than just tax. In fact there are quite a few sources. Not to mention all the people that benefited from the work surrounding the housing boom that also lead to more revenue from them. If it were a real boom instead of just covering up the decline, then tax cuts would have been the right move.

Do you blame the entire economic meltdown on the housing boom collapse? I do not, there were multiple factors leading to this recession and the tax cuts were one of them, because of true nature of the economy at that time.

I dont expect anyone who cannot get past pre-conceived notions, to understand the intricacies of the rapidly changing economy, and to understand how the perceived housing boom lead to an increase in revenue by the government that covered up the ugly truth. The facts about the taxes and our economic downturn are out there. I linked a few, but there are hundreds more to choose from.

 

[riser]

In regards to your links, I noted that they were all Opinion based articles. I proved fact based articles that did not have opinions attached to them. I picked to focus on the first link since it was scoped to the entire argument, not to specifics or individual opinions from the other two links.

If you increase taxes on the individual, revenues from companies decline. Companies are taxed higher than most individuals.

You propose to increase taxes back on the individual, which will cause revenue generation through taxation of companies to shrink or remain flat.

Now, you propose fixing the income tax for the 'wealthy.' The wealthy do not pay income tax. They live in the dream world of Capital Gains tax. What you mean to say is "High Income Earners" instead of wealthy.

You're stuck in the Left's mantra that the tax code is the reason we have deficit spending. The true reality is we have an out of control government spending too much money. We could not raise taxes high enough to balance the budget! The only conclusion that can come from this is to elminiate deficit spending and then start paying down debt. Taxes are the least of the concerns at this point in time.

 

[johnsonma]

johnsonma, you seem to be operating from a pre-conceived notion that government grows an economy, it does not. Private sector spending dwarfs what the government takes, then re-injects into the economy.

You are describing Keynesian economics and its proven all right. Proven to be complete failure.

You say the Bush tax cuts were never meant to grow the economy, yet the economy grew. We were in near recession in 2000, yet Bush enjoyed near full employment for the majority of his two terms.

Our economy is complicated and intricate but it's not complicated to understand. More money in the hands of the private sector = good for economic growth. Simple as that.

The great depression, great recession and other severe downturns show that the economy can destroy itself given the chance, with the help of us of course. By itself the economy will work fine as stated in classical economics, with natural upturns and downturns, but you throw in the imperfect human element that takes advantage of it and it to becomes imperfect, thus Keynesian is the true form of our economy. The whole concept of laissez-faire is wrong when it comes to our economy, because of our imperfection. What happens when that supply is interrupted, then what happens to the market. The oil crisis comes to mind. There are too many unknown variables within our global economy to truly believe that classical economics is right. Human error and greed being the top offenders.

With that in mind, it is not out of the question for the government to screw up as well. That's exactly what the Bush administration did.

Bush unemployment rates:

The seasonally adjusted unemployment rate rose from 4.3% in January 2001, peaking at 6.3% in June 2003 and reaching a trough of 4.4% in March 2007. After an economic slowdown, the rate rose again to 6.1% in August 2008 and up to 7.2% in December 2008. From December 2007 when the recession started to December 2008, an additional 3.6 million people became unemployed. And, as of January 1, 2009, his last month in office, the nation lost 655,000 jobs, raising the unemployment rate to 7.8%, the highest level in more than 15 years.

The rates never even got back to where they were when he entered office. Whoever told you this was the case should not be someone you listen to (please don't tell me you watch Glenn Beck). The only reason they went up in 2007 was from the housing boom illusion. His economic policy was a complete and utter failure, to say less is a lie. Almost 5% unemployment after he took office with a budget surplus and by the time he left unemployment was almost at 8% and the biggest economic downturn since the Great Depression was in full swing. Guess he should of listened to his economic advisers instead of hamster spinning the wheel.

Of course the government isn't the main driver of growth in the economy, however it is the only entity that will spend a ton of money during a downturn. Ask Apple, Microsoft or any other major corporation or private sector business to spend money during a severe downturn and you will be laughed out of the building.

 

[johnsonma]

In regards to your links, I noted that they were all Opinion based articles. I proved fact based articles that did not have opinions attached to them. I picked to focus on the first link since it was scoped to the entire argument, not to specifics or individual opinions from the other two links.

If you increase taxes on the individual, revenues from companies decline. Companies are taxed higher than most individuals.

You propose to increase taxes back on the individual, which will cause revenue generation through taxation of companies to shrink or remain flat.

Now, you propose fixing the income tax for the 'wealthy.' The wealthy do not pay income tax. They live in the dream world of Capital Gains tax. What you mean to say is "High Income Earners" instead of wealthy.

You're stuck in the Left's mantra that the tax code is the reason we have deficit spending. The true reality is we have an out of control government spending too much money. We could not raise taxes high enough to balance the budget! The only conclusion that can come from this is to elminiate deficit spending and then start paying down debt. Taxes are the least of the concerns at this point in time.

I've repeatedly stated that I think a balanced approach is best, but I guess that doesn't matter. I have a far more independent thought process that someone who buys into the left or right. I could say the same thing about you and the "right mantra" that cutting the budget is the only way. I bet you voted for Diana Black, Stephen Fincher and Phil Roe, didn't you?

I think the best course of action for taxes is the fix the loopholes and inefficiencies of the current tax code to gain the extra revenue and then when they budget is under control, lower taxes again to drive growth. The possibility I added earlier of raising the taxes on anyone but the upper crust of society is a last cast scenario to drive down the budget. The rich can take the hit without hurting the economic recovery, the middle class which is the main drivers of our consumer economy cannot, unless the economy is healthy.

I think on one of the links there was a good graph to show how much the taxes would go up if the bush tax cuts expired. Obama only wanted to extend the cuts for people making under $200,000 but obstructive politics made that impossible.

 

[johnsonma]

Historically, 5% unemployment is considered full employment by economists. People are moving in and out of employment constantly.

Do you have any idea why the US had a Great Depression lasting more than a decade and the rest of the world only had a mild depression or a recession lasting only a few years? Keynesian economic policy implemented by FDR.

Recently the government artificially propped up the economic downturn and didn't allow the economy to correct itself. GM bailout, TARP, Stimulus 1, 2 and 3, etc. Now we are swimming in debt and the economy is basically in the same place it was before all the spending.

Really? As far as the causes of the Great Depression:

http://americanhistory.about.com/od/greatdepression/tp/greatdepression.htm

The reason it lasted longer for us and not the rest of the world was because our global economy was NOTHING compared to it is now. The economies of countries all over the world was no where near as entwined as they are now, its completely different than it was then. You can learn from the past but you have to accept that some things were different. You can't even compare the global economy back then to now. Not to mention that until after World War II we were not the supreme economic powerhouse that we have been since.

 

[johnsonma]

Really? What created the decade of prosperity prior the depression known as the roaring 20's? More Keynesian economics?

No the theory had not even been introduced yet. Maybe it had to do with industrialization, or urbanization, or even a complete renovation of our infrastructure. Wait a minute, that can't be right, isn't some of the stimulus money spent on infrastructure? Must of been something to do with aliens.

 

[riser]

Yeah, I think this horse has been beat down enough. Facts aren't significant to some people. You can throw facts at them all day but opinions always trump.

 

[JAYDEEJOHN]

Nobel prize winners?
Thats so ridiculous it stinks.
Like this over taken hollywood scripted award means much these days, as once again, the zealots have taken over
The people, all together with determination turned this country around from the great depression, yes, there was guidance, but look where were heading today with this "guidance" we have now.
The housing bubble? The fact that people were trying to get them in control, while others were living high on the hog.
Democrat cronyism galore.

When you hold a national convention, and not one rep is a business owner tells you something.
With all due respect to our higher learning system, its these types that get too much credit and too many ears by those (the media, certain pols) today, as theyre the ones whove also never owned and ran a business, teaching how things should be done.Each era needs its own approach to these things, and while the past can open our eyes, it isnt the cure all of reform that may be needed, and this applies not only economies of the past, but governing actions as well

 

[johnsonma]

Ok, aliens then.

Or you could just research what Harding and Coolidge did and what Hoover completely reversed.

Have a hard time respecting Harding, other than he was one of our presidents, because he actually believed tariffs were a good thing. I thought you said earlier that it was the private sector that created growth not the government?

 

[johnsonma]

Yeah, I think this horse has been beat down enough. Facts aren't significant to some people. You can throw facts at them all day but opinions always trump.

That's weird I was thinking the same thing. You seem to have a far more pessimistic attitude when it comes the the future of our country and it think it shows in your thinking. Not that being wary is a bad thing.

 

[riser]

That's weird I was thinking the same thing. You seem to have a far more pessimistic attitude when it comes the the future of our country and it think it shows in your thinking. Not that being wary is a bad thing.

Sadly, I've provided by the facts in links. You've provided opinion articles. I am not a pessimist by any means. I am a realist when it comes down to it. Our current path is not good and time is short to resolve it, very short. Social Security goes broke by 2018, even sooner now with the 2% reduction in funding.

What is there to be optimistic about except November?

 

[johnsonma]

Nobel prize winners?
Thats so ridiculous it stinks.
Like this over taken hollywood scripted award means much these days, as once again, the zealots have taken over
The people, all together with determination turned this country around from the great depression, yes, there was guidance, but look where were heading today with this "guidance" we have now.
The housing bubble? The fact that people were trying to get them in control, while others were living high on the hog.
Democrat cronyism galore.

When you hold a national convention, and not one rep is a business owner tells you something.
With all due respect to our higher learning system, its these types that get too much credit and too many ears by those (the media, certain pols) today, as theyre the ones whove also never owned and ran a business, teaching how things should be done.Each era needs its own approach to these things, and while the past can open our eyes, it isnt the cure all of reform that may be needed, and this applies not only economies of the past, but governing actions as well

I agree that politicians need to listen to those in the business community that have far more knowledge on the subject than them. However, that seems impossible now, considering how big ones head must get to qualify to be a politician.

The awards might not mean much to you but their achievements are something that should be honored.

 

[johnsonma]

Sadly, I've provided by the facts in links. You've provided opinion articles. I am not a pessimist by any means. I am a realist when it comes down to it. Our current path is not good and time is short to resolve it, very short. Social Security goes broke by 2018, even sooner now with the 2% reduction in funding.

What is there to be optimistic about except November?

Your complete and utter ignorance is astounding. I have presented facts and you dispute them by saying they are from opinion articles. You should become a politician, you would do well.

 

[johnsonma]

Well, I want to answer anyway even if the horse is dead already.

Warren Harding completely reversed the progressive policies of Woodrow Wilson which were leading un into a depression in 1921. He slashed government spending by a full half and massively cut taxes across the board for all. Coolidge continued these polices when he came into office in 1923, giving us the roaring 20's where everyone prospered not just "the rich". Then in 1929 Herbert Hoover, another progressive, completely reversed those policies creating the downturn in the economy leading to the stock market crash of 1929 which was the catalyst to the great depression.

Yeah, progressives hate the facts riser, for sure.

How is the weather in that bubble? There is still a debate between three schools of economics about why and how the great depression came to be. Funny how you speak of facts when you clearly have nothing but your own opinion speaking for you in your previous statement. Do you have central air in that bubble? Must be nice!

 

[johnsonma]

Whatever history revisionist. What does it feel like to be a prick? Your wife must be so happy.

You refute nothing and just personally attack me. I return the favor good sir!

Don't worry! You will be safe in your bubble, heard those things got Glenn Beck piped straight in. Nice!

 

[wanamingo]

Round and Round we Go ! Where it stops Only the Mods know!

 

[johnsonma]

Whatever history revisionist. What does it feel like to be a prick? Your wife must be so happy.

You refute nothing and just personally attack me. I return the favor good sir!

By the way, just to clarify, I never personally attacked you. I didn't call you a name or bring up your family in any way. I refuted your previous statement and commented on your thought process. Then I ended it with a mild joke.