Where does the money come from to make up for the money lost to higher taxes? I don't know about you, but I have no pool of loose cash available to pay an increased tax burden. If my taxes are increased, then I would be forced to cut spending somewhere or to cut my contribution to my 401K plan, which is already nowhere near as much as it should be. Tax increases must result in cuts in investments unless you adopt liberals' definition of government spending as "investments."

 

Then you wouldn't be considered "rich" the way I understand the term.

Then you wouldn't be considered "rich" the way I understand the term.

Do you honestly believe that rich people have large amounts of cash that is not already invested and that the federal government will make better use of that cash than they would?

Seems to me they would continue investing aggressively to make up for the chunk of money "lost" to taxes.

 

Just as there is no guarantee that a less-heavy tax burden automatically increases investing, there is also no guarantee that a bigger tax burden decreases it.

 

The individauals that we are talking about will either spend their money, thus helping to create jobs or invest in some manner. They will buy stocks or create a business to make more money. Then they will spend that as well creating more jobs.

They are not playing Donald Duck's Uncle Scrooge just sitting on their money, they are going to spend it or invest it.

Do you honestly believe that rich people have large amounts of cash that is not already invested and that the federal government will make better use of that cash than they would?

 

I said neither of those things. What I did say is that it's not some inherent truth that with higher taxes rich people would stop investing, the way the "tax cuts for the rich" choir likes to sing.

The individauals that we are talking about will either spend their money, thus helping to create jobs or invest in some manner. They will buy stocks or create a business to make more money. Then they will spend that as well creating more jobs.

They are not playing Donald Duck's Uncle Scrooge just sitting on their money, they are going to spend it or invest it.

 

I think you're agreeing with me, but I'm not sure. The crux of my point is that rich folks have already bought in, for better or for worse. They don't take the stance that "I'm being taxed too much, so I'll just stop making money to show them," the way supply-siders like to frame the either/or statement.

I said neither of those things. What I did say is that it's not some inherent truth that with higher taxes rich people would stop investing, the way the "tax cuts for the rich" choir likes to sing.

I agree rich people will not stop investing. They will simply have less money to invest. Some will also find ways to shelter income from the IRS by investing elsewhere and by increasing investment in tax-exempt investments. Soaking the rich is bad economic policy and in the long run, demonizing the rich for political gain is not a good political strategy for Democrats.

I think you're agreeing with me, but I'm not sure. The crux of my point is that rich folks have already bought in, for better or for worse. They don't take the stance that "I'm being taxed too much, so I'll just stop making money to show them," the way supply-siders like to frame the either/or statement.

He is not agreeing with you. He is saying essentially the same thing that I am. Scrooge McDuck spends his time physically counting his money but he is a cartoon character. Wealthy people in the real world do not have much idle money to count because they are nearly fully invested in the economy. The earnings on those investments can either be reinvested or paid in taxes to the government. It is an either/or proposition.

I said neither of those things. What I did say is that it's not some inherent truth that with higher taxes rich people would stop investing, the way the "tax cuts for the rich" choir likes to sing.

 

They would have less to invest. Maybe billions less. And because the government has this money, money that does not produce jobs, fewer jobs are created. because The reason being these heavily taxed individuals are spending less or have less to invest.

I do not mind these individuals having more than me. I am not jealous of them and I will take care of myself. The US has and will continue to help those who are truly in need. There is no Constititional power to redistribute wealth, as much as Obama wants to make-up one.

Someone has said the magic words. I keep hearing about how hard the folks at the tippy-top of the income scale have worked for their hard-earned riches. Not to paint with too broad a brush, but many have done exactly what you say - make money by investing. A difference between the lower/middle classes and the upper class - making money by working versus making money by investing.

Well, first of all, when I say investment spending, I mean by businesses taking on more investment projects and such.

 

But either way, making money by working and making money by investing- what's the difference? There is a tremendous amount of risk involved in investing, and often you put a lot of time into deciding what to do with your money.

I don't believe either to be inherently correct. I think it is circumstantial.

 

Is the point of the government to ensure that the collective populous benefits through the economy? I believe it to be. Have Keynesian economics worked? Yes. Have supply-side economics worked? Yes. Why? Different times call for different policies.

Agreed. Now that would be an interesting thread- when is each appropriate. But I'd assume that is over our heads.

I think you're agreeing with me, but I'm not sure. The crux of my point is that rich folks have already bought in, for better or for worse. They don't take the stance that "I'm being taxed too much, so I'll just stop making money to show them," the way supply-siders like to frame the either/or statement.

For some, it is not a yes/no decision based solely on tax rates. But with high top marginal tax rates, someone with an idea is less inclined to risk their financial assets to get into a bracket in which there is less financial benefit due to high taxes.

Tax cuts do not correlate with increased taxes, but with economic growth. It is no wonder that tax revenues have been down with the state of our economy. But is Bush's tax cuts to blame? And does Clinton (and Demand-side economics) deserve credit for two terms with no recession?

 

If tax cuts correlate with economic growth, then why has the economy been lackluster for the past eight years? Even if you ignore the effects of the 2001 recession and 9/11 and look only at 2004, 2005, 2006 (thereby stopping well short of the most recent economic problems), economic growth during the years in which the Bush tax cuts were in full force was still downright tepid (3.1% annual growth) compared to other recent expansions. This during the absolute best years following the Bush tax cuts, when the economy should have been roaring. And job creation during the Bush years has been almost non-existent (around 5 million jobs compared to about 22 million during the 1990's).

 

The position of the paper I linked is that the supply side theory implemented during the Bush tax cuts is not as effective in practice as a demand side approach.

History has proven that tax cuts on wealth producers do strengthen the economy. Ireland is one of the best modern examples of the effects of slashing taxes on businesses. Reagan's tax cuts cured what ailed the Carter economy over a very short period. Liberals prefer to discuss the theoretical because reality has smacked them in their collective face so often in the past. :lol:

 

 

Yet you don't at all speak to the data presented in the paper that completely contradicts the hallowed precept that tax cuts for the rich is the best way to promote economic growth. How do you answer the criticism that tax cuts for the wealthy do not guarantee that the windfall will actually be invested in the domestic economy whereas tax cuts for the middle class are much more likely to be because the middle class spends a higher percentage of income?

Investments create jobs. Money blown in lottery tickets and beer - not so much. Tax cuts to people who pay no federal income taxes is much less likely to be invested in places that will efficiently create jobs than tax cuts given to federal taxpayers.

 

 

Oh yeah? Well, money blown on Japanese-built Lexus automobiles and invested in overseas stock markets doesn't create jobs (at least not in the U.S.) and does not stimulate our economy one iota. Perhaps that is why the U.S. economy has performed so lethargically over the past five years, with weak growth and job creation. Tax cuts to people who spend nearly all of their income in the U.S. creates demand in the U.S. that is likely to be met by businesses in the U.S. where jobs will be created in the U.S.

 

What supply siders like yourself conveniently gloss over repeatedly is that putting more money in the hands of consumers boosts demand for products, which will draw investment (and create jobs in the fulfillment of that demand).

Oh yeah? Well, money blown on Japanese-built Lexus automobiles and invested in overseas stock markets doesn't create jobs (at least not in the U.S.) and does not stimulate our economy one iota. Perhaps that is why the U.S. economy has performed so lethargically over the past five years, with weak growth and job creation. Tax cuts to people who spend nearly all of their income in the U.S. creates demand in the U.S. that is likely to be met by businesses in the U.S. where jobs will be created in the U.S.

 

What supply siders like yourself conveniently gloss over repeatedly is that putting more money in the hands of consumers boosts demand for products, which will draw investment (and create jobs in the fulfillment of that demand).

Putting money int the pockets of consumers while gouging American manufacturing segment simply increases the level of imports in this country. As for addressing statistics from left wing web sites, such as the ones you must use to distract attention away from Reagan's wildly successful tax cuts - thanks, but no thanks.

Oh yeah? Well, money blown on Japanese-built Lexus automobiles and invested in overseas stock markets doesn't create jobs (at least not in the U.S.) and does not stimulate our economy one iota. Perhaps that is why the U.S. economy has performed so lethargically over the past five years, with weak growth and job creation. Tax cuts to people who spend nearly all of their income in the U.S. creates demand in the U.S. that is likely to be met by businesses in the U.S. where jobs will be created in the U.S.

 

What supply siders like yourself conveniently gloss over repeatedly is that putting more money in the hands of consumers boosts demand for products, which will draw investment (and create jobs in the fulfillment of that demand).

The US has the second highest corporate taxes in the world and Barack Obama wants to increase the tax burden on American companies and small businesses. Putting money in the pockets of consumers on the one hand and hammering the companies that employ them on the other is no solution. Obama's economic plan, including his bogus tax plans, is nothing but a farce.

Absolutely. Please read the following story published by the Joint Economic Committee in 1996. Be sure to read it in its entirety. For Econ geeks like me, it is very interesting.

 

http://www.house.gov/jec/fiscal/tx-grwth/reagtxct/reagtxct.htm

 

 

 

The idea that tax cuts cause tax revenues to increase is based on an economics concept called the Laffer Curve. The Laffer Curve is entirely theoretical, and is based on the observations that tax revenues would be zero if the tax rate was zero percent and if the tax rate was 100%. Therefore, the theory goes, somewhere in the middle there must be a theoretical tax rate where tax revenue is maximized and if tax rates are above that point, a reduction in tax rate will actually result in an increase in tax revenue. Discussions about the tax cuts freqently assume (without any thoughtful consideration) that U.S. tax rates are above the point on the Laffer Curve of maximum tax revenues and therefore any cut in tax rates will result in an increase in tax revenue. This is not necessarily a valid assumption. In fact, most economists have concluded that the 2001 and 2003 Bush tax cuts put U.S. marginal tax rates below the point of maximum tax revenues.

 

 

Here is a quote from an article posted on FactCheck.org:

 

Republican presidential candidate Sen. John McCain has said that the major tax cuts passed in 2001 and 2003 have "increased revenues." He also said that tax cuts in general increase revenues. That’s highly misleading.

 

In fact, the last half-dozen years have shown us that we can't have both lower taxes and fatter government coffers. The Congressional Budget Office, the Treasury Department, the Joint Committee on Taxation, the White House’s Council of Economic Advisers and a former Bush administration economist all say that tax cuts lead to revenues that are lower than they otherwise would have been – even if they spur some economic growth. And federal revenues actually declined at the beginning of this decade before rebounding. The growth in the past three years that McCain refers to brings revenues back in line with the 40-year historical average as a percentage of gross domestic product.

 

 

It’s unclear how much of the growth can be attributed to the tax cuts. Capital gains tax receipts did increase greatly from 2003 to 2006, but the CBO estimates that they will level off and decrease in the next few years. The growth overwhelmingly resulted from a sharp rise in corporate tax receipts, the cause of which is a topic of debate.