How a tax cut works

[Negative]

Tiger Shark > My wife just explained the meaning of the word "since" to me... I meant of course after the Great Depression, not including the Great Depression.

Economic Policy Institute
Washington Times
I can't link you to the official statistics because the Bureau of Labor Statistics won't let me...

[Tiger Shark]

Neg: Tell your dear sweet wife that now all she has to do is educate you with regard to sound fiscal policy, (which includes the politicians not spending money on things it can't afford just like you and I aren't allowed to do), and she will have done a wonderful thing.......

Seriously, I had an inkling that you meant "since" but when it was sat there in black and white implying the inclusion of the Depression I had to refute it.

Actually, the whole subject of government spending, taxes etc. is a wasted discussion. The tax code should be reformed in the following way:-

You must pay x% of your gross income to the following things: Defense, transportation, infrastructure etc., etc., etc. Then you must pay a subsequent y% _either_ into the any or all of the above or into a list of nice little social programs to make you feel all warm and fuzzy about yourself. You pick the percentages of the y portion, (the x portion is fixed). Then the governemnt adds it all up and budgets with what it has for each, (no robbing Peter to pay Paul). Then we wouldn't have to worry about tax cuts and their effects on deficits etc. because the politicians couldn't play their crooked games.......

As a side benefit, people who believe like myself, that half the people on the welfare rolls are lazy no-good garbage, created by society for the politicians use, wouldn't have to feel like we are subsidising the dregs of society every time I look at how much tax is being squeezed from my paycheck every two weeks.

[pwaring]

Originally posted here by The Mormon
The point I was trying to get at is that a tax cut helps the economy, and therefore it helps everyone. The employers save more money which eventually leads to higher wages, which are taxed so even though the gov. gets a lower percentage, they still get a lot, and we get to keep more of our money!!!

That has to be the most simplistic argument I have ever heard in favour of tax cuts. Unfortunately, the economy of any country is a complex beast and you can't just expect to wave a magic wand and drastically improve things. As for George Bush, I wouldn't trust him to run my local pub, never mind the world's biggest economy.

If you didn't pay a reasonable amount of tax there would be no libraries, no public healthcare (don't know what the exact situation over there is in the US but in the UK any citizen can get free hospital treatment on the NHS), no legal aid (although in some cases that would be a good thing) etc.

If employers save money do you really think that they will spend that on the wages of their employees or on more people? You must be joking. They will employ people up to the point where the marginal cost of the last employee is equal to the marginal revenue that person brings to the business. Anything further than that would reduce the company's profits or increase their losses.

I suggest that all these people raving on about tax cuts (whether in favour of them or not) go away and think about the economics of the matter, rather than the political issues.

[rcgreen]

The bigger question to ask is:
"What is a reasonable size and scope for government?"

Tax policy would flow from the answer to that question. Now we all have our opinion
on how many services gov't should perform, which should be central gov't, and
which should be local. Unfortunately, few in public office or media want to
start a discussion of the theory of government.

It would be an enlightening discussion. Some people want national health service,
some believe individuals should pay as they go. Some would nationalize steel
and auto industries, some would privatize prisons. Unless there is a discussion
of these issues, we are constantly engaged in a dialog of the deaf.

I may advocate a tax cut because I believe that government can still provide all
necessary services with less money, but my if my reasoning is based on the idea
that some services are illegitemate, I'm not speaking the same language
as the person who says taxes need to be raised to pay for new and unprecedented
services.

Since we're not even talking about the same package of services, how can we
even begin to talk about how much money government really needs to do its job?

After that, there's the whole complex problem of what the tax level does
to the economy in terms of employment etc.

And what about the contentious issue of how you distribute the burden?
Can you really tax the rich? Don't they always find a way to shift the burden
on to someone without political influence?

[fourdc]

The whole concept that if you have a $1200 tax cut and my pay goes up $22 per week doesn't mean I'm going to spend it. I may be paying off the overwhelming charge card debt that most Americans have.

With the Government running a deficit and competing with the consumers for loans eventually the money supply will run dry, interest rates will go up so will personal bankruptcies.

Then the Federal reserve can print some more money and we can have explosive inflation which will reduce the value of individual savings. Could anarchy be any worse?

Of course when the value of the US$ goes down overseas, all of these products, which US businesses were encouraged to outsource the manufacture of offshore, will increase in price so Americans will be left with their debts and the hangover from a "wild GOP party".

[The Mormon]

If Bush dosen't get re-elected, I'm going to have to agree with fourdc that anarchy wouldn't be bad

[RoadClosed]

Ok I am sick of all this crack smoking. I am missing out. Deficit bla bla bla. Stop smoking ze cracken and look at history for a moment. The evil deficit has ROSE with EVERY president since the 60s. Gen X'rs like mysellf have seen it rise billions over the 70s and 80s through all kinds of democrat and republican spending on social and political bs. Gen-X Spending In the seventies it was about the same increase year after year which leads to some confusing statements like this reagan example:

In 1982 (first year after the tax cuts), the economy shrank with 2.2% (the worst since the Great Depression).
Reagan's first deficit was $128 billion. His second was $208 billion. When Bush I took over, it was at $290 billion...
Next: national debt. Carter left Reagan with $994 billion in national debt. By the time Bush left office, it had gone up to $4.3 trillion. It took 200 years for the national debt to reach $1 trillion. In the next 12 years, it quadrupled.

Reagan was at 128 billion while Carter was at 998 billion in deficit? Um that is a huge decrease meaning the deficit is way smaller after reagon, by that quote. If it were true we would all be apllauding Reagan. But that isn't the whole crack nugget, next there is notice that Bush and reagan increased an already stifling 994 billion in debt left by carter to over 4.3 TRILLION in increase. Where the Fck does that crap come from? Ihatebushesassonaplate.com? The CURRENT deficite is not anywhere near a single trillion and certainly the 80s didn't see that kind of debt, it does NOT exist. 200 years of national debt never saw 1 trillion UNTIL a few years after the anniversary. That came in 1979 when a democratic good old boy named Carter was el presidente. By the way the 200th anivarsary of the US was in 1976.

Sigh, I see articles all over the planet that state the US deficit is at record proportions. It's not even close to being a record, those are just lies to piss off the people. You can argue that dollar amounts have a large swing but when you compare the deficit to the gross national product it's not so big, but the masses can be led by the nose on negativity. Don't get me wrong, the deficit is a concern, but keep things in context to reality. Clinton did a good job at the budget, I am not sure anyone argues that and one could go into arguing the effects today on decreased government spending in certain areas, but he kept it under wrap. So what about the other years in the 80s and early 90s? If ya'll remember it was Bushy One that pissed a lot of people off by dipping the scale into the negative and he wasn't re-elected.

The ONLY budget surplus we have had since I have been alive is between 1998 and 2001. That was great, who can argue that? Those numbers are based on the percent of domestic product, you HAVE to take in the account of income or the numbers of way off. If I make 10 and spend 8, that is much different then if I make 20 and spend 8. So before screaming "revolution" look at data. Economics is like the universe, many complex formulas are applied to try and predict results. Let's look back to Reagan....

Even if the deficit does go beyond 1.4 trillion as was darkly estimated in 2004, the prevailing algorthyms are producing estimated surplus again by 2012. That would be an excellent time to run for president because that person will get ALL the credit. Bush won't stand much of a chance, assuming that reaches the estimate, I doubt it. Some would hope it will to get him out of office, can't see how that helps anyone.

Now one last item. Taxes. You make less money you pay little taxes, those in the middle a bigger cut those at the top and even bigger cut, so what is the issue? Even say, if the top 1 percent get a tax cut or the top 30 percent... they are still paying 40-50-60 percent more than the guy with a small income and that percentage is based on a base income so it's not just a blanket increase on a set dollar ammount. I don't get it what the problem is? The rich bastards are paying 90-95 percent of the TOTAL income tax, what is the big freakin deal if they get a little more on some investment? Am I missing something?

I place more concern on trade deficit, we can't support a "service" related economy forever. We don't produce anything anymore and I have my own theories on that issue.

Deficit is one indicator, others are positive. Take in the whole picture.

[Negative]

Reagan was at 128 billion while Carter was at 998 billion in deficit?

Now now now, RoadClosed... I must have confoozled you
The $128 billion was Reagan's first deficit. That's a budget deficit.
The $994 billion is national debt.

Budget
Reagan left Bush with a $290 billion budget deficit. It wasn't until Clinton that this budget deficit was turned into a budget surplus. When Clinton left office, there was a $127 billion budget surplus. I don't know what Bush did in his last two years (nobody seems to agree, but this year it was budgetted at a $500 billion deficit), but in his first year he turned that surplus into a $158 billion deficit, and $400 billion deficit in his second year. If you say that it isn't near a trillion right now, I'll take your word for it

National Debt
When Carter left office, it was at $994 billion. Right now, it is over $7 trillion.

Where the Fck does that crap come from? Ihatebushesassonaplate.com?

Nope, from official sites and news-articles harvesting info from official government-sites
National Debt History
Fox News on the budget deficit
Same on CBS
AP News on the budget deficit
Congressional Budget Office on the budget

Sigh, I see articles all over the planet that state the US deficit is at record proportions. It's not even close to being a record, those are just lies to piss off the people.

If you're talking about the national debt, every day is a new record. See the publicdebt.treas.gov-site for official government-released figures.
If you're talking about the budget deficit: See the Congressional Budget Office for official government-released figures.

[RoadClosed]

Yep I told you it was a monster! Your example of budget deficits versus debt is exactly what I was poking fun at even though I confused terms; you can screw the numbers and cry revolution and people will buy into it. Regan spent a ton of money on defense, you could argue that ended the regime in Russia and issued in a new era of peace, or not... your choice. The facts are he spent alot, **** I would be a fool to argue that, and I don't argue Clinton did a great job fiscally even if you look at the national debt: you can cry that Reagan and Bush left a national debt of 4.3 trillion, but keep going!!! The great and mighty Clinton legacy left us an increase of only a little over 1.3 trillion and he had a budget surplus. Clinton also didn't have much on the radar via international problems, but hey - I can give him credit for that too. My point and argument, badly put perhaps; is that Americans are not going into the toilet and the world isn't ending. If Bush can’t satisfy the people that he’ll turn around the Spending then you guys will have Bush out, I don’t think anyone cares who it is as long as it’s not him, that’s my concern as well.

Nice job on your research, be careful you’ll become like me! j/k

[dublix]

Originally posted here by RoadClosed
If Bush can’t satisfy the people that he’ll turn around the Spending then you guys will have Bush out, I don’t think anyone cares who it is as long as it’s not him, that’s my concern as well.

Let's just hope they choose Dean.