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What would our founding fathers think?
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pueno



Joined: 03 Mar 2007
Posts: 2366

PostPosted: Sun Sep 02, 2012 6:36 am    Post subject: Reply with quote

stevenbard wrote:
So riddle me this, what do the rich folks do with their extra money that they don't pay in higher taxes?

It's easy to "riddle you," Mr. Bard. I suspect that the rising sun is a riddle to you.

Answer: They warehouse their money in foreign banks, where it is out of sight of the IRS.

The truly sad part of this is that their money is available for loan to foreign businesses to help grow THEM, not to help grow American businesses.


stevenbard wrote:
Then riddle me, what do the extra workers who work for the rich folks and the businesses that cater to the rich folks do with their money, that wouldn't be their money if it went to Washington?

Keep in mind, Mr. Riddle, that the "rich folks" account for maybe 1% of our society, so those "extra workers" working for the 1% don't amount to many people.

Answer: They pay rent, buy a few groceries, and put a little gas in the cars (which returns a profit to the Koch brothers). The money that "went to Washington" is returned to those workers in the form of subsidies to maintain the roads, support the public schools, and provide military security.


stevenbard wrote:
They pay taxes buy stuff that they wouldn't have been able to in the 1st place if the rich folks had less money... right?

Answer: Yes, taxes. But no, not right. If the rich folks couldn't afford those workers, they'd find someplace else to work. They'd still pay taxes and buy the goods they need to survive.

The workers and staff of the 1% households amounts to an insignificantly tiny fraction of the US workforce. Don't try to build a specious argument on it.


stevenbard wrote:
Oh, I guess that in a zero sum game, you lefty's would be correct. HOWEVER THAT'S NOT HOW IT WORKS IN THE REAL WORLD.

Mr. Bard, try looking at the macroeconomics view, not a contrived microeconomics model. The "trickle down" model gives more money to the top 1% on the theory that the money makes it to the masses. But the top 1% keep 99% of that money, so only a tiny, tiny bit of it makes it to you and me. The rest ends up in Mr. Romney's Cayman Island bank accounts.

If you really want the money to go to the working class (again, you and me), then devise a tax and economic structure to accomplish that. DO NOT trust the Romneys of the world to do what's in your best interest. He has no incentive to do anything for any of us -- it's all for him.

And please remember that "trickle down" is a theory that has not been proven (in fact, it has been shown to be largely specious). Even David Stockman, Reagan's former budget director, says that "trickle down" was BS and DID NOT WORK.
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pueno



Joined: 03 Mar 2007
Posts: 2366

PostPosted: Sun Sep 02, 2012 7:01 am    Post subject: Reply with quote

stevenbard wrote:
So riddle me this, what do the rich folks do with their extra money that they don't pay in higher taxes?

Mr. Riddle, I'll make a perhaps foolish assumption that you'll read something that's more than a few soundbites long.

Here's an interesting article from Rolling Stone.

Quote:
The nation is still recovering from a crushing recession that sent unemployment hovering above nine percent for two straight years. The president, mindful of soaring deficits, is pushing bold action to shore up the nation's balance sheet. Cloaking himself in the language of class warfare, he calls on a hostile Congress to end wasteful tax breaks for the rich. "We're going to close the unproductive tax loopholes that allow some of the truly wealthy to avoid paying their fair share," he thunders to a crowd in Georgia. Such tax loopholes, he adds, "sometimes made it possible for millionaires to pay nothing, while a bus driver was paying 10 percent of his salary – and that's crazy."

Preacherlike, the president draws the crowd into a call-and-response. "Do you think the millionaire ought to pay more in taxes than the bus driver," he demands, "or less?"

The crowd, sounding every bit like the protesters from Occupy Wall Street, roars back: "MORE!"

The year was 1985. The president was Ronald Wilson Reagan.

Today's Republican Party may revere Reagan as the patron saint of low taxation. But the party of Reagan – which understood that higher taxes on the rich are sometimes required to cure ruinous deficits – is dead and gone. Instead, the modern GOP has undergone a radical transformation, reorganizing itself around a grotesque proposition: that the wealthy should grow wealthier still, whatever the consequences for the rest of us.

Modern-day Republicans have become, quite simply, the Party of the One Percent – the Party of the Rich.

"The Republican Party has totally abdicated its job in our democracy, which is to act as the guardian of fiscal discipline and responsibility," says David Stockman, who served as budget director under Reagan. "They're on an anti-tax jihad – one that benefits the prosperous classes.

The GOP campaign to aid the wealthy has left America unable to raise the money needed to pay its bills. "The Republican Party went on a tax-cutting rampage and a spending spree," says Rhode Island governor and former GOP senator Lincoln Chafee, pointing to two deficit-financed wars and an unpaid-for prescription-drug entitlement. "It tanked the economy." Tax receipts as a percent of the total economy have fallen to levels not seen since before the Korean War – nearly 20 percent below the historical average. "Taxes are ridiculously low!" says Bruce Bartlett, an architect of Reagan's 1981 tax cut. "And yet the mantra of the Republican Party is 'Tax cuts raise growth.' So – where's the fucking growth?"

Read more: http://www.rollingstone.com/politics/news/how-the-gop-became-the-party-of-the-rich-20111109#ixzz25JRWxBj3
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mac



Joined: 07 Mar 1999
Posts: 4673

PostPosted: Sun Sep 02, 2012 12:20 pm    Post subject: Reply with quote

Bard--you're showing your allegiance to Republican talking points instead of thinking. How do you rationalize this claim:

Quote:
Easy. If you let the job creators keep more of their money, they will create more jobs. When more people are working, they pay even more taxes. This is not a zero sum game.

Furthermore, if we had the lowest corporate tax rate, and less manufacturing regulations, we'd also have more jobs, and therefore more taxpayers. Revenue would rise.


with the simple fact that in the US economy 70% of the economic activity is consumer purchasing. With the meltdown of the housing bubble, and the disappearance of roughly $10 trillion in apparent wealth, consumer spending is way down--because workers got laid off, not because the very rich have too little money. The richest 400 families in America already have most of the money. A few simple facts to try to get your mind around:

Quote:
Changes in U.S. Consumer Spending, 2007-2010

by Gwen Sharp, Oct 28, 2011, at 12:32 pm


The Economist posted a graph, based on Bureau of Labor Statistics data, that shows how U.S. consumer spending changed between 2007 and 2010. The results provide a good snapshot of the economic trade-offs Americans are making (i.e., we’re buying more canned veggies and eating out less), as well as which industries are taking the biggest hit as consumers redefine their products as less essential.

The “nominal” numbers refer to the unadjusted overall changes in spending; the “real” numbers are adjusted for the fact that prices rose by about 5.2% on average, so consumers are getting less for what they spend. So the light blue bars tell you the absolute change in what we’re spending; the dark blue bars, the change in spending relative to how much we’re buying. When adjusted for price inflation, consumer spending fell by about 8%:


Now this is hardly a left wing rag:

Quote:
The Regional Economist | January 2012

Don't Expect Consumer Spending To Be the Engine of Economic Growth It Once Was

By William R. Emmons

Can American consumers continue to serve as the engine of U.S. and global economic growth as they did during recent decades? Several powerful trends suggest not, at least for a while. Instead, new sources of demand, both domestic and foreign, are needed if we are to maintain healthy rates of growth. Unfortunately, this won't be easy because consumer spending constitutes the largest part of our economy, and replacements for it—more investment, more government spending or more exports—either can't be increased rapidly or might create unwanted consequences of their own.

How We Got Here: The Consumer-Driven U.S. Economy

It is no exaggeration to say that consumer spending was the dominant source of economic growth in the United States during recent decades. For example:
■During the 10 years ending in the last prerecession quarter (third quarter of 2007), inflation-adjusted personal consumption expenditures (PCE) grew at a continuously compounded annual rate of 3.47 percent, while overall inflation-adjusted annual growth of gross domestic product (GDP) averaged only 2.91 percent.
■During that period, the remainder of the economy—consisting of investment (I), government purchases of goods and services (G), and net exports (NX)—grew at only a 1.70 percent inflation-adjusted annual rate.
■Expressed in terms of its contribution to average quarterly real GDP growth during the decade ending in the third quarter of 2007, PCE accounted for 81.3 percent, while the other components (I, G and NX) contributed only 18.7 percent.
■Over the quarter-century ending in the third quarter of 2007, consumer expenditures grew, on average, at a 3.50 continuously compounded annual rate, while the rest of the economy (I, G and NX) grew at a 2.79 percent annual rate.
■PCE accounted for 70.8 percent of average real GDP growth during those 25 years (1982: Q3 through 2007: Q3), while all other components (I, G and NX) contributed
29.2 percent.

Consumer spending accounts for a majority of spending in all advanced nations. What makes the U.S. experience of recent decades unusual is that the share of consumer spending in GDP was relatively high already before it began to increase substantially further during the 1980s, 1990s and 2000s. In dollar terms, PCE's share of GDP in the third quarters of 1977, 1987, 1997 and 2007 were 62.5, 65.9, 66.7 and 69.5 percent, respectively. (See Figure 1.) Thus, consumer spending was a large and increasingly important part of the American economy during the decades preceding the recession and remains so today.


Figure 1

Personal Consumption Expenditures (PCE)
as Share of Gross Domestic Product (GDP)



Click to enlarge

SOURCE: Bureau of Economic Analysis; quarterly data through 2011:Q3.

International dimensions of U.S. consumer spending. As consumer spending grew rapidly in the U.S., we imported consumer-oriented goods and services even more rapidly. Imports of all goods and services increased at an annual, inflation-adjusted rate of 6.5 percent during the decade ending in the third quarter of 2007. But imports of consumer goods—44 percent of all imports—increased at an annual average rate of 7.5 percent. U.S. imports contributed importantly to growth in many exporting countries around the world. U.S. consumers, therefore, served as the locomotive not only for the U.S. economy but for the global economy. Because we incurred large trade deficits, we required a corresponding inflow of foreign capital to finance them.

These three facets of U.S. and global economic growth—high-spending and low-saving American consumers, large U.S. trade deficits, and substantial inflows of foreign capital—are important contributors to the so-called "global imbalances" long noted by international economists and policymakers. These imbalances may have contributed to the U.S. housing bubble, the global financial crisis and the ensuing Great Recession.1

A neighborly comparison: the U.S. and Canada. To illustrate how striking the growth of consumer spending in the U.S. has been, Table 1 shows decade averages of the four major sectoral expenditure categories for the U.S. and Canada since 1961.


Now I suspect, but I am not an economist, that there is a long-term shift in the American economy going on. If you had studied in school, or at least paid attention, you would know that the US economy before 1920 was not driven much by consumer purchases, so there is no hard and fast economic law that says it will continue to be 70%.

The trickle down theory, the Laffer curve, and other such talking points have been thoroughly discredited in the world that actually pays attention to reality. Let's go back to the guy you think was god, not some senile ex-actor, Ronnie Reagan. Here's what his brain trust, David Stockman, has to say:

David Stockman on the Folly of Anti-Tax Crusades

February 10, 2012


Quote:
In this web clip, exclusively on BillMoyers.com, David Stockman, former Budget Director under President Ronald Reagan and chief architect of Reagan’s supply-side, or “trickle-down,” economic policies, says today’s Republicans have taken their anti-tax campaign too far.

“Taxes are the price we pay for civilization,” Stockman says, borrowing a quotation from Supreme Court Justice Oliver Wendell Holmes. “What they’re saying today is foolish, it’s irresponsible. How can anyone believe with the kind of deficit that we have — a trillion dollars, year after year after year — that we can keep taxes as low as they are?”

Watch Bill’s full interview with Stockman.


There is a long term hollowing out of the American manufacturing sector because while American workers are the most productive in the world, America's wages are higher than that productivity can support. What to do about that is a complex subject. It is ironic that you righties demonize government for existing, and then for not doing something about it, while you lionize sharks like Romney who simply troll the system for money and accelerate the hollowing out. If he had business experience where he identified the sectors in which America's manufacturing economy can sustain good jobs, and targeted investment into those areas, I'd think he might have the stuff to be president. Instead he just looted the corpse.
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bajaDean



Joined: 02 Jul 2011
Posts: 660
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PostPosted: Sun Sep 02, 2012 3:02 pm    Post subject: Reply with quote

pueno wrote:
stevenbard wrote:

ps...it has always worked.

Complete bullshit. It has NEVER worked.

That was called "trickle down" by Reagan. But what trickled down wasn't green, it was yellow and liquid. Bush Senior correctly called it "voo-doo economics."

Those so-called "job creators" have more cash than God right now ----- why aren't they creating jobs?

(p.s. -- when I say "more cash than God" I mean it both ways you can interpret it.)



I call the trickle down concept... Piss on americans.... If the dems would use this word framing it would stop the rightys. it is what it is.

steve, in the so called heydays of america, unions were their strongest and largest membership, and the tax rate for the rich was up to and over 90%.

.here is the history of tax rates
http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=213
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stevenbard



Joined: 11 Nov 1993
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PostPosted: Mon Sep 03, 2012 1:08 am    Post subject: Reply with quote

I'm well aware of tax history. This country ran efficiently for many decades with no income tax.

The real truth is that no matter what the rate is, guys like Buffett will pay no tax. None, because he gave half of his money to his own charitable trust. It's still his money, and he controls it, but will never pay tax on it. His sons each manage a share of it tax free for the rest of their lives.

I say tax the billionaires all you want.

One more thing is that when we had a 90% rate, there were obscene deductions and tax shelters. Some of the shelters of the 60's are just now being unwound at these lower rates. So even though the rate was 90%, almost no one paid it.
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bajaDean



Joined: 02 Jul 2011
Posts: 660
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PostPosted: Mon Sep 03, 2012 1:35 am    Post subject: Reply with quote

stevenbard wrote:
I'm well aware of tax history. This country ran efficiently for many decades with no income tax.

The real truth is that no matter what the rate is, guys like Buffett will pay no tax. None, because he gave half of his money to his own charitable trust. It's still his money, and he controls it, but will never pay tax on it. His sons each manage a share of it tax free for the rest of their lives.

I say tax the billionaires all you want.

One more thing is that when we had a 90% rate, there were obscene deductions and tax shelters. Some of the shelters of the 60's are just now being unwound at these lower rates. So even though the rate was 90%, almost no one paid it.
Ok we agree... lets tax those billionaires...

I would bet there are even more tax avoidence now than yesteryear.

what was the inheritance tax back then? vs now they get around it with trust funds.
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