Despite a bipartisan effort...

@Cycloptichorn,

Cycloptichorn wrote:

Foxfyre wrote:

Cyclop I get as tired of these did too did not idiotic exchanges with you as much as I do OE or anybody else who makes grand proclaimations and/or accusations and then refuses to back them up with anything.

So how about you showing how tax cuts have reduced revenues and lets go from there? We've had this discussion many times in the past so let's start with you not posting deficits, unemployment rates, GDP etc. etc. etc. Show how tax cuts intended to stimulate the economy have reduced REVENUES.

Let us set some foundational principles:

Do you agree that reducing taxes instantly reduces revenues collected? That is to say, if you tax someone at a rate of 15% on a 100 dollar purchase, you collect 15 dollars. If you reduce that to 10% on the same purchase, you collect 10 dollars.

Yes. I agree on that particular purchase, less in taxes will be collected.

One important principle involved, however, is that the 10% saved will most likely be used to purchase something else which is multiplied several times over in the economy before it eventually is absorbed and there is no additional measurable effect. But in each one of those multiplications, it can be successfully argued that taxes are generated for the public treasury.

Further, there is the rationale that without the 10% reduction, the item would not have been purchased in the first place and the treasury collects nothing in taxes for it. And as inventories rise, all the processes that put the item on the shelf for purchase come to a halt also and all the revenues from those processes are lost.

Can we agree on that?

Quote:

I know your arguments revolve around the fact that people behave differently under different levels of taxation; and I'll destroy that argument in time. But before we get to that part, surely you can agree with me that changes in the rate of taxation - without considering changes in customer behaviors - lead to changes in the amount of taxes recovered?

I can agree with that, yes. I can also agree that some changes in behavior produce less tax revenue than if the tax policy had not encouraged such behavior. That is why an increase in capital gains tax so often results in a net reduction in treasury revenues. When Bush41 and Congress included a heavy tax on toys of the rich--jewelry, private planes, pleasure boats etc.--in the tax hike that cost Bush41 his re-election, the rich simply did not buy such things or went elsewhere to get them. Our domestic private boat building and aircraft industries were decimated with loss of tens of thousands of jobs and most of our fine jewelry business moved off shore. The result? Net loss in treasury revenues from that targeted group and a whole lot of pain for a whole lot of less-than-rich folks.

If we can agree on that, we might come to an agreement that tax policy that lowers taxes in an intentional and intelligent way can generate treasury revenues. Of course you lefties won't get the emotional satisfaction of sticking it to the rich, but we all have to make some sacrifices in life in the interest of the common good.

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@Foxfyre,

Foxfyre wrote:

Of course you lefties won't get the emotional satisfaction of sticking it to the rich, but we all have to make some sacrifices in life in the interest of the common good.

Yeah... we all have to make sacrifices in life. The poor by having a little less of a social safety net, and the rich by paying a little less in taxes.

We're all in this together.

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@old europe,

Oh, wait, I'm sorry.

I just took one sentence completely out of context, twisted the meaning of your sentence, refused to look at the coherent argument you've been making over the last couple of years and generally attacked, belittled and demeaned you and your argument by building several strawmen as a diversion without providing any credible evidence to back up my low opinion of you and your argument.

I just realized that after I had already made the post.

But it was still funny.

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@Foxfyre,

Quote:

Yes. I agree on that particular purchase, less in taxes will be collected.

Good.

Quote:

One important principle involved, however, is that the 10% saved will most likely be used to purchase something else which is multiplied several times over in the economy before it eventually is absorbed and there is no additional measurable effect. But in each one of those multiplications, it can be successfully argued that taxes are generated for the public treasury.

Well, it was a 5% difference.

But other than that, I don't understand what you are trying to say here. What is multiplied several times? The money that isn't paid in taxes? I don't necessarily agree with that.

Quote:

Further, there is the rationale that without the 10% reduction, the item would not have been purchased in the first place and the treasury collects nothing in taxes for it. And as inventories rise, all the processes that put the item on the shelf for purchase come to a halt also and all the revenues from those processes are lost.

Can we agree on that?

No, I don't agree with this at all. I haven't seen any actual data to support this supposition, that small changes in the prices of goods lead to buying decisions. Actually, the opposite tends to be true - goods have to change in price dramatically before buying decisions are really impacted.

Look at gasoline. It doubled in price over the course of a few years from 1 dollar to 2 per gallon, and rates of consumption were not affected. Even when it hit 3 dollars a gallon, rates barely dropped. Only when the prices were more than triple their earlier value did we start to see a decline in consumption.

Quote:

I can agree with that, yes. I can also agree that some changes in behavior produce less tax revenue than if the tax policy had not encouraged such behavior. That is why an increase in capital gains tax so often results in a net reduction in treasury revenues. When Bush41 and Congress included a heavy tax on toys of the rich--jewelry, private planes, pleasure boats etc.--in the tax hike that cost Bush41 his re-election, the rich simply did not buy such things or went elsewhere to get them. Our domestic private boat building and aircraft industries were decimated with loss of tens of thousands of jobs and most of our fine jewelry business moved off shore. The result? Net loss in treasury revenues from that targeted group and a whole lot of pain for a whole lot of less-than-rich folks.

If we can agree on that, we might come to an agreement that tax policy that lowers taxes in an intentional and intelligent way can generate treasury revenues. Of course you lefties won't get the emotional satisfaction of sticking it to the rich, but we all have to make some sacrifices in life in the interest of the common good.

Well, I don't see much value in 'encouraging' the rich to spend their monies by cutting taxes to the bone. The truth is that they will spend their monies either way once they adjust to the new levels of taxation.

It's not rational to suppose that the rich will not buy stuff, in perpetuity, b/c they have to pay a few more percentage points then they did last year. Eventually people get used to the levels of taxation. I would remind you that taxation brackets as high as 75-90% didn't stop the rich from making purchases in the past...

Cycloptichorn

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Just popping in to drop a link re today's vote:

The roll call for the stimulus bill vote: five (5) Congressmen went from voting Nay to Yea, and not a single Republican among them. Six Dems voted Nay both times, and one actually went from Yea to Nay.

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Just received this e-mail from a friend who is a member of The Center for Individual Freedom (CFIG.org) and it is offered with no presumption of its accuracy but also suspecting it will stand up to closer scrutiny:

Quote:

A group of liberal lawmakers met secretly... literally behind closed doors, and announced that they had reached a "deal" on the so-called "stimulus package" on Wednesday!

What you're not being told is that Republican lawmakers (including Members of the House-Senate Conference Committee) were EXCLUDED from this deal-making session!

We couldn't make this up!

HOW, IN THE NAME OF ALL THAT IS HOLY, DO YOU REACH A "DEAL" ON THE LARGEST SPENDING BILL IN THE HISTORY OF OUR NATION (NEARLY $1,000,000,000,000 IN TAXPAYER MONEY) WHEN THE OPPOSITION IS NOT EVEN ALLOWED INTO THE ROOM?

According to Connie Hair, writing on HumanEvents.com:

"Republicans have caught the Democrats in a midnight 'stimulus' power play that seeks to cut Republican conferees out of the House-Senate negotiations to resolve a final version of the Obama 'stimulus' package... . They intend to attempt to shove this $1.3 trillion spending bill through in the dead of the night without Republican input so floor action can take place in both chambers..." [Emphasis Mine]

Hair goes on to quote Congressman Mike Pence:

“I think the American people deserve to know that legislation that would comprise an amount equal to the entire discretionary budget of the United States of America is being crafted without a single House Republican in the room.” [Emphasis Mine]

Later, we found out that some Republicans WERE in the room (the most likely suspects are Senators Arlen Specter, Susan Collins and Olympia Snowe - the three Republicans-In-Name-Only who sided with the Democrats and saved this horrendous socialist "porkulus" bill from a well deserved death).

But according to HumanEvents.com, Senators Charles Grassley and John Thune also confirmed that they DID NOT participate in these secret behind-closed-doors meetings.

That means that - at the very least - the ENTIRE Republican House delegation of conferees and AT LEAST two of the Republican Senate conferees were EXCLUDED!

But that's not the half of it. This so-called "stimulus package" is turning into even more of an Orwellian nightmare!

After reaching a “deal” to rectify differences in the House and Senate versions of this so-called "stimulus package," liberals in Congress now want to SHOVE it onto the floor of the House and the Senate for a QUICKIE VOTE BEFORE ANYONE EVEN HAS THE CHANCE TO READ IT!

We don't know what's in it... you don't know what's in it... most of our elected officials won't even know what's in it!

That's NOT a "deal." THAT'S TYRANNY!

Nancy Pelosi and Harry Reid, Barack Obama and liberals in Congress may think they have a "deal."

But I say "NO DEAL!"

Make no mistake, the fate of this "porkulus bill" is STILL UNCERTAIN! Support is VERY FRAGILE!

That's why our elected leaders need to hear you say "NO DEAL" one more time and they MUST hear from you NOW because we only have hours to kill this horrendous bill!

If you've ALREADY sent Blast Faxes or made calls to the Senate, please do so AGAIN. If you HAVEN'T made your voice heard yet, this may be your LAST CHANCE! Time is running out!
http://www.cfiflistmanager.org/obamatheftactiid1be.html

1 Reply

@nimh,

Of course, but, you being a Dutch Hungarian, not living in the USA and not really experiencing what goes on here can only read what the Socialist press says.

If you read the post by Foxfyre, you would know that the Republicans are being excluded. This from a man who said that his maxim would be INCLUSION.
But, time wounds all heels, despite the passage of the phoney stimulus package, the Dow went down another 82 points today.

It would appear that the Messiah's message is not encouraging investors!!!

How could that be?

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Cyclpos wrote:

It's not rational to suppose that the rich will not buy stuff, in perpetuity, b/c they have to pay a few more percentage points then they did last year. Eventually people get used to the levels of taxation. I would remind you that taxation brackets as high as 75-90% didn't stop the rich from making purchases in the past...

As I said, Cyclops is an economic illiterate-

First of all, he appears to know nothing about the loopholes used by the "rich" when the tax rates were at 75-90.

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Cyclops wrote:

Do you understand the difference between correlation and causation?

You see, people do know that Bush's tax cuts. Reagan's tax cuts and Jack Kennedy's tax cuts did not bring more money to the US Treasury. The tax cuts were not causation--it was merely a correlation.

Cyclops is an economic illiterate. He gives no evidence except his own blustering. Here is the full story:

August 13, 2003
The Historical Lessons of Lower Tax Rates
by Daniel J. Mitchell, Ph.D.
WebMemo #327
There is a distinct pattern throughout American history: When tax rates are reduced, the economy’s growth rate improves and living standards increase. Good tax policy has a number of interesting side effects. For instance, history tells us that tax revenues grow and “rich” taxpayers pay more tax when marginal tax rates are slashed. This means lower income citizens bear a lower share of the tax burden " a consequence that should lead class-warfare politicians to support lower tax rates.

Conversely, periods of higher tax rates are associated with sub par economic performance and stagnant tax revenues. In other words, when politicians attempt to “soak the rich,” the rest of us take a bath. Examining the three major United States episodes of tax rate reductions can prove useful lessons.

1) Lower tax rates do not mean less tax revenue.

The tax cuts of the 1920s
Tax rates were slashed dramatically during the 1920s, dropping from over 70 percent to less than 25 percent. What happened? Personal income tax revenues increased substantially during the 1920s, despite the reduction in rates. Revenues rose from $719 million in 1921 to $1164 million in 1928, an increase of more than 61 percent.

According to then-Treasury Secretary Andrew Mellon:

The history of taxation shows that taxes which are inherently excessive are not paid. The high rates inevitably put pressure upon the taxpayer to withdraw his capital from productive business and invest it in tax-exempt securities or to find other lawful methods of avoiding the realization of taxable income. The result is that the sources of taxation are drying up; wealth is failing to carry its share of the tax burden; and capital is being diverted into channels which yield neither revenue to the Government nor profit to the people.

The Kennedy tax cuts
President Hoover dramatically increased tax rates in the 1930s and President Roosevelt compounded the damage by pushing marginal tax rates to more than 90 percent. Recognizing that high tax rates were hindering the economy, President Kennedy proposed across-the-board tax rate reductions that reduced the top tax rate from more than 90 percent down to 70 percent. What happened? Tax revenues climbed from $94 billion in 1961 to $153 billion in 1968, an increase of 62 percent (33 percent after adjusting for inflation).

According to President John F. Kennedy:

Our true choice is not between tax reduction, on the one hand, and the avoidance of large Federal deficits on the other. It is increasingly clear that no matter what party is in power, so long as our national security needs keep rising, an economy hampered by restrictive tax rates will never produce enough revenues to balance our budget just as it will never produce enough jobs or enough profits… In short, it is a paradoxical truth that tax rates are too high today and tax revenues are too low and the soundest way to raise the revenues in the long run is to cut the rates now.

The Reagan tax cuts
Thanks to “bracket creep,” the inflation of the 1970s pushed millions of taxpayers into higher tax brackets even though their inflation-adjusted incomes were not rising. To help offset this tax increase and also to improve incentives to work, save, and invest, President Reagan proposed sweeping tax rate reductions during the 1980s. What happened? Total tax revenues climbed by 99.4 percent during the 1980s, and the results are even more impressive when looking at what happened to personal income tax revenues. Once the economy received an unambiguous tax cut in January 1983, income tax revenues climbed dramatically, increasing by more than 54 percent by 1989 (28 percent after adjusting for inflation).

According to then-U.S. Representative Jack Kemp (R-NY), one of the chief architects of the Reagan tax cuts:

At some point, additional taxes so discourage the activity being taxed, such as working or investing, that they yield less revenue rather than more. There are, after all, two rates that yield the same amount of revenue: high tax rates on low production, or low rates on high production.

2) The rich pay more when incentives to hide income are reduced.

The tax cuts of the 1920s
The share of the tax burden paid by the rich rose dramatically as tax rates were reduced. The share of the tax burden borne by the rich (those making $50,000 and up in those days) climbed from 44.2 percent in 1921 to 78.4 percent in 1928.

The Kennedy tax cuts
Just as happened in the 1920s, the share of the income tax burden borne by the rich increased following the tax cuts. Tax collections from those making over $50,000 per year climbed by 57 percent between 1963 and 1966, while tax collections from those earning below $50,000 rose 11 percent. As a result, the rich saw their portion of the income tax burden climb from 11.6 percent to 15.1 percent.

The Reagan tax cuts
The share of income taxes paid by the top 10 percent of earners jumped significantly, climbing from 48.0 percent in 1981 to 57.2 percent in 1988. The top 1 percent saw their share of the income tax bill climb even more dramatically, from 17.6 percent in 1981 to 27.5 percent in 1988.

Harmful Spending & Complexity
Lower tax rates are important, but they are not the only critical issue. Both the level of government spending and where that money goes are very important. And even when looking only at tax policy, tax rates are just one piece of the puzzle. If certain types of income are subject to multiple layers of tax, as occurs in the current system, that problem cannot be solved by low rates. Similarly, a tax system with needless levels of complexity will impose heavy costs on the productive.

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@old europe,

What is your definition of poor-- Old Europe? do you have any idea of what you are talking about or is "poor" just one of the mantras that left wingers throw around?

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And in addition to the decidedly partisan nature of this bill, it is unlikely that a single one of our elected legislators has read many if any of the 1100 pages or knows what they voted for and even a teleprompter wouldn't help the President describe it coherently if HE even knows the stuff that is in it:

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@Foxfyre,

Foxfyre wrote:

Just received this e-mail from a friend who is a member of The Center for Individual Freedom (CFIG.org) and it is offered with no presumption of its accuracy but also suspecting it will stand up to closer scrutiny:

Quote:
[..] What you're not being told is that Republican lawmakers (including Members of the House-Senate Conference Committee) were EXCLUDED from this deal-making session!

We couldn't make this up!

HOW, IN THE NAME OF ALL THAT IS HOLY, DO YOU REACH A "DEAL" ON THE LARGEST SPENDING BILL IN THE HISTORY OF OUR NATION (NEARLY $1,000,000,000,000 IN TAXPAYER MONEY) WHEN THE OPPOSITION IS NOT EVEN ALLOWED INTO THE ROOM?

You guys have no sense of self-awareness at all, do you?

Do you at all remember how the Republican congressional majorities used to go about these affairs? Or, admittedly, previous Democratic ones?

It was actually a novelty, a break with more partisan, exclusive conventions, that leading Republican Senators got to take part in the formal conference at all.

For sure, the meat of the deal had already been "cooked" in a preceding huddle of Democratic House and Senate leaders. After all, they knew that the Republican leaders were going to vote "no" to anything that remotely looked like the existing House and Senate bills, and the meeting was explicitly intended to create a compromise between the two. So the formal conference meeting was more of a showcase for both parties to present their take in televised speeches.

But even as such, it was actually more bipartisan than these events were under Bush and Clinton. Republicans, note, "often locked Democrats out of conference committee meetings" ... if they even "bothered to tell them where the meeting was being held"!

Before them, a previous generation of Dems was hardly better. Commenting on the open character of the conference committee this week, Republican Sen. Charles Grassley recounted that he "remembered following TV cameras around to try to find a Democratic-controlled conference to make his point of view known" in the past.

So this was actually an improvement on previous, Bush- and Clinton-era practice.

Moreover, what is the actual substance of this criticism? That the Republican nay-sayers were frozen out of the last, final step of the process, which was merely concerned with merging the existing House and Senate bills and levelling out remaining differences between them? Why, what had they wanted to bring to those negotiations, considering they wanted nothing to do with either bill? The opportunity to say "no" to it all? They got that opportunity in the formal conference, in front of the TV cameras, and that's more than the oppositional Democrats could say in the days of Republican majorities.

Or is the complaint that they were frozen out of the preparation of the bill throughout? How is that a reasonable complaint? Republican Senators who even showed the slightest inclination to find some kind of common ground with the administration were showered with unprecedented attention - Olympia Snowe was invited, to her own amazement, to a one-on-one with Obama - something no progressive Democrat could dream of. But what was there to discuss with the 36 Republican Senators who voted for the DeMint amendment?

That was an amendment, again, that featured none, zero, zilch in stimulus spending whatsoever. But did prescribe a waiver of tax cuts, mostly for the upper income groups, that would have indebted the US to the tune of 3 trillion dollar. What in heaven's name was there to negotiate there? Even someone who actually agrees with the DeMint line must surely agree that there was no common ground to be found whatsoever between that line and the Obama line. I mean, zero government spending - and this was an amendment McConnell, McCain and all the rest voted for. What the hell is there left to talk about then? Beyond giving the opposition the chance to state their "nyet" formally and openly, which they were given?

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@nimh,

Don't worry- Nimh...When Obama and his clique loses big in the 2010 elections, they will get their comeuppance. Or, don't you remember 1994, when the Republicans evicerated the Democrats and took over?
The American public is fickle. The Messiah won't be running in 2010 but the entire House will run as well as one third of the Senate.

You are really amazing, NImh--Not even an American Citizen and you presume to meddle in our affairs. Why don't you go across the border to the Ukraine? They will take off your Socialist head!!

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@nimh,

Oh I think I have a great deal of self awareness, Nimh, and I lost any naivete in politics long long ago. I know enough to know that any 'bones' thrown to the Republicans was specifically to garner Republican votes and come up with something the PresBO could claim was a bipartisan effort. Why? Because if this thing crashes and burns as many predict, he did not want to saddle the Democrats with the full blame.

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@Foxfyre,

Foxfyre wrote:

Oh I think I have a great deal of self awareness, Nimh, and I lost any naivete in politics long long ago. I know enough to know that any 'bones' thrown to the Republicans was specifically to garner Republican votes and come up with something the PresBO could claim was a bipartisan effort. Why? Because if this thing crashes and burns as many predict, he did not want to saddle the Democrats with the full blame.

You should consider yourself lucky. Obama tried to extend the olive branch, and threw in hundreds of billions of dollars in tax cuts before he even started any negotiation with the Republicans. Many of us Liberals were pissed when we heard about that, as in our opinion that money is not as stimulative as actual spending.

It was a mistake. He should have started with no tax cuts, and then let the Republicans argue him up to 35% or so, so they could crow and clap each other backs about what a great victory they had.

Obama ran on trying to work with the other side; when he got into office, he attempted to work with the other side. He met with the Congressional Republicans on 5 or 6 occasions for 1-2 hours each time. He had people over to his house for drinks to talk about it. He had the Senators come to the WH to watch the super bowl and talk about it. What more do you want the guy to do?

Nimh is correct; when 36 of your Senators had voted to remove all spending whatsoever, it sent a clear signal that your side is not being serious about this bill whatsoever, and doesn't recognize an opportunity when they are given one.

Next time Obama probably will do exactly that - make the Republicans argue for everything they want, from the ground up. You'll see more victories for them, but you'll get less overall than if you try some comity.

Cycloptichorn

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Sorry for just popping in and out all the time, but I've just got another link to drop here:

Polling the stimulus

Karl Rove opined in the WSJ that "support for the stimulus bill is falling", and that "the more Americans learn about the bill, the less they like it." Is he right? Not quite. An overview of the polls that were conducted in the past two and a half weeks.

(Turns out Rasmussen is the odd one out, while the other pollsters agree that proponents outnumber opponents by anywhere between 9% and 26%.)

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@nimh,

Where did you learn English? Or have you forgotten how to speak English because of an overload of that Hungarian Papricka?

You wrote:

An overview of the polls that were conducted in the past two and a half weeks.

That is not a sentence. You need a good privatedocent. But the Germans would be afraid to soil their hands in filthy Hungary, wouldn't they?

*********************************************************************

Read it and weep:

Blog Entry Comments (22) Rasmussen Poll: Americans Want Tax Cuts, Not Obamanomics
February 04, 2009 11:38 AM ET | James Pethokoukis | Permanent Link | Print
Some fascinating polling results from Rasmussen:

1) The latest Rasmussen Reports national telephone survey found that 37% favor the legislation, 43% are opposed, and 20% are not sure.Two weeks ago, 45% supported the plan. Last week, 42% supported it.

2) Opposition has grown from 34% two weeks ago to 39% last week and 43% today. Sixty-four percent (64%) of Democrats still support the plan. That figure is down from 74% a week ago. Just 13% of Republicans and 27% of those not affiliated with either major party agree.

3) Seventy-two percent (72%) of Republicans oppose the plan along with 50% of unaffiliated voters and 16% of Democrats.

4) Despite the declining support, 78% say it is at least somewhat likely that the economic recovery package proposed by PresidentObama and congressional Democrats will become law during Obama's first 100 days in office. That figure includes 36% who say passage is Very Likely. That latter figure is down significantly from a week ago when 52% said passage of the legislation was Very Likely.

5) A stimulus plan that includes only tax cuts is now more popular than the economic recovery plan being considered in Congress. Forty-five percent (45%) favor a tax-cut only plan while 34% are opposed.

Me: Whatever the economic impact of the Obama plan, it is not a confidence builder. And that is a huge problem.
END OF QUOTE

And wait until the end of 2009 when the legislators begin tocampaign for the 2010 elections. Obama's stimulus will be doing very little and Obama will run into the same problem that Clinton had in 1994.

1 Reply

@nimh,

On November 14 Presidential-candidate Barack Obama promised that change would come from the bottom up, not the top down, and every bill, every decision, every earmark would be posted and the people would have a chance to see it and comment on it before Congress voted on it.

Well the bill was passed in the dark of night, without the Republican leadership even having opportunity to amend it, much less participate in the initial or final negotiations. The only 'olive branch' extended was to three RINOs that could generally be counted upon to vote left and could give an illusion of bi-partisanship.

Well so much for keeping promises. So much for transparency. And so much for the audacity of hope. Through the audacity of fearmongering, the country has just been subjected to a trillion dollar spending bill that the President said would produce trillion dollar deficits every year in the foreseeable future without giving our elected leaders time to read it, much less the electorate. The only thing we know about it is that there is very little stimulus in it.

The left better hope and pray that the economy gets well on its own and fast or I think the people who have swallowed hard and are following on blind faith will beocme disallusioned quite quickly.

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I don't think Nimh is aware of this:

Fifty-one percent of those questioned in a CBS News poll released Thursday evening approved of the stimulus package. That's down 12 points from a poll taken January 11-15, the last time CBS asked the question. Thirty-nine percent opposed the plan, up 15 points from the previous poll, taken before President Barack Obama was inaugurated and before the House of Representatives passed an $819 billion stimulus package, with no Republican support, on January 28

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@Foxfyre,

Quote:

On November 14 Presidential-candidate Barack Obama promised that change would come from the bottom up, not the top down, and every bill, every decision, every earmark would be posted and the people would have a chance to see it and comment on it before Congress voted on it.

When did Barack state that?

I have heard he will allow comment before he signs bills but nothing about he would interfere with congress before they pass legislation.

1 Reply

Despite a bipartisan effort...

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