Let's discuss the minimum wage

Surely you realize that if you slash taxes rates, and they drop the revenues by 200 billion dollars a year, the economy has to grow at a tremendous rate in order to provide far, far more money to those people who pay taxes, who then give money to the US at a lower rate, in order to make up for the lost funds.

You couldn't come up with a formula that shows how this is supposed to work if you tried. You can't point to any specific industries which have benefitted from the tax cuts; there's just this nebulous cloud which supposedly leads to huge gains, which make up for the tax cuts.

I'm sorry, but I don't buy it. There's no evidence to back up the theory; on the other hand, it isn't difficult to calculate how much money has been lost.

Cycloptichorn

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You can see at the two extremes that revenue is zero. At 100% taxation, there is no economic activity and no income. At 0% taxation, there is maximum activity (at least until the government collaspes) and zero revenue. In between, there are two values. One is the optimum value that provides maximum income to the government. The second is the lowest value that provides the government the income it requires.

We are clearly not getting the money the government requires. The question is whether or not we are at the optimum. (If the government requires more than the optimum, we have bigger problems.) In this case, we can compare the Clinton and Bush timeframes. I think that comparison shows that the tax rate in the Clinton timeframe was more optimum than that during the Bush timeframe.

As Okie pointed out, there are other differences between those time periods in terms of world conditions and consumer confidence. It's hard to make a direct comparison. Outside of the obvious numbers (Clinton - surplus, Bush - deficit) the key for me is the extreme excess cash sloshing around Wall Street. Lots of big corporations are sitting on cash. If they felt that they had a good place to invest it, they would out of self interest, so this leads me to conclude that the market has been overstimulated. If we returned to the Clinton level of taxes or to some mix that kept the best part of the Bush cuts (focused on the low end of the income spectrum), I think we would see increase government revenue with little economic impact.

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Cycloptichorn wrote:

Surely you realize that if you slash taxes rates, and they drop the revenues by 200 billion dollars a year, the economy has to grow at a tremendous rate in order to provide far, far more money to those people who pay taxes, who then give money to the US at a lower rate, in order to make up for the lost funds.

You couldn't come up with a formula that shows how this is supposed to work if you tried. You can't point to any specific industries which have benefitted from the tax cuts; there's just this nebulous cloud which supposedly leads to huge gains, which make up for the tax cuts.

I'm sorry, but I don't buy it. There's no evidence to back up the theory; on the other hand, it isn't difficult to calculate how much money has been lost.

Cycloptichorn

I think one factor you ignore is the cumulative effect. If an economy grows 1% annually vs 2 to 3%, after a period of a few years, you have a very serious tax revenue problem, compared to the tax revenues you rake in at a lower rate, given the cumulative effect of economic growth. There is a short term effect and more long term effects, similar to how interest multiplies savings or debt.

And you still have to recognize what engineer is describing, which is some form of a Laffer curve, which is not deniable. I know many people still do, but simple math proves the concept, and observation of state run economies totally run into the ground in some communist countries, which would be akin to the 100% tax rate. Compare the gdp of North Korea vs South Korea. The only thing that can be debated is what is the optimum tax rate that returns the most revenues.

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okie wrote:

Cycloptichorn wrote:
Surely you realize that if you slash taxes rates, and they drop the revenues by 200 billion dollars a year, the economy has to grow at a tremendous rate in order to provide far, far more money to those people who pay taxes, who then give money to the US at a lower rate, in order to make up for the lost funds.

You couldn't come up with a formula that shows how this is supposed to work if you tried. You can't point to any specific industries which have benefitted from the tax cuts; there's just this nebulous cloud which supposedly leads to huge gains, which make up for the tax cuts.

I'm sorry, but I don't buy it. There's no evidence to back up the theory; on the other hand, it isn't difficult to calculate how much money has been lost.

Cycloptichorn

I think one factor you ignore is the cumulative effect. If an economy grows 1% annually vs 2 to 3%, after a period of a few years, you have a very serious tax revenue problem, compared to the tax revenues you rake in at a lower rate, given the cumulative effect of economic growth. There is a short term effect and more long term effects, similar to how interest multiplies savings or debt.

And you still have to recognize what engineer is describing, which is some form of a Laffer curve, which is not deniable. I know many people still do, but simple math proves the concept, and observation of state run economies totally run into the ground in some communist countries, which would be akin to the 100% tax rate. Compare the gdp of North Korea vs South Korea. The only thing that can be debated is what is the optimum tax rate that returns the most revenues.

But there's no evidence showing that tax cuts really grow the economy all that much. That's the missing part of your equation; the important part of the equation. On the other hand, there's plenty of evidence that cutting taxes shrinks revenues, directly.

We already HAD a revenue problem BEFORE taxes were cut. The cuts compounded our existing revenue problem, and we have not seen a huge spurt in economic growth to replace it. What we have seen is the national debt go up by half. You never seem to want to mention that part...

Cycloptichorn

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Reagan did a terrible disservice by teaching the public that we could have it all without paying for it. He made taxes a dirty word. Since then, it has been borrow and spend.

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Advocate wrote:

Reagan did a terrible disservice by teaching the public that we could have it all without paying for it. He made taxes a dirty word. Since then, it has been borrow and spend.

I remember stagflation vividly. I give Reagan props for trying something. Where we failed as Americans is in punishing Bush senior for raising taxes. The economy did jump start under Reagan's cash infusion. Roosevelt did the same thing during the Great Depression with the WPA. But after the economy started rolling again, we needed to move back to the optimum tax rate. GHB moved us there and we promptly tossed him from office, incidentally teaching his son a really bad lesson as well.

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Advocate wrote:

Reagan did a terrible disservice by teaching the public that we could have it all without paying for it. He made taxes a dirty word. Since then, it has been borrow and spend.

Taxes has always been a dirty word. I don't suppose the Democratic Congress had anything to do with increased spending during the Reagan years? Tax revenues increased fairly dramatically, but spending went up even faster. And it was borrow and spend long before Reagan. Fact is, the national debt as a percent of gdp is lower now than at the end of WWII.

http://encarta.msn.com/media_461520373/National_Debt_of_the_United_States.html

Another point that is important. The most upward trending growth sector of federal spending in terms of % of gdp, is entitlements like social security / medicare / medicaid.

http://angrybear.blogspot.com/2005/12/spending-growth-in-context.html

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Of course
Taxes are not popular.
Yes Yes Yes
But how can the so called self-made corporate vultures sell their products without tax payers money/blood?
How long can these leaches( blood suckers)deprive the need-based wages?
One more quixotic question.
What is the upper limit of the compassionate corporate CEO's earning?
Is it not a dirty system which deprive 90 percent of the local citizens
to struggle to make 10 percent of the neighbours to wage war?

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let ignorance
Let the passions and bonds pass-by
Who has lived in this land forever?
Path of arrival is known - but
Path of departure and the route unknown.
If all who came opt to stay
Where's the space in this sphere?
Life is just a business -in which
the birth is credit and death is debit. ---
Kannadasan( A non-person)

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Cycloptichorn wrote:

okie wrote:
Cycloptichorn wrote:
Surely you realize that if you slash taxes rates, and they drop the revenues by 200 billion dollars a year, the economy has to grow at a tremendous rate in order to provide far, far more money to those people who pay taxes, who then give money to the US at a lower rate, in order to make up for the lost funds.

You couldn't come up with a formula that shows how this is supposed to work if you tried. You can't point to any specific industries which have benefitted from the tax cuts; there's just this nebulous cloud which supposedly leads to huge gains, which make up for the tax cuts.

I'm sorry, but I don't buy it. There's no evidence to back up the theory; on the other hand, it isn't difficult to calculate how much money has been lost.

Cycloptichorn

I think one factor you ignore is the cumulative effect. If an economy grows 1% annually vs 2 to 3%, after a period of a few years, you have a very serious tax revenue problem, compared to the tax revenues you rake in at a lower rate, given the cumulative effect of economic growth. There is a short term effect and more long term effects, similar to how interest multiplies savings or debt.

And you still have to recognize what engineer is describing, which is some form of a Laffer curve, which is not deniable. I know many people still do, but simple math proves the concept, and observation of state run economies totally run into the ground in some communist countries, which would be akin to the 100% tax rate. Compare the gdp of North Korea vs South Korea. The only thing that can be debated is what is the optimum tax rate that returns the most revenues.

But there's no evidence showing that tax cuts really grow the economy all that much. That's the missing part of your equation; the important part of the equation. On the other hand, there's plenty of evidence that cutting taxes shrinks revenues, directly.

We already HAD a revenue problem BEFORE taxes were cut. The cuts compounded our existing revenue problem, and we have not seen a huge spurt in economic growth to replace it. What we have seen is the national debt go up by half. You never seem to want to mention that part...

Cycloptichorn

To the contrary, Clinton's economic plan of raising taxes and balancing the budget lead to the greatest economic expansion in history.

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Never heard of a recession called " the greatest economic expansion in history." before.

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Re: Of course

Ramafuchs wrote:

Taxes are not popular.
Yes Yes Yes
But how can the so called self-made corporate vultures sell their products without tax payers money/blood?
How long can these leaches( blood suckers)deprive the need-based wages?
One more quixotic question.
What is the upper limit of the compassionate corporate CEO's earning?
Is it not a dirty system which deprive 90 percent of the local citizens
to struggle to make 10 percent of the neighbours to wage war?

You are beginning to reveal where your affections are, Ramafuchs, and its not looking good for you.
If we didn't have corporate vultures, what kind of vultures would you prefer?
Need based wages. Since when was the free market products sold at a price entirely based on need of the person selling them, and since when was a wage based entirely on the need of the person doing the work? Here again, you have it backwards, the free market makes decisions from the bottom up, not from the top down.
"Is it not a dirty system which make 10 percent of .........." Say again. Please explain the cockeyed statement.

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McGentrix wrote:

Never heard of a recession called " the greatest economic expansion in history." before.

Me either; you've been listening to too much Larry Kudlow, b/c what we are currently experiencing is certainly not that.

Cycloptichorn

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Cycloptichorn wrote:

McGentrix wrote:
Never heard of a recession called " the greatest economic expansion in history." before.

Me either; you've been listening to too much Larry Kudlow, b/c what we are currently experiencing is certainly not that.

Cycloptichorn

Oh, you generally ignore Roxxxanne's posts too?

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McGentrix wrote:

Never heard of a recession called " the greatest economic expansion in history." before.

Better check your facts.

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Okie
Please tolerate me to have my views which are radically different from the many around us.
I will uphold the minute wages of Bill Gate for example which serves his needs.

But he has no time to sip a cup of tea.
(Time is money.
When I work I have no time and l I have money abundantly.
When I don't work I have time and no money.
This is the case now we face)

"NOW often looks at the flip-side of the American dream, as in its profile of the struggles of low-wage workers in "Downward Mobility". NOW also keeps track of the high end of the income spectrum. Recently we updated viewers on the fate the past years' corporate scandals. It seems that all the bad press and shareholder outrage, executive pay keeps on rising. According to a August 2003 report by THE ECONOMIST, median senior total pay among America's top 350 companies rose by 10 percent last year, even as median total shareholder returns in those companies fell by more than 5 percent.

Turns out that American executive compensation rates are quite different from those of the rest of the developed world. In Japan a typical executive makes eleven times what a typical worker brings home; in Britain, 22 times. In America...

According to recent studies, the top one percent ?- the wealthiest among us ?- are getting richer and richer. The Organisation for Economic Cooperation and Development (OCED) has found the United States to be the most unequal society of all industrialized nations. The U.S. ranks last among OECD nations in terms of income equality, yet in 1993 the poorest 10% of the U.S. population was still wealthier than two-thirds of the rest of the world.
http://www.pbs.org/now/politics/executive2.html
There should be freedom to earn if you have time to enjoy your fruit.
It is not a decent system where the appointed CEO's of the Corporate world getting paid beyond their needs.
It is Greedy system

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Perhaps this link will vouchsafe my views
China: a shared poverty to uneven wealth?
Taejoon Han
The George Washington University
The Elliott School of International Affairs
http://www.gwu.edu/~econ270/Taejoon.html

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It was not borrow and spend before Reagan. When Reagan came in, the national debt was a nothing $800 B.

The problem with Carter was that he stayed with an incompetent Fed Chief, who allowed the interest rates to soar. It didn't take supply-side to change that and spur the economy.

The economy wasn't all that great under Reagan. On an annual basis, there was far more job growth under Carter and Clinton, especially the latter.

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Ramafuchs brings up a point about abuse at the top of corporations. Place a huge marginal tax rate over a million in compensation or salary, whether its money or stock. I don't think it will help the economy, but it will accomplish social engineering.

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Social justice
Social justice is vital
Unbridled greed and uncontrolled avarice is
anathema to a rational society.
Let the never ending DREAMERS live among us-
the poor struggling wage earners

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Let's discuss the minimum wage

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