Tax Cuts

The bush tax cuts expire at the end of 2010. According to a clip I saw on the daily show / CNN, the national deficit would be reduced by up to 33% just by the expiration of these tax cuts. Yet republicans are pushing for further tax cuts. I was hoping someone may be able to explain to me the logic behind tax cuts and economy. It seems to me that tax cuts are a temporary solution to a long term problem.

I think it has something to do with keeping big business in the United States instead of jumping ship and going somewhere else with tax incentives? Mostly just politics though, how are the politicians going to keep their pockets filled? I suppose Republicans could just start raping gov. programs though if the tax cuts dissolve, like the Democrats.

I think it has something to do with keeping big business in the United States instead of jumping ship and going somewhere else with tax incentives?

what are some examples of corporations actually jumping ship? you see this point made from time to time but NEVER with examples, and that makes me suspicious.

I know the countries with the most business-friendly economic policy tend to be in Africa and various developing countries and, surprisingly, you don't see many news pieces about American companies heading over.

No, companies haven't been to Africa since the early 1700's and trade was booming then.

I think the major philosophy behind tax cuts is the fact that the amount of money that the rich actually pay in taxes is silly compared to the amount of money the lower and middle class has to pay in taxes. I guess you have to figure the people who became rich got rich for a reason and they contribute to the economic security of our country so giving them tax cuts allows them more capital in which to invest in other ventures and business interests (and the occasional multi-million dollar yacht). Our government throughout the years, Democratic and Republican alike, have used tax cuts to try and stimulate the economy for exactly the reason I said. If the rich have more money, that's money that they will hopefully invest in further enriching our overall economy. In case you wanted to crap on Republicans about it, know that around 300 billion dollars in tax cuts were made by Obama as part of the Recovery Act. Like I said, its really meant as a means to stimulate the economy. I agree with the practice only because I don't see why the rich should have to support the rest of us. We're a country built on the basis of equal opportunity and although it may seem to be a dying principle, everyone who has money had to get it from somewhere, right?

As far as companies jumping ship, I know that in California there has been this http://www.modbee.com/2009/09/06/843767/dan-walters-california-factory.html and here are a few broader examples http://www.sodahead.com/united-states/10-big-businesses-that-have-moved-to-avoid-paying-taxes/question-680127/.

the amount of money that the rich actually pay in taxes is silly compared to the amount of money the lower and middle class has to pay in taxes.

this just can't be right though, because when the US had the highest standard of living in the world the top tax bracket was 91%. 91%! all throughout the '50s.

the world didn't collapse, the US was still productive, its citizens had great lives. the state just soaked the rich and things were, compared to the rest of the world, better than they are today.

its absurd to say that rich people have it really hard in America

man I love tax cuts, I'd love the Obama tax cuts so long as they were targeted at the poor. the poor should pay barely any taxes.

(on that thought, just for future discussion, I'd probably support a negative income tax even)

Oh Kyle.

The 1950's were indeed a great time for the US economy. Let's consider this moment in time. WWII had just ended and the Korean War begun. Men were leaving home, women finally entered the workplace. When they came back they had lots of babies, facilitated the infamous baby boom. Mortgage companies began doing more business, taxes were raised on all levels and something else bubbled up to, the deficit! The US was no longer relying on imports and instead saw manufacturing increases within its own borders. The government cut back on frivolous spending and continued to raise taxes simply because people were starting to make more money. The world didn't collapse, but how come there's only this decade of time in which the nation was prosperous. I guess we don't even have to consider the economy's downturn in the 60's do we? I mean, that couldn't have possibly been a result of the 50's? No, I think decades of time are isolated, one not affecting the other, am I right? Weird that Kennedy made some major tax cuts with a Democratic majority backing him. I guess tax cuts are pretty silly. Who said rich people have it really hard in America. Who is rich and has it hard at all anywhere? The economy suffers when production slows down, when unemployment goes up, when the rich are simply rich enough and have no incentive to produce when there is a 91% tax bracket in place. So cheers to you, perhaps with your philosophy we can enjoy a decade of bliss before we lose it again, oh wait, that silly deficit is still there. Silly deficit, Trix are for Kids!

nickthenoobboy wrote:WWII had just ended

this is touching on something I point out to people who think that American prosperity is solely the result of our domestic policies, which is: it really, really helped that the rest of the West destroyed itself and, needing restoration (the Marshall Plan), was forced to comply with the establishment of a scheme of commerce that favored the US.

so I won't go on like a high income tax is societal panacea.

nickthenoobboy wrote:Weird that Kennedy made some major tax cuts with a Democratic majority backing him.

not gonna hurt my feelings - Kennedy was an abysmal president imo!

The economy suffers ... when the rich are simply rich enough and have no incentive to produce when there is a 91% tax bracket in place.

I don't claim to know much about economics or anything, but this sounds like a complete fantasy scenario. "Oh, taxes /siiiigh, fuck it we're rich enough." When do rich people ever get tired of making more money? Money makes money, once you have it it's not hard to make more anyway... unless you really fuck up.

I think reasons for an economic downturn are so subtle and complex that I couldn't even begin to suggest to know all the socioeconomic factors that go into it, although I know subprime mortgage loans didn't help.

exactly!

also, lets take the phrase "rich people" to mean, say, the top 0.8% of earners (the only group of people that's done really well since the Reagan administration).

It's a fantasy to people like you and me because we're not in those shoes. You can make all the silly quotes you want coming out of rich people's mouths but in reality perhaps its not far from the truth. After all, how many people make their fortunes and simply retire. You've never heard of retirement?

Jeff asked "What is the purpose of tax cuts." I gave my opinion based on things I've read and practices through history. How did this and the Ayn Rand thing turn into arguments of political ideology? Why do you waste time arguing?

And when I said Kennedy made tax cuts, it wasn't meant to be a stab in your dark liberal heart or anything, it was meant to say in order to salvage the 1950s economy which carried into the 60s from getting worse tax cut had to be made to appease the 0.08%.

You seem to balk at that small of a number, but say the student to teacher ratio was about the same and you suddenly lost that small percentage of teachers, there would be nobody to teach. Right? (not stating fact, complete fiction)

Lets not also forget that the 50s left us with an abundance of new mouths to feed. So, we'll review;

50s = Time o' Plenty
Time After 50s = Fucked (Baby Boom)

Our economy can't support the 50's.

i haven't been talking about political ideology at all. i didn't think i've even been arguing tbh.

well your explanation of the logic of tax cuts was perfect - that people with wealth and real job-creating power lose incentive to create more wealth and employ more people when unduly burdened with taxes. and there's a lot to this.

but this country is so far right, easily the most right-wing country in the West. we're already at the practical limits of your perspective atm. inequality at present is as bad as the beginning of the century, the so-called "Guilded Age," and that represents a failure in policy.

nickthenoobboy wrote:in order to salvage the 1950s economy which carried into the 60s from getting worse tax cut had to be made to appease the 0.08%.

I've never even been exposed to a narrative in which the '50s way of life was unsustainable and had to be rescued by tax cuts. I figured JFK cut 'em because of his beliefs, not that it was a life-or-death decision.

Sooooo it didn't level off back to the oh-so-great 50s economy why then? You haven't been exposed to that narrative? You're living in it motherfucker.Here's your narrative too.

http://www.wbur.org/2010/01/08/jfk-tax-cuts

Talk to Newman's sister for more info. SHE LOVES THE 50s.

lol

nickthenoobboy wrote:Sooooo it didn't level off back to the oh-so-great 50s economy why then? You haven't been exposed to that narrative? You're living in it motherfucker.Here's your narrative too.

http://www.wbur.org/2010/01/08/jfk-tax-cuts

I'll check that out soon. I still don't understand what your pitch is here, hopefully that link'll clear it up.

little bit of conservative commentary on taxes: http://www.nationalreview.com/agenda/243212/millionaires-taxes-reihan-salam

For someone who has such an understanding of the philosophy behind tax cuts, albeit focusing on the negatives, I still have no understanding as to why you started an argument when I was objectively stating why tax cuts are put in place. Can you explain to me how this conversation flipped to a subjective argument. We can throw links at each other all day Kyle, but the truth is both sides have fundamental flaws in their reasoning and practice. I expressed this opinion by basically showing both sides of the coin here whilst you only seem to be dwelling on the "benefits" of one. Shouldn't the rights of all people residing in America be considered, rich and poor alike? Why protect the poor and neglect the rich? Why protect the rich and neglect the poor? Your 1950s were a peak for us as far as prosperity goes but it didn't last and there are reason for that. You can't be so short-sighted.

nickthenoobboy wrote:Talk to Newman's sister for more info. SHE LOVES THE 50s.

hahaha

wow I have to catch up on this thread. It's close to epic status

nickthenoobboy wrote:Talk to Newman's sister for more info. SHE LOVES THE 50s.

Good one. Props.

Tax cuts are a bandaid on a fuckin shark bite. All it did was raise the usual annual inflation rate of about 5% to about 8%, or if you want you can look at it like this. The most recent tax cuts have raised inflation by over 50%. The only reason we should have/keep tax cuts is to sink ourselves deeper in economic recession by rasising more skepticism and debt. Due to the fact that this recession had been looming for years because people barrowed money they don't have and couldn't pay it back, wouldn't it only make sense that Bush would barrow money he doesn't have and had no plan to pay it back? When was the last time we had a national financial surplus? If I recall correctly Clinton achieved that once, and thats all I can recall right now. So, lets put it like this. Every year for the last 15 years we've barrowed money and we don't have a plan on paying it back. If he wanted to give us all tax cuts, or endorse further tax cuts he needs to be starring in his own bikini car wash deep in the heart of Texas. To me, that sounds a little risque and mcnasty, just like tax cuts in general.

Nick McNasty wrote:When was the last time we had a national financial surplus? If I recall correctly Clinton achieved that once

recall: successful!

although its debated whether it was a real surplus, for some reason.