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InvisibleAnnapurna1
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tax cuts *dont* work...
    #3039602 - 08/23/04 03:00 PM (12 years, 3 months ago)

first..look at the chart below (it has a link)..and notice that average hourly earnings declined steadily following reagans' tax cuts in the mid 1980s (the median is prolly even worse).. and then rebounded slightly after clinton raised taxes on the wealthy in the 1990s...unfortunately..the chart only goes to 1995..so it doesnt show the decline under bush..which john kerry touts as $9000...

of course this doesnt mean that one causes the other...but it does show that cutting taxes doesnt necessarily lead to an increase disposable incomes either...



there are many reasons why this is the case..not the least of which is that the costs of removing the tax can easily outweigh the tax itself...more specifically..tax cuts can lead to a net loss of jobs..in both the public and private sectors...

as an oversimplified example..suppose you own a small store..and 30% your customers work for the local bus company...and then suppose that the bus company shuts down because of a tax cut...you have now lost 30% of your business in return for a $300 tax rebate cheque...and it doesnt stop there either...if the bus company has a contract with a private catering service..then the caterers..who might also be your customers..lose their jobs too...

nor is there any reason to assume that the tax money that used to finance the bus company will eventually create new..equal paying jobs.. and this is shown clearly the chart...remember that the next time the neocons try to sell you a "tax cut"..because theres no such thing...


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InvisibleEvolving
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Registered: 10/01/02
Posts: 5,385
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Re: tax cuts *dont* work... [Re: Annapurna1]
    #3039704 - 08/23/04 03:25 PM (12 years, 3 months ago)

Quote:

Annapurna1 said:
as an oversimplified example..



That is an understatment.

Of course you are brushing off the effects of people having more of their own money to spend on what they see fit - it doesn't fit your agenda. The money kept in the hands of the producers will be spent in other ways. Even if saved or invested, this money is available through the investment instruments to create jobs. You have no way of knowing all of these unseen effects (unseen to you), but they do exist for everyone who has more money in their pockets.

You also are ignoring the fact that merely reducing taxes (on the federal level) without reducing spending means that the tax is offset by debt monetization which means more currency being created. This increased currency is in fact a TAX (although hidden) on every single dollar in circulation - lowering the purchasing power of the currency. So by decreasing taxes but maintaining government spending all you are doing is shifting the tax burden to be carried via another mechanism as well as incurring debt. Who wins? The first ones to use the newly created currency.


--------------------
To call humans 'rational beings' does injustice to the term, 'rational.'  Humans are capable of rational thought, but it is not their essence.  Humans are animals, beasts with complex brains.  Humans, more often than not, utilize their cerebrum to rationalize what their primal instincts, their preconceived notions, and their emotional desires have presented as goals - humans are rationalizing beings.


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InvisibleEvolving
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Re: tax cuts *dont* work... [Re: Annapurna1]
    #3039756 - 08/23/04 03:38 PM (12 years, 3 months ago)

Oh, I also notice that you have made no mention of JFKs tax cuts and their effects (maybe because it doesn't fit your agenda). It can be argued that President Kennedy?s tax cuts touched off what was then the longest economic expansion in US history, with 5.1 percent annual growth rates from 1964 to 1967.

You can read JFK's appeal to the Congress for a tax cut here.


--------------------
To call humans 'rational beings' does injustice to the term, 'rational.'  Humans are capable of rational thought, but it is not their essence.  Humans are animals, beasts with complex brains.  Humans, more often than not, utilize their cerebrum to rationalize what their primal instincts, their preconceived notions, and their emotional desires have presented as goals - humans are rationalizing beings.


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Anonymous

Re: tax cuts *dont* work... [Re: Evolving]
    #3040200 - 08/23/04 06:03 PM (12 years, 3 months ago)

enough. you are a neoconpoop.

there is no such thing as a tax cut
there is no such thing as a tax cut
there is no such thing as a tax cut


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InvisibleAnnapurna1
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Re: tax cuts *dont* work... [Re: Evolving]
    #3040213 - 08/23/04 06:11 PM (12 years, 3 months ago)

>> Of course you are brushing off the effects of people having more of their own money to spend on what they see fit

no im not..in the example above..the store owner has an extra $300...but just because you now have that tax money in your pocket doesnt mean you have more money in your pocket...

>> it doesn't fit your agenda

according to the chart..neither does it fit the agendas of a majority of the population...what your saying is that wealth is striclty for the wealthy and fuck everyone else...but the numbers clearly show that whats good for the rich isnt always good for the country...

>> The money kept in the hands of the producers will be spent in other ways. Even if saved or invested, this money is available through the investment instruments to create jobs.

thats how its supposed to work on paper..but the figures show that the reality is very different...

>> You have no way of knowing all of these unseen effects (unseen to you)

what unseen effects??...the effects are shown plainly on the chart...

>> but they do exist for everyone who has more money in their pockets

so a policy that causes an overall loss is justified simply because it makes the rich richer??...please explain...

Quote:

You also are ignoring the fact that merely reducing taxes (on the federal level) without reducing spending means that the tax is offset by debt monetization which means more currency being created. This increased currency is in fact a TAX (although hidden) on every single dollar in circulation - lowering the purchasing power of the currency. So by decreasing taxes but maintaining government spending all you are doing is shifting the tax burden to be carried via another mechanism as well as incurring debt. Who wins? The first ones to use the newly created currency.




thats only another way that tax cuts dont work..since in the real world..that spending is not reduced..because it is still necessary..even if it doesnt fit your agenda...


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InvisibleEvolving
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Registered: 10/01/02
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Re: tax cuts *dont* work... [Re: Annapurna1]
    #3040378 - 08/23/04 06:56 PM (12 years, 3 months ago)

Quote:

Annapurna1 said:
just because you now have that tax money in your pocket doesnt mean you have more money in your pocket...



Can you be any more illogical?

Quote:

according to the chart..neither does it fit the agendas of a majority of the population...



Huh? According to your chart, JFK's tax cuts helped the economy. Why do you ignore that?

Quote:

what your saying is that wealth is striclty for the wealthy and fuck everyone else...



You really shouldn't post while under the influence of hallucinogens. I never said anything of the kind, nor did I imply it.

Quote:

but the numbers clearly show that whats good for the rich isnt always good for the country...



No, the numbers show no such thing. The numbers are based on aggregates and are averages and do not address the effects of various policies on a diverse population of individuals, changes in demographics, the effects of debt monetization or the effects of economic troubles in countries that trade with the U.S.

The fact is 'good for the country' is a quite nebulous and subjective term. We could kill all the people receiving welfare and then show that the income of the average American is higher and government expenditures are down, the statistics could then be interpreted in such a way to say that this is 'good for the country.'

Quote:

thats how its supposed to work on paper..but the figures show that the reality is very different...



Please explain how it works then.

Quote:

what unseen effects??...the effects are shown plainly on the chart...



Huh? Do you even read what you are responding to? Your chart addresses nothing of the sort. The chart is based on aggregate numbers, that is all. Another thing your chart does not take into account is the massive numbers of immigrants and the lower income of increased numbers of unskilled and illiterate wage earners which skews the numbers.

Quote:

so a policy that causes an overall loss is justified simply because it makes the rich richer??



I never said that nor did I imply that. Your charts offer no evidence of your contention. There are too many factors at play to draw your conclusion. Your charts also contradict your assertion when looking at the period following the tax cuts of JFK.

Quote:

..that spending is not reduced..because it is still necessary



That the spending is necessary is HIGHLY debatable.

In summary, your argument is flawed and unsupported by the facts, your own chart goes against your assertion. You are cherry picking a certain period of time, ignoring other factors and proclaiming a conclusion that can not be substantiated.


--------------------
To call humans 'rational beings' does injustice to the term, 'rational.'  Humans are capable of rational thought, but it is not their essence.  Humans are animals, beasts with complex brains.  Humans, more often than not, utilize their cerebrum to rationalize what their primal instincts, their preconceived notions, and their emotional desires have presented as goals - humans are rationalizing beings.


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InvisibleAnnapurna1
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Re: tax cuts *dont* work... [Re: Evolving]
    #3041778 - 08/24/04 12:14 AM (12 years, 3 months ago)

i dont have time to read all the details of JFKs proposal..but i did have time to read the opening paragraphs ..

Quote:

A strong and sound Federal tax system is essential to America's future. Without such a system, we cannot maintain our defenses and give leadership to the free world. Without such a system, we cannot render the public services necessary for enriching the lives of our people and furthering the growth of our economy.

The tax system must be adequate to meet our public needs. It must meet them fairly, calling on each of us to contribute his proper share to the cost of government. It must encourage efficient use of our resources. It must promote economic stability and stimulate economic growth. Economic expansion in turn creates a growing tax base, thus increasing revenue and thereby enabling us to meet more readily our public needs, as well as our needs as private individuals.




which stands in sharp contrast to your earlier statement ..

Quote:

Of course you are brushing off the effects of people having more of their own money to spend on what they see fit - it doesn't fit your agenda. The money kept in the hands of the producers will be spent in other ways. Even if saved or invested, this money is available through the investment instruments to create jobs. You have no way of knowing all of these unseen effects (unseen to you), but they do exist for everyone who has more money in their pockets.




which seems to imply that there should not be any such tax structure.. and which you used in reference to a series of tax cuts whose nature is well known and documented...

>> your own chart goes against your assertion

wrong...the chart shows a gain after JFKs tax cuts..but a loss after the more recent tax cuts...so the chart still shows that a tax cut doesnt necessarily produce a net gain...and the JFK quote might explain why this is the case too..since i would imagine that whatever JFK did was far less reckless than the later reaganites/neocons...

>> Another thing your chart does not take into account is the massive numbers of immigrants and the lower income of increased numbers of unskilled and illiterate wage earners which skews the numbers.

and why do you think there are "increased numbers of unskilled and illiterate wage earners" anyway??...ill offer a couple of suggestions.. feel free to laugh at them...one is that theres not enough educational funding available as a result of the recent tax cuts.. another is that we have also removed taxes on foreign slave labour..and in doing so turned our own skilled workers into unskilled workers...if thats so..then the chart does take that into account...


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Anonymous

Re: tax cuts *dont* work... [Re: Annapurna1]
    #3041923 - 08/24/04 12:40 AM (12 years, 3 months ago)

as an oversimplified example..suppose you own a small store..and 30% your customers work for the local bus company...and then suppose that the bus company shuts down because of a tax cut...you have now lost 30% of your business in return for a $300 tax rebate cheque...and it doesnt stop there either...if the bus company has a contract with a private catering service..then the caterers..who might also be your customers..lose their jobs too...

ad infinitum until the whole economy comes grinding to a halt i suppose. :smirk:

what about the other stores that haven't got any business with the bus drivers? they get a big tax cut and increased revenues because of increased disposable income of their customers. this leads to an increase in investment and consequently, productive employment and production. maybe "bus-driver's'r'us", with a whopping 30% of its revenue generated by sales to bus company employees, will lose some business, but everyone else benefits.

look at the bigger picture.

taxes discourage production and employment. your graph example is flawed for reasons evolving has made quite clear to you if you'd take a minute to really understand them.


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Anonymous

Re: tax cuts *dont* work... [Re: Annapurna1]
    #3041945 - 08/24/04 12:45 AM (12 years, 3 months ago)

... to put it another way...

capital is simply being invested somewhere else. either the government is investing it in a bus service or private individuals invest it where they see fit. private individuals, for very numerous reasons, almost always invest capital better than the government does.

those dollars that you're worrying won't be spent by bus-employees don't just disappear when taxes are cut. they are spent by private individuals in ways far more efficient than the government bureaucracy could ever hope to acheive.


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InvisibleEvolving
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Re: tax cuts *dont* work... [Re: Annapurna1]
    #3042047 - 08/24/04 01:18 AM (12 years, 3 months ago)

Quote:

Annapurna1 said:
seems to imply that there should not be any such tax structure..



I never claimed that I agreed with everything Kennedy said or did. The gist of my post is the fact that JFK promoted decreased taxes. These decreased taxes resulted in economic growth according to your chart. This simple fact blows your 'theory' out of the water, for in fact, according to your own charts as a basis for your assertion, lower taxes do help.

Quote:

the chart still shows that a tax cut doesnt necessarily produce a net gain



You fail to take into account the truth of taxation during the Reagan era, the overall tax burden under Reagan wasn't cut at all. Social Security taxes were hiked from 6.13 percent on the first $25,900 in 1980, to 7.51 percent on the first $45,000 by 1988. Social Security tax increases by themselves were probably enough to offset Reagan's tax cuts on the highest income brackets. I have already mentioned how inflation from the monetization of debt is in fact a tax on every dollar in circulation - in addition to this, inflation during Reagan resulted in 'bracket creep,' which pushing almost everyone into higher tax brackets. There was also the elimination of 'tax loopholes' such as the abolition of numerous shelters, the elimination of the deductibility of IRA contributions, the imposition of the Alternative Minimum Tax, lengthening of depreciation schedules, the tightening of investment-related deductions, a clampdown on offshore activities, and overall tightening of IRS enforcement ? just to mention a few things.

Quote:

i would imagine that whatever JFK did was far less reckless than the later reaganites/neocons...



You are correct, JFK actually cut taxes.

Quote:

and why do you think there are "increased numbers of unskilled and illiterate wage earners" anyway??



Having a hard time reading are you? I already stated, "Another thing your chart does not take into account is the massive numbers of immigrants." Flew right past you, huh?


--------------------
To call humans 'rational beings' does injustice to the term, 'rational.'  Humans are capable of rational thought, but it is not their essence.  Humans are animals, beasts with complex brains.  Humans, more often than not, utilize their cerebrum to rationalize what their primal instincts, their preconceived notions, and their emotional desires have presented as goals - humans are rationalizing beings.


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InvisibleAnnapurna1
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Re: tax cuts *dont* work... [Re: ]
    #3042118 - 08/24/04 01:38 AM (12 years, 3 months ago)

>> what about the other stores that haven't got any business with the bus drivers? they get a big tax cut and increased revenues because of increased disposable income of their customers. this leads to an increase in investment and consequently, productive employment and production. maybe "bus-driver's'r'us", with a whopping 30% of its revenue generated by sales to bus company employees, will lose some business, but everyone else benefits.

like i said earlier..thats the theory..but the graph shows that its not always the case...and i see no reason to dispute the graph...moreover..the nature of recent tax cuts is such that any store much smaller than wal-mart doesnt get a "big" tax cut at all...

>> taxes discourage production and employment.

not necessarily..since they also generate production and employment in infrastructure industries..most of which are privately owned govt contractors...


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Anonymous

Re: tax cuts *dont* work... [Re: Annapurna1]
    #3044192 - 08/24/04 02:27 PM (12 years, 3 months ago)

like i said earlier..thats the theory..but the graph shows that its not always the case...

the graph proves absolutely nothing. in a system of even minimal complexity, correlation (or lack thereof) does not prove (or disprove) causation. in a system as complex as the economy of the united states, it proves nothing. consider also that the graph is of pre-tax income. what is the income after taxes? (not that it matters very much either).

not necessarily..since they also generate production and employment in infrastructure industries..most of which are privately owned govt contractors...

this is done by paying more for a service than its market value. less wealth is created by the spending than would be if private buyers and investors bought goods at market value. it's wastefulness.

imagine if the government initiated a tax hike to pay people to shovel gravel. perhaps everyone who lost their job as a result of the tax hike was able to find equally-paying work shoveling gravel. now instead of whatever they were producing (and being paid for at market value) they are being subsidized to shovel gravel, a worthless task. there is less wealth created than would otherwise be. this in turn results in a whole host of economic calamities, one of which being actually less employment.

though a bus terminal is not worthless, and therefore the amount of waste caused by the program not as large, the analogy still applies.


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Offlinegrib
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Re: tax cuts *dont* work... [Re: Annapurna1]
    #3044442 - 08/24/04 03:52 PM (12 years, 3 months ago)

Quote:

...because it is still necessary..even if it doesnt fit your agenda...




Examples of government spending in 2004 (are these examples of what you consider still necessary?)

$100,000.00 to restore a historic Coca-Cola building in Macon, GA  (I didn't know Coke was hurting so badly! Last I heard they were the top selling soft drink in the world.)

$50,000,000.00 for an indoor rainforest in Coraville, IA  (rainforest in Iowa?) :confused:

$15,000,000.00 for overseas dairy development (talk about being milked!)

$6,800,000.00 to the YMCA :rolleyes:

$20,000,000 for the Pennsylvania Department of Education to help struggling schools  (that's it! when something fails throw more money at it!)

$100,000 for Bradford High School (PA) to improve the metalworking program  (I'm guessing that they'll be switching from scrap steel to something a bit more precious)

These are only a few examples of the thousands of millions of dollars wasted each year by the government. Cut waste and let us keep the money that we earn.


--------------------
<~>Our truest life is when we are in dreams awake <~>


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