How likely are you to watch the CNN/You Tube debates tonight?

[1968]

Simple "need" is not the sole factor for determining government involvement (that is precisely what I am arguing against). Individuals should- whenever possible- supply their own needs. Without question there are some needs which are societal and must be provided by a community.

Sorry to badger the point: Why is healthcare a societal need, but eating is not?

[1968]

People discuss income and taxes in a possessive (ugh, I need spell check on these computers) way. If I make $40,000 a year then that is what I should take home. I see it in a different way. You made $40k (before taxes), but if the tax rate was 15% instead of 25% would you have really made that amount? No, most likely you would have made closer to $35k. Why? Because our income is made out of demand. We base demand on income after taxes, because if I cannot afford to eat then I want more money in my pocket (not just on paper).

So what really is the effect of lower taxes? Lower salaries. Of course this would also lead to lower prices, so we are again at the same level we were at before the lower taxes. The one thing that is hurt is social programs, which would have less taxes to live off of.

By this line of thinking, if you were given a raise to $400,000 and taxed 90% of your income, you would take home a true $40,000 and the government would get $360,000 to help society! I don't think things work that way...

[Grubendol]

But the 91% tax rate only ever kicked in at 3.2 million in current dollars.

[For-Life]

By this line of thinking, if you were given a raise to $400,000 and taxed 90% of your income, you would take home a true $40,000 and the government would get $360,000 to help society! I don't think things work that way...

If that happened there would be a shock to society and just would not work. The current tax rates have been pushed through slowly, so the economy has had a chance to react to it.

[1968]

If that happened there would be a shock to society and just would not work. The current tax rates have been pushed through slowly, so the economy has had a chance to react to it.

How would the economy react if a 25% tax rate was slowly pushed to 90%? If lower taxes is bad, then raising taxes must be good... is that not true?

[For-Life]

How would the economy react if a 25% tax rate was slowly pushed to 90%? If lower taxes is bad, then raising taxes must be good... is that not true?

If you moved them to 90 percent, it would probably take you 500 years to reach that level.

Saying that, I agree that 90 percent is too high. There needs to be a balance between social good and individual good. These two are tied in, and one cannot be achieved without the other. Total social good, leads to the loss of the individual. Total individual good leads to the destruction of society.

At 90 percent you are moving toward too much social good.

[Grubendol]

two things being missed in this discussion of the 90% tax. First, we had that for about 30 years in the US....as a progressive tax. Only if you made the equivalent of 3.2 million did you get taxed at that rate. After that we had a 70% top marginal tax rate from 1961 until 1980. Our economy was its strongest during this period.

Once Reagan came into power he dropped the top marginal to 35%. There has been a steady decline in the wealth and size of the middle class since then.

The tax was dropped overnight to that rate, and yet there wasn't a dramtic improvement to the economy. When Bush created his major tax cuts in 2001, (with the greatest cut going to that top tax bracket), there wasn't a significant improvement to the economy. In fact, the only segments of the economy to improve since 2001 are military contractors and governmental jobs related to Homeland Security...Outside of these two areas the other area which had some increase was service industry/min wage jobs such as fast food (because fast food was reclassified as manufacturing to make the numbers look better).

The lower taxes have consistently hurt the economy since they were implemented in 1981. The top 5% may be doing better but the rest of the nation is most definitely worse off.

[ksquared]

[Pete Hanlin]

Once Reagan came into power he dropped the top marginal to 35%. There has been a steady decline in the wealth and size of the middle class since then. The tax was dropped overnight to that rate, and yet there wasn't a dramtic improvement to the economy. When Bush created his major tax cuts in 2001, (with the greatest cut going to that top tax bracket), there wasn't a significant improvement to the economy.
Not a dramatic improvement to the economy? One can attempt to argue that Reagan's tax cuts were not related to the economic upswing during his administrations- but its silly to pretend the economy didn't improve quite dramatically during the Reagan years. Even though it serves your argument, stating that the middle class has had a steady decline since the beginning of the first Reagan administration is simply not true. The median income- adjusted for inflation- is about $1,000 lower than it was 28 years ago. This isn't overly surprising given the exodus of manufacturing jobs from this country (I'm sure that's somehow the fault of big business and Reagan).

Sorry to badger the point: Why is healthcare a societal need, but eating is not?
I'm not sure what is causing your consternation on this issue... I'm against national healthcare- not for it. My only thought would be the goverment could help organize large groups of lives to provide better rates on major medical coverage. I'm not proposing that government should in any way, shape, or form be involved with the provision of health services.

If the question is "why should hospitals be built by the community- but not grocery stores," my reply would be if hospitals are built by investors the community doesn't have to build them. There are some services which are needed by the community that are not attractive to investors... so the community has to take it upon itself to build.

People discuss income and taxes in a possessive (ugh, I need spell check on these computers) way. If I make $40,000 a year then that is what I should take home. I see it in a different way. You made $40k (before taxes), but if the tax rate was 15% instead of 25% would you have really made that amount? No, most likely you would have made closer to $35k. Why? Because our income is made out of demand. We base demand on income after taxes, because if I cannot afford to eat then I want more money in my pocket (not just on paper).

So what really is the effect of lower taxes? Lower salaries. Of course this would also lead to lower prices, so we are again at the same level we were at before the lower taxes. The one thing that is hurt is social programs, which would have less taxes to live off of.
I've re-read this several times trying to understand the logic (not saying its not a logical statement- I'm just missing something). I, for one, do not feel I should keep every penny I earn. As mentioned previously, I use numerous resources provided by my community- and there has to be a "usage fee." Regarding income vs. taxes... when the current (temporary) tax cuts went into effect, my income did not drop (therefore, my net income grew). In fact, my income has gone up every year since the tax cut went into effect. One could argue that higher taxes result in higher cost of goods- since businesses pass taxes on to their customers (there is no better example of this than gasoline- where most of the cost associated with a gallon of gas is represented by taxes).

[For-Life]

Pete, income does not move swiftly with changes. That is why there was no affect on your income going up or down. Now if we were to glare into the future in 10 years, compare your job, performance, and every little thing with and without the tax cut, I would put money down that you would make less (before taxes) then than without the tax cut. In the end, your disposible income would remain the same.

Now I am not a magician, so I cannot prove my theory, but I do have something to compare against. Take two jobs, with the same company, with the same position and responsibilities. Isn't the one in NYC probably going to pay more than the one in Milwaukee? Why? Cost of living. The pay difference is to offset the higher cost of living, so you would make close to the same in disposible income.

[Grubendol]

So what really is the effect of lower taxes? Lower salaries. Of course this would also lead to lower prices, so we are again at the same level we were at before the lower taxes. The one thing that is hurt is social programs, which would have less taxes to live off of.
I've re-read this several times trying to understand the logic (not saying its not a logical statement- I'm just missing something). I, for one, do not feel I should keep every penny I earn. As mentioned previously, I use numerous resources provided by my community- and there has to be a "usage fee." Regarding income vs. taxes... when the current (temporary) tax cuts went into effect, my income did not drop (therefore, my net income grew). In fact, my income has gone up every year since the tax cut went into effect. One could argue that higher taxes result in higher cost of goods- since businesses pass taxes on to their customers (there is no better example of this than gasoline- where most of the cost associated with a gallon of gas is represented by taxes).

Actually this is argued against using the traditional conservative economic model. The price on goods is associated with supply and demand, not taxes. The price is what the market will bear. When taxes go up, the profits may decrease for the manufacturer, but the net price difference for the consumer has no significant change.

While a large percentage of gasoline’s cost is associated with taxes, when the taxes change, the percentage change in fuel costs is minimal. What is impacted is the profits to the oil companies. The price of gasoline is more closely associated with cost of living in a given area than it is with the taxes associated with that gallon of gas.

[Grubendol]

Also an addendum in regards to the US economy in the years of Reagan. If the economy was run as it traditionally had been, then the economy would have completely crashed with the tax cuts. What kept the nation afloat and continues to for right now is deficit spending. Reagan and both Bush’s did not pay as they went, but rather cut taxes dramatically and then continue to spend on borrowed money. Reagan generated more debt than all previous presidents combined. Bush has generated more debt than all previous presidents combined, including Reagan. Over 20% of our debt is owned by China which sets us up to bow to foreign interests rather than our own. (the second or third highest owner of our debt is Saudi Arabia). When we must placate to nations which are producing enemies of our state (remember that Osama is a Saudi) and even the missile components for our military are produced by another of these debt-owning nations, we are completely beholden to their political whims.

EDIT: The question in the end is this…


Do we work for the economy or does the economy work for us?

[1968]

Sorry to badger the point: Why is healthcare a societal need, but eating is not?
I'm not sure what is causing your consternation on this issue... I'm against national healthcare- not for it. My only thought would be the goverment could help organize large groups of lives to provide better rates on major medical coverage. I'm not proposing that government should in any way, shape, or form be involved with the provision of health services.

I am not clear on how the government could help organize large groups of lives to provide better rates on major medical coverage. Some would argue that universal healthcare would do that... and still leave the actual provision of health services to private entities.

If the question is "why should hospitals be built by the community- but not grocery stores," my reply would be if hospitals are built by investors the community doesn't have to build them. There are some services which are needed by the community that are not attractive to investors... so the community has to take it upon itself to build.

To be clear, when you say "the community has to take it upon itself" in this context, you are talking about local government rather than private citizens. Is that correct?

As I see it, investors are attracted when they see that they can make a profit. This typically happens when they perceive that the demand for a service or product outweighs the supply for that service or product. If demand exceeds supply and still there are no investors, then it makes sense that something has removed the profit motive for the investors. I typically get concerned when the government at any level meddles with supply and demand curves. (Yes, I'm an opponent of "corporate welfare", too.)

[1968]

Pete, income does not move swiftly with changes. That is why there was no affect on your income going up or down. Now if we were to glare into the future in 10 years, compare your job, performance, and every little thing with and without the tax cut, I would put money down that you would make less (before taxes) then than without the tax cut. In the end, your disposible income would remain the same.

Increasing taxes has other repercussions on the economy aside from what directly affects your net pay. For example...

Actually this is argued against using the traditional conservative economic model. The price on goods is associated with supply and demand, not taxes. The price is what the market will bear. When taxes go up, the profits may decrease for the manufacturer, but the net price difference for the consumer has no significant change.

Are you stating that decreased profits for manufacturers has no bearing on what influences supply and demand?

Do we work for the economy or does the economy work for us?

With all due respect, that question is meaningless and sounds merely like a labor union slogan. If "economy" is defined as "the system of human activities related to the production, distribution, exchange, and consumption of goods and services", then the question makes no sense. Our work is a part of our economy, and in this context the purpose of our work is to exchange the value of our knowledge and time for some other value... usually money.

[Grubendol]

Quote:
Originally Posted by Grubendol
Actually this is argued against using the traditional conservative economic model. The price on goods is associated with supply and demand, not taxes. The price is what the market will bear. When taxes go up, the profits may decrease for the manufacturer, but the net price difference for the consumer has no significant change.

Are you stating that decreased profits for manufacturers has no bearing on what influences supply and demand?

it may or may not effect supply but it will not effect demand, and will not impact cost. i'm not making an argument about whether or not it is bad for the capitalists, I am making an argument that it is not bad for the working classes.

Quote:
Originally Posted by Grubendol
Do we work for the economy or does the economy work for us?

With all due respect, that question is meaningless and sounds merely like a labor union slogan. If "economy" is defined as "the system of human activities related to the production, distribution, exchange, and consumption of goods and services", then the question makes no sense. Our work is a part of our economy, and in this context the purpose of our work is to exchange the value of our knowledge and time for some other value... usually money.

What I am talking about is, in the end, how we define the economy. All of the financial analysts seem to define the economy as the stock market. As the Dow. If we allow ourselves to use that definition, then as long as those numbers go up the economy is good. The fact that those numbers are continually going up over the past 8 years, while there are less jobs in America today than there were 8 years ago says much about the faults of using the Dow or even the GDP as an economic measuring factor.

GDP goes up when someone is diagnosed with cancer. The stock market goes up when there are massive layoffs to “reduce costs”.

This is what I mean. It’s just a lot quicker to say it in that one sentence than in a dissertation.

[For-Life]

1968, I do not disagree that tax increases can have a negative effect on the economy. Again, we are talking about slow tax increases over time, and not immediately.

[1968]

it [i.e. decreased profits for manufacturers] may or may not effect supply but it will not effect demand, and will not impact cost.

Wanna bet? Here is one scenario: If taxes increase, then profits decrease. If profits decrease, then costs increase. If costs increase, then demand decreases. Here is another one: If taxes increase, then profits decrease. If profits decrease, then layoffs occur. If layoffs occur, then demand decreases. If demand decreases, costs decrease. The bottom line is that it is not accurate to state that consumers will not be affected by tax increases.

i'm not making an argument about whether or not it is bad for the capitalists, I am making an argument that it is not bad for the working classes.

Although it's a bit simplistic to define employers as the bourgeoisie and employees as the proletariat, I am arguing that increasing and decreasing taxes may affect employers and employees or producers and consumers similarly.

[For-Life]

1968, at the same time, government spending can increase employment.

[Grubendol]

we certainly could use more government spending in the likes of infrastructure repair, as has been evidenced by the steam line explosion in New York and the bridge collapse in Minneapolis.

[1968]

1968, at the same time, government spending can increase employment.

Government spending can do lots of things, but we were discussing the impact of taxes on private for-profit industry.

[For-Life]

Increase in taxes leads to government spending.

[Pete Hanlin]

Wow, there are a lot of seperate issues flying around at this point- proper scope of government, effect of tax rates, creation of jobs, etc. What's really refreshing (and disturbingly rare) is the civility of tone!

1968- The community (which is represented by the local government) will necessarily need to supply any services or infrastructure that will not naturally be created by private enterprise. For example, roads do not lend themselves to private enterprise (over the long term), because it is hard to derive continued profit from them (I suppose if a private citizen could erect a toll road...). Now, a private individual may construct a road to raise the value of property (e.g., when a contractor builds roads in a development), but the roads will eventually be turned over to the community in most cases. Accessibility of addresses is a service that benefits the entire community, and the community maintains that service. Ideally, most services will be provided by private enterprise.

Grubendol- I think we are approaching things from very different starting points, which is fine. If I understand correctly, you believe taxes are not passed on to the population in the same proportion to which they affect corporations. I just do not believe this is the case.

For-Life- In my opinion, government spending should be on an "absolutely necessary" basis only (as outlined above- the government should only be providing infrastructure and services that private enterprise will not naturally provide). The thought of raising taxes with a view toward raising spending (or "creating jobs") is antithetical to my view of government's role. Simply put, I trust the private sector a lot more than I trust government (when I weigh the potential for greed-driven motivation in private sector vs. the potential for apathy and inefficiency in government, the scales tip in favor of the private sector).

[1968]

Increase in taxes leads to government spending.

Ain't that the truth!

[Grubendol]

Ain't that the truth!

Except in the case of the Bush Administration where tax cuts lead to increased government spending.

[For-Life]

Well then you have the national debt, but who cares about that? I mean does it matter that a large chunk of taxes is spent on paying interest every year instead of health care, education, or even cutting taxes?