kentfan32 Wrote:History is the proof, the ecomony has florished under the Reagan and Bush tax cuts, while we were in recession shortly after Clinton left office. It is amazing we aren't in a depression now if you think of what the economy has shrugged off the last 6 years. 9/11, Katrina, war on terror, enron/corp scandel, $3 gas, an inherited recession... imagine if Gore had won, came in and raised taxes and cut the military budget.... then 9/11 happpened, we would still be in recession and everyone would be crying about there 401K being half what it used to be. Tax and spend doesnt work because the gov't is very inefficient with money no matter who is in charge. For instance, congress has spent the last month or so trying to pass a non-binding resolution about Irag. Non-binding means it doesn't mean anything, more or less an opinion. A month they spent on this. In the business world this would be known as a waste of time and money, but in gov't its business as usual.

any smart economist will tell you that the economy would have acted that way regardless of who is in power. Smart economist will also tell you that we were not in a recession in 2001.

Big_Man Wrote:

kentfan32 Wrote:History is the proof, the ecomony has florished under the Reagan and Bush tax cuts, while we were in recession shortly after Clinton left office. It is amazing we aren't in a depression now if you think of what the economy has shrugged off the last 6 years. 9/11, Katrina, war on terror, enron/corp scandel, $3 gas, an inherited recession... imagine if Gore had won, came in and raised taxes and cut the military budget.... then 9/11 happpened, we would still be in recession and everyone would be crying about there 401K being half what it used to be. Tax and spend doesnt work because the gov't is very inefficient with money no matter who is in charge. For instance, congress has spent the last month or so trying to pass a non-binding resolution about Irag. Non-binding means it doesn't mean anything, more or less an opinion. A month they spent on this. In the business world this would be known as a waste of time and money, but in gov't its business as usual.

any smart economist will tell you that the economy would have acted that way regardless of who is in power. Smart economist will also tell you that we were not in a recession in 2001.

Exactly. A President has very little effect on the economy. If a President does have such an effect on the economy, then why is Michigan in a one state recession? Does it mean that Democrat Gov. Granholm has more power over the economy that the President of the USA?

=>Suppose that every day, ten men go out for beer and the bill for all
ten comes to $100. If they paid their bill the way we pay our taxes,
it would go something like this: The first four men (the poorest) would
pay nothing.

The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.

So, that's what they decided to do.
The ten men drank in the bar every day and seemed quite happy with the
arrangement, until on day, the owner threw them a curve. "Since you
are all such good customers," he said, "I'm going to reduce the cost of
your daily beer by $20."Drinks for the ten now cost just $80.



The group still wanted to pay their bill the way we pay our taxes so
the first four men were unaffected. They would still drink for free.
But what about the other six men - the paying customers? How could
they divide the $20 windfall so that everyone would get his 'fair
share?' They realized that $20 divided by six is $3.33. But if they
subtracted that from everybody's share, then the fifth man and the
sixth man would each end up being paid to drink his beer. So, the bar
owner suggested that it would be fair to reduce each man's bill by
roughly the same amount, and he proceeded to work out the amounts each
should pay.

And so:
The fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33%savings).
The seventh now pay $5 instead of $7 (28%savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).
The tenth now paid $49 instead of $59 (16% savings).

Each of the six was better off than before. And the first four
continued to drink for free. But once outside the restaurant, the men
began to compare their savings.
"I only got a dollar out of the $20,"declared the sixth man. He
pointed to the tenth man," but he got $10!"
"Yeah, that's right," exclaimed the fifth man. "I only saved a dollar,
too. It's unfair that he got ten times more than I!"
"That's true!!" shouted the seventh man. "Why should he get $10 back
when I got only two? The wealthy get all the breaks!"
"Wait a minute," yelled the first four men in unison. "We didn't get
anything at all. The system exploits the poor!"
The nine men surrounded the tenth and beat him up.

The next night the tenth man didn't show up for drinks, so the nine sat
down and had beers without him. But when it came time to pay the bill,
they discovered something important. They didn't have enough money
between all of them for even half of the bill!

And that, boys and girls, journalists and college professors, is how
our tax system works. The people who pay the highest taxes get the
most benefit from a tax reduction. Tax them too much, attack them for
being wealthy, and they just may not show up anymore. In fact, they
might start drinking overseas where the atmosphere is somewhat
friendlier.


David R. Kamerschen, Ph.D.
Professor of Economics
University of Georgia

mollautt Wrote:=>Suppose that every day, ten men go out for beer and the bill for all
ten comes to $100. If they paid their bill the way we pay our taxes,
it would go something like this: The first four men (the poorest) would
pay nothing.

The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.

So, that's what they decided to do.
The ten men drank in the bar every day and seemed quite happy with the
arrangement, until on day, the owner threw them a curve. "Since you
are all such good customers," he said, "I'm going to reduce the cost of
your daily beer by $20."Drinks for the ten now cost just $80.



The group still wanted to pay their bill the way we pay our taxes so
the first four men were unaffected. They would still drink for free.
But what about the other six men - the paying customers? How could
they divide the $20 windfall so that everyone would get his 'fair
share?' They realized that $20 divided by six is $3.33. But if they
subtracted that from everybody's share, then the fifth man and the
sixth man would each end up being paid to drink his beer. So, the bar
owner suggested that it would be fair to reduce each man's bill by
roughly the same amount, and he proceeded to work out the amounts each
should pay.

And so:
The fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33%savings).
The seventh now pay $5 instead of $7 (28%savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).
The tenth now paid $49 instead of $59 (16% savings).

Each of the six was better off than before. And the first four
continued to drink for free. But once outside the restaurant, the men
began to compare their savings.
"I only got a dollar out of the $20,"declared the sixth man. He
pointed to the tenth man," but he got $10!"
"Yeah, that's right," exclaimed the fifth man. "I only saved a dollar,
too. It's unfair that he got ten times more than I!"
"That's true!!" shouted the seventh man. "Why should he get $10 back
when I got only two? The wealthy get all the breaks!"
"Wait a minute," yelled the first four men in unison. "We didn't get
anything at all. The system exploits the poor!"
The nine men surrounded the tenth and beat him up.

The next night the tenth man didn't show up for drinks, so the nine sat
down and had beers without him. But when it came time to pay the bill,
they discovered something important. They didn't have enough money
between all of them for even half of the bill!

And that, boys and girls, journalists and college professors, is how
our tax system works. The people who pay the highest taxes get the
most benefit from a tax reduction. Tax them too much, attack them for
being wealthy, and they just may not show up anymore. In fact, they
might start drinking overseas where the atmosphere is somewhat
friendlier.


David R. Kamerschen, Ph.D.
Professor of Economics
University of Georgia

I liked that example, buy why doesn't Bill Gates leave? He's threatened to leave before. Seattle ain't that great--I've lived there twice. A nice Caribbean beach sounds much better. So, seriously, why don't more of these CEO types leave?

mollautt Wrote:=>Suppose that every day, ten men go out for beer and the bill for all
ten comes to $100. If they paid their bill the way we pay our taxes,
it would go something like this: The first four men (the poorest) would
pay nothing.

The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.

So, that's what they decided to do.
The ten men drank in the bar every day and seemed quite happy with the
arrangement, until on day, the owner threw them a curve. "Since you
are all such good customers," he said, "I'm going to reduce the cost of
your daily beer by $20."Drinks for the ten now cost just $80.



The group still wanted to pay their bill the way we pay our taxes so
the first four men were unaffected. They would still drink for free.
But what about the other six men - the paying customers? How could
they divide the $20 windfall so that everyone would get his 'fair
share?' They realized that $20 divided by six is $3.33. But if they
subtracted that from everybody's share, then the fifth man and the
sixth man would each end up being paid to drink his beer. So, the bar
owner suggested that it would be fair to reduce each man's bill by
roughly the same amount, and he proceeded to work out the amounts each
should pay.

And so:
The fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33%savings).
The seventh now pay $5 instead of $7 (28%savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).
The tenth now paid $49 instead of $59 (16% savings).

Each of the six was better off than before. And the first four
continued to drink for free. But once outside the restaurant, the men
began to compare their savings.
"I only got a dollar out of the $20,"declared the sixth man. He
pointed to the tenth man," but he got $10!"
"Yeah, that's right," exclaimed the fifth man. "I only saved a dollar,
too. It's unfair that he got ten times more than I!"
"That's true!!" shouted the seventh man. "Why should he get $10 back
when I got only two? The wealthy get all the breaks!"
"Wait a minute," yelled the first four men in unison. "We didn't get
anything at all. The system exploits the poor!"
The nine men surrounded the tenth and beat him up.

The next night the tenth man didn't show up for drinks, so the nine sat
down and had beers without him. But when it came time to pay the bill,
they discovered something important. They didn't have enough money
between all of them for even half of the bill!

And that, boys and girls, journalists and college professors, is how
our tax system works. The people who pay the highest taxes get the
most benefit from a tax reduction. Tax them too much, attack them for
being wealthy, and they just may not show up anymore. In fact, they
might start drinking overseas where the atmosphere is somewhat
friendlier.


David R. Kamerschen, Ph.D.
Professor of Economics
University of Georgia

Nice anecdotal story, but it doesn't look at the entire tax structure. Instead, it looks at the Federal Income Tax in a vacuum, and thus only gives you a partial glimpse at a part of the tax structure.

Hey! It is possible to put a moderator on ignore.

Endzone2 Wrote:Hey! It is possible to put a moderator on ignore.

EZ2, you are totally clueless. Do you understand the tax code, or did you just see a good story and thought..."Hey, I can tell that to my friends and they will think I am smart"?

Insult away, my comment on this thread wasn't even directed at you.

HuskiesComeOnYouHuskies Wrote:

dynovinyl Wrote:

klake87 Wrote:Keep voting the dems in and we will pay more and more. Not saying that the Republicans don't spend but they believe(as I do) that cutting taxes stimulates the economy and generates increased revenue. Raising taxes(or repealing those enacted currently) stunts the growth of our economy. Maybe there are less hand outs under republicans(good thing in my eyes) but personally, I will pay less taxes.

...and yet your fiscally conservative republican President has run up the worst debt in U.S. history.

that's because of the war.

That he started all based on a lie.

onlinepole Wrote:

HuskiesComeOnYouHuskies Wrote:

dynovinyl Wrote:

klake87 Wrote:Keep voting the dems in and we will pay more and more. Not saying that the Republicans don't spend but they believe(as I do) that cutting taxes stimulates the economy and generates increased revenue. Raising taxes(or repealing those enacted currently) stunts the growth of our economy. Maybe there are less hand outs under republicans(good thing in my eyes) but personally, I will pay less taxes.

...and yet your fiscally conservative republican President has run up the worst debt in U.S. history.

that's because of the war.

That he started all based on a lie.

I have to agree with you. That WMD thing was a snow job, but I knew it was the first day I heard it--didn't you? I think Bush just wanted to finish the job that his dad didn't. But, I am glad Saddam Hussein and his thugs are dead. That is certainly one good thing that has come out of this.

BTW onlinepole which party is going to secure our border with Mexico and stop the 4,000 illegal Mexicans from pouring in every day? Which party is going to stop exporting our jobs overseas and importaing labor to take the jobs we do have? Which party should I vote for?

Regarding taxes, 99.5% of folks do not fully understand the complexities of the tax code or structure. I would fall into that category too, like yourself.

Though an anecdote, it is spot on accurate. It would also apply to any income tax and just as accurately.

What is not conveyed, and likely missed or misunderstood is that tax revenues go up when taxes are reduced. Significantly. So the argument that the cash coming in is reduced is false.

Aside from tax rates and tax revenue the real issue is the short sightedness of American citizens. Understandably, most are only concerned about their own perceived needs. If they perceive a benefit, they are happy for someone else to pay higher taxes. The problem is two-fold. Either they are paying into that till too and don't remotely know what it is costing them or at one time or another are paying for someone elses benefit with the same ignorance. That ignorance allows pols to continue to load pork spending onto numerous bills w/o most citizens knowledge. Unbundle that type of spending, put clearly on the table and most citizens would rightly put a halt to it. Shortly thereafter, most would begin to realize the gradually growing burden of unneccessary taxes they spend. Look at your telephone bill as an example.

Though the tax code(s) are (unnecssarily) complicated the debate really centers on tax fairness. That removes all the technicalities and allows for the discussion to move forward, IMO.

Endzone2 Wrote:Hey! It is possible to put a moderator on ignore.

Hey, that's great. I'm happy for you.

Karl Wrote:

Endzone2 Wrote:Hey! It is possible to put a moderator on ignore.

Hey, that's great. I'm happy for you.

Thanks Karl!!!

What is not conveyed, and likely missed or misunderstood is that tax revenues go up when taxes are reduced. Significantly. So the argument that the cash coming in is reduced is false.
[/quote]

So if we eliminated all taxes the government's revenue would be infinite?
I'm sure there are some serious limitations on this statement.

Eliminate taxes? Who said that?

When tax rates are high two things happen.
People shelter their income to avoid paying taxes to keep more in their possession. The result is less is made available to be taxed resulting in a reduced tax revenue.

When tax rates are reduced, people actually invest and spend more of the money they earn. The money accumulates faster, more is spent, more is invested and more is moved from one investment to another. The end result aside from the primary benefit of faster wealth accumulation and or acquistion of consumer goods is that more $ are exposed to taxable situations, albeit lower rates. More $ taxed generally equates to more tax revenue.

A good example of this that I heard close to a decade ago was regarding a tax New Jersey was going to put on luxury watercraft. Legislators in Pennsylvania and Delaware got wind of this and cut taxes on the same. New Jersey's sale of the targeted boats plummetted to near zilch. Though with a higher rate they garnerd nothing compared to either Delaware or Pennsylvania that increased sales, had lower rates and raked in more tax revenue than the dopes in NJ.

Only a liberal would argue that increasing the tax burden would be fair to most, and is automatically going to increase revenue.

gobaseline Wrote:Eliminate taxes? Who said that?

When tax rates are high two things happen.
People shelter their income to avoid paying taxes to keep more in their possession. The result is less is made available to be taxed resulting in a reduced tax revenue.

When tax rates are reduced, people actually invest and spend more of the money they earn. The money accumulates faster, more is spent, more is invested and more is moved from one investment to another. The end result aside from the primary benefit of faster wealth accumulation and or acquistion of consumer goods is that more $ are exposed to taxable situations, albeit lower rates. More $ taxed generally equates to more tax revenue.

A good example of this that I heard close to a decade ago was regarding a tax New Jersey was going to put on luxury watercraft. Legislators in Pennsylvania and Delaware got wind of this and cut taxes on the same. New Jersey's sale of the targeted boats plummetted to near zilch. Though with a higher rate they garnerd nothing compared to either Delaware or Pennsylvania that increased sales, had lower rates and raked in more tax revenue than the dopes in NJ.

Only a liberal would argue that increasing the tax burden would be fair to most, and is automatically going to increase revenue.

Likewise, reducing taxes isn't automatically going to increase revenue. Certainly the correlation is there and in some cases it will. But the increase in consumption has to be more than the loss due to the tax reduction, and that may or may not happen. My point was that if you take the tax reduction hypothesis to its logical conclusion, you would just get rid of taxes altogether, because that would maximize the money available for consumption and investment.

So you agree that by reducing tax rates you can, as has been done, increase the tax coffers?

The logical progression, IMO, for reducing the tax burden, is not to eliminate them. That is illogical, for the obvious conclusion you draw.

Liberals have historically, fought the reduction of tax rates. They resort to demonizing those who have been fortunate to have financial resources, including taxable income and wealth.

There are clearly services that the government must provide and be financed by taxes. But the tax system, the tax rates specifically, had become onerous.

I find it funny now that liberal politicians claim they want to ONLY lower taxes on the "wealthy". The reason for this slight shift away from cradle to grave government dependence is that ANYONE is considers themselves middle class KNOWS that the tax rate cuts have put more of their earned income into their pockets not the government coffers.

To overtly suggest that you go back and take more directly away would be political suicide. However, many liberals and liberal pols now want to indirectly tax the middle income group by "shifting the definition of middle income" and still target that groups employers. The very ones who provide the income to the MIG to begin with. Employers are not in the business to provide jobs. They are in business to make a profit. They take the investment risks that generate the capital that makes payroll. To go after them will simply be passed on to the MIG.

It's not too difficult to understand.

gobaseline Wrote:So you agree that by reducing tax rates you can, as has been done, increase the tax coffers?

The logical progression, IMO, for reducing the tax burden, is not to eliminate them. That is illogical, for the obvious conclusion you draw.

Liberals have historically, fought the reduction of tax rates. They resort to demonizing those who have been fortunate to have financial resources, including taxable income and wealth.

There are clearly services that the government must provide and be financed by taxes. But the tax system, the tax rates specifically, had become onerous.

I find it funny now that liberal politicians claim they want to ONLY lower taxes on the "wealthy". The reason for this slight shift away from cradle to grave government dependence is that ANYONE is considers themselves middle class KNOWS that the tax rate cuts have put more of their earned income into their pockets not the government coffers.

To overtly suggest that you go back and take more directly away would be political suicide. However, many liberals and liberal pols now want to indirectly tax the middle income group by "shifting the definition of middle income" and still target that groups employers. The very ones who provide the income to the MIG to begin with. Employers are not in the business to provide jobs. They are in business to make a profit. They take the investment risks that generate the capital that makes payroll. To go after them will simply be passed on to the MIG.

It's not too difficult to understand.

What I was saying, which you seem to agree with, is that at some point it no longer helps to cut taxes. No one can definitively say where that point is or if we are already at that point. We don't know if tax revenues will increase when we cut taxes.

Also, what bothers me, is when politicians insult our intelligence by claiming they are going to cut taxes, imply that they will be able to increase spending (either by not cutting anything, or conveniently omitting the fact that some things will be cut), and still balance the budget. The result is the largest deficits we've ever seen. And that will eventually lead to higher interest rates, which will hurt the economy. But it won't happen right away. It will happen a little ways down the road when the next president is in office, who will get blamed for it.