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RE: the link I posted above on the tax plans, it looks like Obama's plan helps lower income people more than McCain, does virtually the same thing for the middle class as McCain's plan, and completely assfucks people making over $2.9 million per year. Since I can't see myself in that tax bracket over the next 4-8 years/ever, I'm fine with it.

The thing that cracks me up about McCain's plan is somehow, everyone pays less than they are paying now. It's just not realistic.

The thing that cracks me up about McCain's plan is somehow, everyone pays less than they are paying now. It's just not realistic.

Hope!

Hope is definitely the theme of every campaign and McCain might be the only one who uses it as much as Obama, but what do you think of the plans?

That's the question.

The thing that cracks me up about McCain's plan is somehow, everyone pays less than they are paying now. It's just not realistic.

Hope!

Actually, it is realistic. What you fail to ignore is that when tax rates go down, revenues actually go up. This is the point that Obama got stuck on in the debate. Every time capital gains tax rates have been reduced, the amount of capital gains tax revenue raised increased.

How is it possible you say? Because when people are being taxed at a lower rate, they're more inclined to take a capital gain in a certain year than if they're being taxed at a higher rate.

The inverse will happen if the mass populi knows a tax increase is coming. I.E. If Obama wins the election and states that he will be raising capital gains taxes, people will start cashing out their stocks before the higher tax rate takes affect, thus you'll see a surge in revenues directly before the tax increase, and a marked decrease in revenues once it takes effect.

The problem with any strictly mathematical analysis of tax rates is that it doesn't account for human behavior. It assumes same behavior year to year no matter what the tax rate is, which is definitely not true.

Fair enough, but why does the government start showing massive deficit issues every time tax cuts are imposed for any duration of time?

I'm asking, not disputing anything you're saying. I'm just looking big picture and trying to understand.

Actually, it is realistic. What you fail to ignore is that when tax rates go down, revenues actually go up.

Revenues can go up. It depends which taxes are cut and to what extent.

From the supply-side argument (which it appears you're incorporating), there a point of maximum tax revenue that is reached when taxes are at a certain point. Raise them too much and it chokes the private enterprise. Lower them too much and you reduce tax revenues.

Some of the more recent economic booms have taken place after targeted tax cuts. I'm thinking of the Kennedy tax cuts, Reagan's tax cuts and Bush's 2001 cuts.

I favor a corporate tax rate cut because I think it will make US corporations more competitive internationally if they have more assets and capital to develop R&D, resources, and emerging markets.

I'm not sure the individual tax rates need much tinkering, though an overhaul of the tax system is long overdue. That is, if it stays as is, it wouldn't bug me. If they simplify tax codes for small businesses and for individuals, I'll gladly lend support.

Wanna help the US? Put a majot tarriff on shit goods from China et al

Fair enough, but why does the government start showing massive deficit issues every time tax cuts are imposed for any duration of time?

I think much of it has to do with growing the government at all levels and the diminishing ability to raid the left-over Social Security funds to make deficits look better. Even during the "balanced budgets," we ran huge deficits because they were allowed to use SS money to level the books.

Tariffs will help working Joes but hurt the bluebloods such as yourself, EAG.

I agree with your premise, NC, but the truth of the matter is that tax cut is really just channelled into profits not reinvestment into R&D. I don't know enough about businesses in general, but I can tell you from a phramaceutical co. standpoint, there is less that is invested into R&D and the numbers quoted are often WAY overstated. Generally, most R&D has been "outsourced" to local universities in partnerships (which is fine since the intellectual property is generally joint between researchers, university and said company), HOWEVER, it doesn't mean that if you tax them less, they are going to give more to their employees or the company per se. Those gains are realized as profit. And THAT is the biggest motivating factor of all. Work your workers to the bone (despite the Stephen Covey notion of the three year burn out cycle), stretch everything as much as possible to make as much as possible. Outsource to China if its cheaper. And viola.

PS, NEAG, AGREE COMPLETELY. I think if we stopped buying Chinese garbage, then they will either have to cut costs of those products to sell them or risk losing EVEN more trade. We are by and far their largest consumers. Their economy is nearly entirely dependent on us. The only problem is that they are buying up most of our reserves.

Tax breaks do stimulate the economy to a point by re-valuing a commodity by virtue of its earnings which go up. HOWEVER, it often doesn't result in increased collected revenue by the Guvmint. There IS still a need to have those revenues that isn't limited to food stamps or psych wards. They are needed to rebuild a decrepit infrastructure that is laughable.

I favor a corporate tax rate cut because I think it will make US corporations more competitive internationally if they have more assets and capital to develop R&D, resources, and emerging markets.

Exactly. The U.S. currently has the 2nd highest corporate tax rate in the world at 35%. U.S. companies are building factories overseas to avoid this tax. Most other countries have reduced their rates to well below 30%, and have seen revenues increase.

A quote from the linc'ed article
"The U.S. has the second-highest corporate tax rate in the OECD and yet collects less revenue (as a percentage of total revenue) than other OECD countries with lower rates."
click here

Tariffs will help working Joes but hurt the bluebloods such as yourself, EAG.

Agree, but I think an average American should be able to sustain his family with a job that requires a H.S. education. He may not live in luxury, but still I'd rather him have the job than Red China

Fair enough, but why does the government start showing massive deficit issues every time tax cuts are imposed for any duration of time?

Unfortunately, for some politicians, more tax revenues then mean more money to spend, so they try to institute more spending, which of course depletes the extra cash that actually arrived via the extra revenue.

I agree with your premise, NC, but the truth of the matter is that tax cut is really just channelled into profits not reinvestment into R&D.

I think the American corporate environment is healthy enough to know that increased profits can mean attacking the market share of competitors.

Let's remember, though, that corporations have a responsibility to shareholders to profit. This compact is what will keep your 401K or Roth IRA in good shape as you get older.

Going after profits for noble ends is good on paper, but a (public) company that can't show profits and pass them along to shareholders or improve market presence devalues and pension plans lose money, individuals lose asset value, and the company looks for ways to further shield tax liability.

In short, going after corporate profits isn't the best strategy in a weakened economy.

I think the American corporate environment is healthy enough to know that increased profits can mean attacking the market share of competitors.


To follow up on that quickly. Oil companies are in the cross-hairs because of profits.

They want to drill in the US.

They want to reinvest within our borders and we are stopping them.

So, what should they do with their money? Explore/develop elsewhere. Pass along to shareholders. Recruit top executives.

If we let them, they will pour profits back into our economy. However, we have weighed and measured and decided to stop them from developing fields in our borders and exploring new opportunities in our borders. We have environmental concerns.

It doesn't change the fact that the businesses would reinvest in our borders if they were allowed to do so.

The bottom line is that there is ample evidence that the added benefit from drilling in Alaska is no more than 200k barrels per day. We use 20 MILLION/day. Do you really think that eases the crunch? The bottom line is that fuel efficiency, alternative energy and some more judicious usage overall is in order.

I think that the "oil company" revenues are bullshit. They purchase agreements for costs that are established in 10 to 20 year increments. They are paying the prices of upto 20 years ago today. They then pass the current market value onto you. The problem is that this has a complete cascade of effects to the economy. EVERYTHING costs more. Travel, food, energy to heat or cool homes, getting to work, work expenses, etc. There has to be some give in light of windfall profits. Sorry, you can't rape Joe Public and call it good business based on a "speculator's" rate.

I don't buy into the notion of "unfairly" taxing them. Their profits directly result in wholesale inflation. That feeds off itself and directly impacts the economy in numerous, obvious ways.

Jules,
My point was more along the lines of how a corporation would use their profits. I used the oil companies as an example.

Along the lines of energy policy, we've danced around for decades and done nothing to make us less foreign energy dependent.

But that song has come to an end, and the dance is over. It needs to be. Can't be the children of yesteryear begging mommy and daddy to stay at the zoo a little longer.

As for corporate profits, I agree with the premise, but the workings are different. It shakes out that if you had more profits because you get taxed less, then you have more profits to show to your shareholders. Is all. No reinvestment, unless it is to reinvest in stocks, etc. The true strategic planning of the past is gone. Maybe it never was. In today's corporation, today's buck is the most important.

This is an interesting question...would either of these rats be eligible to run for President if born in Freedom?


Yo, click it

Actually, it is realistic. What you fail to ignore is that when tax rates go down, revenues actually go up. This is the point that Obama got stuck on in the debate.

This is not sound logic. It is possible, and in some cases very likely, to be true, but as a statement it is not sound. The question is whether current rates are such that revenues are likely to go up or down with the change in tax rates. You have yet to hear much intelligent discussion on this issue. And don't expect it. Economists, whose purview this really falls to, are divided on the issue. What may appear as ideological differences is, in this case, the manifestation about differing beliefs are the responsiveness of revenues to changes in the neighborhood of the current rates.

The problem with any strictly mathematical analysis of tax rates is that it doesn't account for human behavior. It assumes same behavior year to year no matter what the tax rate is, which is definitely not true.


Again, not true. You are speaking about "static" analyses; "dynamic" analyses incorporate the behavioral response you are talking about. The problem with dynamic scoring is that small changes in the underlying assumptions can yield very significant changes in the eventual conclusions; the models are not robust to changes in certain assumptions.

In general, this is a common feature of analysis that involves money and the future. Compounding is incredibly powerful and can magnify even seemingly inconsequential changes until the conclusions are almost completely different.

As an example, $1000 invested today and compounded daily at an interest rate of 3.5% is worth over $11,500 after 70 years while an interest rate of 3.25% would be worth only $9700. Generally, the assumptions different ideological adherents exhibit a much large range than .25% and the sums being compounded are significantly larger than one grand.

Has anyone bought one of these, not as a joke?
link

I don't get it.

I don't think he is getting alot of African American support

Veep selection committee guy resigned (the guy from Fannie Mae).

Actually, it is realistic. What you fail to ignore is that when tax rates go down, revenues actually go up. This is the point that Obama got stuck on in the debate.

This is not sound logic. It is possible, and in some cases very likely, to be true, but as a statement it is not sound.

Lower tax rates (corporate, capital gains, income) encourage investment across the board, thus increasing possible revenue sources. This is absolutely sound logic, and something that virtually all economists agree on.

"Higher Corporate Income Tax Rates Don’t Guarantee Higher Revenue
Many people would expect high tax rates to yield high tax revenues, but the reverse is often the case. Collection data from 2002 (most recent) demonstrate that many countries with high corporate tax rates — such as the U.S., Germany, and France — have lower-than-average corporate tax collections as a percentage of total tax collections. In fact, of the 13 states with above-average corporate tax rates, nine of them have below-average collections."

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