Can A Conservative Tax Plan Benefit All Social Classes?

[Macfistowannabe]

Don't get me wrong, I find Bush's $1.3 trillion tax cut rather extreme. But I also think that quite a few people who make $200,000 or more a year have businesses and can offer more jobs if they can afford to hire more people. This could benefit both the underpriveliged class, middle class, and the unemployed. It can also increase spending, in theory, because it promotes economic activity. Maybe this helps bring a little logic to reaganomics.

What do all you Alan Greenspans think?

 

[U2Kitten]

All I know is, Republican tax plans always help me better personally. My husband is a civil service worker, and his tax breaks, raises and benefits are always better under the Rep. When Dems are in there, they block our raises, cut out our COLAs (cost of living increase, raise) and our health care premiums shoot way up. Not only the rich are helped. Look at it this way, the rich save more because they have more, but everyone saves, per capita, prorated to their own situation.

 

[verte76]

Very interesting and good food for thought for this liberal. Do I have it all wrong?

 

[blueyedpoet]

That's assuming when the rich have more money they feel benevolent...but for some reason the saying is true, rich get richer while the poor get poorer

 

[popshopper]

Don't get me wrong, I find Bush's $1.3 trillion tax cut rather extreme. But I also think that quite a few people who make $200,000 or more a year have businesses and can offer more jobs if they can afford to hire more people. This could benefit both the underpriveliged class, middle class, and the unemployed. It can also increase spending, in theory, because it promotes economic activity. Maybe this helps bring a little logic to reaganomics.

What do all you Alan Greenspans think?

Ah the trickle down myth. Reagan, Thatcher, Bush what do they all have in common. They cut the upper band of tax, in the belief that it would cause the rich folks (who incidentally give those politicians lots of money) to go out and spend more money, employ more people, and drive the economy. Result of this fantastical bit of nonsense...huge deficits and high unemployement.

The secret is this...if a rich person gets more money they save it (it's how they got rich), if a poor person gets more money they spend it on necessities. Middle class people either invest (in the hopes of become rich) or start spending on luxury items.

Economic growth is dicated by demand. A 'rich' person doesn't hire more people because he's feeling flush, he hires people because he's needs to fulfil customers orders.

Cutting the upper tax band is at best a very poor way of driving demand. Cutting the lower bands by a smaller amount works better, because the extra money goes straight back into the economy.

The other fallacy is that rich people drive the stock market. Wrong, pension funds and middle class investors make up the vast majority of shareholders.

 

[blueyedpoet]

well said popshopper

 

[verte76]

Yeah, thanks popshopper.

 

[U2Kitten]

Well, it's true most rich will never feel benevolent. However, I don't believe it's the government's place to take their money away from them and spend it as THEY see fit. I don't always agree with what the gov't does with their (our) money either. I am someone who is made sick by the thought of some people having $10million or more sitting in a bank while some can't pay their electric bill. But I also don't like the concept of the government taking people's money. They're both wrong.

 

[U2Kitten]

Since I don't trust the gov't, I have a suggestion that will never come to pass- in leiu of taxes, rich people and corporations could pay some of what they owe directly to charities of their choice.

 

[popshopper]

Since I don't trust the gov't, I have a suggestion that will never come to pass- in leiu of taxes, rich people and corporations could pay some of what they owe directly to charities of their choice.

what about defense, roads...etc. some things have to be centrally paid for. The main problem is that the US government likes to spend far more money than it has.

I'm actually the opposite for you in this respect. The price of society is taxes, a tax scheme should be progressive (the poor pay less, the rich may more) simply because (for the reasons outlined above) it fuels the economy and allows everyone to be better off.

Of course if I lived in American I'd probably be classed as a communist but since I live in the UK I'm more than happy to get decent healthcare for the price of my taxes. At least everyone as access.

 

[blueyedpoet]

yes, i am often called a socialist like it's a bad thing

 

[BVS]

Well, it's true most rich will never feel benevolent. However, I don't believe it's the government's place to take their money away from them and spend it as THEY see fit. I don't always agree with what the gov't does with their (our) money either. ... But I also don't like the concept of the government taking people's money. They're both wrong.

Then how will the country ever pay for anything. I love how no one wants to pay taxes, yet they want the best security and such that money can buy. Just like pops use to say "money doesn't grow on trees."


Popshopper is absolutely right the theory of trickle down is nothing but that, a useless theory.

 

[verte76]

It's a cultural/historic thing, really. I mean, heck we Americans started the Revolutionary War over taxes. I can see what you're saying about taxes and services. This makes me more leftist than most Americans, to be perfectly honest. I hope this doesn't piss anyone off. I have political views more like a Canadian or a European. It's sort of strange really.

 

[verte76]

yes, i am often called a socialist like it's a bad thing

Me too. I don't think it's bad at all. Granted, it's not everyone's cup of tea and that's fine. That's why democracies have conservative parties to vote for if you don't like that approach. I want to at least have the chance to vote for something a little further left, although there's not a chance in hell of them getting elected in the U.S. I've gotten used to this, when I vote for someone who wins I'm usually in shock.

 

[U2Kitten]

what about defense, roads...etc. some things have to be centrally paid for.

That's why I said 'some of'

The main problem is that the US government likes to spend far more money than it has.

Exactly, it sure does, and THAT is why I am eternally against candidates who mandate raising taxes as a way to solve problems or reduce the deficiet. Bullshit. The more they take the more they'll find a way to spend it, they're not paying off jack shit, just spending more. It's like your average person who gets a $500 bonus at work, are they going to pay off a bill or go on a skii trip or buy a plasma TV? It's the American way. But I waste enough of my own money, I don't need them to do it for me!

 

[BVS]

Exactly, it sure does, and THAT is why I am eternally against candidates who mandate raising taxes as a way to solve problems or reduce the deficiet. Bullshit. The more they take the more they'll find a way to spend it, they're not paying off jack shit, just spending more. It's like your average person who gets a $500 bonus at work, are they going to pay off a bill or go on a skii trip or buy a plasma TV? It's the American way. But I waste enough of my own money, I don't need them to do it for me!

So basically you're for tax cuts so that everyone can run up their debt? Our poor grandchildren.

 

[U2Kitten]

So basically you're for tax cuts so that everyone can run up their debt? Our poor grandchildren.

No, I'm not saying that should happen, I'm saying that WILL happen, because that's how the people and the government are. Grandchildren? Sorry I'm having too much trouble raising my own children, now. And don't call me stupid or selfish, fuck that, I'm suffering enough NOW.

As a Bible verse goes, (perhaps NBC could find the exact passage) "Don't worry too much about tommorrow, for today holds enough worry of its own."

It's pointless to throw away today thinking about someone 100 years from now anyway, hey, I had to deal with it, they'll deal with it when the time comes or die trying like the rest of us. Besides, I firmly believe NO FUCKING TAX INCREASE will EVER go to reduce the deficiet, because the government will find a way to waste it. I'm sure you'll find a way to call me stupid for this, well, I think anyone who doesn't see this is pretty darn lame. I've seen it all my life (be 35 in couple weeks)

I do see your point and your philosophy, but it does not work, never has, never will with our current system of gov't (both parties) so I'm not falling for it.

 

[kobayashi]

Bullshit. The more they take the more they'll find a way to spend it, they're not paying off jack shit, just spending more.

for your consideration,

alberta, a conservative powerhouse in canadian provincial politics, has, on the strength of rising energy prices, paid off its deficit as of this spring i believe.

or,

federal canada. where budget surpluses are, by law, required to pay down the deficit. canada being the only g7 to run surpluses in recent memory, our deficit is being comparatively attacked.

it is possible. it comes down to political will and the expectations and willingness to pay of constituents.

but there are examples of developed nations attacking deficits.

 

[BVS]

No, I'm not saying that should happen, I'm saying that WILL happen, because that's how the people and the government are. Grandchildren? Sorry I'm having too much trouble raising my own children, now. And don't call me stupid or selfish, fuck that, I'm suffering enough NOW.

As a Bible verse goes, (perhaps NBC could find the exact passage) "Don't worry too much about tommorrow, for today holds enough worry of its own."

It's pointless to throw away today thinking about someone 100 years from now anyway, hey, I had to deal with it, they'll deal with it when the time comes or die trying like the rest of us. Besides, I firmly believe NO FUCKING TAX INCREASE will EVER go to reduce the deficiet, because the government will find a way to waste it. I'm sure you'll find a way to call me stupid for this, well, I think anyone who doesn't see this is pretty darn lame. I've seen it all my life (be 35 in couple weeks)

I do see your point and your philosophy, but it does not work, never has, never will with our current system of gov't (both parties) so I'm not falling for it.

Calm down no one's calling you stupid or selfish.

Believe me I understand where your cynicism comes from, but you don't have to throw away today to think about tomorrow. They can go hand in hand. Call me optimistic. But countries are paying off deficits. I understand where your hesitant to think tax increases will go towards paying these off, but with cooperation and work they can. Tax cuts on the other hand never can.

 

[nbcrusader]

As a Bible verse goes, (perhaps NBC could find the exact passage) "Don't worry too much about tommorrow, for today holds enough worry of its own."

Matthew 6:33-34

"But seek first his kingdom and his righteousness, and all these things will be given to you as well. Therefore do not worry about tomorrow, for tomorrow will worry about itself. Each day has enough trouble of its own."

 

[LPU2]

I understand the theory behind supply-side economics. I even think it can work, but only to continue a thriving economy. Bush is using it to revive an economy and that is exactly the wrong thing to do in my opinion.

In a strong economy it makes sense to cut taxes on business and the wealthy. In a strong economy, finanical security and confidence spurs investment, growth and hiring. But in a bad economy, business does the opposite. Prudence and uncertainty force businesses into a shell. They keep the tax cut money, spend little and ride out the recession, meanwhile, because of the tax cuts, the debt explodes before our eyes.

A tax cut for the wealthy, in a bad economy, at a time of war, is a sign of shocking ineptitude on the part of the Bush administration. 30 years from now we're going to look back at this administration and wonder how we let it happen.

 

[U2Kitten]

Matthew 6:33-34

"But seek first his kingdom and his righteousness, and all these things will be given to you as well. Therefore do not worry about tomorrow, for tomorrow will worry about itself. Each day has enough trouble of its own."

Thanks!

 

[pax]

I like the lilies of the field one, too. I think it's right around the same place.

 

[nbcrusader]

I like the lilies of the field one, too. I think it's right around the same place.

Matthew 6:27-29

"Who of you by worrying can add a single hour to his life?
And why do you worry about clothes? See how the lilies of the field grow. They do not labor or spin. Yet I tell you that not even Solomon in all his splendor was dressed like one of these."

 

[Flying FuManchu]

The secret is this...if a rich person gets more money they save it (it's how they got rich), if a poor person gets more money they spend it on necessities. Middle class people either invest (in the hopes of become rich) or start spending on luxury items.

This is not fact and filled with generalities... just as "trickle down" is filled with generalities and theory.


Working in retail in extremely poor neighborhoods and knowing people who own businesses in such neighborhoods... poor people rarely spend "their" money on necessities. This is coming from living in both the midwest and the south. The rich also do not "save" in the conventional sense. Stocks, bonds (such as tax free municipal bonds which actually contribute to the local government cash that they need in order to maintain local government) are investments that that help businesses, companies, and government. The rich spend money on that crap. Those tax free bonds are probably how Theresa Heinz Kerry was able to pay so little in taxes.

Again... things aren't as simple and cut and dried. This can be a potentially interesting debate. I'm not completely "knowledgeable" about tax issues and how it relates to the economy but I know that there are exaggerations on both sides of the issues in terms of tax cuts and tax hikes.

"Trickle down" is theoretical...

IMO the question is which is more beneficial to, as Bush would say, "Grow our economy." One thing was certian during the Clinton years, the stronger the economy (more new businesses and industry and growth) the more able the governement is to cutting the debt and deficits and such.

 

[Flying FuManchu]

Re: Re: Can A Conservative Tax Plan Benefit All Social Classes?

Ah the trickle down myth. Reagan, Thatcher, Bush what do they all have in common. They cut the upper band of tax, in the belief that it would cause the rich folks (who incidentally give those politicians lots of money) to go out and spend more money, employ more people, and drive the economy. Result of this fantastical bit of nonsense...huge deficits and high unemployement.

The secret is this...if a rich person gets more money they save it (it's how they got rich), if a poor person gets more money they spend it on necessities. Middle class people either invest (in the hopes of become rich) or start spending on luxury items.

Economic growth is dicated by demand. A 'rich' person doesn't hire more people because he's feeling flush, he hires people because he's needs to fulfil customers orders.

Cutting the upper tax band is at best a very poor way of driving demand. Cutting the lower bands by a smaller amount works better, because the extra money goes straight back into the economy.

The other fallacy is that rich people drive the stock market. Wrong, pension funds and middle class investors make up the vast majority of shareholders.

IMO no one truly knows what kind of tax cut (middle class, upper class- defintely not the poorer classes b/c they actually get money/ benefits from the government more than what they give in taxes) actually benefits the US economy as a whole. So many variables can effect the way a specific tax cut may work as well as how governement responds. During the Reagan years, the tax cuts were beneficial IMO (the years where I'm assuming you believe trickle down is "proven" to be a myth), however one has to consider the government spending of the time (which was tons). That is why, Bush and company are making a point to cut spending down for the next couple of years. Do I think that will happen. LOL... I don't have an answer to that.

However, I can't really disagree with this point that you made...

Economic growth is dicated by demand. A 'rich' person doesn't hire more people because he's feeling flush, he hires people because he's needs to fulfil customers orders.

However, that is not always a set case. Just ask General Motors.

 

[Flying FuManchu]

Again it is not cut and dried in terms of who is actually more likely to save... the middle class or the upper class. I would love to know if there is actual information concerning this area. Again, it probably depends on the environment and other factors.

 

[Flying FuManchu]

Also what is rich? A family of four that makes a little over $200,000 a year before taxes? IMO, that family probably earns their money through hard work (you have to in order to get that wage outside of celebrity). People would say that is rich. Hell, in my mind that is rich. However, that wage in a huge urban area with a high cost of living, payment of loans, and savings for the future such as children's education/ needs, and then your own necessities and recreational junk. That high amount of money comes down a bit. And people scream, that tax cuts for people like that is unfair. Hmmmm....

I agree with U2Kitten, in the sense that I want to see the needs of the poor/ lower income met but I get a sick taste in my mouth just as much from the idea of government taking money that many people work for just b/c they make more money above the mean income.

How about making it a tax option for the wealthy who want tax increases to put in more than what they actually give.

I'm actually interested in seeing what Bush has to offer in this front considering he is harping about tax reform.

 

[Macfistowannabe]

A lot of interesting responses so far. Just when I thought taxation wasn't much of a key political issue, it seems everyone has an opinion on it. From what I've seen in my lifetime, I've seen conservative tax plans work sometimes, and other times, not so well. Nowadays, it could be that 9/11 closed down and hurt a lot of businesses, or not enough economic wisdom, or maybe a combination of both, who knows for sure.

I can't really say that I favor either or, but I'm not sure either side will be promoting universal health care anytime soon, unless something funny happens. Yes, some people work their arses off to get where they're at, and some just make a killing because of celebrity status or whatever. I don't think it's fair to say that celebrities should get higher taxes than CEOs though.

The point about taxation starting the Revolutionary War was a reminder that I needed. Maybe taxation is an important issue, after all, we wouldn't really have this country if we didn't win a war over taxation. (no offense England)

 

[Flying FuManchu]

I don't think celebrities deserve higher taxes than CEOs either. However, IMO, the time put in to get that high level wage in their field (relative to their careers) is seemingly so much lower. I mean a successful doctor (of course depending on the field) IMO puts in more time/ work than a successful basketball player. Yet the successful basketball player will see much more money. I mean NBA basketball players don't work for a few months. Practices last 2-3 hrs a day and they have games that last 2-3 hrs... then they make millions. I knew someone who graduated w/ an accounting degree from U of Chicago, got a job right off in NY with home and moving paid for as well as a salary just edging close to $100,000 a year (to start). However, he had to work 60+ hrs a week. That is my perspective about some aspects of celebrity, while writing the above. People might say, the basketballplayer practiced a lot to get there... but the accountant had to study/ sacrifice time to get to his level as well. Sorry... too much Ron Artest news today.