my baseline for changing rates is based upon the fact that we have had three economic crashes in the past hundred years and they are all directly tied to massive tax cuts, especially as they pertain to the wealthy. After World War I the top marginal tax rate was something like 73% so Herbert Hoover lowered them in a series of cuts between 1922-1925 from 73% to 56% to 46% and finally to 25%. This caused a 2-3 year boom in the economy and then in 1929 it crashed. The next massive tax cut comes in 1982. Throughout the sixties and seventies the top marginal rate had never dropped below 70%, after a high of around 90% during the sixties, until Reagan lowered the top marginal rates from 70% to 50% and then to 38.5% (I could be a percent off one way or the other). We experiences 2-3 years of economic boom and then Black Monday, 1987 happens with the savings and loan crisis. Lastly, GWB tax cuts drop the top marginal rates only a little (39.6% to 35%) but significantly drop the capital gains taxes and include several loopholes to allow even further deductions. We had a few good years before the crash of 2008. So you see there is a pattern here and it is no coincidence. further, there is no evidence that tax increases are job killers. in fact, quite the contrary. as I stated in an earlier forum, the top tax rate during the sixties was like 90% yet gdp growth averaged 3.7% for the decade. there is no evidence to suggest that tax increases create jobs but the notion that they are job killers is patently false. from my research on the subject I believe that tax cuts are an excellent temporary measure to infuse the economy with liquidity but only provide a temporary stimulus. if left alone, tax cuts eventually become a drain on liquidity as the wealthy stash away their influx of cash. The Bush Tax Cuts did indeed provide some assistance to the middle class in the form of mortgage deductions, etc. And actually that is a facet of the bush tax cuts that i thought were good because it put money in the hands of the people who need it and who will spend it in ways that allow the money to "multiply" in the economy and impact several businesses and jobs. That said, they too should have been temporary. Of course it is but unemployment is 4% higher than it was 11 years ago so I doubt that revenues have increased over that span. If so, then certainly not a rate that can keep up with the rate of inflation, thus making it, at best, a wash.
Tax cuts are like steroids: used for a short period and under a doctors supervision, they can increase the immune system and help rebuild muscle or tissue. left unchecked they make your dick short.
None of that is objective. In fact it is a logical fallacy. Correlation is not evidence of causation.
It is undeniable. The truly damning part, and what I should have included, is that when marginal tax rates have increased, however dramatically, it has had no ill effects on either gdp or unemployment. I don't know how old you are but if you remember in 1993 when Clinton and the Republicans were duking it out over tax increases, the Republicans made exactly the same argument that they are making today: tax increases would be job killers, would plunge us into the depths of depression,etc. I should know because I was among those who opposed the tax increases at the time. But what happened? We had unprecedented growth and record low unemployment and, in spite of the tax increases, people made a hell of a lot of money.....and not just the wealthy either. All of this said, you have provided nothing to support your side of this argument. Tell me why you oppose tax increases? For arguments sake, let's take the middle class tax cuts off the table and talk only about raising taxes on the wealthiest 1-2%. Why do you oppose increasing taxes on them? What effects do you believe it would have on the economy? On your personal finances? Correlation is not evidence of causation but it also not irrelevant. We have 100 years of economic data supporting the fact that tax cuts are effective only in the short term, that they are not long term solutions and that increasing taxes does not create a negative effect on the economy. Your turn my friend.
If it's absolutely that cut and dried and so undeniably true as you say then can I assume that all of the upper echelon economists see it the same way? Because, the way you state it we should all see this as 2+2=4; like its just a fact. And certainly every top echelon economist should be able to see this undeniable truth. So do they? Or is it just a theory that you agree with?
The 90's economic growth was largely driven by one of the great innovations in the history of civilization. It is impossible to not recognize this. For one, most of the 1%, like 8/10s of them, are W-2 wage earners, and with consumer spending shaky I don't think now is the appropriate time to rip money out of their hands. Especially when there is no end in sight for the governemnt's runaway spending train. I don't think it is appropriate to ask them to shoulder more of the burden when congress can't close a needless military base. Hell those assholes wont't even close a post office. And further, without massive reform of the entitlements (SS, MC, MD) and military spending, tax increase would be akin to the Polish calvary riding out to stop the Nazi blitzkrieg. I have a small (less that 50K most years) side business. I sell vintage action figures on ebay. When the upper middle class tighten up my business all but disappears. I have no doubt it would cost me dearly. I know you think this, but if you line up 100 economists they would tell you 100 different things using the same data. Without considering all the things going on in the economy you can't make the assertions you are making. I am not skilled enough to do such an analysis. Maybe you are. It is a simple matter of who you believe. I know I am a better steward of my money than Congress.
You ask a very good question; one that I have asked myself many times. The answer is that historically, if you look back since all of these metrics were measured, you will see that this has been a non-partisan issue until the eighties. If you just look back at the top marginal tax rates you will see that when our economy went into recession it was very common for congress to easily pass tax cuts to infuse the economy with liquidity. You can also see where the top marginal rates were raised just a few years later as gdp growth picked up and the country got back on it's economic feet. This all changed in the eighties when an ideological movement began within the Republican party, led by William Buckley and others, to limit government by limiting it's resources. This is evidenced by the Reagan tax cuts of 1986 that lowered the top marginal tax rate from 50% down to 38.5%. This time though the effect was the opposite that it had been before because in 1987 the Savings and Loan Crisis brought the economy to it's knees. So much so that shortly after GHW Bush took office he had to recant his pledge not to raise taxes by doing so in order to balance the budget and get our fiscal house in order. To your other point about economists agreeing with this: I think you will find that most economists would agree with this position. You can find an economist from the far left or far right who talks a good game but has no historical or factual basis for their arguments. They are the puppets of the parties but serious economists would not and cannot dispute this. My brother in law is an economist, a conservative economists, and he is actually the one who turned me onto this information. You can find "facts" to support bull shit all day long.....the internet is filled with it. But Truth is another thing.
this I have never denied my friend. I agree with about 75% of this. I have said all along that any tax increase would have to be accompanied by spending cuts to entitlements, defense and some discretionary along with at least a 10 year budgetary plan that would bring us into balance. This would have to be achieved over the course of 10-15 years because doing it faster would be too much of a shock on the economy. I liken it to a drunk who has been drinking heavily for 50 years. If you take away the bottle he will die. You have to slowly get him off of it with medications, etc. Sounds profitable so good for you. If we raise taxes on those in the highest income bracket, we are talking about those who make $372,000 or more per year. I think your business would be safe. Phasing out the Bush Tax cuts would have to start at the top and work their way down as the economy grew and picked up steam. I am not talking about the talking heads economists that you see on political shows. Those are little more than economic hit men who are hired guns to come on shows like Rachel Maddow and extoll the virtues of uber liberal economics or on Sean Hannity that do the same for uber conservative economics. I am talking about serious economists who work in the confines of their offices in Universities and on Wall Street. The ones who actually study the effects of economic policy and understand the finer workings of the economy are real economists. When you have some time look it up for yourself so you don't have to take anyone's word for it.
