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Old 10-18-2008, 03:36 PM
 
Location: Bradenton, Florida
27,236 posts, read 40,310,013 times
Reputation: 10915

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Quote:
Originally Posted by BigJon3475 View Post
Those years were some of the slowest growth we have ever had.

The problem is once you tax rich folks like that and it still isn't working you can't tax them even more after all they are an infinite source of tax income. Eventually it rolls down and people don't get rich in our society from taking it laying down.....they pass cost on to the consumer which in turn removes more of their disposable income. It's a domino effect. Of course everyone has the want to be rich or independently wealthy. How effective is this to most Americans? It's effectively like being on the 40 yard line and suddenly moving the goal post 20% further back. You took the chance to even try for a field goal away by doing that. Why was the largest number of millionaires ever registered during the "trickle down" period?

Nope, never wanted to be rich. I'm satisfied with "making do".
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Old 10-18-2008, 04:06 PM
 
Location: Pinal County, Arizona
25,107 posts, read 34,391,056 times
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Quote:
Originally Posted by TKramar View Post
Nope, never wanted to be rich. I'm satisfied with "making do".

Too bad - you don't know what you are missing!
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Old 10-18-2008, 05:16 PM
 
2,180 posts, read 3,190,095 times
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A couple of very interesting charts, though I get different implications from them than you do, I suspect. The 2nd one is easier to discus, so I'm going to take the lazy way out and approach it, first.

At first blush, it certainly would seem to make your case about the slowness of growth over time. Unfortunately, it doesn't have a clean break at the same place as the tax rate changes, but we can deal. In January of 1952, the RGDP was at $2 trillion. It took 20 years to go up another $2 trillion. From 1972, it took 12.5 years to go up the next $2 trillion. From mid-1984, it only took 10 years for another $2 trillion. And from mid-1994, it took a mere 7.5 years to make that same leap. We're looking at 7.5 more years to go from $10 trillion up to $12 trillion, based on where that chart is.

But hold on just a moment.

It took 20 years for the RGDP to double from $2 trillion to $4 trillion. It took 22.5 years for it to double from $4 trillion to $8 trillion. It looks like it will be 25 years for it to have doubled from $6 trillion to $12 trillion. Percentage growth is slower now than it was then, not faster.

In fact, looking back at the 5, 10, 15, and 20 year RGDP growth after a major income tax cut (using 1963, 1970, 1981, and 1986 as my base years), with exceptions, each successive cut has shown a reduction in RGDP for each period. Obviously, the 20 year mark for 1986 is a bit of a negative outlier, and there are two positive outliers, as well. Similarly, the impacts of the 2001/2003 cuts are harder to determine both because of the lack of time and because both sets of data at 5 years are very skewed by 9/11.

Conversely, when I look at the tax increases after 1931 and 1950, I see growth stronger than after the tax cuts, as a general rule, with the 10 year growth stronger than any of the 1970-1986 tax cuts (and averaging equal to 1963's), and the 15, 20, and 25 year growth rates stronger than even the 1963 tax cut.

*******
The first chart is interesting to me. I will note that it is out of date, as Bush's debt to GDP ratio passed the Clinton peak last month and was at 69% as of September 30th - a 53 year high.

I am not convinced that this sharply increasing ratio is a good thing, though I do see that the ratios have been worse...

So, explain to me why what we see in the first chart is a good thing, please? Or, for that matter, having a national debt that 'merely' maintained that 60% of GDP ratio would be good...

Thanks!
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Old 10-18-2008, 05:48 PM
 
406 posts, read 1,380,802 times
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If we need to raise taxes, I would much rather see them raise the gas tax than the income tax.

Greg Mankiw's Blog: The Pigou Club Manifesto


Socially, I think the benefits of a gas tax are much greater than the benefits of an income tax. High US gas taxes mean that people in the US will reduce demand for gasoline. That will push oil prices down. High Oil prices tend to strengthen the hand of dictators in places like Russia, Venezuela and the mideast. If it wasn't for oil, we probably wouldn't be in either Iraq or Afghanistan. For that reason alone, I think we probably should raise the gas tax.

There might also be some greenhouse gas benefits from raising the gas tax too.
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Old 10-18-2008, 06:00 PM
 
27,903 posts, read 33,454,079 times
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I think spending should slow down and allow our GDP to catch up. I'm not happy with the spending. The first chart is from a website clearly blaming republicans for our financial problems but the chart has some merits.

The thing is tax cuts do work. Look at how other nations are trying to compete with US....they are keeping their taxes low and wages low so our businesses take an interest in them.

For a while that 60% was actually reversing. There are watch clocks on the internet for GDP to debt ratios. I don't think it's a good thing it's not going up again. It wasn't until late 2006 where that ratio reversed and started rising again. It only gives an idea of our debt to the ability to pay it off. I don't think we actually want to pay it off.

Just as an example: If a country has a GDP of let's say China: 3.251 trillion they have an investment in us that equals as much as their entire revenue in one year or we owe them close to $674.3 billion which may have gone up since 2007 CIA est. 19.1% of their GDP comes from us. In a way it keeps them wanting us around they could not afford not to.

We are in the wrong direction by spending but taxing more and spending more isn't going to fix it so even though I don't like it I'm going to go with the person still at least acting like he will try to slow spending down. He does have a remarkable record on earmarks. But in Bush's defense it's been a wild 8 years full of disasters and scandals that have caused some serious damage to the economy. I'm truly surprised it's not way worse and part of the reason behind that was the tax cuts. Of course the current financial crisis is always the worst one. Our history proves otherwise.
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Old 10-18-2008, 06:02 PM
 
27,903 posts, read 33,454,079 times
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Quote:
Originally Posted by zen_klown View Post
If we need to raise taxes, I would much rather see them raise the gas tax than the income tax.

Greg Mankiw's Blog: The Pigou Club Manifesto


Socially, I think the benefits of a gas tax are much greater than the benefits of an income tax. High US gas taxes mean that people in the US will reduce demand for gasoline. That will push oil prices down. High Oil prices tend to strengthen the hand of dictators in places like Russia, Venezuela and the mideast. If it wasn't for oil, we probably wouldn't be in either Iraq or Afghanistan. For that reason alone, I think we probably should raise the gas tax.

There might also be some greenhouse gas benefits from raising the gas tax too.

I agree we need to do something. Oil prices are dropping with loss of supply. The lower demand could also help prices in the heating areas of our nation taking some of the burden off the "northerners"
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Old 10-18-2008, 06:58 PM
 
48,519 posts, read 81,130,238 times
Reputation: 17979
That same logic can be put to use in food looking at most americans. Help with the overweight and health care poroblems by eliminating many of teh causes. The stop all alcohol and cigarette sales. Higher gas taxes actually hurt the lower and miidle lcass that have to commute to weork more or use their vehcile for work. Until alternatives are actaully cheaper than gasoline and eqaul it in poweer'you casn forget repalcing it.
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Old 10-18-2008, 07:13 PM
 
406 posts, read 1,380,802 times
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In the short term, you are right the demand for gasoline is fairly inelastic (for many people there are few alternatives to driving) but when you know that gas taxes are going to be permanently higher, it starts impacting the choice of what kind of car you are going to drive and when you will decide to replace the big old clunker with something that gets better mileage. It also has other more subtle effects. When gas prices are higher it makes sense for employers to relocate out of congested cities into suburban office complexes that offer cheaper rents and are closer to surburban workforces. This means shorter commutes for everyone. As more employers move out to the burbs it makes it easier to walk or bike to work.

The net effect, less money for the Hugo Chavez's of the world, smaller US trade deficits, more money staying in the US.
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Old 10-18-2008, 08:08 PM
 
Location: Charlotte
12,646 posts, read 13,623,351 times
Reputation: 1679
Default Is it fair that the top 5-10% pay the majority of taxes?

Quote:
Originally Posted by zen_klown View Post
In the short term, you are right the demand for gasoline is fairly inelastic (for many people there are few alternatives to driving) but when you know that gas taxes are going to be permanently higher, it starts impacting the choice of what kind of car you are going to drive and when you will decide to replace the big old clunker with something that gets better mileage. It also has other more subtle effects. When gas prices are higher it makes sense for employers to relocate out of congested cities into suburban office complexes that offer cheaper rents and are closer to surburban workforces. This means shorter commutes for everyone. As more employers move out to the burbs it makes it easier to walk or bike to work.

The net effect, less money for the Hugo Chavez's of the world, smaller US trade deficits, more money staying in the US.
So, "Is it fair that the top 5 - 10% of the earners pay a higher percentage of their income in taxes than everybody else does?"
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Old 10-18-2008, 08:16 PM
 
27,903 posts, read 33,454,079 times
Reputation: 4016
Quote:
Originally Posted by BigJon3475 View Post
I agree we need to do something. Oil prices are dropping with loss of supply. The lower demand could also help prices in the heating areas of our nation taking some of the burden off the "northerners"
loss of demand dummy.
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