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During the stimulus debate, the argument was that you can't spend your way out of debt, so I'm asking, if you can't spend your way out of debt, how does taking a salary cut help you reduce your debt?
For example, Wisconsin Governor Walker argues that the state needs to make significant cuts in the budget... ok. But how does cutting taxes by 67 million help you pay off your debts?
Let me see now.............................
One simply spends less than what you earn. If you earn less, you spend less.
Cutting taxes stimulates the economy by allowing citizens to keep more of thier money. By increased economic activity, there is more spending and thus more collection of state sales tax. Further, increased private spending stimulates increase demand, which allows buisness to hire, increasing the state revenue pool for taxes.
It is simply amazing to see how liberals think. It is like declaring "opposite day" when you were a kid.
So, 1.4 Trillion deficit and a overall debt of 14 trillion is not spending beyond the income of the US?
Not if you understood previous that debunk this myth that we should not look beyond spending. We should never consider what has contributed to reduction in revenue over the years. Trust me, you would be more credible if you took upon yourself (like the other one I responded to earlier) and were more honest in claiming that the real idea you maintain is to reduce revenue so the government is forced to cut down to only services that you support. Nothing else matters. In other words, the desire to implement “starve the beast”.
Seriously? You don't think if people have more disposable income they won't spend it? That's odd.
Short answer: Not always.
Long answer: Spending is a function of the stage of life you are in. Look at the consumer expenditure survey form the BLS. As people age they spend less even if they have more. The largest generation the boomers have ALL entered they age when they will spend less over time. More income would just go to pay off debt or into savings.
Many in the younger generations would pay off debt or save; frugality is big among Gen-Xers.
This is the main problem we have when we look to our revenue from volatile sources such as income.
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Originally Posted by le roi
Who said we needed to cut capital gains taxes now? I simply challenged the person claiming that lowering the tax rate magically brings in more government revenue. You provided a chart that proves nothing, other than the topic is complicated, which we already knew. Otherwise, I don't know what the hell else you keep accusing me of, "faling into the trap of the elites", or why.
My view is that we need to raise the capital gains rate, because that is the best way to claw back all that credit money we've been printing for the past 20 years and giving to the F.I.R.E. industries. I'm not one of these folks who thinks that increased valuations on financial assets leads the American people (the bottom 95% of us, at least) to greater prosperity -- the assets are concentrated in too few hands, so boosting financial assets with tax dollars is in fact the subsidizing of the rich. The typical "sheep of the elite" belief seems to be that the stock market performance is indicative of the economic health of American families, and this is the assumption that I reject.
You are falling for the elites by participating in the illusion that our best and only way to generate revenue is from the incomes off of our productivity. Every increase or decrease of income, capital gain, dividend and other tax on productivity does nothing to increase or decrease the standing of the common man. It gives the game players more tools and resources to benefit the elite, while causeing the rest of us to falll further behind and spend our time arguing and fighting a battle that takes the focus off of the real issues.
I agree with you 100% that increasing financial assets are meaningless regarding the health of the economy. It is too manipulated and controlled.
During the stimulus debate, the argument was that you can't spend your way out of debt, so I'm asking, if you can't spend your way out of debt, how does taking a salary cut help you reduce your debt?
For example, Wisconsin Governor Walker argues that the state needs to make significant cuts in the budget... ok. But how does cutting taxes by 67 million help you pay off your debts?
This is a troll thread right, just to get peeps think'n? Cause the question cannot be for real. Yeah, this is a joke question to see who's paying attention.
I get it now!
Good one!
(for those who don't get it, cutting the budget doesn't mean cutting taxes. Cutting the budget means not spending so much of the taxes collected. Unless you think that income taxes collected from government employees generates enough taxes to sustain itself, nah, you couldn't believe that.)
Seriously? You don't think if people have more disposable income they won't spend it? That's odd.
Nope. I can present self as an example. My income has increased several times since I started professional career about fifteen years ago. My spending hasn't increased in proportion, not even close. My largest expense is mortgage and any additional increase in income/bonus is going towards that. In fact, at the current rate, I will be a proud home owner in three years from now, and six years ahead of my loan schedule (took a 15-year mortgage).
After that, I will be saving more and continue to invest globally (that I already do to a lesser extent). There comes a point with income that any additional money is better saved/invested than spent.
Seriously? You don't think if people have more disposable income they won't spend it? That's odd.
Perhaps if you had stepped foot in a econ class and read the literature it wouldn't seem all that odd because it is readily established that in times of economic uncertainty individuals and corporations tend to hold on to "disposable" income. (see corporate coffers rise with little expenditure on investments of hiring).
As for my quotation that sparked your were responding?
"Only problem with your argument is that governments aren't profit making entities and only derive income from taxes and while I can fully understand cutting budget liabilities by slashing salaries, benefits and overall employment (other economic costs aside) that would do nothing to increase revenue."
If government slashes both its expenditures and taxes where does the increase in tax revenues come from? By slashing government expenditures you reduce the income of both government workers and those business that they patronize thus reducing their expenditures and any taxes that those expenditures would generate by some marginal rate. By reducing taxes, any amount of taxable income or expenditures by the private sector are also reduced by some marginal rate. Now as a result of state constitutions that require balanced budgets, the requirement to cut government expenditures to meet revenue shortfalls is unavoidable. But to reduce taxes at the same time acts to further exacerbate the very short fall that required the cuts in expenditures to begin with.
Again, the cuts being required by states aren't the result of overspending, but rather the sharp drop in tax revenues spawned by a downturn in the economy. In short, falling tax revenues.
I suppose it takes one troll to recognize another.
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Cutting the budget means not spending so much of the taxes collected.
That's your first gold star, let's how well you do on the rest of the exam.
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Unless you think that income taxes collected from government employees generates enough taxes to sustain itself, nah, you couldn't believe that.)
Ah, no that isn't the argument in the least. Once again, due to statutory requirements states must maintain a balanced budget and the only way to do that during a budgetary short fall is to reduce expenditures. But the fact remains that for every employee or state expenditure there is a cost to the overall economy. The question then becomes what is the marginal rate of lost income to the economy as a result.
When one is borrowing from tomorrows to pay for today, It means one is in debt, no? Then, one must curb spending today, not keep borrowing. Pretty simple.
Basic. I think we learned this in elementary school.
Do you have examples, where this has happened before?
Or did you find this sketched on the back of a napkin by some clown named Laffer?
JFK cut income taxes. Tax revenues to the Feds increased.
Reagan cut income taxes. Tax revenues to the Feds increased.
Clinton cut capital gains taxes. Tax revenues to the Feds increased.
Bush Jr. cut income taxes. Tax revenues to the Feds increased.
The largest take in taxes by the U.S. Federal government happend in 2005 and 2006. Strangely right after Bush cut taxes.
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