Official Fiscal Cliff Discussion

[TLR Is Mental Poison]

I'd word it like this...
In order to continue this recovery we need to continue to build up the middle class, we need to extend these breaks so that the heart of this country can continue to recover, so that working moms and dads can continue to provide. We also need to go ahead and close those loopholes Romney and Ryan were talking about, as we both agreed it was a good idea we should start there.


Now which of these two are you opposed to exactly?
Helping out the middle class.
Closing loop holes.
?

I am not opposed to either. Tax cuts for the middle class haven't worked in 10 years though. So I am not sure why you think the way forward is with more tax cuts. People need jobs and as the last decade shows with our current record low workforce participation rate (fukk UE ) middle class tax cuts don't generate them. Plus tax cuts won't help the deficit. People have been saying for the last 5-6 years we cant raise taxes till the economy gets stronger. But tax cuts are not doing anything for the economy.

Here is what I think we should do. Corporate/business taxes are worthless and are generating a shrinking amt of revenue because corporations have the manpower to weasel out of paying them. And they use them as leverage to screw the middle class over by firing/not hiring/providing healthcare. So ditch those shyts. No more corporate taxes. That will be a huge private sector stimulus. They will start hiring for sure which will actually help the middle class as opposed to tax cuts in income they aren't making. Then a year or so into the recovery begin removing middle class deductions to generate revenue. People with jobs can pay taxes, that is how it worked for 220 or so years, not sure why we should abandon that now.

 

[Brown_Pride]

I am not opposed to either. Tax cuts for the middle class haven't worked in 10 years though. So I am not sure why you think the way forward is with more tax cuts. People need jobs and as the last decade shows with our current record low workforce participation rate (fukk UE ) middle class tax cuts don't generate them. Plus tax cuts won't help the deficit. People have been saying for the last 5-6 years we cant raise taxes till the economy gets stronger. But tax cuts are not doing anything for the economy.

Here is what I think we should do. Corporate/business taxes are worthless and are generating a shrinking amt of revenue because corporations have the manpower to weasel out of paying them. And they use them as leverage to screw the middle class over by firing/not hiring/providing healthcare. So ditch those shyts. No more corporate taxes. That will be a huge private sector stimulus. They will start hiring for sure which will actually help the middle class as opposed to tax cuts in income they aren't making. Then a year or so into the recovery begin removing middle class deductions to generate revenue. People with jobs can pay taxes, that is how it worked for 220 or so years, not sure why we should abandon that now.

so trickle down?
i'll say it again in case you weren't here before
IN this economy people aren't purchasing cause they don't have money. Corporations aren't hiring because people don't have money...Corporations have money, they just aren't going to spend it. That would be dumb. Why give them more money?

Example
You own a bike store. Max production with 1 employee is 10 bikes a month. You are only selling 5 bikes because of low consumption. You get a tax break. What do you do with the money? Hire a worker? Advertise to people with no money? No you keep that shyt in the bank...and that's exactly what corps did with the current tax breaks.

More takehome pay = more consumption = more bikes sold = a need to hire another worker to make more bikes.

 

[TLR Is Mental Poison]

so trickle down?
i'll say it again in case you weren't here before
IN this economy people aren't purchasing cause they don't have money. Corporations aren't hiring because people don't have money...Corporations have money, they just aren't going to spend it. That would be dumb. Why give them more money?

Example
You own a bike store. Max production with 1 employee is 10 bikes a month. You are only selling 5 bikes because of low consumption. You get a tax break. What do you do with the money? Hire a worker? Advertise to people with no money? No you keep that shyt in the bank...and that's exactly what corps did with the current tax breaks.

More takehome pay = more consumption = more bikes sold = a need to hire another worker to make more bikes.

No not trickle down. Trickle down = tax cuts for the rich in the hopes that they will give it to the poor. That shyt doesn't work either and nothing I said suggested anything like that.

In this economy people aren't purchasing because they don't have money. That's true. But why dont they have money. Its not because their taxes are too high. The 2 lowest quintiles (i.e. the bottom 40%) have negative federal income tax rates. In other words instead of paying taxes the govt is refunding all their taxes and then some. The middle quintile is at about 0. And yet they still have no money. So how much more money should the govt print up to get these people to spend. Especially when you consider one of the reasons these folks have no money is because they are either unemployed or underemployed, after the recession wiped out millions of their jobs

Taxes arent the problem, employment is. Tax cuts won't create employment or demand in this economy, taxes for the middle class are the lowest they have ever been and REAL unemployment (1 minus workforce participation rate) is at its highest in years. My suggestion is to play with taxes in a way that will create jobs, so people have the money to spend, and the govt has the revenue to cover its budget.

 

[zerozero]

I am not opposed to either. Tax cuts for the middle class haven't worked in 10 years though. So I am not sure why you think the way forward is with more tax cuts. People need jobs and as the last decade shows with our current record low workforce participation rate (fukk UE ) middle class tax cuts don't generate them. Plus tax cuts won't help the deficit. People have been saying for the last 5-6 years we cant raise taxes till the economy gets stronger. But tax cuts are not doing anything for the economy.

Here is what I think we should do. Corporate/business taxes are worthless and are generating a shrinking amt of revenue because corporations have the manpower to weasel out of paying them. And they use them as leverage to screw the middle class over by firing/not hiring/providing healthcare. So ditch those shyts. No more corporate taxes. That will be a huge private sector stimulus. They will start hiring for sure which will actually help the middle class as opposed to tax cuts in income they aren't making. Then a year or so into the recovery begin removing middle class deductions to generate revenue. People with jobs can pay taxes, that is how it worked for 220 or so years, not sure why we should abandon that now.

wow, it's amazing how your even-handed analysis of the economic situation ended up giving corporations complete tax freedom and raised taxes on the middle class. Tax cuts for the middle class are useful because middle class people spend what they save, creating demand for corporations. Meanwhile thirty years of upper class tax cuts have done nothing to cause median income growth

 

[Dusty Bake Activate]

No not trickle down. Trickle down = tax cuts for the rich in the hopes that they will give it to the poor. That shyt doesn't work either and nothing I said suggested anything like that.

In this economy people aren't purchasing because they don't have money. That's true. But why dont they have money. Its not because their taxes are too high. The 2 lowest quintiles (i.e. the bottom 40%) have negative federal income tax rates. In other words instead of paying taxes the govt is refunding all their taxes and then some. The middle quintile is at about 0. And yet they still have no money. So how much more money should the govt print up to get these people to spend. Especially when you consider one of the reasons these folks have no money is because they are either unemployed or underemployed, after the recession wiped out millions of their jobs

Taxes arent the problem, employment is. Tax cuts won't create employment or demand in this economy, taxes for the middle class are the lowest they have ever been and REAL unemployment (1 minus workforce participation rate) is at its highest in years. My suggestion is to play with taxes in a way that will create jobs, so people have the money to spend, and the govt has the revenue to cover its budget.

How are you not arguing for trickle down? You are calling for an elimination of corporate taxes altogether, a pretty radical idea that the most extreme teabaggers probably wouldn't even support because they "disincentivize investment" which is classic trickle down logic. (Corporations only pay a real rate of 12% btw). And you're calling for tax hikes on the middle class who have the largest capacity to spend and increase comsumption and aggregate demand.

 

[TLR Is Mental Poison]

wow, it's amazing how your even-handed analysis of the economic situation ended up giving corporations complete tax freedom and raised taxes on the middle class. Tax cuts for the middle class are useful because middle class people spend what they save, creating demand for corporations. Meanwhile thirty years of upper class tax cuts have done nothing to cause median income growth

I know it sounds like I am being a Reaganite but lets look at the current parameters

I keep saying it but people don't seem to get it. The middle class basically pays no income taxes after all the tax cuts, stimulus and deductions. And yet the middle class is worse off now than its ever been. More tax cuts won't do shyt, they haven't in the past 10 years.

We are running a $1T deficit. We can't do that forever.

US spends $500B on tax prep because of our convoluted code and the opportunities for the rich + corporations to buy their way out of paying

Corps contribute only 5% of revenue/1% of GDP on taxes, but probably spend 2x that in tax prep. And their piece of the pie has been shrinking steadily from ~6% of GDP in the 60s. It doesnt seem worth it to me when the upside is a huge stimulative effect and a significant weakening of one of the GOP's cornerstones of obstruction.

Reality does not coincide w/the idea that middle class tax cuts will work.

 

[Dusty Bake Activate]

The middle quintile is at about 0.

That sounds like You got a link?

 

[newworldafro]

Going off a cliff.....hope yall got your wingsuits??

 

[zerozero]

All these tax cuts for the middle class were the idea of Milton Friedman and company. The reason they work is that that money gets spent rather than stored in some sheltered account. You can't say the middle class is worse off during a recession after a financial collapse so tax cuts for them don't works so let's raise their taxes During the recovery both upper income people and corporations have been gaining and recovering piles of cash. There is no evidence that some more cash will get corporations to start hiring. They want to see demand.

You just said that workforce participation issues are cause of unemployment insurance!! You sound delusional breh. Can you think of another reason people don't have jobs?

 

[TLR Is Mental Poison]

How are you not arguing for trickle down? You are calling for an elimination of corporate taxes altogether, a pretty radical idea that the most extreme teabaggers probably wouldn't even support because they "disincentivize investment" which is classic trickle down logic. (Corporations only pay a real rate of 12% btw). And you're calling for tax hikes on the middle class who have the largest capacity to spend and increase comsumption and aggregate demand.

Corporate taxes are goofy for a couple of reasons. They introduce inefficiency in the revenue stream as corporations fight tooth and nail not to pay, while politicians use inflated corporate revenue estimations to justify bad fiscal policy. They don't generate a significant piece of revenue (5% of revenue collected, 3% of budget), but they give the GOP a huge ideological weapon to roadblock the Dems with. And they wind up being paid mostly by individuals anyway, as corporate taxes are applied wholly to dividends/earnings. If you have a dividend that pays out $1.00, "corporate taxes" take out up to 35%, and then individual capital gains taxes take out up to another 35%, I think. Why not just make the individual pay the whole 70%?

And you know one of the reasons the middle class is so far below capacity to consume? Weak employment. Middle class tax cuts have been applied time and time again over the last decade and yet demand is still super low. Why do you think it will be any different this time around? Again what good is a tax cut when you don't have a job?

We need to get shyt started and the shyt we have been doing isn't working. Im tired of people talking about middle class tax cuts, in the context of negative middle class effective tax rates. It makes no sense.

And I am not saying to hike tax rates right away. I don't think we should raise any taxes until the economy has momentum. But I do think we need to try something different, and also deal with the deficit.

 

[TLR Is Mental Poison]

That sounds like You got a link?

Cmon bro why would I say that if I couldn't back it up. Look it up.

Historical Effective Federal Tax Rates for All Households

We are talking about federal income tax correct? That is what the second data group breaks down.

 

[TLR Is Mental Poison]

All these tax cuts for the middle class were the idea of Milton Friedman and company. The reason they work is that that money gets spent rather than stored in some sheltered account. You can't say the middle class is worse off during a recession after a financial collapse so tax cuts for them don't works so let's raise their taxes During the recovery both upper income people and corporations have been gaining and recovering piles of cash. There is no evidence that some more cash will get corporations to start hiring. They want to see demand.

You just said that workforce participation issues are cause of unemployment insurance!! You sound delusional breh. Can you think of another reason people don't have jobs?

I am not saying to raise their taxes to stimulate the economy

I am saying we can't have the middle class paying negative income tax rates indefinitely and once they are good and the economy is strong we have to get their taxes back to the positive side

There are a lot of reasons folks don't have jobs... but the point is they don't have jobs and getting them jobs is the most straightforward way to a recovery. This convoluted, "low taxes make people spend, spending creates demand, demand creates jobs" thing hasn't been true at all during this recession. Taxes are at record lows. I dont think Milton Friedman would advocate for over 40% of the population to have a negative tax rate for a decade but that is where we are with nothing to show for it. People need jobs and once those people have jobs they have to pay taxes.

 

[zerozero]

I am not saying to raise their taxes to stimulate the economy

I am saying we can't have the middle class paying negative income tax rates indefinitely and once they are good and the economy is strong we have to get their taxes back to the positive side

There are a lot of reasons folks don't have jobs... but the point is they don't have jobs and getting them jobs is the most straightforward way to a recovery. This convoluted, "low taxes make people spend, spending creates demand, demand creates jobs" thing hasn't been true at all during this recession. Taxes are at record lows. I dont think Milton Friedman would advocate for over 40% of the population to have a negative tax rate for a decade but that is where we are with nothing to show for it. People need jobs and once those people have jobs they have to pay taxes.

No tax rate stays indefinitely. These are policy tools. Middle class tax rates are far more effective than upper class tax rates in stimulating demand (fact.) Now you want to skirt this issue and deal with the corporate taxes. Which are also at record lows. Lowering their tax rates so they can save more marginal money has zero chance of increasing job growth. US corporations are awash in cash. All the benefits of the recovery have gone to them and to upper class individuals. Clearly a few % more in cash isn't going to change their behavior when all the cash they've accumulated so far hasn't.

 

[TLR Is Mental Poison]

No tax rate stays indefinitely. These are policy tools. Middle class tax rates are far more effective than upper class tax rates in stimulating demand (fact.) Now you want to skirt this issue and deal with the corporate taxes. Which are also at record lows. Lowering their tax rates so they can save more marginal money has zero chance of increasing job growth. US corporations are awash in cash. All the benefits of the recovery have gone to them and to upper class individuals. Clearly a few % more in cash isn't going to change their behavior when all the cash they've accumulated so far hasn't.

By the same token, more middle class tax cuts when most of the middle class' tax rates are negative won't stimulate shyt either. And ditching the corporate tax is less about putting more cash in their pockets than it is about removing inefficiency from the economy/revenue system and eroding one of the pillar's of the GOP's obstruction toolbox

 

[zerozero]

By the same token, more middle class tax cuts when most of the middle class' tax rates are negative won't stimulate shyt either. And ditching the corporate tax is less about putting more cash in their pockets than it is about removing inefficiency from the economy/revenue system and eroding one of the pillar's of the GOP's obstruction toolbox

First of all we're not talking about another middle class tax cut we're talking about an extension of the Bush tax cuts. Your argument about companies is that they're going to employ more and I explained how if that was true then they should have been employing more already -- it's essentially classic trickle-down. Meanwhile more money in middle class and lower class pockets does cause economic activity. The GOP willl obstruct on whatever breh. They've filibustered nearly everything obama has put out there for years. Fulfilling a voodoo economics wishlist is certainly not going to stop them