Official Fiscal Cliff Discussion

[Brown_Pride]

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.

just cause you want to call it somethign else doesn't mean it's not trickle down.

The thing you're not getting is CASH FLOW. Yes at the end of the fiscal year on paper the taxes will be refunded. In the meantime though they do get taken out in payroll taxes. My son, 18 years old, will see his taxes, on a check by check basis, increase. He will not be able to purchase as much.

Come mid april, he'll see it come back, he will THEN spend that money. The rest of the year though, he'll have more taxes being taken out resulting in less purchasing power on a month by month basis.

There's more to taxes than the bottom line. You need to look at how it'll affect day to day opperations. Especially when considering individuals, who tend to live on a check to check basis. That extra 5, 10, 20% makes a difference on a weekly basis. You give them that money to take home upfront and they spend it. DO the same to a corporation and they save it.

 

[Brown_Pride]

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.

LOL @ the effective corp tax for the lowest, second and third quintile being damn near zero, in most cases double and triple the individual rate for the same quintile group...

Bottom line is lowering taxes doesn't create jobs if demand is non existent.


When you cut a middle class persons tax ALL THE MONEY goes right back out the door in terms of a purchase. I'm sure i don't need to link to the abysmal saving habits in this country. The opposite can be said of corporate taxes.

Just because you give a patient 1/12 of the recommended dosage doesn't mean the medicine doesn't work.

 

[TLR Is Mental Poison]

So what do you think 12/12ths of the dosage would be... the govt giving the middle class 25, 50, 100% of its income back in taxes

Where is the $$$ to pay for this supposed to come from... 100% tax on the rich? More printing eroding people's purchasing power through inflation?

How big does the debt have to get before you feel like we should start to deal with paying it down (which is the whole reason this fiscal cliff shyt was implemented in the first place)? 200% of GDP? 500%? 1000%? How can the govt double the middle class' income after spending the lion's share of its budget on interest on the debt? What happens if the price of our debt goes up and we can't borrow?

I think you guys are being incredibly short sighted... shyt is fukked up now, I agree that tax hikes on the middle class in its current state would be bad for the economy... but given the debt + deficit, the growing reliance on govt for economic activity and the generally weak + uncertain state of the economy, whats the end game? We cant keep doing this forever, there has to be some kind of plan to jump start the economy back to normal

We have been doing middle class tax cuts for years now to little effect, something else has to happen and we have to deal with the debt + deficit too. Only way out is by getting the economy back to normal, which perpetual income supplementation of more than half the population WON'T do.

 

[Brown_Pride]

So what do you think 12/12ths of the dosage would be... the govt giving the middle class 25, 50, 100% of its income back in taxes

Where is the $$$ to pay for this supposed to come from... 100% tax on the rich? More printing eroding people's purchasing power through inflation?

How big does the debt have to get before you feel like we should start to deal with paying it down (which is the whole reason this fiscal cliff shyt was implemented in the first place)? 200% of GDP? 500%? 1000%? How can the govt double the middle class' income after spending the lion's share of its budget on interest on the debt? What happens if the price of our debt goes up and we can't borrow?

I think you guys are being incredibly short sighted... shyt is fukked up now, I agree that tax hikes on the middle class in its current state would be bad for the economy... but given the debt + deficit, the growing reliance on govt for economic activity and the generally weak + uncertain state of the economy, whats the end game? We cant keep doing this forever, there has to be some kind of plan to jump start the economy back to normal

We have been doing middle class tax cuts for years now to little effect, something else has to happen and we have to deal with the debt + deficit too. Only way out is by getting the economy back to normal, which perpetual income supplementation of more than half the population WON'T do.

it's not a long term plan. It can't be. But, you're worried about the college fund while the kids are dying of starvation.

A plan is needed...long term. Tax cuts for middle class are NOT that plan. But right now the ship has to be righted and the most sensible way of doing so is to give the purchasing power back to the people...cause they purchase shyt.

If you did some type of tax break for corporations providing they spent the money, i.e. tax break for specific purchases (computers, american auto, travel, etc.) i'd be somewhat for that assuming other things were fixed and given they could not lay people off then i'd be for something to that effect)

Step 1. Get people working
step 2. worry about the debt

you gotta get your horse in front of your cart.

 

[TLR Is Mental Poison]

it's not a long term plan. It can't be. But, you're worried about the college fund while the kids are dying of starvation.

A plan is needed...long term. Tax cuts for middle class are NOT that plan. But right now the ship has to be righted and the most sensible way of doing so is to give the purchasing power back to the people...cause they purchase shyt.

Who "took" the purchasing power away from them?

And also what about the idea that the level of consumption we deemed to be normal might not have been sustainable? Its entirely possible given how much of it was driven by credit- the avg household balance sheet speaks to this

If you did some type of tax break for corporations providing they spent the money, i.e. tax break for specific purchases (computers, american auto, travel, etc.) i'd be somewhat for that assuming other things were fixed and given they could not lay people off then i'd be for something to that effect)

Heres the problem with that, and kind of your whole strategy in general. When the govt picks favorites, or creates an artificial supplement/stimulus for a long time, people get used to it and then begin to argue that said efforts should be permanent. You see it with industry subsidies, hell you see it here in this thread w/folks claiming we should shrink the tax base indefinitely. Ultimately our economy is fukked up, and the more we put on the federal credit card to try and keep up appearances the worse it will be when we are no longer able to do so

Which is why I think its better to get the economy moving through means that dont involve printing + spending

Step 1. Get people working
step 2. worry about the debt

you gotta get your horse in front of your cart.

Middle class tax cuts have not got people working in the last 4 years.

US Labor Force Participation Rate

If a strategy is not working you don't intensify it, you change your strategy

 

[Brown_Pride]

Who "took" the purchasing power away from them?

well when the bubble burst and people started losing work. So...i guess greedy bankers?

And also what about the idea that the level of consumption we deemed to be normal might not have been sustainable? Its entirely possible given how much of it was driven by credit- the avg household balance sheet speaks to this

agreed. That's why it was considered a bubble. BUT what i will ask is that the economy is no longer hemoraging jobs, unemployment is down, most economic indicators show us on a positive trend. See the thing is we were in a hole. We have barely climed out the hole, so while it looks like we're on the ground we've actually come a long way up.

Heres the problem with that, and kind of your whole strategy in general. When the govt picks favorites, or creates an artificial supplement/stimulus for a long time, people get used to it and then begin to argue that said efforts should be permanent. You see it with industry subsidies, hell you see it here in this thread w/folks claiming we should shrink the tax base indefinitely. Ultimately our economy is fukked up, and the more we put on the federal credit card to try and keep up appearances the worse it will be when we are no longer able to do so

given this then how do you arrive at no taxes for corporations?

It looks like your issue isn't that my idea doesn't work, more that you're affraid it will become permanent. Which, as i've stated isn't a long term solution, but is required right now. Later on, when the economy is bumping along i'll be right there with you on raising taxes back up and handling debt. Right now, as i said, we got starving kids.

Which is why I think its better to get the economy moving through means that dont involve printing + spending

but your ideas don't work. Not to be rude but your suggestions just don't make sense. Mine may not be the bets LONG TERM, but for right now they are the best band-aid untill we can find a way to get stitches.

Middle class tax cuts have not got people working in the last 4 years.

US Labor Force Participation Rate

If a strategy is not working you don't intensify it, you change your strategy

you have to mar that up with the job creation report. Of course participation is going to be down if you're losing THOUSANDS OF JOBS every month for the past 4 years. We're just now creating jobs, we should see positive growth in the participation numbers...assuming job creation remains positive. We'll have to wait and see...

 

[Zapp Brannigan]

We're all aware that the smug prick, Eric Cantor, is probably under intense fire from his advisers for weakening his party so intensely during the last fiscal ceiling fight, right? I wonder if the Obama administration will act knowing this and not put up with the same bullshyt. I mean, outside of the Republican bubble, it's pretty common knowledge that it's their fault for things being the way that they are. This is evidenced by the election results.

 

[TLR Is Mental Poison]

well when the bubble burst and people started losing work. So...i guess greedy bankers?

agreed. That's why it was considered a bubble. BUT what i will ask is that the economy is no longer hemoraging jobs, unemployment is down, most economic indicators show us on a positive trend. See the thing is we were in a hole. We have barely climed out the hole, so while it looks like we're on the ground we've actually come a long way up.

You are missing the point

What happened might have been a correction to a more realistic normal.

given this then how do you arrive at no taxes for corporations?

Inefficiency and uncertainty gums up the economy and keeps corps from taking on the risk of expansion (which would lead to job growth). The complex tax code is a major point of inefficiency and uncertainty for corporations. That is part of why they are hoarding cash.

There are big tax hikes & govt mandated costs looming for businesses. Doing away w/business taxes completely would eliminate a lot of that uncertainty w/no ding in revenue. Again a big part of business taxes are paid by individuals anyway; I am just saying to completely shift the burden to individuals and remove that point of contention from corporate lobbying forces. It would be revenue neutral, save a big part of the $500B we spend on tax prep, and as you pointed out have pretty much no impact on the middle class tax burden

It looks like your issue isn't that my idea doesn't work, more that you're affraid it will become permanent. Which, as i've stated isn't a long term solution, but is required right now. Later on, when the economy is bumping along i'll be right there with you on raising taxes back up and handling debt. Right now, as i said, we got starving kids.

To go along with your analogy you are basically saying to steal from tomorrow's meal + the cupboards of folks w/food to eat. I'm saying lets figure out how to grow more food, maybe by improving food making processes

but your ideas don't work. Not to be rude but your suggestions just don't make sense. Mine may not be the bets LONG TERM, but for right now they are the best band-aid untill we can find a way to get stitches.

Your idea doesn't work. Middle class taxes were low during the boom and even lower through the bust. Job growth hasn't turned around appreciably in 4 years.

And like I said before. We spend $500B on tax prep. Much of that is spent by corporations. All so the govt can get a measly $150B/yr in corporate taxes. In other words we could just collect that $150B from the investors holding those corporations' stocks, and free up the corporations' tax prep money. I think it would be a move of good faith that could result in corps loosening the purse strings and reinvesting in expansion + JOBS. It would cost us nothing.

you have to mar that up with the job creation report. Of course participation is going to be down if you're losing THOUSANDS OF JOBS every month for the past 4 years. We're just now creating jobs, we should see positive growth in the participation numbers...assuming job creation remains positive. We'll have to wait and see...

Yea but again the point is we had low taxes before, during and now hopefully after the crash. So where is the proof that lowering taxes even further would do anything?

 

[zerozero]

anyway breh your obsession with corp tax prep costs is a kind of specialized issue here. The reason the president talks about the middle class tax cuts is cause they're set to sunset as part of the bush tax cuts package. So what are you saying? Sunset the middle class tax cut and keep the upper class tax cut? Sunset the whole thing? what?

 

[zerozero]

it's a wrap brehs

Boehner's Plan B fiscal cliff bill pulled amid dissension in GOP caucus - CNN.com

House Speaker John Boehner's proposal to avert the looming fiscal cliff's automatic tax increases has failed to get enough Republican support, throwing yet another monkey wrench into the contentious debate.
Boehner said earlier Thursday that he was confident that his so-called Plan B -- which would extend tax cuts that are set to expire at year's end for most people while allowing rates to increase to 1990s levels on income over $1 million -- would pass the House, and in the process put pressure on President Barack Obama and the Democratic-controlled Senate. But that gambit seemed in doubt Thursday, as Republican leaders struggled to get all their members to sign on, knowing the chamber's Democrats oppose it.
GOP leaders could be seen working the House floor earlier Thursday, trying to convince their party colleagues. Sen. Rob Portman was one of them, telling reporters that he and other Republican senators had been asked to come over and make their pitch.
Around 8 p.m., House Majority Leader Eric Cantor announced that the measure would not go up for a vote as planned.
"The House did not take up the tax measure today because it did not have sufficient support from our members to pass," Boehner said in a statement. "Now it is up to the president to work with Senator (Harry) Reid on legislation to avert the fiscal cliff."
Democratic leaders already had signaled they oppose the so-called Plan B.
What this means next in the fiscal cliff talks is unclear. From here, scenarios range from intensified and ultimately successful talks in the coming days or entrenchment as the fiscal cliff becomes a reality next year, when a new Congress could enter negotiations with Obama.

 

[Regular_P]

These clowns should all be relieved of their duties if they can't pass something. It's their fukking job.

I blame the Republicans for this though.

 

[gldnone913]

 

[acri1]

Congress.

 

[Robbie3000]

What the hell is going on the GOP brehs. Boehner can't even pass a GOP plan? Ridiculous.

 

[Julius Skrrvin]