Saturday, July 30, 2011
Facts on Taxes
What people do not understand about taxes. 1. Lower tax rates increase state revenue in the longer haul. It happened under Presidents Kennedy and Reagan. Why? People pay less taxes, make more money, and pay more taxes overall. 2. Lower tax rates on the higher incomes does not merely help those people, but helps those who benefit from their increased profits--that is, the people they hire and the salaries they give. Remember this, next time you hear talk of "the wealthy paying their fair share." Their "fair share" (higher taxes) means a worse economy for everyone. Further, (3), why penalize success in business unless it is out of envy, which is a sin?
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6 comments:
Dr. Groothuis,
Reagan closed tax loopholes and reduced tax breaks--just like certain politicians want to today.
http://money.cnn.com/2010/09/08/news/economy/reagan_years_taxes/index.htm
Dr. Groothuis,
History shows that this is much theory and little fact, I'm afraid. This idea that money will come "trickling down," when you throw more "at the top" has never worked, and only benefits the top 1%-5% percent of income earners, but especially corporations.
President Reagan did close tax loopholes for top earners and mega-corporations in the wake of his massive "Reaganomic" 1981 tax breaks, partially to help stop the flood of unemployment that ensued from them.
Read Thomas Sowell on this, as well as George Guilder, Wealth and Poverty.
If the title of your post had been Opinions on Taxes, I would have not written this response. But you chose to call it Facts on Taxes. Can you please source the facts, with data and not the names of known partisans like Thomas Sowell?
I like to accompany the opinions I express on my blog with facts, as I did in http://thedailyfuel.blogspot.com/2011/07/on-fantasy-of-job-creators-wrong-and.html, which is my view on the myth that taxing "job creators" is wrong. Please read it, as it addressed the fallacies of your assumptions in this post. (I posted it on July 13.)
Envy, by the way, has nothing to do with asking for the rich to pay a higher rate on some of their income. Progressive taxation is based on the assumption that it is fair for those who have more discretionary income to pay more than those whose income is barely sufficient to make ends meet. Not to mention the fact that the rich benefit more from public services and infrastructure more than low-income Americans, directly or indirectly.
Besides, for someone who believes in the "religion of the free-market", can't you see that a strong economy needs to leave more money in the pockets of those who are more likely to spend it--lower-income Americans--than in the pockets of those who are more likely to save it, or invest it--often outside of the United States?
Finally, if I hear one more time that "we do not have a revenue problem, we have a spending problem", I am going to throw up. It's just a talking point, a clever but mendacious one for the most part.
Of course we have a spending problem, mostly driven by elective wars and the greed of mega-corporations in the oil, banking, and health services industries. But we also have a revenue problem, created by George W. Bush tax cuts which were supposed to have "sunset" by now, and have been extended by the outrageously weak and inept President Obama. Or did you miss the news that revenues are at their lowest point in at least 50 years, if not since the Great Depression, and that top tax rates are at their lowest point since Eisenhower (with the exception of one of the Reagan Years)?
Ironically, remember, that President Obama was accused by his opponents of being the most liberal Senator when he was running, a lie easily born-out by his first 30 months in the White House. He is a centrist at heart, and has been governing from right of center. Of course, in a country where politics is dominated by right-wing extremists, governing from right-of-center still makes you look a liberal extremist, I guess. But compare Obama's policies with FDR's, Johnson's, and even Carter's, and you will see that he is a pro-business, pro-establishment politician. Far from being the socialist populist he has been depicted as by most of the media, he is a corporate socialist.
Peace out.
Isn't that the guy who claimed there was no poverty problem in the US?
MC said:
This idea that money will come "trickling down,"
I'm not aware of any economist who advocates "trickling down." It is usually framed in different terms, with those at the "bottom" benefiting first, before the rich get a payout. If the rich are given sufficient incentive to invest in and start up a new company, for example, the first people who receive the benefits are the employees who are hired, the building contractors, the suppliers, etc. Since most businesses fail, the rich rarely see a return on their investment, whereas those employed in the initial start up still earn some payment.
The economy is of course replete with examples of enormous corporations getting more and more money from flawed governmental exceptions and policies, all at the expense of the tax payer and/or consumer, directly or indirectly. But this is not part of the theory put forth by free market economists. Much of what passes today for economic activity is neither strictly free market nor highly regulated. It tends much more toward simple and flagrant corruption, perpetrated by both Democrats and Republicans, and this needs to be differentiated from the theories proposed by the free market economists (and more liberal economists) and the real life examples they propose as evidence of the theory working. It is simply fallacious to assume the current market is a good example of what a free market would look like, or even a more regulated market.
Sirfab said:
Can you please source the facts, with data and not the names of known partisans like Thomas Sowell?
Everyone's a partisan in politics. I will admit to being one, and it seems rather obvious from your comments that you are as well. Sowell has done his necessary economic homework to be taken seriously, just as Krugman has, even if I agree with the former more than than latter. Sowell has written on the strawman of "trickle down," and I suspect that's one reason Dr. Groothuis recommended his work. (I could be wrong, of course.)
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