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November 18, 2010

Keep Bush tax cuts

The Star editorial board’s call for allowing President George W. Bush’s top tax rate cut to expire (11/10, “Cutting the deficit means the rich lose tax cuts”), ostensibly to help pay down the deficit, comes from the flawed view that the economy is zero sum or static, where the size of the economic pie remains the same. The economy is actually dynamic, and the size of the pie can increase.

Contrary to the editorial’s claim, Bush’s 2001 and 2003 tax cuts brought on strong economic growth, creating jobs and bringing in revenue. The economic downturn is the result of bad home loans from Fannie Mae and Freddie Mac.

The editorial’s claim that the “very rich” don’t help the economy when they “sock their money away” is also flawed.

That money stays in the economy through savings and investments, enabling businesses to start and expand. It is production, not consumption, that drives the economy.

History shows that tax rate reduction virtually always expands economic growth and thus increases treasury revenues.

Not only should all of Bush’s tax cuts be made permanent, but further tax rate reduction and a major regulation overhaul are needed to get the economy roaring again.

Mark S. Robertson
Independence

Comments

Kevin Groenhagen

Ryan:

"They conveniently then say that the booming economy of the same timeframe was somehow the miraculous work of the conservative congressional majority at the same timeframe. Bush expanded the economy for 52 straight months and obama tanked it."

I'm sure this wasn't your intent, but you made my point.

Kevin Groenhagen

currahee:

"I think that would be great, except Pres. Bush came into office with an unemployment rate of 4.2% and left with a rate of 7.3%. Compare with Clinton who came in with a rate of 7.6% and left with 4.2%."

Bush also came into office with the Clinton recession and an economy that was further shaken by 9/11. The higher unemployment rate when Bush left office was the result of the bursting of the housing market, which, of course, occurred because of policies Clinton and the Democrats pushed.

whispering_to_kc

http://www.huffingtonpost.com/2010/11/21/warren-buffett-paying-more-taxes_n_786516.html

WASHINGTON -- Billionaire Warren Buffett rebutted claims that the Obama administration is unjustly hurting business orders with high taxes by saying that in fact, the wealthy have never had it so good.

"I think that people at the high end, people like myself, should be paying a lot more in taxes. We have it better than we've ever had it," he told ABC's Christiane Amanpour in a clip played on "This Week" on Sunday.

When Amanpour pointed to critics' claims that the very wealthy need tax cuts to spur business and capitalism, Buffett replied, "The rich are always going to say that, you know, 'Just give us more money, and we'll go out and spend more, and then it will all trickle down to the rest of you.' But that has not worked the last 10 years, and I hope the American public is catching on."

**********

Well, some of us are "catching on".

Are you gonna believe Warren "Trickle Down Doen't Work" Buffett or Mark "You Aren't Being Trickled On, It's Raining Golden Coins From Heaven" Robertson?

Some of us are a little late to the party.

Ryan Roedel

Has anyone noticed....... by kevin. Yes, I have noticed. I have been reading your posts for nearly a week now. Hey, I used my name, what more do you require of me? Yes, IMO all the talk about he said/she said on taxes and job growth is all smoke and mirrors. Conservatives blame the current economic crises on clinton and the deregulation of the mortgage industry. They conveniently then say that the booming economy of the same timeframe was somehow the miraculous work of the conservative congressional majority at the same timeframe. Bush expanded the economy for 52 straight months and obama tanked it. Numbers can lie and create a web for naives when spun by fools...on both sides.
So pray tell...what am I not willing to learn?

currahee

"
I think most Americans would welcome the 5 percent unemployment we had under Bush."

I think that would be great, except Pres. Bush came into office with an unemployment rate of 4.2% and left with a rate of 7.3%. Compare with Clinton who came in with a rate of 7.6% and left with 4.2%.
http://www.davemanuel.com/historical-unemployment-rates-in-the-united-states.php

I too, would like to know where Leopold gets his numbers. What I find supports some of figures, but contradicts others. By the same token, what is the source of your of your numbers from the 1920's? Just would like to know.

Kevin Groenhagen

"....it's all BS. Smoke and mirrors for the less informed, IMO"

"Of course, this explanation is probably over the head of some of you."

Has anyone else noticed that the most ignorant posters here are the first to question what others know or are capable of learning?

Ryan Roedel

And I agree sty, we really can't raise taxes right now. It's also a shame that mom blew all our savings on ice cream for the kids now that dad lost his job. In other words, we are in the exact position conservatives love...run up spending and deficits so they can gain justification in slashing domestic spending. Deficits....job creation....tax cuts....it's all BS. Smoke and mirrors for the less informed, IMO

Ryan Roedel

So kevin, is it government's responsibility to create jobs? We can lower taxes and we did. The federal register grew b/c of homeland security and our collective responses to 9/11. Actual regulation in areas like the FDA, EPA, dept of interior or minerals management were slashed.

whispering_to_kc

Here's a two year old's explanation of what to do with the Bush tax cuts ...

http://movementvision.org/videoblog/bush-tax-cuts/

Of course, this explanation is probably over the head of some of you. Fortunately, the kid sums it all up at the end so that even the most dense might understand.

Smarter Than You

The argument is that most economists think this is the wrong time to be raising taxes on anyone. Documentation has previously been provided. There are few economists who support the Obama class warfare piece-meal approach.

If it’s about recent jobs numbers, let me borrow a page from this administration and randomly claim that the Bush tax cuts have “created OR SAVED” over 12 million jobs, making them four times more effective than the (un)stimulus. Can I prove that? No, but it has credibility in the same ball park as an Obama apologist spouting the stimulus’ jobs accomplishments.

Now, Obama apologists, maybe you can provide some clarity to your murky position; Why the class warfare? Democrats had a year to roll back the tax cuts yet opted to concentrate on Obamacare; putting the economy on the back burner and exploding the deficit.

If rolling back tax cuts IS the answer, why were you so derelict in your duty when there was no Republican capable of stopping it? For that matter if taxes are the answer why not, as the true progressives have argued, roll back all of the tax cuts?

Kevin Groenhagen

Ryan Roedel:

"More of the same will give us more of what he have. We've had lower taxes and less regulation."

I think it's a bit of a myth that we had less regulation during the Bush years. The number of pages in the Federal Register grew significantly during those years. The Bush tax cuts were followed by 52 straight months of job growth, a record. I think most Americans would welcome the 5 percent unemployment we had under Bush.

"It's ironic that many conservatives on this thread bash the stimulus as a failure, but 1/3 of the money was more tax breaks for personal and business."

The Obama admin said that the so-called stimulus would keep unemployment from going over 8 percent. It went over 10 percent and is currently at 9.6 percent. How can you characterize he so-called stimulus as anything but a failure?

Ryan Roedel

Mark wants us all 2 live in an oligarchy, totally and complete. Mark wants those with the money 2 have all the power. We have a simple choice - vote conservative 2 let coorporations rule or vote liberal 2 let government (and by extension - the people) rule. As with many other things in this society...I just hope those conservatives realize before it's too late that many of them are just full of crap.

Ryan Roedel

More of the same will give us more of what he have. We've had lower taxes and less regulation. LOOK AROUND. I know it's not the only factor in this economic mess we're in but definitely didn't help. When you take away the safety valve, we're left with declining services, school closings, even more deficits. It's ironic that many conservatives on this thread bash the stimulus as a failure, but 1/3 of the money was more tax breaks for personal and business taxes.

Kevin Groenhagen

Harold:

As usual, you provided no source to back up your claim. In any case, your numbers, bogus or not, do nothing to disprove the fact that wealthy Americans paid more in taxes during the 1920s AFTER their tax rates were cut.

Leopold

Taxpayers reporting incomes of $300,000 or more paid $77 million in taxes in 1922. In 1927 the same group paid taxes of $230 million. Do you believe "population growth, higher incomes and inflation" caused a threefold increase in tax receipts during during that five-year period?

--------

Your question leads to the asinine assumption that the same taxpayers in 1922 were the same in 1926. It does not take into consideration that their numbers grew or that that their incomes grew.

Knowing that, let's look at how America's tax receipts fared after the tax cuts of 1921 (Revenue Tax Act of 1921).

Receipts in millions.
1921 5,571
1922 4,026
1923 3,853
1924 3,871
1925 3,641
1926 3,795
1927 4,013


How about after a tax increase(Revenue Act of 1918).

receipts in millions
1917 1,101
1918 3,645
1919 5,130
1920 6,649

Smarter Than You

Reuters, Today

President Barack Obama's fellow Democrats in the U.S. Congress, many upset with him for election losses, are in disarray over what to do about tax cuts for millions of Americans that are set to expire on December 31.

Despite a number of options -- including renewing all tax cuts or only those for the middle class or tying any extension to a renewal of jobless benefits -- there is no indication a consensus is near.

"How the hell should we know when we will figure this out?" said a senior Senate Democratic aide. "This is the Democratic Party," long known for internal struggles and diverse views.

"It seems like no one is on the same page," said Chris Krueger of MF Global, a private firm that tracks Washington for investors. "It has the potential to be a train wreck."

With some Democrats blaming Obama for their loss of control of the House in the November 2 elections, Obama's ability to rally his troops is being tested on the expiring tax cuts, which were signed into law by Republican President George W. Bush.

"A lot of our guys, the progressives, don't want to extend these tax cuts for anyone," said a senior House Democratic aide. "They never liked them in the first place."

The aide said some Democrats are now wary of Obama, who convinced them to overhaul the U.S. healthcare system -- a landmark achievement that backfired and hurt them with voters.

"Our guys aren't sure what comes next. Will Obama help them in 2012, or will just be focused on getting himself re-elected?" the aide said.

Kevin Groenhagen

Harold:

"Kev's link to "prove" the falsehood of my statement takes you to an op-ed piece in Rupert's WSJ written by a Heritage Foundation fellow.

"Proof?"

Yes, it does disprove your claim. If you have anything to back up your claim, pressent it.

whispering_to_kc

Kev's link to "prove" the falsehood of my statement takes you to an op-ed piece in Rupert's WSJ written by a Heritage Foundation fellow.

Proof?

Can't find "proof" written by Mark Robertson, Dick Armey or the Koch brothers?

http://www.ritholtz.com/blog/wp-content/uploads/2010/08/Bush-tax-cuts-BW.png

The Bush tax cuts line up perfectly with falling revenues, super-charged spending and ruinous deficits. To claim otherwise is ... foolish.

Kevin Groenhagen

Harold:

"
Mostly true, but misleading. After the Reagan tax cut in '83 tax receipts fell for that year to bounce back in '84. To contend that it bounced back because of the tax cut is, and can only be, a guess. Higher tax receipts happen almost every year, tax cut or not, based on population growth, higher incomes and inflation. To claim higher tax receipts are due to tax cuts, one would need a crystal ball."

The top marginal rate of 73% was cut to 55% in 1922 and to 25% in 1926. Taxpayers reporting incomes of $300,000 or more paid $77 million in taxes in 1922. In 1927 the same group paid taxes of $230 million. Do you believe "population growth, higher incomes and inflation" caused a threefold increase in tax receipts during during that five-year period?

In the state of New York, they raised taxes on the wealthy.

Kevin Groenhagen

whispering:

"The Bush tax cuts had a sunset provision for a reason. The Bush tax cuts are the biggest chunk of our current deficit problems."

That's absolutely false.
http://online.wsj.com/article/SB10001424052748704738404575347302831199046.html

 
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