By Dennis Cauchon, USA TODAY
Consumers are buying more luxury items but spending remains tight for everyday essentials such as food and dental care, a USA TODAY analysis finds, suggesting a growing divide between haves and have-nots.
Purchases of TVs, jewelry, recreational vehicles and pet supplies are growing robustly, government data show. At the same time, spending on medical care, day care and education is down in the dumps.

"The rising tide isn't lifting all boats," says Carl Steidtmann, chief economist at the Deloitte accounting and consulting firm and author of an index tracking consumer spending.

He says higher-income and older households, helped by a strong stock market, are experiencing increased wealth and spending more. However, high unemployment is pulling in the other direction, depressing spending among people without jobs and those anxious about job security.
Consumer spending accounts for about 70% of the nation's economy and is crucial to any recovery. Spending rose 1.4% in the first eight months of this year compared with the same period a year earlier, the Bureau of Economic Analysis reports. Consumers are on track to increase spending for the first time since 2007.

Yet more than one-third of the 350 spending categories tracked by the government remain in decline, as if the recession that technically ended in June 2009 was still underway. Spending on new cars has fallen another 8.2% this year, on top of disastrous drops in 2008 and 2009. Consumers are spending less on prescription drugs, life insurance and a wide range of everyday essentials while spending more on watches, wine and toys. Part of the jump in luxury items is a rebound from deep lows in the recession. What's hot now:

•Televisions. Spending is up 34.7% this year, tops among consumer items. "There is a lot of excitement" because of 3-D TVs, bigger panels and high definition, says Best Buy's Scott Morris.

•Recreational vehicles. Winnebago sales have doubled. The company added 350 workers. Buyers — typically 55 or older — are purchasing somewhat less expensive RVs, says Winnebago spokeswoman Sheila Davis.

•Pet supplies. Organic dog food, timed cat food dispensers and other high-end pet items are driving healthy increases in spending, says Bob Vetere, president of the American Pet Products Association. "People are cutting back on themselves more than they're cutting back on pets," he says.

Pet products illustrate how some consumers are going high end and others low end. Cheap pet food is selling briskly, reflecting the weak economy, at the same time costly items are thriving, he says. It's the middle of the market that's shrinking, he says.

Entertainment that depends on mass appeal is still hurting. Spending at concerts, movie theaters and casinos is down.

The revenue decline at casinos is starting to stabilize, says Frank Fahrenkopf Jr., president of the American Gaming Association. "We're not going to see a dramatic turnaround until employment picks up," he says. "We're still packing people in. They're just spending less."



And some of you want the tax cut for the wealthy?

And some of you want the tax cut for the wealthy?

Yep...at least if by "wealthy" you mean "higher income earners".

Why shouldn't we have a tax cut for the "wealthy?" To punish them?

Is envy the standard of judgment used to determine policy?

YouTube - What We Believe, Part 3: Wealth Creation (http://www.youtube.com/watch?v=KkXI-MNSb8Q)

And some of you want the tax cut for the wealthy?For the 1 billionth time, Joey...

The wealthy don't pay taxes. They don't earn income.

You didn't even read your own article. The article doesn't use the word 'wealthy.' It says 'higher income.' Can you define that for us, please?

Furthermore:

Won't buying luxury items employ the people who make, sell, and distribute those items? That's job creation.

Won't buying luxury items allow the manufacturers to achieve economies of scale, thus lowering prices so the middle class can afford said luxury items?

In both cases, NEW tax revenue is generated.

Economics 101 - try it.

And some of you want the tax cut for the wealthy?

To be more precise, we don't want to see anyone get a TAX INCREASE in 2011.

But can you define "wealthy" for us.
And how much should the "wealthy" pay in income tax?
What exactly would be accomplished by taking any wealth out of the private sector?

With this said, I'm firmly convinced there's some massive market manipulation taking place amongst the super-elite right now. Like the highest stakes game of poker, it's only a matter of time before they pull all the chips off the table after they've built up the pot.

But, even on principle, tax policy should not be punitive.
And those aren't families or small business that make $250k a year.

We can argue over the defination of wealthy and higher income all day long. Its semantics and irrelevant.

But yes, we should raise their tax before we raise the tax of the income group that is having their homes foreclosed on and are unable to find a job.

Its not about punitive. Its about affordability. A guy making $250k+ can afford taxes a whole lot more then someone making $40k. Those people should get the tax cuts.

We can argue over the defination of wealthy and higher income all day long. Its semantics and irrelevant.


"Wealthy" and "high income earners" are two different things and WE DO NOT TAX WEALTH IN THIS COUNTRY.There is very good reason for that.

Did you watch that video I posted? What would be the effect of increased taxation on the wealthy on the mechanism of wealth creation?

But yes, we should raise their tax before we raise the tax of the income group that is having their homes foreclosed on and are unable to find a job.

Its not about punitive. Its about affordability.


These two points contradict one another.

If there is another reason to tax high income earners more besides envy; besides an attempt to punish them, lets hear it. I have yet to see such an argument, unless it is assumed that taxing the wealthy at a higher rate leads to higher tax revenue (considering the current "progressive" tax structure, any appeal to "fairness" only undercuts your entire argument).

It all comes back to that static vs. dynamic analysis. The argument you are promoting is rooted completely in envy unless the static analysis makes sense. But it has been shown countless times (on this forum alone) to be utterly worthless. It is the height of foolishness to assume that increasing taxes does not alter incentive structures and does not change the behavior of the person being taxed.

A guy making $250k+ can afford taxes a whole lot more then someone making $40k. Those people should get the tax cuts.


That is a gross generalization.

But ignoring that point, the guy making $250k can also do a lot more for the economy then someone making $40k. Also, the guy making $250k will use that money more efficiently and and effectively in regards to the economy then ever could be done by any government program.

The individual utilizing his money will create wealth while the government utilizing that same money only steals, redistributes and (in the long run) destroys wealth.

What is your focus here? Is it to stimulate the economy or to "get back" at those who make more then you? It sure seems like the latter.

There is a reason that John Stuart Mill famously called envy, "[the] most anti-social and odious of all passions".

We can argue over the defination of wealthy and higher income all day long. Its semantics and irrelevant.

But yes, we should raise their tax before we raise the tax of the income group that is having their homes foreclosed on and are unable to find a job.

Its not about punitive. Its about affordability. A guy making $250k+ can afford taxes a whole lot more then someone making $40k. Those people should get the tax cuts.How do you know that, Joey? Do you understand how the IRS treats a Sub-S corporation's earnings at the end of the year? A typical small business that earns $250k has to retain cash at the end of each month to meet expenses such as payroll and purchasing. At the end of December all that cash is taxed as REGULAR INCOME by the IRS. So this 'rich' guy who's just trying to meet his expenses and probably isn't taking a salary over $60k just had his expense money RAPED by the IRS. And you think this guy should pay more? Brilliant, Joey.

And by the way, Joey, your boy Obama is poised to raise taxes SIGNIFICANTLY ON THE MIDDLE CLASS starting this year and continuing through the activation of Obamacare with the TAX PENALTY for not purchasing health insurance.

How do you like them apples?

Those people should get the tax cuts.

Why not refrain from raising ANY taxes right now.

Is your goal to prevent spending and investment? Or merely to drive all industry overseas? Because those are the consequences of punitive, class-envy driven tax policy.

The problems this country face aren't because the government can't spend enough money.

We need radical tax reform.
The system in place is corrupt, inefficient, and designed in a way that it gives power to the political class. The tax structure shouldn't penalize success, it should apply to everyone (no free rides), and it should be standardized and universally applied to avoid fraud and political manipulation.

And in doing so, we need to drastically reduce the size and scope of the federal government. If you want socialized programs, they should be voted on, approved, and paid for by the local or state governments- not the federal government. That's one of the benefits of federalism.

If a city like San Fransisco, or a State like Maine want to be socialist, then they can- without having to be imposed upon the rest of the country, or financed by us.

Why not refrain from raising ANY taxes right now.

Is your goal to prevent spending and investment? Or merely to drive all industry overseas? Because those are the consequences of punitive, class-envy driven tax policy.

The problems this country face aren't because the government can't spend enough money.

We need radical tax reform.
The system in place is corrupt, inefficient, and designed in a way that it gives power to the political class. The tax structure shouldn't penalize success, it should apply to everyone (no free rides), and it should be standardized and universally applied to avoid fraud and political manipulation.

And in doing so, we need to drastically reduce the size and scope of the federal government. If you want socialized programs, they should be voted on, approved, and paid for by the local or state governments- not the federal government. That's one of the benefits of federalism.

If a city like San Fransisco, or a State like Maine want to be socialist, then they can- without having to be imposed upon the rest of the country, or financed by us.
You realize you're talking right over Joey's head. He's convinced himself that the evil rich are the problem in this country, and the government is the savior of all and can and should fix everything.

If a city like San Fransisco, or a State like Maine want to be socialist, then they can- without having to be imposed upon the rest of the country, or financed by us.

Well, it would still have to be financed by the rest of the country to be sustained in the long term ;)

Well, it would still have to be financed by the rest of the country to be sustained in the long term ;)

Well, economically speaking, it would just fail and the city would go bankrupt.
And it would then suck to be them.
But I wouldn't care. I don't live in San Fransisco nor would I be financially responsible for it.

Well, economically speaking, it would just fail and the city would go bankrupt.
And it would then suck to be them.
But I wouldn't care. I don't live in San Fransisco nor would I be financially responsible for it.See Detroit.

See Detroit.

Detroit is an incredible story.
Horrifying. The notion of wild animals running through some parts of that ghost town is amazing.

I do find the idea that it might eventually return to being an agricultural city to be fascinating though.

As usual, Joey does his drive by attack on capitalism, ignores our replies, and disappears.

Detroit is not a "ghost town", please don't believe what the media is saying. Detroit is actually on the rebound, I see it with my own eyes. We had some rough times, but people are overcoming adversity all over Detroit.

Detroit was never Bankrupt, they hit a rough patch when the auto industry fell down, but some people found alternative ways to supplement income, and the ones who didn't are the same ones wanting Obama to extend unemployment benefits (Lazy people)

Now, I do have a question about taxes, why aren't we all taxed a certain percentage of our income, like 10%, so if I made 50K, I pay 5K in taxes, If i made 1m, then I pay 100k in taxes.

We can argue over the defination of wealthy and higher income all day long. Its semantics and irrelevant.

But what if a guy makes 1 million dollars per year and squanders it all by December 31? Is he not poor? High income poor person?

How many celebrities do we know like this? Ones that come to mind are McHammer, some 80's basketball player, and I'm sure others can add to the list. So yes, wealthy and higher income are two different things, Sir.


But yes, we should raise their tax before we raise the tax of the income group that is having their homes foreclosed on and are unable to find a job.

What do you think will happen when taxes get raised on higher income (or wealthy people)? Seeing how most of these people EMPLOY others, they will likely just cut a few people off the employee roll to make up the difference. How is this beneficial to the people working for them?


Its not about punitive. Its about affordability. A guy making $250k+ can afford taxes a whole lot more then someone making $40k. Those people should get the tax cuts.

Those 40K a year people will become $ ZERO per year people when they get laid off by the wealthy people, Joey. This is what "you guys" don't understand, it seems.

I have a fair idea of what you're pulling down off the forumS. Would you be interested in Uncle O taxing your forum income at say, 95%? Ask yourself that and get back to me. And I'll even say, these can be net income taxes, after all, you have to pay for bandwidth, servers, hosting, etc. And you have a lot of people who don't pay membership here (like me). But the Google ads pay something, otherwise you wouldn't have them.

Detroit is not a "ghost town", please don't believe what the media is saying. Detroit is actually on the rebound, I see it with my own eyes. We had some rough times, but people are overcoming adversity all over Detroit.
I think we're going to talk past each unless we both agree on the language being used.

Hard working individuals might be working to overcome adversity, but the industrial glory of that city is a distant memory. While there may be areas that are improving, there are vast areas that are desolate and abandoned. Inhabited by animals, criminals, and the professional homeless.

Detroit was a testing ground for the Progressive Utopian ideals and we can see what ultimately happened to it. The collapse of manufacturing accelerated it's inevitable outcome. The government and social scientists, with their experimentation and political manipulation, failed Detroit. Individuals represent the salvation for Detroit, NOT government solutions.

When government gets out of the way, they lower taxes and regulation, and stop interfering with the society and social welfare, investors will likely move back in, buy all the depreciated property, and rebuild the once great city and port town.

That won't happen until the free-market, liberty loving politicians take office there.

Now, I do have a question about taxes, why aren't we all taxed a certain percentage of our income, like 10%, so if I made 50K, I pay 5K in taxes, If i made 1m, then I pay 100k in taxes.

Because we have a burdensome Progressive Tax in this country right now. What you proposing is usually referred to a "flat-tax."

The progressive tax is defended for a number of reasons. Those who exploit class-rhetoric claim that it's "more fair" because a "rich" person is much better able to pay. Joey references this concept in his earlier post. Politicians like the progressive tax, and all it's regulation, because it gives them an incredible amount of power to buy votes, buy favor, and punish their enemies through the tax code and prosecution of it.

We should adopt a uniform flat tax, or something like the "Fair Tax" (http://www.fairtax.org/site/PageServer?pagename=about_main) which would replaced the income and payroll taxes with a national sales tax.

As I've stated before:

Our tax system and regulations preserve old wealth and make new fortunes impossible. The truly rich fend off the law with lawyers, leaving those below to be picked clean by the IRS. The government is a parasite that taxes half our income, then taxes everything we buy. We struggle to live on a quarter of our productive capacity - an eighth if you count regulation - while the STATE consumes the other seven eighths.

Government is a disease masquerading as its own cure.

We could solve most of the country's poverty and hunger problems if the government would just leave people alone.

We can argue over the defination of wealthy and higher income all day long. Its semantics and irrelevant.

But yes, we should raise their tax before we raise the tax of the income group that is having their homes foreclosed on and are unable to find a job.

Its not about punitive. Its about affordability. A guy making $250k+ can afford taxes a whole lot more then someone making $40k. Those people should get the tax cuts.


You must be a Socialist. Reminds me of when I lived in Canada. You musn't have any idea of how life in a Socialist country is, and let me inform you, it is not pretty. Redistribution of wealth does NOT work.

Explain to me, according to the Constitution, where it is proper and/or just for the Federal Government to impose taxes on people who earn more money and give it away to the lower income earners? People who have a high income have it for a reason. Not because they slacked through school, nor because they drug their knuckles around in life feeling sorry for themselves. They made things work, made sacrifices, and hold jobs that pay that increased amount. In very few cases are people born into wealth. When I moved from Canada with my family, we were considered "less fortunate" in Canada. However, working with the free enterprise system, my parents manage to build a business that is currently grossing $1.4m/year with $400k of payroll. This is job creation, not the entitlement handout crap that Democrats are allowing!


So, that guy making $250k+ should be taxed more why, besides the fact he can afford it. If we cut down the taxes for all the low income earners, what will that do to help the economy? Maybe those low-earners can get three big macs instead of two next time. Or maybe those low-earners can save an extra $12 a paycheck. The bottom line is that the only way to make the economy rebound is the trickle down effect. The only fair income tax system would be a flat-tax rate, and a one time tax on big purchase items, i.e. cars, homes etc.

Otherwise know as Reganomics, if we chop down the tax rate for major corporations and institute incentives that will benefit them to keep jobs on this side of the big pond, that will happen. Trickle down effect will increase available gross, allowing them for expansion, which would in turn create new jobs, which in turn creates new tax-payers. It is as simple as that. Giving out to "poorer" people will do no good for the rebound of the economy.

The fact is that the American people have lost sight of what the American dream is. Pre-entitlements, citizens would grow up, get married and start a business. People would make a name for themselves and turn a profit. However, with as much government intervention as there is now, people would rather let the government pay for their expenses. There is a huge lack of responsibility in some people that it makes me sick.

Does the government waste? Stimulus fun fact. The US government spent $800,000 on teaching uncircumcised African-American men how to clean their genitals. How in the hell is that going to stimulate the economy? This goes to prove that the Feds do not know, at all, how to properly spend our tax dollars. Actually, let me re-phrase that, the Democratic Machine, is purposely wasting our tax dollars on BS. My guess is that all these little entitlements in the stimulus are for repayment of organizations gathering votes for Mr. Obama, but we will never, for sure, know the absolute truth.


You have a lot of learning to do, sir. Doubtfully so, being that you live in the most corrupt city in the country (Chicago, mostly democrats), that you will continue to live in denial and bondage of the left. I pray that you will wake up.

-Dylan, your fellow 17yr. old American :Beer

Detroit is not a "ghost town", please don't believe what the media is saying. Detroit is actually on the rebound, I see it with my own eyes.

And Mayor Bing has just been holding a series of town meetings to float the idea of turning some of the 'bombed-out' parts of the city back into farm land.

Areas that bustled when I was a kid are now emptied and, if not torn down, look like a set from a WW II movie.

What was a city of almost two million is now somewhere just north of 800 thousand.

The former train station is a wreck mostly used as a place to go exploring. Some months ago the rotted corpse of a homeless someone was discovered at the bottom of what had been an elevator shaft. It was concluded that the body had been there for several months.

There's more than a murder a day within the city limits and the metro area is the most violent in the country.

Renaissance---I don't think so.

KS

If someone could show a historical correlation between tax rates and the economy, I'd sure like to see it. All I hear is theory.

Here's some stuff to get you started:

Historical top marginal tax rates 1913 - 2003 (http://www.truthandpolitics.org/top-rates.php) (simple - only shows top marginal rate)
Historical tax rates (http://www.taxfoundation.org/files/fed_individual_rate_history-20100923.pdf) (detailed - shows all rates and marks the dates of major tax law changes)

Unemployment rate 1948 - Present - in easy to read bar graph (http://www.miseryindex.us/urbymonth.asp)

Real GDP growth 1930 - 2009 (http://www.bea.gov/national/nipaweb/TableView.asp?SelectedTable=1&ViewSeries=NO&Java=no&Request3Place=N&3Place=N&FromView=YES&Freq=Year&FirstYear=1930&LastYear=2009&3Place=N&Update=Update&JavaBox=no#Mid)

Historical Budget tables 1940 - 2009 (http://www.gpoaccess.gov/usbudget/fy09/pdf/hist.pdf) (PDF) Page 26 has the most concise and "apples to apples" comparison of tax revenues, although feel free to cite any other table.

While I'm at it, there's something I'd like to point out on that last link. The right loves to claim that "tax revenues doubled under Reagan". This is a myth. The only way you can arrive at that conclusion is by counting the entire decade of 1980 to 1990 and use real (non-constant) dollars. Yet, no matter how you count it, the decade of the 80s was behind every other decade in terms of revenues. Even the 70s beat the it in terms of real, constant, and percent of GDP.

Consider this: Despite what you call the "punitive" tax rates of the 1940s through to Reagan, the economy ticked along quite nicely for 40 years. It had its normal ups and downs, yet employment, investment, and GDP stayed fairly steady. It's also fair to say that we can thank the reforms of the 30s for the lack of any further gigantic bubbles or collapses. I'm sure you'll disagree, but then, you'd be wrong. ;-)

On a side note, bear in mind that not one person actually paid those crazy rates. I get the feeling some people mistakenly believe that if you go up to the next tax bracket, then suddenly all your income is taxed at the higher rate. I assume everyone here knows that's false, but just in case... If you earn $249,000 this year and you make $255,000 next year, you'll only pay the higher rate on $5000. The rest is still taxed at the lower rates. I'm sorry if I've insulted anyone, but it's really frustrating to hear people talk about how the "small business owner making $250,000" is going to be decimated if the tax cuts expire.

Sorry to get off track but that's another pet peeve of mine.

Taxes are currently at the lowest levels since 1992, yet we've had several booms and busts since then. And right now we're in the worst bust in 80 years. Yet if all it takes is lower taxes to boost an economy, then we should be seeing the best times since... wait... weren't the 90s our last big boom? Back in the day after Clinton raised taxes and Republicans told us the sky would collapse (I can provide quotes if needed)?

So it would seem that lowering taxes gets diminishing returns at some point. In other words, looking back at history, it appears that we're currently way over on the left side of the mythical Laffer Curve. If the tax cuts expire, we go back to the rates we had during the Clinton years. Ah, if only we could have it so good.

So I ask again: show me, historically, where the correlation between tax rates and the health of the economy is.

It should be transparently clear to anyone: Taxes aren't the problem. Companies aren't shipping jobs overseas because of taxes. They're shipping them overseas because they can. There is no tax break that can possibly make an American worker competitive against a Chinese or Indian worker making $5 a day.

By the way, when I ask for a correlation, I don't mean one isolated era. You can't say, "look at the unemployment rate in the 80s" and leave out the fact that the early to mid 50s had an even lower unemployment rate (when the top rate was highest).

While I'm at it, there's something I'd like to point out on that last link. The right loves to claim that "tax revenues doubled under Reagan". This is a myth.
Nice straw man. Try to address the posts that are currently in this thread, k? :rolleyes:

By the way, does all your 'data' account for state and local taxes, social security taxes WHICH ARE NOT PUT INTO A TRUST FUND, excise taxes, gas taxes, regulation, fees, corporate taxes, and sin taxes like Obama has enacted on products such as alcohol and tobacco? It's easy to use 'certain' statistics to prove your point. I doubt you have the knowledge to correctly sum up the entire, complicated US economy.

Do I need to dredge up an old Arthur Laffer article to debunk you again?

My brother and I made it into the top 1% in the last 6 years aquiring a net worth of about 10 million so far starting with a 100k investment.
We have been at it for 25 years now so we certainly paid our dues.
Other than a couple million my brother and I set aside for retirement
the rest of the money finances my receivables and funds further expansion.
We have managed to do this while paying a combined state and federal tax rate of about 40% six years ago and 45% this year.
We are not plutocrats or Wall st types paying 15% tax rate on capital gains.
Although we have a big line of credit we are almost entirely self funding and hardly ever use the line.
Currently we are an S corp where the company profits are considered personal income.

It is amusing reading speculation here on a 4-5% tax increase being a job killer because the rich won't spend.

It is sophistry from rich people protecting their personal interests and from ideologically motivated people who hate government, have no personal experience and are only speculating about having money while arguing nonsense and engaging in fantasy:D

If demand is there for sales business will meet it because it makes money and 5% more in taxes though not pleasant is hardly a cause not to invest in the future.

In our roadrunner Acme style we just bought an 11th piece of equipment for 75k that would cost a million new and will be putting it up and making it work over the winter for a total cost of about 200k.

Beyond that we also purchased another million dollar piece of equipment for 115k that makes material that we now buy for our 10 other large pieces of production equipment.

That's another project to get going for an extra 5% in profit.

Why do governments tax the rich more?
Because that's where the money is and we can afford it.
My income is huge because of the S Corp thing but I live on 100k and don't have a mortgage so i have lots left over for anything even at a 45% tax rate.
But it mostly just rides on the street as juice for my company.

It's the plutocrats and Wall St types paying 15% tax rates who are getting away with
things unfairly and not the mere junior millionaires who are suppliers,contractors and/or make product(s) that add value to the economy while paying 40-45% tax rates.

My brother and I made it into the top 1% in the last 6 years aquiring a net worth of about 10 million so far starting with a 100k investment.
We have been at it for 25 years now so we certainly paid our dues.
Other than a couple million my brother and I set aside for retirement
the rest of the money finances my receivables and funds further expansion.
We have managed to do this while paying a combined state and federal tax rate of about 40% six years ago and 45% this year.
We are not plutocrats or Wall st types paying 15% tax rate on capital gains.
Although we have a big line of credit we are almost entirely self funding and hardly ever use the line.
Currently we are an S corp where the company profits are considered personal income.

It is amusing reading speculation here on a 4-5% tax increase being a job killer because the rich won't spend.

It is sophistry from rich people protecting their personal interests and from ideologically motivated people who hate government, have no personal experience and are only speculating about having money while arguing nonsense and engaging in fantasy:D

If demand is there for sales business will meet it because it makes money and 5% more in taxes though not pleasant is hardly a cause not to invest in the future.

In our roadrunner Acme style we just bought an 11th piece of equipment for 75k that would cost a million new and will be putting it up and making it work over the winter for a total cost of about 200k.

Beyond that we also purchased another million dollar piece of equipment for 115k that makes material that we now buy for our 10 other large pieces of production equipment.

That's another project to get going for an extra 5% in profit.

Why do governments tax the rich more?
Because that's where the money is and we can afford it.
My income is huge because of the S Corp thing but I live on 100k and don't have a mortgage so i have lots left over for anything even at a 45% tax rate.
But it mostly just rides on the street as juice for my company.

It's the plutocrats and Wall St types paying 15% tax rates who are getting away with
things unfairly and not the mere junior millionaires who are suppliers,contractors and/or make product(s) that add value to the economy while paying 40-45% tax rates.Thanks for demonstrating that the rich go to great lengths to avoid taxes. That makes my point for me. The only people hurt by taxes on the so-called wealthy are small business owners and the middle class.

The only thing you're arguing is that you've succeeded DESPITE the government - which plays into my argument. Where would you be if they hadn't been taxing you at those rates? How many more jobs might you have created, taxpayers generated?

If someone could show a historical correlation between tax rates and the economy, I'd sure like to see it. All I hear is theory.

Are you positioning yourself to say that tax policy has no influence on the economy? That the economy and entrepreneurs function without regard to or influenced by the tax policy? And that it doesn't negatively impact the economy when money is forcefully seized from investors and citizens and dumped into D.C?

But I suspect you've purposefully posed a question that you know will never be answered to your satisfaction. Because of the needless complexity of tax policy in this country, there's no way to present such information without it being subject to interpretation.

Obama has recently started using the rhetoric of how tax rates, even after the Jan 1 tax increase, will still be lower than they were under Eisenhower and early in Reagan's tenure. On it's surface, this would seem like something easy to discuss, but it fails to note that there were far more tax brackets then. It also fails to note the vast array of accounting tricks and deductions that were used to avoid such taxation.

So the rhetorical trap set here is for me to present the period of sustained growth following the Reagan tax cuts, and then for you to use the fact there was a 70% tax rate in 1981 (though Reagan continued to work to cut these rates throughout his Presidency bringing them BELOW current rates today by the end of his Presidency.)

To keep this simple, I'll just point out the historical reality.
Reductions in tax policy have been used to stimulate economic recovery throughout the past century.

It was done in the 20s, leading to the "Roaring 20s."
They dropped rates from 70% to 25% and included deep federal spending cuts. Tax revenues ROSE by 61% following the cuts because of economic activity.

It was done in the late 40s by the Republican congress, finally helping to pull the U.S. out of the depression/recession that had started under FDR and Hoover.

It was done by JFK (http://www.wnd.com/news/article.asp?ARTICLE_ID=39517) with his across the board tax cuts in 1961. They lowered the top rate from 90% to 70% yet resulted in another 62% increase in revenues.

And it happened again under George W. Bush.

It was done in the 80s by Reagan. Deep reductions in the tax rates and deductions that lead to increased economic activity and tax revenue generated.... but that's something you appear to want to discuss:

While I'm at it, there's something I'd like to point out on that last link. The right loves to claim that "tax revenues doubled under Reagan". This is a myth. The only way you can arrive at that conclusion is by counting the entire decade of 1980 to 1990 and use real (non-constant) dollars. Yet, no matter how you count it, the decade of the 80s was behind every other decade in terms of revenues. Even the 70s beat the it in terms of real, constant, and percent of GDP.
Tax revenues increased by 99.4% by the end of the 80s, that is absolutely true, despite cutting the top rate from 70% and gradually falling to 28% in the LAST YEAR of his Presidency in 1988. You have to include the entire decade inorder to calculate the economic impact of the last tax cut.

If tax cuts didn't stimulate economic activity, how else could such a radical drop in the tax rate (over 40%) result in such a steep increase in revenue generated? Some can be attributed to the fact that when tax policy isn't overly punitive, people have less incentive to find creative ways to avoid paying taxes. And while that isn't sufficient to explain the entire increase in revenue, it does further support the argument for a lower, less complicated tax policy.

But to address you issue of real dollars

Federal receipts equaled $517 Billion in 1980
In 1990, they equaled 1.032 Trillion.

But, in constant dollars (Y2005), 1980 receipts equaled $1.2 Trillion dollars
And in 1990, they equaled $1.51 Trillion. So, despite your claim, and despite reducing the top rate by over 40%, revenue INCREASED by 3 Trillion dollars.

And to correct your claim about taxation as a result of GDP-
The tax revenue collect as a percent of GDP was 19% in 1980.
In 1990 it was 18%.

Also interesting and significant-
The share of income taxes paid by the top 10 percent of earners increased during the Reagan administration despite the reduced rates. It went from 48% in 1981 to over 57% in 1988.

The top 1% of earners paid even more. Their share of the budget raised from 17.6 in 1981 to 27.5 in 1988.

Taxes are currently at the lowest levels since 1992, yet we've had several booms and busts since then. And right now we're in the worst bust in 80 years. Yet if all it takes is lower taxes to boost an economy, then we should be seeing the best times since... wait... weren't the 90s our last big boom? Back in the day after Clinton raised taxes and Republicans told us the sky would collapse (I can provide quotes if needed)?
Yes, taxes are the lowest right now since 1992, but we are facing across the board tax INCREASES come January 1. And, as you've noted, these would be significant tax increases during "the worst bust in 80 years." That is economically suicidal to do.

It doesn't JUST take reduced tax rates to restore the economy, but raising them will undermine it.

I can argue that the economic strength of the 90s was a byproduct of the economic conditions that were created by the Reagan economic policy. Things were prosperous enough, and we had a "bubble", so that the tax increases were absorbed. It was also important to note that the economy DID dip in 1992, creating the economic and political situation that enabled Clinton to be elected. "It's the economy stupid."

It's also critically import to remember that the Congress changed parties in 1995 and they, briefly, imposed fiscal discipline on the President.

There are a lot of conditions and factors at play, the tax policy isn't a silver bullet to everything, but it is a significant factor when trying to manage and observe the economy.

So it would seem that lowering taxes gets diminishing returns at some point.
Yes. There's something called the Laffer curve that displays this point.

In other words, looking back at history, it appears that we're currently way over on the left side of the mythical Laffer Curve.
If we were way "over on the curve, that means revenues would have fallen sharply.

Basically, you're presenting a schizophrenic argument here. Arguing that the current tax policy, and previous tax cutting policies (often correcting bracket creep an vast government expansion) push us too far to the side of the Laffer Curve. Yet, I've just demonstrated that following all of these tax cuts, revenues increased (in constant dollars).

If the tax cuts expire, we go back to the rates we had during the Clinton years. Ah, if only we could have it so good.
Well, rest assured, you're going to get a Republican House or Representatives pretty soon after this Presidents first midterm election as well. And maybe they can establish some fiscal responsibility in the coming years as they briefly did last time. Also, Clinton did sign some bills LOWERING taxes during his second term.

And this still avoids the illogical decision to RAISE taxes during an economic down turn. The high-tax arguments are economically illiterate even during economic healthy times, but to do so right now, is either ignorant or deliberately destructive.

And Obama has expressed his real tax policy during the primaries.
When addressing the economic REALITY that reducing the capital gains tax generated MORE revenue, both under Clinton and Bush, Obama argued that he supported raising them in the name of "fairness" despite the decreased revenue.

YouTube - Obama: Raise Taxes, Capital Gains - "For Purposes of Fairness" (http://www.youtube.com/watch?v=WpSDBu35K-8)

Companies aren't shipping jobs overseas because of taxes. They're shipping them overseas because they can. There is no tax break that can possibly make an American worker competitive against a Chinese or Indian worker making $5 a day.
Taxes are among the reasons companies move overseas.
And tax reform would be something that stimulated companies to refrain from outsourcing, as well as stimulating other companies to in-source production to this country.

Regulation is another problem problem.
And political uncertainty, particularly with this administration and their overt hostility to capitalism is another.


Here are the numbers I used for reference:
http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=200

Thanks for demonstrating that the rich go to great lengths to avoid taxes. That makes my point for me.

The only thing you're arguing is that you've succeeded DESPITE the government - which plays into my argument. Where would you be if they hadn't been taxing you at those rates? How many more jobs might you have created, taxpayers generated?


I can't say since with my serendipitious luck we hit the jackpot in 2004 and our child was spared and passed over by the recession( we have had our best year so far) but in dealing with what is we have made as much as a 20% yearly pre tax return on sales, in line with the most profitable corporate legal businesses.
Margins are going down but we already have our golden pot and have countered with increased efficiency and more mechanization.

I'm not going to lament what might be under easier rules.

Jobs require an idea, ingenuity and a successful product or service that adds value to increase the wealth.
In a different universe if I paid half as much taxes there may not be the government sponsored ADA infrastructure projects that make life better for people and profit me.

I can't say since with my serendipitious luck we hit the jackpot in 2004 and our child was spared and passed over by the recession( we have had our best year so far) but in dealing with what is we have made as much as a 20% yearly pre tax return on investment, in line with the most profitable corporate legal businesses.

I'm not going to lament what might be under easier rules.

Jobs require an idea, ingenuity and a successful product or service that adds value to increase the wealth.
In a different universe if I paid half as much taxes there may not be the government sponsored ADA infrastructure projects that make life better for people and profit me.

The issue isn't whether you're ABLE to create wealth despite tax policy. It's an issue of whether as much wealth can be created when the disincentives created by the federal government are increased.

This is especially important when, time and time again, it's demonstrated that the long term tax receipts collected tend to remain about the same or increasing when the disincentive is reduced.

It's also interesting that you note that you've been working since 1985 but have seen economic success these past six years. The Bush tax cuts were passed in 2001 and 2003.

There's also the ethical issue of how much should a person be expected to pay to the federal government? How much of your life should you be forced to hand over to the government? And how big should that government be.

Tax policy is an important subject, but it's also a narrow focus on an even larger social and political issue. Personally, I regret even debating this in terms of "how much revenue is generated" or even the economic impact, because I think that tax policy is as much a social and philosophical issue as an economic one.

It's also interesting that you note that you've been working since 1985 but have seen economic success these past six years. The Bush tax cuts were passed in 2001 and 2003.




Serendipitous luck.
My product was expanded to fill a new market 5-10 times larger that
what it was originally designed for.
We were ready and had the capacity by running 24 hrs and expanding our capital equipment quickly.
My success was not because of the Bush tax cuts but having the right product at the right time and having the capacity to fill the demand.
If I had had to pay an extra 4-5% in taxes it wouldn't have spoiled my success and I'd be only slightly less rich.

Thanks for demonstrating that the rich go to great lengths to avoid taxes. That makes my point for me. The only people hurt by taxes on the so-called wealthy are small business owners and the middle class.




I haven't demonstrated such or gone to any great lengths but in my business I don't have the opportunity for complicated tax avoidance measures like buying sewers in Germany and leasing them back to the local municipalities.
I need my money for me to generate profits with it.

I can write off 100% of my capital purchases this year which is nice.

I suppose it depends on how you define a small business.
I'm a small business owner but under any measure I'm in the top 1%(just)
Mom and Pop businesses with less than 1 million in revenues don't make enough to be affected by higher tax rates.

It should be transparently clear to anyone: Taxes aren't the problem. Companies aren't shipping jobs overseas because of taxes. They're shipping them overseas because they can. There is no tax break that can possibly make an American worker competitive against a Chinese or Indian worker making $5 a day.

taxes are not the only problem. However, the only person who ever implied they were in this thread was you. That's called a straw man. To claim that any one factor is the cause is foolish; a notion that has been discredited with the demise of classical economics.

The focus is on the incentive structure involved and the way taxes effect that incentive structure. Not one shred of information you provided in any way counters that argument. In fact, the info you provided, when analyzed properly actually confirms that focus on the incentive structure, the method of analysis used, and the underlying theory of social causation.

You really should know the argument you are trying to counter before making the attempt.

Also, the characterization of the conservative theoretical argument as tax cuts always leading to a net increase in tax revenue (generally) is a lie. While there may be some more ignorant conservatives who do make that argument, the actual economic theory and the argument made from it is something entirely different, and not near as simply; thus being easy for the propagandist to distort. It is convenient for those looking to dismiss the viewpoint to find the most ignorant, inarticulate and inaccurate statement of the theory and use that to try and discredit the actual theory. That is simply dishonest; a thinly veiled straw man argument.

As to the actual argument about taxes, revenue increases and incentives, you mentioned one of the best sources of those arguments; the creator of the "Laffer Curve' that those arguments and ideas (at least partially) stem from; Arthur Laffer.

There have been two (http://www.lincolnvscadillac.com/showthread.php?p=708162&highlight=Laffer#post708162) articles (http://www.lincolnvscadillac.com/showthread.php?p=690696&highlight=Laffer#post690696) by him that have been posted recently on this forum alone. Before attempting to counter the conservative economic argument on taxes, it would be a good idea to familiarize oneself with those articles and the arguments presented in them:
The composition of wealth also responds to incentives. And it's also simple enough for most people to understand that if the government taxes people who work and pays people not to work, fewer people will work. Incentives matter (http://online.wsj.com/article/SB10001424052748704113504575264513748386610.html?m od=WSJ_latestheadlines).
See how, like any and all valid economic theory, the focus is first and foremost on incentives? To miss that point is to misunderstand the theory.

Here are also a few lines from this article (http://online.wsj.com/article/SB10001424052748703977004575393882112674598.html?m od=rss_opinion_main) that better expand on the theory behind the argument:
...there is a false presumption that higher tax rates on the top 1% of income earners will raise tax revenues.

Anyone who is familiar with the historical data available from the IRS knows full well that raising income tax rates on the top 1% of income earners will most likely reduce the direct tax receipts from the now higher taxed income—even without considering the secondary tax revenue effects, all of which will be negative. And who on Earth wants higher tax rates on anyone if it means larger deficits?
This is the inverse of the argument many on the left claim conservatives are making; that tax cuts directly lead to net increases (generally) of tax revenue. This is a very important distinction. The mythical conservative argument of leftist fantasy is a positive argument (tax cuts = revenue increase) while the actual conservative is a negative one (tax increases = revenue decreases). The two are opposites and do not logically imply one another.

Not to get too distracted, but the difference in focus between the progressive and conservative positions is also implicit here. Progressives look to government first as the means for social change (progress), hence the myopic focus on generating tax revenue with little concern for how those attempts to increase revenue might effect other areas of society, like the people being taxed. Conservatives and libertarians look away from government and to the private sector as the engine of social change, hence the focus primarily on how attempts to generate tax revenue will effect those being taxed and (more broadly) how it will effect the private sector.

More from the article:
Since 1978, the U.S. has cut the highest marginal earned-income tax rate to 35% from 50%, the highest capital gains tax rate to 15% from about 50%, and the highest dividend tax rate to 15% from 70%. President Clinton cut the highest marginal tax rate on long-term capital gains from the sale of owner-occupied homes to 0% for almost all home owners. We've also cut just about every other income tax rate as well.

During this era of ubiquitous tax cuts, income tax receipts from the top 1% of income earners rose to 3.3% of GDP in 2007 (the latest year for which we have data) from 1.5% of GDP in 1978. Income tax receipts from the bottom 95% of income earners fell to 3.2% of GDP from 5.4% of GDP over the same time period.
http://sg.wsj.net/public/resources/images/ED-AL963_laffer_NS_20100801181202.gif
Again, it should be noted what the argument for tax cuts is and, more importantly, what the argument is not.

As to the demand for a direct correlation between tax rates and the economy the theory first needs to be understood.
If someone could show a historical correlation between tax rates and the economy, I'd sure like to see it. All I hear is theory.
The problem is you don't understand the theory and how it works. Without an accurate understanding of the theory, no amount of empirical evidence can logically infer anything (but it does open the door to spin and propaganda).

The demand for a correlation itself is a little absurd as well because of all the mitigating factors involved. income tax rates are only one of many factors that can lead to economic prosperity or recession (by altering the incentive structure). Relying simply on stats creates a whole host of problems (either way) due to the statistical abstraction involved as well. Not understanding the theories involved and not having a firm grasp of the methodologies used in statistical analysis only heightens the uncertainty and allows for more deception.

These are all important reasons why it is necessary to first have a firm grasp of the underlying (and competing) theories involved instead of simply knowing the mere rhetoric concerning the theories promoted by propagandists and demagogues (among others).

…without principles, all reasoning in politics, as in everything else, would only be a confused jumble of particular facts and details, without the means of drawing out any sort of theoretical or practical conclusion.
-Edmund Burke

To demand a clear correlation (especially without a clear understanding of the theories involved) is effectively raising the goalposts to an unrealistic and unachievable degree.

In fact, the demand for a clear correlation comes across as simply a cheap attempt to delegitimize a theory (without fully understanding it). It would help if a competing, seemingly more accurate theory could be articulated. Basically, you are attempting to simply say "this understanding is wrong" without showing what the "right" understanding is and why it is "right".

This phenomenon of simply attempting to delegitimize a viewpoint without presenting an alternative, more accurate viewpoint, is also very endemic of the recent and broader push on the left to discredit the entire notion that taxes have any substantive effect on the economy; almost always through shoddy, misleading and dishonest "analysis" that belies little understanding of the theory (many of Johnny's recent posts and sources being prime examples of this). It is simply sloppiness of thought that suggests a myopic focus on rationalizing a dismissal of opposing views.

Instead of an honest debate of ideas, we get elaborate excuses to dismiss opposing views. That drags down any discussion.

^^^*owned*

Seems like about once a year Marcus trolls his lame talking points on this exact subject and then gets thrashed by Shag.

Some people never learn.

Despite what you call the "punitive" tax rates of the 1940s through to Reagan, the economy ticked along quite nicely for 40 years. It had its normal ups and downs, yet employment, investment, and GDP stayed fairly steady. It's also fair to say that we can thank the reforms of the 30s for the lack of any further gigantic bubbles or collapses.

First, where are you getting the notion that the economy ticked along quite nicely for 40 years? We were still "ticking along quite nicely" with the stagflation and misery index in the 1970's? It might be worth noting that the economic recovery didn't happen until after WWII.

As to the notion that government reforms prevented further gigantic bubbles or collapses, again you might want to actually familiarize yourself with the actual theories instead of mere rhetoric.

This country, and with it most of the Western world, is presently going through a period of inflation and credit expansion. As the quantity of money in circulation and deposits subject to check increases, there prevails a general tendency for the prices of commodities and services to rise. Business is booming.

Yet such a boom, artificially engineered by monetary and credit expansion (http://oll.libertyfund.org/?option=com_staticxt&staticfile=show.php%3Ftitle%3D1887&chapter=109644&layout=html&Itemid=27), cannot last forever. It must come to an end sooner or later. For paper money and bank deposits are not a proper substitute for nonexisting capital goods.

Economic theory has demonstrated in an irrefutable way that a prosperity created by an expansionist monetary and credit policy is illusory and must end in a slump, an economic crisis. It has happened again and again in the past, and it will happen in the future, too.

If one wants to avoid the recurrence of periods of economic depression, one must start by preventing the emergence of artificial booms. One must prevent the governments from embarking upon a policy of cheap interest rates, deficit spending, and borrowing from the commercial banks.

This is, of course, a very difficult task. Governments are in this regard very obstinate. They long for the popularity that booming business conditions seldom fail to win for the party in power. The unavoidable crash, they think, will appear only later; then the other party will be in power and will have to account to the voters for the evils which their predecessors have sown.

Thus there is no doubt that we shall one day have to face again an economic recession, although it is impossible to determine the date of its outbreak and the degree of its severity. It will be bad indeed. But worse than the crisis itself could prove the psychological and ideological consequences of an erroneous interpretation of its causes.
-Ludwig von Mises, 1951
Far from government action preventing bubbles and collapses, they in fact insured those bubbles and collapses by distorting the market and creating artificial booms.

In fact, the entire notion that governmental actions prevent bubbles and collapses makes no logical sense. It is easy to simply look to the most immediate symptoms of a collapse and attribute it to those factors, but that would be a shoddy and one-sided analysis. You need to first understand how the economy works (theory), then how the boom and bust cycle works (more theory) then you need to look for the actual causes of a boom and/or bust, not simply the most emotionally satisfying scapegoats to place blame.

Serendipitous luck.
You missed the point.
The observation isn't based on the idea that you were encouraged to pursue your self-interest because the tax rate had been reduced. But that the economic environment had expanded so that the opportunity for you to expand presented himself.

It's purely speculative of me to say this, but would the same opportunity have presented itself had the tax rates not changed, stimulating the economy in '01 and '03? Probably not.

And had you not seen that 5% reduction, how much less would you have had to invest in your company those 5 years?

It's not necessary to answer those questions, and maybe they don't apply to you, but it did apply for many other companies. Frankly, I'd prefer to not make this about you or your business specifically because this is a macro-discussion.

YouTube - Why Can't Chuck Get His Business Off the Ground? (http://www.youtube.com/watch?v=YQscE3Xed64)

You missed the point.
The observation isn't based on the idea that you were encouraged to pursue your self-interest because the tax rate had been reduced. But that the economic environment had expanded so that the opportunity for you to expand presented himself.

It's purely speculative of me to say this, but would the same opportunity have presented itself had the tax rates not changed, stimulating the economy in '01 and '03? Probably not.

And had you not seen that 5% reduction, how much less would you have had to invest in your company those 5 years?

It's not necessary to answer those questions, and maybe they don't apply to you, but it did apply for many other companies. Frankly, I'd prefer to not make this about you or your business specifically because this is a macro-discussion.

You guys like to talk theory.
I'm a living example and just putting in my .02
I'm sorry if you feel that deflates your discussion.
My success is driven by ambition, ADA and siezing an opportunity,not the Bush tax cuts although it didn't hurt having them when real wealth was/is being generated.
I can borrow a million tomorrow but have my own money.
Tax cuts or no I have the means at my disposal to accomplish what I want.
If my tax rate goes up 5% I'm already working on making 5% more.
I have to stay competitive and keep evolving to stay in business.

Companies aren't shipping jobs overseas because of taxes. They're shipping them overseas because they can.


In other words, taxes are the reason jobs are being shipped overseas, there is no reason jobs are being shipped overseas. ;)

That is not a very convincing (or logical) conclusion.

It makes more sense to look at the incentive structures involved. What incentives do businesses have to stay here and what incentives do they have to go somewhere else?

If a business is going to be taxed higher and/or regulated more here but not so much in another country, they have every reason to go overseas. Basically, businesses are going to follow the path of least resistance in maximizing profit and growing their business.

If you looked at the theory involved this would all make sense. When you don't look at the theory involved, there is no reasonable conclusion that can be drawn from any amount of evidence.

Again...
…without principles, all reasoning in politics, as in everything else, would only be a confused jumble of particular facts and details, without the means of drawing out any sort of theoretical or practical conclusion.
-Edmund Burke

My success is driven by ambition, ADA and seizing an opportunity...

I don't think anyone is trying to delegimize your accomplishments and well earned success. The issue is whether or not an opportunity would have been their (or to such a degree) if not for certain policies.

When it comes to the broader discussion involved, theory is indispensible and impossible to overlook and maintain any rational analysis and reasonable discussion.

Political pragmatism is impossible without ideology (in the general sense). Objective rational analysis is impossible without theory.

You guys like to talk theory.
I'm a living example and just putting in my .02
I'm sorry if you feel that deflates your discussion.
It doesn't "deflate" anything, but it's extremely specific and none of us are in a position to address your specific business situation. A microeconomic discussion about whatever your business is just isn't possible.

My success is driven by ambition, ADA and siezing an opportunity,not the Bush tax cuts although it didn't hurt having them when real wealth was/is being generated.
...

Tax cuts or no I have the means at my disposal to accomplish what I want. If my tax rate goes up 5% I'm already working on making 5% more.
I have to stay competitive and keep evolving to stay in business.
The fact is, you will make business decisions based upon the economic information you have available. To indulge your very micro economic situation, a 5% increase in taxes will influence the decisions you make. It may reduce the amount your customers are willing to spend. It will reduce the amount of revenue you have to reinvest in your business. Be it $5,000 or $500,000. That could be the difference of buying new equipment or hiring new employees or even an advertising campaign or pay raises. And that money spent would multiply as it traveled through the economy.

Worse yet, when you don't know what's gong to happen. When you can't forecast the economic conditions within the next few years. When you don't know what the tax rate is going to be. That leads to paralysis, companies stop investing and hold tight waiting to see what happens.

So what happens when the economic indicators are troubling. You don't know if your taxes are going up by 5%- which is significant. And you also have looming regulation and health care regulation on the horizon too?

It doesn't "deflate" anything, but it's extremely specific and none of us are in a position to address your specific business situation. A microeconomic discussion about whatever your business is just isn't possible.


...


The fact is, you will make business decisions based upon the economic information you have available. To indulge your very micro economic situation, a 5% increase in taxes will influence the decisions you make. It may reduce the amount your customers are willing to spend. It will reduce the amount of revenue you have to reinvest in your business. Be it $5,000 or $500,000. That could be the difference of buying new equipment or hiring new employees or even an advertising campaign or pay raises. And that money spent would multiply as it traveled through the economy.

Worse yet, when you don't know what's gong to happen. When you can't forecast the economic conditions within the next few years. When you don't know what the tax rate is going to be. That leads to paralysis, companies stop investing and hold tight waiting to see what happens.

So what happens when the economic indicators are troubling. You don't know if your taxes are going up by 5%- which is significant. And you also have looming regulation and health care regulation on the horizon too?

I base my decisions on the opportunity presented me in my micro world.
It's all conjecture on your part as the future is uncertain.
I can't say what I would have done if this was that.
I have more money in my pot of gold than I need to make my investments.
If the tax rate rises 5% I can go back to being a C corp.
The profit money stays in the company anyways and I can take out old tax free money from the profits till now as the taxes have already been paid.
I'm like my own bank.
I'll just continue to live on 100k which is plenty for me since I have no debt.
This strategy will also work if they ever further or fully index social security deductions past 100k.
I've had the best 2 years so far and they were after the recession.
Next year looks even better especially when we get Big 11 machine which can make huge items working over the winter.
I have enough faith in myself my associates and in my judgement to make good decisions and take the right action.
America needs infrastructure rebuilds and improvements and that is not going away.
And these public works jobs cannot be exported and have high respending factors here in america.
Tax policy has very little to no effect on my plans.
America had it's greatest ecomony with tax rates higher than they are today.
Conservatives always pine for the time after WW2 until the Beatles spoiled it all with sex, drugs and dissolute rockstar lifestyles as some kind of utopian shangra la but that time had up to 90% tax rates.

In this case fear of the thing is greater than the thing itself.
When gas went to 4.00 a gallon(like a big tax increase) it was demonstrated that blood can be squeezed out of a stone and people would adjust and go about their business.

I hope for your sake that your fortune doesn't disappear or else you won't have anything else to talk about.

I hope for your sake that your fortune doesn't disappear or else you won't have anything else to talk about.

Foss,
I don't have a gun collection like you to be proud of.:p

And I don't have religion so forget about joining you in the better afterlife
you are looking forward to.

I usually don't talk about myself (recently:D) but you middle class guys are always for some reason defending tax cuts for the wealthy 1% so as one of those 1%ers I thought I should add my opinion and perhaps got a little carried away tooting my own horn.
Pride is a funny thing.
So I'm sorry if I've inadvertently become a troll :eek:

...I think a larger point is being lost here.
Is the purpose of tax policy to simply make the most money for the government?
Is it supposed to be a tool to stimulate the economy?

Or is it really just a necessary evil that we all accept because we need the federal government to fulfill it's responsibilities responsibly. And part of that responsibility is seizing AS LITTLE as possible from the citizens.

So the question shouldn't be what's the best way for the government to take MORE money from the population- but in principle, how much should the government be tolerated to seize from us. And shouldn't the government be forced to stay small and fiscally responsible with the money it has taken from us?

It's all conjecture on your part as the future is uncertain.

No more so conjecture then to assert that air will be available to take your next breath with, that you will wake up tomorrow or that the next step you take will land on solid ground and not fall into some infinite void.

If you want to go with the whole "the future is uncertain" dodge then nothing is certain in this world. No scientific finding is legitimate and, more broadly no assumption about anything is valid.

No more so conjecture then to assert that air will be available to take your next breath with, that you will wake up tomorrow or that the next step you take will land on solid ground and not fall into some infinite void.

If you want to go with the whole "the future is uncertain" dodge then nothing is certain in this world. No scientific finding is legitimate and, more broadly no assumption about anything is valid.

Science is not politics and the laws of physics do not change.
But human endeavors though well planned do not always have certain outcomes so I'll modify my statement to say outcomes can be anticipated
and predicted but are not always certain and a foregone conclusion.

Science is not politics and the laws of physics do not change.

The logic is still the same. If something has happened in the past that doesn't mean with absolute certainty that it will happen in the future. U need to look at how things are known with science (hard or soft). To rationalize a negation of theory using the "future is uncertain" argument is to also negate science.


The laws of social interactions are just as constant as the laws of social interaction. The only challenge to both hard and soft sciences is in discerning those laws accurately.

Hume elaborated on this argument. Here are some notes from a philosophy class I took last year that lay out the argument:
All inferential reasoning is either deductive or inductive
Cause and effect reasoning is not deductive. Why not? Because when you’re performing such reasoning, you can deny without contradiction that the conclusion follows from the premises.
So, cause and effect reasoning is inductive. (from 1, 2)
All inductive reasoning presupposes the truth of the Principle of the Uniformity of Nature (http://en.wikipedia.org/wiki/Principle_of_uniformity) (herein, PUN). The PUN says: The future is similar to the past.
The PUN is a synthetic (informative) sentence; you can deny it without contradiction. Moreover, the truth of the principle, if known, is known a posteriori.
But how exactly are you supposed to know through sense-experience that the PUN is true? You have observed in the past that the future was similar to the past. So, you predict that also in the future the future will be similar to the past. In order to arrive at this conclusion, however, you have to presuppose the PUN. You have already to presuppose what you want to prove - hence, you move in a circle. But a circular attempt to justify the PUN is no good justification at all. So, you do not know (a posteriori) that the PUN is true.
Since cause and effect reasoning is inductive and thus based on the truth of PUN, it is no good reasoning at all. (from 3, 4, 5, 6)

This is essentially a more elaborate version of the argument you are making (Hume does have a resolution for this dilemma, BTW). Essentially, the future cannot be logically know. It is an absurd abstraction from reality.

However you are now added a false dichotomy between soft sciences and hard sciences to rationalize that, in the process creating a double standard. With hard sciences, the future can logically be inferred from the past, but with soft sciences that is not possible.

In fact, the argument you are making, if anything, negates the hard sciences while not so much the soft sciences. The hard sciences are rooted much more in empirical verification (and thus inductive reasoning) which would fall into the circular reasoning that Hume spells out and that you are alluding to. However, the soft sciences are more rooted in theory and deductive reasoning (where the conclusion necessarily follows from the premises) and thus avoid that circular reasoning flaw.

But human endeavors though well planned do not always have certain outcomes so I'll modify my statement to say outcomes can be anticipated
and predicted but are not always certain and a foregone conclusion.

In a very specific sense, you are correct. We cannot predict exactly how long a depression or an economic boom will last (down to the number of days, hours, etc) or how much wealth will be created or lost, but we can predict that it will occur with certainty and make rough estimates with accuracy. It depends on the degree of specificity and your argument would have to assume an exactness on the part of soft sciences which is simply not there.

There are also natural events or Acts of God as some refer to them and acts of men that cannot be readily predicted.

Tunguska comes to mind as an extreme example

http://en.wikipedia.org/wiki/Tunguska_event

Katrina was a natural disaster.

On the man made side we have accidents like Chernobyl, Bhopal,Challenger,3 Mile Island, Exxon Valdez, Gulf Oil Spill, the lost hydrogen bomb off the Georgia coast, etc

or deliberate acts like Saddam diverting the Euphrates river.

http://findarticles.com/p/articles/mi_m1134/is_9_116/ai_n21092828/

and of course 9/11.

Natural and man made events can influence the future in unpredictable ways.

Also people have personal accidents, health problems, personality disputes, criminal activity.

Natural and man made events can influence the future in unpredictable ways.

How is that relevant? The social sciences are focused on understanding the patterns of social causation and gleaning certain truths from them.

The "random events" you are referring to are outliers and exceptions to the rule. Things are not as unpredictable as you seem to think. Most of those events still have effect natural and/or social phenomena in predictable ways. houses didn't get torn apart in Katrina in a manner inconsistent with the laws of physics. The societal chaos and political fallout from Katrina were consistent with certain theories of social causation in various different fields.

Also, you are still negating all thought and all attempts to understand the truth, weather in a field of hard science or social science. Undermining the truth is not a credible argument.

How is that anything more then a red herring?

Do you understand the focus of social sciences?

Give me the short version:p

Predicting human behavior?

I know my business and can predict the future based on the past but I can't predict who may become a serious competitor and put pressure on prices.
All I can predict is that where there is money there will be competitors.
That's why I have to keep expanding and evolving and improving efficiencies.
It's evolution.
Adapt or die.

How is that relevant? The social sciences are focused on understanding the patterns of social causation and gleaning certain truths from them.

The "random events" you are referring to are outliers and exceptions to the rule. Things are not as unpredictable as you seem to think. Most of those events still have effect natural and/or social phenomena in predictable ways. houses didn't get torn apart in Katrina in a manner inconsistent with the laws of physics. The societal chaos and political fallout from Katrina were consistent with certain theories of social causation in various different fields.

Also, you are still negating all thought and all attempts to understand the truth, weather in a field of hard science or social science. Undermining the truth is not a credible argument.


we're getting off topic.

I know you like to work out your intellectual muscles with your analysis :D

Some things I thought would work didn't and other things have worked out differently than anticipated.
That's all I'm saying.