Taxes, Taxes, Taxes

[hcap]

http://www.theatlantic.com/business/archive/2012/09/tax-cuts-dont-lead-to-economic-growth-a-new-65-year-study-finds/262438/

Tax Cuts Don't Lead to Economic Growth, a New 65-Year Study Finds

..Here's a brief economic history of the last quarter-century in taxes and growth.

http://cdn.theatlantic.com/static/mt/assets/business/assets_c/2012/09/Screen%20Shot%202012-09-16%20at%2011.15.58%20AM-thumb-340x466-98936.png

In 1990, President George H. W. Bush raised taxes, and GDP growth increased over the next five years. In 1993, President Bill Clinton raised the top marginal tax rate, and GDP growth increased over the next five years. In 2001 and 2003, President Bush cut taxes, and we faced a disappointing expansion followed by a Great Recession.

Does this story prove that raising taxes helps GDP? No. Does it prove that cutting taxes hurts GDP? No.

But it does suggest that there is a lot more to an economy than taxes, and that slashing taxes is not a guaranteed way to accelerate economic growth.

[Tom]

Sorry, you are wrong.
But nice shade of blue.

[hcap]

Sorry, you are wrong.
But nice shade of blue.i am surprised you can opine on nuance. I was under the impresion it was black or white only :lol: :lol:

[ArlJim78]

so, we're just a few solid tax increases away from a robust economy again. that is great news because there are plenty of new taxes hitting in 2013.

[hcap]

It does seem to undermine the endless calls for tax cuts for the wealthy.

Our immediate problem is jobs. Not useless ways to soak the middle class and grease the top10%, all in the NAME of job creation.

[Tom]

You do understand that the tax tsunami coming Jan 1 will plunge the economy into the toilet and kill any growth, right?

[ElKabong]

Our immediate problem is jobs. Not useless ways to soak the middle class and grease the top10%, all in the NAME of job creation.

Psssst....

(a) The problem the Obama took office was "jobs", hcap. Here we are 45 months later and the immediate problem is still jobs

(b)The middle class is going to take the brunt of the tax hit. No change there....Obama extended the so-called Bush tax cuts, did he not? Rename it : Bush-Obama tax cuts for the rich

[delayjf]

In 1993, President Bill Clinton raised the top marginal tax rate, and GDP growth increased over the next five years.

Left out the fact that Clinton cut capitol gains taxes in 97. If tax increase are so good for the economy - why didn't Obama raise taxes back in 08 and 09 when he had the chance - after all he is so smart.

[Striker]

Left out the fact that Clinton cut capitol gains taxes in 97. If tax increase are so good for the economy - why didn't Obama raise taxes back in 08 and 09 when he had the chance - after all he is so smart.
How did Obama have the chance to do this?

[elysiantraveller]

How did Obama have the chance to do this?

He could have let them expire instead of extending them. However, his administration was on record as not wanting to let them expire because it would hurt economic growth.

Obama wouldn't buy what Hcap is selling in this thread.

[Striker]

He could have let them expire instead of extending them. However, his administration was on record as not wanting to let them expire because it would hurt economic growth.

Obama wouldn't buy what Hcap is selling in this thread.
He only wanted to extend them for people making less than $250k though. He had to give in to the republican demands of extending them to everyone in order to get his extension for unemployment benefits for the millions of people that were to have their unemployment benefits stop.

[ElKabong]

Still Bush's fault, I see. That seems to be where the buck stops.....

No leadership in this administration, and no accountability.

[elysiantraveller]

He only wanted to extend them for people making less than $250k though. He had to give in to the republican demands of extending them to everyone in order to get his extension for unemployment benefits for the millions of people that were to have their unemployment benefits stop.

I understand what happened. I am saying that Obama disagrees with Hcap that higher taxes equals economic growth. In addition to unemployment benefits another cut, the payroll tax holiday, was also extended. He doesn't agree that raising taxes increases economic growth. That was my point. Hcap and Obama don't see eye to eye on this.

[Striker]

If Obama let those tax cuts expire for all americans, don't you think his fate would have been sealed, right then and there, in this upcoming election?

[Tom]

Not with 47% not paying income taxes - why would they care?

[rastajenk]

If higher taxes means economic growth, why don't we just give all our income away?

[acorn54]

i think there is a middle ground between higher taxes. as far as job creation goes the fed's tool of lower interest rates was not there when the great recession came along as interest rates were already low.
70% of the economy is consumer driven and the lower and middle class drive this part of the economy for the most part.

[rastajenk]

"70% of the economy is consumer driven and the lower and middle class drive this part of the economy for the most part" sounds like a good reason to keep taxes low, doesn't it?

[Tom]

If higher taxes means economic growth, why don't we just give all our income away?

That is his next term.....

[dartman51]

If Obama let those tax cuts expire for all americans, don't you think his fate would have been sealed, right then and there, in this upcoming election?

So, what you're saying is, Obama made the decision to keep the tax cuts, in order to get reelected, the country be damned. Does that about sum it up? :ThmbUp:

[Tom]

More importantly, Obama is talking smack about the economy rebounding, jobs being created....must be the results of keeping taxes low, right?

Sounds like we should be lowering taxes, unless OB and Jay are lying to us.
Why would anyone expect raising taxes to improve on what not raising them has, according to OB?

Taxes - not just for the employed anymore!

[mostpost]

More importantly, Obama is talking smack about the economy rebounding, jobs being created....must be the results of keeping taxes low, right?

Sounds like we should be lowering taxes, unless OB and Jay are lying to us.
Why would anyone expect raising taxes to improve on what not raising them has, according to OB?

Taxes - not just for the employed anymore!

Rebounding equals improving; moving back up. Obama is not saying these are boom times, just that they are getting better. Unemployment, once 10% is now 8.1% and trending down. We have been creating jobs for 23 straight months-30 if you only consider the private sector.

It was reported today that new housing starts were the highest they have been in over two years. Ditto for the sales of existing homes.

[mostpost]

If higher taxes means economic growth, why don't we just give all our income away?
If lower taxes lead to economic growth why not eliminate taxes altogether? Try that and see how it works. :rolleyes:

What hcap is saying and what is proven by looking at history, is that there is no correlation between lowering taxes and stimulating the economy. The fallacy lies in the reasoning of conservatives. If you allow a business owner to keep more of his profit by taxing him less, he is going to invest that money in his business. But that is only true if his business needs to expand. If no one is buying his product he is going to hunker down. He will put that extra money aside to protect himself and his family until things turn around

[elysiantraveller]

If Obama let those tax cuts expire for all americans, don't you think his fate would have been sealed, right then and there, in this upcoming election?

You are being obtuse. Obama and Biden are on record saying you don't raise taxes in a weak economy. Hcap is implying tax hike improve the economy. These two thoughts are mutually exclusive. That was the only point I was making.

[johnhannibalsmith]

.... If no one is buying his product he is going to hunker down. He will put that extra money aside to protect himself and his family until things turn around

Dirty rat bastard he is indeed, better make sure that doesn't happen. Isn't that essentially what tax breaks that you do support are designed to do? Put more money in the hands of those that need it so that, at some point, the economy will be stimulated by those that are currently "hunkering down"?

[Tom]

uh oh, logic alert! Logic alert!

So mostie, unemployment down from 10 to 8....with no tax hikes, so if we raise taxers, then what, 8 to 10, 12?

[hcap]

.....Hcap is implying tax hike improve the economy........No!

What hcap is saying and what is proven by looking at history, is that there is no correlation between lowering taxes and stimulating the economy. The fallacy lies in the reasoning of conservatives.


Yes, thank you!

The headline of the article is.....

"Tax Cuts Don't Lead to Economic Growth, a New 65-Year Study Finds"

I specifically said....

"and that slashing taxes is not a guaranteed way to accelerate economic growth".

So the only thing I am implying is that conservatives are wrong.

[Striker]

You are being obtuse. Obama and Biden are on record saying you don't raise taxes in a weak economy. Hcap is implying tax hike improve the economy. These two thoughts are mutually exclusive. That was the only point I was making.
I understand your point, you have stated it more than a few times already. All I did was ask you a very simple question that you could have responded with a yes or no, and you send a derogatory adjective my way. Stay classy.

[badcompany]

As I explained in another thread, the reason these charts are meaningless is that they don't take into account the existence of a business cycle.

A massive tax cut in 2007 wouldn't have prevented the recession because the die had already been cast. It's during recessions that the harmful effects of government interventions: excessive taxation, regulations, and price controls, take their toll, as evidenced by this stat from a Conservative :lol: site called Huffington Post:

****************
http://www.huffingtonpost.com/2012/06/16/teen-unemployment-summer-2012_n_1602254.html

Washington, D.C.'s teenage unemployment rate was 51.7 percent, an analysis by research fellow Michael Saltsman of the Employment Policies Institute showed.
Gerren Price, Washington's associate director of youth programs, tied its teenage unemployment crisis to local high schools' high drop-out rate and competition from area college students.

****************


The Consevative/Libertarian theory is that profits are more efficiently allocated by those who actually made them, as opposed to politicians and bureaucrats, most of whom have no business experience, much like the liberals on this site are are always pining for more wealth to be sucked out of the private sector.

[hcap]

Actually the article says

"Does this story prove that raising taxes helps GDP? No. Does it prove that cutting taxes hurts GDP? No.

But it does suggest that there is a lot more to an economy than taxes, and that slashing taxes is not a guaranteed way to accelerate economic growth.

That was the conclusion from David Leonhardt's new column today for The New York Times, and it was precisely the finding of a new study from the Congressional Research Service, "Taxes and the Economy: An Economic Analysis of the Top Tax Rates (http://graphics8.nytimes.com/news/business/0915taxesandeconomy.pdf)

[badcompany]

This study might shed some light on the subject:

http://journalistsresource.org/wp-content/uploads/2011/08/Govt-Size-and-Growth.pdf

Abstract: The literature on the relationship between the size of government and economic growth is full of seemingly contradictory findings. This conflict is largely explained by variations in definitions and the countries studied. An alternative approach—of limiting the focus to studies of the relationship in rich countries, measuring government size as total taxes or total expenditure relative to GDP and relying on panel data estimations with variation over time—reveals a more consistent picture. The most recent studies find a significant negative correlation: An increase in government size by 10 percentage points is associated with a 0.5 to 1 percent lower annual growth rate.

[Tom]

Unless Obama, Jay, and mostie are all lying, leaving tax cuts in place improves the economy.

[rastajenk]

If lower taxes lead to economic growth why not eliminate taxes altogether? Try that and see how it works. :rolleyes:
Could be worth a try. Some states get by on that plan. I think they're the ones doing the best right now.

[Tom]

Take the government out of the equation and we will have a booming economy.