The GOP Tax Cut and Rising Wages....or not.

[Andrew77]

It's 1.5 trillion.

Let's be honest and let's be factual. Less taxes equates to more profits in capital gains. True or false? There were no cuts in government services to match the tax cuts, which means a greater budget deficit due to loss of revenue. True or false? The money seen in the greater profits for corporations is therefore paid for by taxpayers who have to make up the difference in revenue. True or false?

False. Look at the budget revenue.

• FY 2019 - $3.422 trillion, estimated.
• FY 2018 - $3.34 trillion, estimated.
• FY 2017 - $3.32 trillion.
• FY 2016 - $3.27 trillion.
• FY 2015 - $3.25 trillion.
• FY 2014 - $3.02 trillion.

Where is the huge 'loss' of revenue?

Sure looks to me like revenue went "UP".

When revenue is going up, you can't blame tax cuts for a deficit. You can only blame increased spending.

Cut the spending. I would agree with that.

If you could show me a year in which revenue declined directly after the tax cuts, then I would agree with your point.

Even then.... from every single estimate I've read thus far..... if you were to look exclusively at just corporate income tax revenue....

The total loss of income tax revenue should be at most about $50 billion dollars. Corporate income tax revenue was $340 Billion in 2015, and $290 Billion in 2016, and then $420 Billion in 2017, and estimated to be about $500 Billion this year.

In other words, we had an expected short term loss of revenue that was only $50 Billion dollars. In one year, it increased to a higher level of revenue than was ever recorded during the Obama years, and this year will be almost 50% hire than the average for Obama's entire two terms.

Now compare that $50 Billion loss, to the $1.3 Trillion dollar deficits Obama had with his higher tax rate. Do you a problem there with your logic?

 

[Arcangl86]

That's impossible to calculate. What is for sure, is that increasing taxes does not create jobs. How does a company pay an employee a wage, with money stolen by the government?

The question you should be asking is, in which situation is a company more likely, or less likely, to increase wages, or create jobs:
1. When government is taking 33% of their profits.
2. When government is taking 20% of their profits.

Under which system is a company more likely to increase wages or jobs?

1. When they have more money, because taxes are lower.
2. When they have less money, because taxes are higher.

It doesn't take a Ph.D in economics, with a $200 million dollar grant from the government, to figure out that if you have no money because the government taxed your money away, that you are less likely to higher someone to mow your lawn.

Businesses are no different. If they don't have money, they are less likely to give raises, or hire more people. If they do have money, then they are more likely to give raises and hire more people.

I could figure that out when I was in elementary school, shoveling snow. I didn't go to the poor people's house to see if they'll pay me to shovel snow. I went to the doctor, or lawyers house. They had the money to pay me to do that work. I don't need some government union statistician to figure out the numbers on this. It's pretty basic common sense.

Taxes are levied on profit, not revenue. Companies are only taxed on any money that is left over from paying businesses expenses. One such expense, and actually usually the largest one for most companies, is payroll. So your illustration doesn't actually work.

 

[childeye 2]

Again... no one is "giving money to corporations".

Where do people come up with this nonsense?

No, it's nonsense to not acknowledge that a loss in revenue without a matching cut to services creates a deficit.

If I rob you, and take $10 out of your wallet, and then turn around and give you $5..... am I being generous? Am I 'giving you $5'?

No.

Would you go around saying "That guy Andy, gave me money!", after I removed $10 from your wallet at gun point?

No

This is crazy.

Yes that's why it's a ripoff.

Allowing people to keep THEIR OWN MONEY... is not 'giving them money'. Allowing corporations to keep their own money, that they rightfully earned, is not 'giving them money'.

That's not the point now is it. The point is that there were no matching cuts in government spending.

And the problem with borrowed money, has nothing to do with taxes. It has to do with spending. When you over spend..... it does not matter how much money you are given.

That's exactly the point. There were no cuts in spending to match the tax cuts.

I can't count the number of people who get a pay raise, and end up just as poor, or poorer than before they got the pay raise. Why? Because they increase spending.

You can't over-spend non-stop and then complain about tax cuts. Stop over spending. Government needs to stop spending money it doesn't have.

When I'm complaining about tax cuts given to corporate heads, it is precisely because there were no matching cuts in government spending. It's simply not fair to those who will have to make up the difference.

 

[Andrew77]

Trickle down economics is based on the theory that, if the poor are starving, give more food to the rich in the hope that the poor will subsist on the extra crumbs that fall from the tables of the rich.

First off, Trickle down was made up by the left. It's not something the right-wing, or Republicans, came up with.

So when you make up your own theory, and then make up what your theory means, that's fine.... but you are only harming yourself. Since you are the only one pushing this as a theory, you can make fun of yourself all you want.

As for supply side economics.... which I think is what you really are referring to....

Since that is our theory, not yours, I'll define it for you, so that you actually have a clue what you are talking about.

The basic theory is, letting people keep what they make, allows them to invest which creates more wealth.

I know this is crazy, but everything that exists, is created by a wealthy person. This is where your made up trickle down theory, should be made.

Why do I have a home to live in right now? Because a rich guy built it, and sold it.
Why do I have a computer to use? Because a rich guy built it.
Why do I have a internet service? Because a rich guy invested in providing it.
Why do I have a clothes? Because a rich guy invested and created them.

The car, the stereo, the Iphone, the lights, the food, just about everything there is.... only exists because of rich people, and we the average people benefit from it.

Even the poor. I worked at the shelter. The building, the freezer, the clothing, the food, the whole thing and everything in it, was all because rich people created it.

So in that effect, you could make the case that "trickle down" is how the whole world works. We call that supply side economics, because that is the actual theory. But it's more than a theory, because everything is due to suppliers.

If you think that isn't true, then show me the car built by poor people. Show me poor impoverished people, that hired factory workers, and built a factory and produced cars for themselves and everyone.

Doesn't exist. Poor impoverished beggars are not hiring people. Rich people hire people. Rich people produce cars and products that people like us use.

 

[Andrew77]

Taxes are levied on profit, not revenue. Companies are only taxed on any money that is left over from paying businesses expenses. One such expense, and actually usually the largest one for most companies, is payroll. So your illustration doesn't actually work.

Well where do you thinking the money comes from to hire new people?

Profits.

So if government takes your profits away in taxes, can you hire and invest, with the money that was taken? No. So are you as likely to do so? No.

Here... let me put it another way.....

Walmart. Rough estimate I've seen, says that to open a single Walmart store, will cost $10 Million dollars.
That's just to build the store. Then you have to pay for truckers to bring in product, and employees to stock the entire store, and then all operational costs, and that is before a single product is sold at the store.

So where does all that money come from? It comes from existing profits.

Thus, in order for a store to be built, stocked and become operational, and employing 300 people, you need $10 Million dollars in cash, that comes from existing profits.

So let me ask again...... is the company more likely, or less likely to invest that money, hire hundreds of people, if they have lower taxes thus keeping more profits, or higher taxes thus keeping less profits?

Which situation would you be more likely to invest, and hire people? Higher taxes, so you have less money. Or lower taxes, so you have more money?

It's that simple.

 

[Belk]

Yeah, I do.... its called "math".

Great. So go ahead and show us the "Math" that supports your claims.

Where do you think that money comes from?

If it is taken from companies or employees.... (that would mean everyone), then without needing a Ph.D from Harvard, I can figure out that money can't go to a job in the private sector.

That is incorrect. A lot of money from the government goes both directly and indirectly to the private sector. What, do you think the government is hording it?

This isn't hard. If I have less money (because you taxed it from me), then I can't buy stuff. If I can't buy stuff, then no one can be hired to provide that stuff.

Except the money is going to pay me and I am buying stuff.

Right now, I have a door that needs replaced on my house. I can't hire someone to replace it, or purchased the door itself, because I don't have the money. If I did not lose 20% of my income in taxes, I could hire someone to replace the door.

But the money in taxes is going to me and I am buying things. It is also going to the local contractors who are paying their employees. You act as if once the money is taken in taxes it disappears into a black hole and that is not the case.

Now you would be right to point out, that no one would gain a full time job, because one person in the country had money to hire him. Yeah, I agree. But taxes affect everyone.

In a nations of 300 Million plus, lowering taxes on everyone, and every company, would result in a ton of people being able to afford more things, which would result in more people hired.

No would, could. Simply because the money is there does not mean it is being spent. Lots of companies are doing stock buy backs and other things which takes the money out of circulation.

Again... this is basic logic. I don't need a Ph.D to figure this out. All I need is a calculator to see that if my taxes were lower, I could afford a ton more.

The highest marginal tax rate between 1932 to 1982 fluctuated between 66% to 94%.

The highest marginal tax rate is almost irrelevant. It's more of a joke by politicians to dupe stupid voters.

Just being honest. It's a joke.

The only reason I brought it up was to rebut your claims that it would cause the downfall of society.

Let's raise the highest marginal tax rate to 94% right now. Today. Do you know who would be affected by that? Warren Buffet? Nope. He makes $100K a year. Mark Zuckerberg? Nope, he earns $1 a year.

The rich can avoid taxes, without blinking an eye. That's why high top marginal rates had little effect on the economy, because no one was paying them.

This is also why, high top marginal tax rates didn't improve the governments budget much. There were deficits in the 50s, 60s, and the 1970s. If top marginal rates being high resulting large tax revenue, why were there deficits back then?

By the way, during that time, taxes were being increased on the middle class, because those high marginal rates were not producing tax revenue. There's a reason why the social security tax went from 1% to 15% during the time period we had 70%+ top marginal tax rates. And who pays the majority of social security taxes? The lower and middle class.

So during the time you point to high tax rates, the real result was higher taxes on the lower and middle class.

Then perhaps we should look at effective strategies to ensure the tax burden moves from the middle class to the rich. That would seem more effective then continuing to run a deficit.

 

[childeye 2]

False. Look at the budget revenue.

• FY 2019 - $3.422 trillion, estimated.
• FY 2018 - $3.34 trillion, estimated.
• FY 2017 - $3.32 trillion.
• FY 2016 - $3.27 trillion.
• FY 2015 - $3.25 trillion.
• FY 2014 - $3.02 trillion.

Where is the huge 'loss' of revenue?

Sure looks to me like revenue went "UP".

Let's be honest and truthful to one another. First notice that between 2014 and 2015 there was an increase in revenue of roughly 230 billion. So no one said revenue doesn't increase as an economy grows. No one said revenue didn't go up, so lets' not create strawmen.

 

[Andrew77]

No, it's nonsense to not acknowledge that a loss in revenue without a matching cut to services creates a deficit.

No.
No

Yes that's why it's a ripoff.
That's not the point now is it. The point is that there were no matching cuts in government spending.


That's exactly the point. There were no cuts in spending to match the tax cuts.
When I'm complaining about tax cuts given to corporate heads, it is precisely because there were no matching cuts in government spending. It's simply not fair to those who will have to make up the difference.

No, it's nonsense to not acknowledge that cutting taxes, is not 'giving corporations money', when it was their money.

The point is, if you can't be honest that a tax cut is not 'giving them money', then there is no honesty in the discussion, and thus there is no reason to discuss any topic based on lies and dishonesty.

Along the same lines, I provided concrete proof that tax revenue increased, not decreased. That's fact. It is not a debatable point.

It's simply not fair to those who will have to make up the difference.

So I assume you are against tax deductions for earned income, child care, education, and mortgages? After all, we shouldn't be 'giving tax cuts' to people. After all, it's not fair to those who will have to make up the difference.

I don't understand this moral hypocrisy. It's not fair to let people keep their own money, because other people will have to pay more in taxes. Why is it fair to let YOU keep more of your money? Did you take a tax deduction last year? That's not fair.

Cut welfare and entitlement spending. I'm all for that.

No one has to pay more in taxes. Just cut the spending. Get people off of taking money from government. The problem isn't tax cuts. It's spending.

 

[Andrew77]

Great. So go ahead and show us the "Math" that supports your claims.

That is incorrect. A lot of money from the government goes both directly and indirectly to the private sector. What, do you think the government is hording it?

Except the money is going to pay me and I am buying stuff.

But the money in taxes is going to me and I am buying things. It is also going to the local contractors who are paying their employees. You act as if once the money is taken in taxes it disappears into a black hole and that is not the case.



No would, could. Simply because the money is there does not mean it is being spent. Lots of companies are doing stock buy backs and other things which takes the money out of circulation.



The only reason I brought it up was to rebut your claims that it would cause the downfall of society.



Then perhaps we should look at effective strategies to ensure the tax burden moves from the middle class to the rich. That would seem more effective then continuing to run a deficit.

A lot of money from the government goes both directly and indirectly to the private sector.

Again, that does not matter. Every single dollar the government uses for anything.... has to come from the private sector.

And honestly, I don't want the government giving a penny to the private sector. The only time I want a private sector person getting a dollar from me, is when they provide me a good or service that I deem worthy of me giving them a dollar. Not when government steals a dollar from my paycheck, and gives it to them for nothing.

It is also going to the local contractors who are paying their employees. You act as if once the money is taken in taxes it disappears into a black hole and that is not the case.

Sylandra. The medical insurance co-ops that all failed. Medicare Fraud at $60 Billion yearly.
At the local level, it doesn't happen as often. State level, just depends. But at the Federal Level... we had TARP. We actually paid people to buy worthless assets, and called that saving the economy. Cash For Clunkers. We actually paid people to destroy.... literally paid them to destroy cars.

Yeah... we do tax money and flush it down into black holes.

No would, could. Simply because the money is there does not mean it is being spent. Lots of companies are doing stock buy backs and other things which takes the money out of circulation.

Um.... no. No. That is incorrect. Companies can only do one of three things with money. They can spend the money, they can invest the money, and they can save the money. If they save the money, the money is being saved to invest or spend on larger things later, and in the mean time, the banks will use that money to spend or invest.

No matter what the company does with the money, it benefits the economy.

Specifically for stock buy backs.... What do you mean it takes money out of circulation? That's impossible.

I have a IRA invested into stocks. If a company I own stock from, does a buy back, and I sell the stock to the company..... I get the money. I typically use that money to buy even more stocks.

Regardless of what I do with the money.... it's not "out of circulation". I don't know what you mean by that. But no, it is not 'out of circulation' because the company bought back its stock.

I would guess that if you are a contractor, you have a pension. Your pension is likely invested in stock. If the company buys back the stock, that money goes to your pension, which it then uses to buy more stock. It does not take the money out of circulation.

 

[Belk]

A lot of money from the government goes both directly and indirectly to the private sector.

Again, that does not matter. Every single dollar the government uses for anything.... has to come from the private sector.

Yes, it does matter since your entire claim is that taxes remove money from the private sector. This is not correct.

And honestly, I don't want the government giving a penny to the private sector. The only time I want a private sector person getting a dollar from me, is when they provide me a good or service that I deem worthy of me giving them a dollar. Not when government steals a dollar from my paycheck, and gives it to them for nothing.

I do not find your desires reasonable nor possible.

It is also going to the local contractors who are paying their employees. You act as if once the money is taken in taxes it disappears into a black hole and that is not the case.

Sylandra. The medical insurance co-ops that all failed. Medicare Fraud at $60 Billion yearly.
At the local level, it doesn't happen as often. State level, just depends. But at the Federal Level... we had TARP. We actually paid people to buy worthless assets, and called that saving the economy. Cash For Clunkers. We actually paid people to destroy.... literally paid them to destroy cars.

Yeah... we do tax money and flush it down into black holes.

That you do not find the uses to which it is put desirable or that some companies fail does not equate to a black hole. The money is still in curculation.

No would, could. Simply because the money is there does not mean it is being spent. Lots of companies are doing stock buy backs and other things which takes the money out of circulation.

Um.... no. No. That is incorrect. Companies can only do one of three things with money. They can spend the money, they can invest the money, and they can save the money. If they save the money, the money is being saved to invest or spend on larger things later, and in the mean time, the banks will use that money to spend or invest.

No matter what the company does with the money, it benefits the economy.

Specifically for stock buy backs.... What do you mean it takes money out of circulation? That's impossible.

I have a IRA invested into stocks. If a company I own stock from, does a buy back, and I sell the stock to the company..... I get the money. I typically use that money to buy even more stocks.

Regardless of what I do with the money.... it's not "out of circulation". I don't know what you mean by that. But no, it is not 'out of circulation' because the company bought back its stock.

I disagree

The once illegal practice of companies purchasing their own shares is pulling money away from employee compensation, research and development, and other corporate priorities—with potentially sweeping effects on business dynamism, income and wealth inequality, working-class economic stagnation, and the country’s growth rate. Evidence for that conclusion comes from a new report by Irene Tung of the National Employment Law Project (NELP) and Katy Milani of the Roosevelt Institute, who looked at share buybacks in the restaurant, retail, and food industries from 2015 to 2017.

Are Stock Buybacks Starving the Economy? - The Atlantic

I would guess that if you are a contractor, you have a pension. Your pension is likely invested in stock. If the company buys back the stock, that money goes to your pension, which it then uses to buy more stock. It does not take the money out of circulation.

I am not a contractor, I am a direct employee of the local government. I do have a pension though.

 

[Andrew77]

Yes, it does matter since your entire claim is that taxes remove money from the private sector. This is not correct.



I do not find your desires reasonable nor possible.



That you do not find the uses to which it is put desirable or that some companies fail does not equate to a black hole. The money is still in curculation.



I disagree



Are Stock Buybacks Starving the Economy? - The Atlantic



I am not a contractor, I am a direct employee of the local government. I do have a pension though.

Yes, it does matter since your entire claim is that taxes remove money from the private sector. This is not correct.

The door on my condo, right now, needs replaced. I don't have the money for it. I would if my taxes were lower.

When you say taxes do not remove money from the private sector, my calculator, wallet and tax fillings, prove otherwise.

That you do not find the uses to which it is put desirable or that some companies fail does not equate to a black hole. The money is still in curculation.

Money can be used for good or bad purposes. Money can build the economy, and money can destroy an economy.

Being in circulation, doesn't equal good or bad.

If I give you $10 today, and then you give me $10 tomorrow, and I give you $10 the day after, and we keep going back and forth every single day.....

Money is circulating. But the circulation is not doing anything of value. The economy is not benefiting from that action.

When I say money is being flushed into a black hole, I don't mean (obviously) that they are filling spaceships with money, and shooting them towards black holes.

I mean that the money is being used to in such a wasteful and even negative manor, that it is harming rather than helping the economy.

When you spend money, you can spend it in a way that makes the country wealthy, or you can spend it in a way that makes the country poor.

Let's have government fund a living wage to the entire country, so no one anywhere has to work. We consume, but never produce. What will happen? The entire country will end up impoverished like Venezuela. Because if no one produces anything, or very little, but we all consume, country will end up starving to death.

When you pay people to produce nothing, that is flushing money down a black hole. I would rather pay people when they produce something of value.

Example, in 2010, we had an Obama stimulus program here in the town I live. The project was to paint a bridge. The city got money from the Feds, to paint the bridge. Is painting the bridge a benefit to society? You bet. Bridges that are not painted rust out much faster, and need to be replaced quicker.

Here's the problem. The bridge had just the previous year, been painted. Does repainting the exact same bridge that had already freshly been painted, produce anything good? No. It was just a complete waste of money. We were all poorer as a country, because we consumed wealth, to produce nothing.

I am not a contractor, I am a direct employee of the local government. I do have a pension though.

And your pension benefits from stock buy backs. You are directly a beneficiary of these stock buy back programs.

(or will be when you retire, if you are not retired yet).

 

[Belk]

Yes, it does matter since your entire claim is that taxes remove money from the private sector. This is not correct.

The door on my condo, right now, needs replaced. I don't have the money for it. I would if my taxes were lower.

When you say taxes do not remove money from the private sector, my calculator, wallet and tax fillings, prove otherwise.

How does this example change the fact that the money your send for taxes goes back into the public sector?

That you do not find the uses to which it is put desirable or that some companies fail does not equate to a black hole. The money is still in curculation.

Money can be used for good or bad purposes. Money can build the economy, and money can destroy an economy.

How does one go about destroying an economy with money?

Being in circulation, doesn't equal good or bad.

If I give you $10 today, and then you give me $10 tomorrow, and I give you $10 the day after, and we keep going back and forth every single day.....

Money is circulating. But the circulation is not doing anything of value. The economy is not benefiting from that action.

Those are not transactions. Therefore the money is not in circulation.

Circulation (currency) - Wikipedia

When I say money is being flushed into a black hole, I don't mean (obviously) that they are filling spaceships with money, and shooting them towards black holes.

I mean that the money is being used to in such a wasteful and even negative manor, that it is harming rather than helping the economy.

When you spend money, you can spend it in a way that makes the country wealthy, or you can spend it in a way that makes the country poor.

Let's have government fund a living wage to the entire country, so no one anywhere has to work. We consume, but never produce. What will happen? The entire country will end up impoverished like Venezuela. Because if no one produces anything, or very little, but we all consume, country will end up starving to death.

When you pay people to produce nothing, that is flushing money down a black hole. I would rather pay people when they produce something of value.

Example, in 2010, we had an Obama stimulus program here in the town I live. The project was to paint a bridge. The city got money from the Feds, to paint the bridge. Is painting the bridge a benefit to society? You bet. Bridges that are not painted rust out much faster, and need to be replaced quicker.

Here's the problem. The bridge had just the previous year, been painted. Does repainting the exact same bridge that had already freshly been painted, produce anything good? No. It was just a complete waste of money. We were all poorer as a country, because we consumed wealth, to produce nothing.

On that we agree. We should not pay farmers to not raise crops and similar ventures.

I am not a contractor, I am a direct employee of the local government. I do have a pension though.

And your pension benefits from stock buy backs. You are directly a beneficiary of these stock buy back programs.

(or will be when you retire, if you are not retired yet).

Yes, I do benefit. But then, I am in the top 10% of wage earners in the US and we typically get more from the stock market. The benefit to the average US citizen is unrealized. Higher wages are of more benefit to them

 

[Andrew77]

How does this example change the fact that the money your send for taxes goes back into the public sector?

How does one go about destroying an economy with money?


Those are not transactions. Therefore the money is not in circulation.

Circulation (currency) - Wikipedia



On that we agree. We should not pay farmers to not raise crops and similar ventures.



Yes, I do benefit. But then, I am in the top 10% of wage earners in the US and we typically get more from the stock market. The benefit to the average US citizen is unrealized. Higher wages are of more benefit to them

At this point, I don't know how else to discuss this with you. I explained it very clearly.

When you blow money on things that provide no value, or even destroy value, you are destroying the economy.

Pretend there was a government program to destroy roads. We could spend millions of dollars paying people and contractors to destroy all the roads in the country. Would that circulate money? You bet. But the country would be destroyed by it.

Does that not make sense?

We actually paid people to destroy cars. Cash for clunkers.

How would the benefit to the average citizen not materialize? Because I just looked at my IRA and 401K, and it sure seems to have materialized for me. Does my $20K a year income place me above the average citizen? I'm actually up to $25K for this year (assuming nothing happens between now and the end of the year).

Am I not the average citizen?

 

[iluvatar5150]

Stock buyback programs benefits nearly everyone, unless they choose to not save money for retirement.

Not really:

Only 54% of Americans are invested in the market at all (including through pensions).
Millions of Americans are left out of the stock market boom

And lest you think it's just people putting their cash under their mattress: 40% of adults couldn't cover a $400 emergency expense without taking on debt:
40% of Americans can't cover a $400 emergency expense

Walmart has a employee stock purchase program that any employee, no matter how low their income, can invest in. I had a woman friend who worked as a floor associate, and accumulated thousands of dollars in Walmart stock. Using that money, plus their tuition reimbursement program, got a degree in civil engineering.

She benefited from stock buybacks, and where do you think the money came from to fund tuition reimbursement? It came from profits that were not taxed away.

Tuition reimbursement probably wouldn't have been taxed anyways, since it counts as employee compensation.

But while I realize that WalMart is not really the point here, if you look at their stock performance over the last several years, it's rarely beaten the broader market. So, while the company match helped, she would've been better off dumping WMT immediately and putting the money into an S&P500 index fund. And if WM had used that money to pay her more instead of buying back stock, well, then she would've been even better off.

Tax cut triggers $437 billion explosion of stock buybacks

Right. And how much have they saved from taxes? A ton more.

eh...

This is from March, but suggests that ~60% of the tax cut savings are going back to shareholders.
Bloomberg - Are you a robot?

And again, you can't buy back stock forever, because the amount of stock is limited. So what happens when they stop buying back stock? What are they going to do with the money then? Invest? Hire people? Pay raises? Whatever they do, will be a benefit to working people.

They can increase dividends even further, and they can find other ways to invest the money. When GE was flush with cash in the 80s, they started a financial services arm that effectively turned them into a bank that also made light bulbs. Insurance firms often do something similar.

Who said anything about 100%? but hooray for strawmen, eh?

It didn't seem that complicated, but apparently you still missed the point.

You claimed that taxes creates jobs. That's impossible. If really think that, then we can test the theory. Just increase taxes to 100%. After all, in 'your world', taxes create jobs. So let's tax ourselves into opulent prosperity.

Your argument is ridiculous. Nobody claims that the process works indefinitely. Either you're not arguing honestly, or you have no idea what you're talking about.

By your simplified reasoning wherein raising taxes always results in a reduction of private sector jobs, then cutting all taxes would maximize private sector jobs. A 0% rate would be great!

Except it wouldn't, would it? We'd have no government, society would crumble, and the economy would tank. Bye bye jobs.

Every single dollar given to someone in a government job, has to come from someone else in the private sector, plus more.

Paying a military E-5 person that massive $2,000 a month wage, you have to take that from someone in the private sector.... PLUS more. Because every dollar to a military person, isn't one dollar from a private person, because everyone in the chain has to be paid as well. The IRS has to be paid. The union government workers have to be paid. The military offices have to be paid, all to pass that $1 to the enlisted man.

So someone in a higher paying private sector job, has to lose their income, for an enlisted man earning less money can get his job.

In short.... taxes do not create jobs. More jobs are lost, than created.

The jobs in the defense, pharmaceutical, and tech industries are not low-paying. Neither are construction jobs for infrastructure.

Again... relative to whatever the pay is.... you still lose a higher paying job, to create a lower paying one.

If you have a government job that pays $100K a year.... still doesn't matter. Because the amount of taxes against the private sector will have to be higher, than the amount paid out in the public sector. You have to tax $100K plus more, to pay for a $100K a year government job.

This is exactly what happened in Greece, and almost what happened in France. France they imposed a wealth tax, and all the wealthy people started running away. They had to cut taxes, and impose reforms on government employee pay, or face a national implosion.

Venezuela did the same thing. Endless government benefits and government jobs, and the entire economy crashed under the weight of the taxes and regulations.

Taxes do not create jobs, or Greece would be the dominate economy over the entire European Union. Taxes do not create jobs, or Venezuela should be the leading economy in south America.

If taxes created jobs, then the 1970s should have been a gold age in the US, and the 1980s should have been the malaise of stagflation.

Private sectors workers have to get paid, too. And where does their pay come from? Other people in the private sector. By your math, one set of private sector jobs should siphon pay/work from other private sector jobs.

What your entire argument ignores is the value of the work that's provided by these government jobs and the multiplier effects that that work can have. By having, for example, a functioning legal system that enforces laws, and also employs a small subset of the population, we enable an entire economy to function smoothly. That one police officer in that one small town provides enough security to facilitate the existence and smooth operation of hundreds of other jobs. That one trash collector provides enough value in sanitation to allow dozens of businesses to stay open and serve their customers.

To this end, there's no real difference between a government job and a private sector job - both charge money to provide a valuable service. In fact, government can sometimes be more cost effective, since it's not motivated by profit.

 

[iluvatar5150]

When you blow money on things that provide no value, or even destroy value, you are destroying the economy.

There's your problem - you aren't properly calculating the value of this work.

 

[Belk]

At this point, I don't know how else to discuss this with you. I explained it very clearly.

When you blow money on things that provide no value, or even destroy value, you are destroying the economy.

Pretend there was a government program to destroy roads. We could spend millions of dollars paying people and contractors to destroy all the roads in the country. Would that circulate money? You bet. But the country would be destroyed by it.

Does that not make sense?

We actually paid people to destroy cars. Cash for clunkers.

How would the benefit to the average citizen not materialize? Because I just looked at my IRA and 401K, and it sure seems to have materialized for me. Does my $20K a year income place me above the average citizen? I'm actually up to $25K for this year (assuming nothing happens between now and the end of the year).

Am I not the average citizen?

I do not know either. I don't think we are far off from agreement but you keep using an example that I do not think accurately reflects reality. The fact is that the economics of this is not a simple zero sum equation.

 

[Andrew77]

I do not know either. I don't think we are far off from agreement but you keep using an example that I do not think accurately reflects reality. The fact is that the economics of this is not a simple zero sum equation.

And I agree with that. It isn't a zero sum equation.

If you pay people to reduce the wealth of the economy, even though the total number of dollars moving around doesn't change, the total amount of wealth goes down.

If you take money from wealth producers, to give to wealth destroyers, that is bad for the economy, even if the total amount of money is the same.

 

[mark46]

The concept is simple.

If there had been no tax cut for rich Americans, 1 TRILLION dollars would have been available for infrastructure spending (including roads, bridges, tunnels, airports, the wall, and military infrastructure).

"right to hand a trillion dollars to business"....

.

Again... no one is "giving money to corporations".

Where do people come up with this nonsense?

If I rob you, and take $10 out of your wallet, and then turn around and give you $5..... am I being generous? Am I 'giving you $5'?

Would you go around saying "That guy Andy, gave me money!", after I removed $10 from your wallet at gun point?

This is crazy.

Allowing people to keep THEIR OWN MONEY... is not 'giving them money'. Allowing corporations to keep their own money, that they rightfully earned, is not 'giving them money'.

And the problem with borrowed money, has nothing to do with taxes. It has to do with spending. When you over spend..... it does not matter how much money you are given.

I can't count the number of people who get a pay raise, and end up just as poor, or poorer than before they got the pay raise. Why? Because they increase spending.

You can't over-spend non-stop and then complain about tax cuts. Stop over spending. Government needs to stop spending money it doesn't have.

You don't mow someone's lawn, and then tell them "I decided to buy a new car, and the car payment is due, so I need you to pay me $500 for mowing this lawn".

That's not how life works. You don't blow money buying stuff, and then demand other people pay you how much you need to pay for your incompetence. Instead, you determine how much money is coming in, spend based on how much you make.

Similarly, the government doesn't determine "oh hey, everyone wants $2 trillion dollars in stuff, so now we need all of you to pay for it, after we already bought it!".

No, you look at how much money is coming in, and then spend less than that. You don't blow $800 billion in an Obama stimulus package that mostly went to political supporters, and then tell the American Public we need to raise taxes or we'll have to borrow $1.3 Trillion for 5 years.

No, you cut your spending. We can't afford universal health care. We can't afford public housing. We can't afford endless retirement pensions. You need to cut your spending. That's the solution. Not whine about how everyone should pay more taxes, because you want free stuff.

 

[childeye 2]

No, it's nonsense to not acknowledge that cutting taxes, is not 'giving corporations money', when it was their money.

Let's not argue the semantics. Just because I say corporations were given money in the form of tax breaks does not disavow that the money being taxed was from their profits.

The point is, if you can't be honest that a tax cut is not 'giving them money', then there is no honesty in the discussion, and thus there is no reason to discuss any topic based on lies and dishonesty.

I'm being completely honest with you when I say that you're being dishonest with yourself by insinuating I'm being dishonest. I know that you know that I know that taxes are paid out of the taxpayers money, so please let's move on.

Along the same lines, I provided concrete proof that tax revenue increased, not decreased. That's fact. It is not a debatable point.

But that really has nothing to do with anything substantive since revenue always increases as an economy grows and the real issue is the growing budget deficit. I also added that since no one was ever debating whether revenues have increased or not, it's a strawman argument.

It's simply not fair to those who will have to make up the difference.

So I assume you are against tax deductions for earned income, child care, education, and mortgages? After all, we shouldn't be 'giving tax cuts' to people. After all, it's not fair to those who will have to make up the difference.

Well Andrew, the thing is that tax deductions and tax cuts are not the same thing.

I don't understand this moral hypocrisy. It's not fair to let people keep their own money, because other people will have to pay more in taxes. Why is it fair to let YOU keep more of your money? Did you take a tax deduction last year? That's not fair.

With al due respect, since you're confusing tax cuts with tax deductions, your application of what you see as hypocrisy is going to be the product of taking things out of context.

Cut welfare and entitlement spending. I'm all for that.

No one has to pay more in taxes. Just cut the spending. Get people off of taking money from government. The problem isn't tax cuts. It's spending.

Tax cuts do not address cuts in spending however, and I would add that Trump greatly increased the spending when he took away the sequester imposed during the Obama administration as a means to cut spending.

 

[Andrew77]

The concept is simple.

If there had been no tax cut for rich Americans, 1 TRILLION dollars would have been available for infrastructure spending (including roads, bridges, tunnels, airports, the wall, and military infrastructure).

No, that is crazy wrong. Not even close. I have no idea what mathematical fraud someone had to come up with that bonkers number, but they lied to you.

First, people change how they live to fit the incentives. Again, Warren Buffet, one of the richest people in this entire country, and world for that matter, has a total salary of $100,000 a year. The top marginal tax rate only affects people earning over $600,000 a year. You could raise the top marginal rate to 100%, and Buffet wouldn't pay 1 cent more in tax.

Second, taxes have an effect on the economy. Small effect or large, there is an effect. Meaning: If you tax a rich person, so that he doesn't invest and create new jobs, you lose the tax revenue you would have gotten from the economic growth that didn't happen.

Just like the cut in Corporate Tax rates, resulted in the corporate tax now bringing in almost double the tax revenue that ever came in under Obama.

You act like the growth in the economy that resulted in those massive revenue numbers, had nothing to do with a policy of lower taxes that companies were reacting to.

But let's set aside the mythology of the $1 Trillion in revenue you claim would have been there.....

Even if there was an extra $1 Trillion dollars laying around.... Giving that money to government rarely results in money being spent on infrastructure.

Remember, the big selling point for Obama's massive $800 Billion stimulus package, was that we would invest in infrastructure.

Yet, we know now, that very little of the money spent went to infrastructure projects. Very little.

Last I checked, only about $33 Billion went to infrastructure, out of $550 Billion in direct spending.

So if infrastructure is so important, why was only a tiny fraction of the money spent, spent on infrastructure?

There are two possible answers: 1. Maybe all of these desperately needed infrastructure spending claims, are not nearly as desperate, or as needed, as you claim. Or 2. Maybe you can't be as trusting with government, when you give them all your money.

Remember, Obama was elected with full control over both houses. So everything that happened with the stimulus bill, was all on the Democrats and Obama. You can't blame Republicans for the Democrats blowing half a Trillion dollars on non-infrastructure spending, if you claim it is so desperately needed.

By the way, even that $33 Billion spent on infrastructure is a joke. A large chunk of that went to Unions, and political supporters. Does giving the EPA several Billion for new buildings, count as infrastructure for society? Or is it supporting political supporters with tax money? Does giving a billion dollars to the National Forest Service, really count as improving infrastructure for society? How about that $5 Billion to the Army Corp of Engineers?

So when you say that without tax cuts, we'd have $1 Trillion for infrastructure spending.... that doesn't convince me it would actually go to infrastructure spending. I think more likely, most of that money would end up going to political paybacks... and I have good cause to think that based on what we've already seen.