The Evil Rich conservatives

ThatRobGuy

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It's not as cut and dried as all that.

The more recent historical data would seem to suggest that no matter what sorts of tax breaks you give very wealthy people, it doesn't motivate them to do anything particularly beneficial with the spare cash. Just because a business owner is paying fewer taxes doesn't mean he's going to hire more employees or raise the wages of the ones he has.

Republicans like to characterize things as liberals being too soft-hearted to face reality and do what needs to be done, while they are wise and experienced enough to face the reality of situations.

I don't buy it.

Which recent historical data is that? The last time we tried the low tax/low government spending approach, it worked very well. That was in 96-97...to the best of my knowledge, it hasn't been tried since then.

I realize that tax cuts have been tried since then, but as I mentioned above (and in prior posts), the low spending element has to be there for it to work...that's why the Bush tax cuts didn't work.
 
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ThatRobGuy

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acropolis

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Marginal tax rate and unemployment are not closely linked:
e1.jpg
 
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ThatRobGuy

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Marginal tax rate and unemployment are not closely linked

If you look at a cummulative graph, that's what I'd expect to see.

Keep in mind, one of the critical elements is government spending in comparrison to inflation.

Government Spending in United States: Federal State Local for 1970 - Charts Tables History
Nice little web app that lets you view spending by year

Spending increase while tax rate was at 70% (1970-1981: years leading up to recession)
321.8 Billion to 940.2 Billion
Average inflation rate from 70-79: 6.2%

Adjust the ending number for inflation: 881.9 Billion
Spending increase rate: ~274%

Spending rate in 1983-89 when tax rates were lowered (the period of the rebound and lowered unemployment rates)
1.1 trillion to 1.9 trillion
Average inflation rate in that period: 7.9%

Adjust the ending number for inflation: 1.74 trillion
Spending increase rate: ~159%

So while unemployment rate and tax rate alone don't establish any correlations, I think if we look at unemployment vs. (Tax&Spending), it starts help draw some usable stats.
 
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SnowCal

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Well, based on the historical data I provided, it was the goals of the current democrat side (IE: Increasing taxes) that caused the high unemployment and recession/depression...

Not even Milton Friedman believed this garbage.

Spending increase while tax rate was at 70% (1970-1981: years leading up to recession)
321.8 Billion to 940.2 Billion
Average inflation rate from 70-79: 6.2%

Adjust the ending number for inflation: 881.9 Billion
Spending increase rate: ~274%
Your math is majorly wrong. See if you can find the mistake. Actually, there's at least a couple of them.
 
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ThatRobGuy

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Not even Milton Friedman believed this garbage.

Your math is majorly wrong. See if you can find the mistake. Actually, there's at least a couple of them.


Well, if it's garbage, feel free to post some US historical data to contradict it.

Feel free to correct the math as well if that's an issue.

I think you'll still find that the more successful time was in an era of lower taxes and lower spending.
 
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KCfromNC

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So why are we demonizing them for not wanting to take an approach that's never worked in the past?

It's not like the lower taxes and raise spending approach has worked out all that well either during past Republican administrations (notice our current debt load) so I can see why there would be honest differences of opinions here.

And are you really saying that the cause of the great depression was high tax rates on the top 1% of earners?
 
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KCfromNC

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Sure

Historical Top Tax Rate

Where can I find the unemployment rate for previous years?


1971 to 1981: Top tax bracket was paying 70%

1982: Unemployment was at it's peak; Top bracket was dropped to 50%

1989: Taxes were at their lowest, so was unemployment

91-92: Taxes raised by 8%, unemployment peaks.

1993: Spending cuts are made, tax rate left alone, unemployment starts dropping again.

You're cherry-picking results and pretending that there's some sort of cause and effect going on.

In the 30s, during the height of the great depression, top tax rates were lower than during the 50s and 60s when the economy was doing quite well. So you have some examples of drops in tax rates and a bad economy, others with drops in taxes and a good economy. Look elsewhere for cause and effect.
 
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SnowCal

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You're cherry-picking results and pretending that there's some sort of cause and effect going on.

It's not even cherry-picked. He screwed up his math pretty massively and his errors are producing the result that's 'supporting' his conclusion. I'll fix his math for him, as he asked.

Government Spending in United States: Federal State Local

Spending increase while tax rate was at 70% in inflation-adjusted dollars (2005 dollars):
1970: $1243.1 B
1981: $1379.9 B
Spending increase rate: 0.87%

Spending rate in 1983-89 when tax rates were lowered in inflation-adjusted dollars (2005 dollars):
1983: $1430.8
1989: $1829.4
Spending increase rate: 3.58%

That really kind of kicks your conclusion in the teeth, doesn't it?
 
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wanderingone

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It has nothing to do with being left or right, nor does it have to with how much was donated to charity- not paying your fair share of taxes along with business and financial practices meant to maximize personal profit regardless of where that leaves people you are doing business with and your community, even your own business... twisting laws and maneuvering public policy to one's personal benefit rather than for the benefit of the larger community.
 
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selfinflikted

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It has nothing to do with being left or right, nor does it have to with how much wqs donated to charity- paying your fair share of taxes along with business and financial practices meant to maximize personal profit regardless of where that leaves people you are doing business with and your community, even your own business... twisting laws and maneuvering public policy to one's personal benefit rather than for the benefit of the larger community.

QFT. :thumbsup:
 
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mdancin4theLord

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Just a question for you. If I live in a blue state like California and pay a significantly larger amount of taxes to support social services than people in red states like Texas do, do I have the same moral imperative to tithe as much of my after-tax income towards charities as somebody in Texas does?

It seems pretty logical to me that Democrats tend to make fewer charitable donations than Republicans do; they make sure that people are taken care of through their taxes.

You allow illegals in the state and that makes a huge difference. I think you should do what the scriptures tell you to do and not base it on anything else.

I give to other organizations and support two girls in Somalia…this has nothing to do with my tithing to my church however. You should give whatever the case…..cheerfully. God loves a cheerful giver. Give what you can.

A note on taxes. Our taxes go towards a lot of things I do not agree with but I still pay them. They don't necessarily go towards helping people with room and board and food all the time.
 
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mdancin4theLord

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They say the party of the little people are the Democrats. They also say that Obama in the upcoming campaign will spend over a billion dollars.

And MINI you are right…if you look at the rich politicians most are Democrats…who have made it big or their families have made it big in the corporate world.
 
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wanderingone

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They say the party of the little people are the Democrats. They also say that Obama in the upcoming campaign will spend over a billion dollars.

And MINI you are right…if you look at the rich politicians most are Democrats…who have made it big or their families have made it big in the corporate world.

So... I'll say it again... the issue of who doesn't pay their fair share has nothing to do with what their public persona regarding politics is.
 
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ThatRobGuy

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It's not even cherry-picked. He screwed up his math pretty massively and his errors are producing the result that's 'supporting' his conclusion. I'll fix his math for him, as he asked.

Government Spending in United States: Federal State Local

Spending increase while tax rate was at 70% in inflation-adjusted dollars (2005 dollars):
1970: $1243.1 B
1981: $1379.9 B
Spending increase rate: 0.87%

Spending rate in 1983-89 when tax rates were lowered in inflation-adjusted dollars (2005 dollars):
1983: $1430.8
1989: $1829.4
Spending increase rate: 3.58%

That really kind of kicks your conclusion in the teeth, doesn't it?

We're not talking 2005 dollars. We're talking currency values at the beginning and end of the periods within the context of this discussion. Taking amounts from 1970-81 and 1983-89 and trying to use a year outside that time window by 20 years as a control doesn't make any sense because the longer inflation goes, the more it skews the value of currency.

Let's try it again, the original spending numbers I provided appear to be off (I'll provide my sources this time) I'm using 3rd party data and a 3rd party inflation calculator...In fact, I'm using two 3rd party inflation calculators just to make sure...
The Inflation Calculator
Government Spending in United States: Federal State Local for 1970 - Charts Tables History
Inflation Calculator | Find US Dollar's Value from 1913-2011

To simplify, we'll look at just federal spending (since that's what we're really talking about here, if California raises it's taxes, it doesn't impact people in Ohio)

Spending in 1970: $195 Billion
Spending in 1981: $678 Billion
Adjust 1970 to 1981 value:
Turns $195 Billion into $457 Billion
457 to 678
~ 50% increase

Spending in 1983: $808 Billion
Spending in 1989: $1,100 Billion
Adjust 1983 to 1989 value:
Turns $808 Billion into $1,005 Billion
1005 to 1100
~ 10% increase

Even though these numbers aren't as drastic as the ones I posted originally, it's still shows that the federal spending trend was 5x the pace in the time leading up to the recession than it was in the time leading up to economic success.

You still didn't address the high vs low taxes element of this either.

I suppose it's easy to suggest raising taxes dramatically for a particular group (especially when you're not in that group)...hopefully one day you'll be fortunate enough to get up in my tax bracket and you'll see how frustrating it is when people suggest that the answer is to take something away from me (that I worked hard and made sacrifices for) and hand it to someone else with less ambition just so we can all be "equal".

The tax adjustment impacts more than just the "1%'ers". It's not just as simple as identifying these folks and taking their money and leaving everyone else's alone...if you did that, it would just transfer the 1% status to the group that directly below them on the ladder and we'd get to have this conversation all over again.
 
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ThatRobGuy

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It's not like the lower taxes and raise spending approach has worked out all that well either during past Republican administrations (notice our current debt load) so I can see why there would be honest differences of opinions here.

And are you really saying that the cause of the great depression was high tax rates on the top 1% of earners?

I agree with the first part, that's why I mentioned that the tax cut has to be accompanied by a slowing in the federal spending pace. If the federal spending pace is running wild, the economy is going to be bad regardless of what the tax rates are.

I don't think the high tax rates were the sole cause, but it was a combination of that and the investment bankers (JP Morgan in particular) setting up a false flag panic.

The more money you take from someone, the less they're going to be able to spend in stores, restaurants, etc... The less people spend in places like that, the more it hurts everyone.

I'll provide a simple example. Let's look at a upscale restaurant in the business district. It employs a manager, bartender, 10 waiters, 3 bus boys, and 3 dish washers.

There are a dozen people with good incomes that eat there everyday which provides enough revenue to keep everyone working there employed and get raises every year. You take 70% of the income away from that dozen, they can no longer afford to eat there every day. When they don't have the steady business coming in, they don't have enough money to pay those 18 employees so they have to let half of the staff go. That half of the staff no longer has jobs so they're not spending any money at stores so those stores start suffering from the decrease in business, so on and so on...sort of the trickle down in a nutshell.

Like I mentioned in another post, tax brackets are a progressive scale, so you're not just impacting the top 1%, it's actually impacting everyone to varying degrees.

Here's the breakdown of the increases that took place in 2011:

- The 10% bracket rises to an expanded 15%
- The 25% bracket rises to 28%
- The 28% bracket rises to 31%
- The 33% bracket rises to 36%
- The 35% bracket rises to 39.6%


I'm by no means in the 1%, but still ended up having to pay about $1,000 more in taxes this year just at the federal level.
 
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ThatRobGuy

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They say the party of the little people are the Democrats. They also say that Obama in the upcoming campaign will spend over a billion dollars.

And MINI you are right…if you look at the rich politicians most are Democrats…who have made it big or their families have made it big in the corporate world.

Another interesting thing to note, the folks making these decisions in congress aren't impacted by the tax increases they're voting for. They can vote to have they're salaries increased to adjust for the increased taxes so their take-home pay is still the same...much like the $4,600 pay raise they voted in for themselves to cover for the recent tax increases.
(And both sides were guilty on that one)

This pay raise had support of both parties. Difference being, the democrats who supported this were talking out of both sides of their mouths.

They told the people who voted for them that people that make six figures should be taxed more and voted for a tax increase that would cost a person who makes $130k/year an additional $1,800 in taxes. Then they (who make $137k/year) turn around and give themselves a pay raise that covers that amount two times over.
 
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SnowCal

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We're not talking 2005 dollars. We're talking currency values at the beginning and end of the periods within the context of this discussion. Taking amounts from 1970-81 and 1983-89 and trying to use a year outside that time window by 20 years as a control doesn't make any sense because the longer inflation goes, the more it skews the value of currency.

Wrong. "2005 dollars" are simply a way of comparing apples to apples as far as inflation is concerned. The federal government provides "real" statistics that are adjusted for inflation (that's what "real" means) and as of today they present them in 2005 dollars. That's simply what they use as a baseline. Your argument doesn't float.

Let's try it again, the original spending numbers I provided appear to be off

No, you're original numbers were fine. You simply screwed up the math. And you're still screwing up the math, though you've corrected one of your mistakes. You've still got two things left to fix. Here's a hint: One of them involves "apples to apples" and the other involves exponents.
http://www.usgovernmentspending.com/fed_spending_1970USbn
To simplify, we'll look at just federal spending (since that's what we're really talking about here, if California raises it's taxes, it doesn't impact people in Ohio)

Why the sudden change? Did you run the numbers for federal/local/state (continuing to make mathematical errors) and realize that even with errors that benefit your point you can't make it work? One of the major political changes during the Reagan-era was a reduction of federal control. Numerous federal programs were erased and simultaneously replaced with equivalent state programs with almost identical funding but that also enjoyed "local control".

It's true that just because "California raises it's taxes, it doesn't impact people in Ohio", but the actual data says that across the United States total government spending increases were drastically higher under Reagan than during the decade preceding him. Why don't you account for that. For me, as a worker or as a businessman, it really doesn't change the fact that 22% of my income is being taxed rather than 20% just because responsibilities were shifted to local governments. If the tax rates are going up, they're going up. And Reagan was very proud of shifting numerous spending responsibilities to local governments while simultaneously jacking up spending in various wings of the federal government.

Even though these numbers aren't as drastic as the ones I posted originally, it's still shows that the federal spending trend was 5x the pace in the time leading up to the recession than it was in the time leading up to economic success.

You still didn't address the high vs low taxes element of this either.

TEFRA. Good enough? And like I said before, there's still two major errors you're making in your math. You've fixed only one of the three.

I suppose it's easy to suggest raising taxes dramatically for a particular group (especially when you're not in that group)...hopefully one day you'll be fortunate enough to get up in my tax bracket

What tax bracket are you in? I make pretty good money and I'm in my early 20s. I have several family members who are in the top bracket. My family is doing fine. But you know what? All of my successful relatives enjoyed the opportunity to attend public schools. There wasn't much money in my family until the current generation. Grandparents? Farmers. Parents? Industrial workers. My generation? Corporate mucky-mucks and engineers. And that transition from poverty to success wasn't really possible except for the fact that tax dollars provided a lot of support for me and my family. I don't think that I or any of my relatives mind paying our fair share for the opportunity that was given us.
 
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ThatRobGuy

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No, you're original numbers were fine. You simply screwed up the math. And you're still screwing up the math, though you've corrected one of your mistakes. You've still got two things left to fix. Here's a hint: One of them involves "apples to apples" and the other involves exponents.

I did apples to apple's, I used the ending year's value as the baseline...but if 2005 makes you feel better...

Federal Spending Numbers (Adjusted to 2005) values.
Spending in 1970: $195 Billion ($981 billion)
Spending in 1981: $678 Billion ($1456 billion)
-------------------------------------------
Spending in 1983: $808 Billion ($1584 billion)
Spending in 1989: $1,100 Billion ($1748 billion)

Spending pace percentages still work out to about the same

Spending was still increasing faster leading up the bad time then is was leading up to (and during the good time)


Why the sudden change? Did you run the numbers for federal/local/state (continuing to make mathematical errors) and realize that even with errors that benefit your point you can't make it work?

If another state want's to tax their successful folks into mediocrity, that's up to them and has nothing to do with me.

It's true that just because "California raises it's taxes, it doesn't impact people in Ohio", but the actual data says that across the United States total government spending increases were drastically higher under Reagan than during the decade preceding him. Why don't you account for that. For me, as a worker or as a businessman, it really doesn't change the fact that 22% of my income is being taxed rather than 20% just because responsibilities were shifted to local governments. If the tax rates are going up, they're going up. And Reagan was very proud of shifting numerous spending responsibilities to local governments while simultaneously jacking up spending in various wings of the federal government.

I dont doubt that spending increased under Reagan (as I mentioned in a prior post, there's only been one tax cut accompanied by an actual spending cut)...it's all about the pace that you increase spending...slow & steady; no problem...drastic; problem.


What tax bracket are you in? I make pretty good money and I'm in my early 20s. I have several family members who are in the top bracket. My family is doing fine. But you know what? All of my successful relatives enjoyed the opportunity to attend public schools. There wasn't much money in my family until the current generation. Grandparents? Farmers. Parents? Industrial workers. My generation? Corporate mucky-mucks and engineers. And that transition from poverty to success wasn't really possible except for the fact that tax dollars provided a lot of support for me and my family. I don't think that I or any of my relatives mind paying our fair share for the opportunity that was given us.

I make $82,000/year here in Ohio...I used the CNN cost of living salary converter and found that the comparable salary for California is $111,500.

I came from a family of 5 with a household income of less than $50k/year. I had no financial help from the government, from my parents, or from grants of any kind. I worked full time and went to college full time for 3 years straight (waking up at 5:30am and not getting home until 11:45pm).

So for my situation, I lived in a lower tax state, never got to reap the benefits of tax dollars, and still made it without taking any handouts. When I hear people suggest taking more from me (which by the time I'm done paying all taxes, I already lose about 40%), I get frustrated because they're using the concept as an easy-out to not have to make the same sacrifices people like me did.
 
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SnowCal

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I did apples to apple's, I used the ending year's value as the baseline...but if 2005 makes you feel better...

Federal Spending Numbers (Adjusted to 2005) values.
Spending in 1970: $195 Billion ($981 billion)
Spending in 1981: $678 Billion ($1456 billion)
-------------------------------------------
Spending in 1983: $808 Billion ($1584 billion)
Spending in 1989: $1,100 Billion ($1748 billion)

Spending pace percentages still work out to about the same

Spending was still increasing faster leading up the bad time then is was leading up to (and during the good time)

You fixed the inflation thing last past. That wasn't what I was talking about. Where you're still making a mistake is with the rate. You either need to select two comparable timeframes of the same length (this won't give you the actual rate, but it will give you a relatively accurate comparison) or you can keep the current disparity in time and figure out the actual rate (take the starting figure. multiply by 2% ^ 11 or however many years... adjust the 2% until you get the final year). Okay?

If another state want's to tax their successful folks into mediocrity, that's up to them and has nothing to do with me.

Your point is fine for another discussion, but when you're claiming that the rate of increase in government spending was reduced during the Reagan years and that this led to an economic boom, you're completely off base. The rate of spending during those years increased pretty dramatically. It doesn't really matter if Reagan was responsible for all of that (and pawning a lot of traditionally federal spending items onto local governments was something that Reagan was responsible for). As far as the macroeconomy is concerned, government spending very much did increase during the Reagan years at annual rates substantially higher than during the preceding decade. This totally invalidates your point.

I dont doubt that spending increased under Reagan (as I mentioned in a prior post, there's only been one tax cut accompanied by an actual spending cut)...it's all about the pace that you increase spending...slow & steady; no problem...drastic; problem.

But like I said earlier, as far as the macroeconomy is concerned, spending increased more drastically under Reagan than it had been increasing during the '70s.

I make $82,000/year here in Ohio...I used the CNN cost of living salary converter and found that the comparable salary for California is $111,500.

I came from a family of 5 with a household income of less than $50k/year. I had no financial help from the government, from my parents, or from grants of any kind. I worked full time and went to college full time for 3 years straight (waking up at 5:30am and not getting home until 11:45pm). So for my situation, I lived in a lower tax state, never got to reap the benefits of tax dollars, and still made it without taking any handouts. When I hear people suggest taking more from me (which by the time I'm done paying all taxes, I already lose about 40%), I get frustrated because they're using the concept as an easy-out to not have to make the same sacrifices people like me did.

No financial help from the government? Did you go to a public or land grant college?
 
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