Tax Cut For The Rich (Political)

[R. Richard]

Everybody knows that George W. Bush pushed through a tax cut for the rich. The following will demonstrate why "everybody knows" is not admissalbe in court. Comments?


Projected US budget deficit shrinks by 100 billion dollars

WASHINGTON (AFP) - The projected US budget deficit unexpectedly has shrunk by some 100 billion dollars, thanks to an increase in tax revenue from corporations and wealthy Americans.

The White House is on Tuesday to release figures showing the budget deficit to be about 100 billion dollars less than projected six months ago, the New York Times reported Sunday

An administration official contacted by AFP would not comment on the story Sunday.

Corporate tax receipts, as well as those from the affluent Americans, is expected to exceed last year's by some 250 billion dollars, the Times wrote.

The daily reported that tax revenues rose about twice as quickly as budget officials in President George W. Bush's administration had anticipated.

 

[S-Des]

Everybody knows that George W. Bush pushed through a tax cut for the rich. The following will demonstrate why "everybody knows" is not admissalbe in court. Comments?


Projected US budget deficit shrinks by 100 billion dollars

WASHINGTON (AFP) - The projected US budget deficit unexpectedly has shrunk by some 100 billion dollars, thanks to an increase in tax revenue from corporations and wealthy Americans.

The White House is on Tuesday to release figures showing the budget deficit to be about 100 billion dollars less than projected six months ago, the New York Times reported Sunday

An administration official contacted by AFP would not comment on the story Sunday.

Corporate tax receipts, as well as those from the affluent Americans, is expected to exceed last year's by some 250 billion dollars, the Times wrote.

The daily reported that tax revenues rose about twice as quickly as budget officials in President George W. Bush's administration had anticipated.

Well, we all know the New York Times is a Right-Wing rag that is completely dedicated to supporting the Bush administration, so it must be a lie .

I'm still less in favor of the tax cuts than I would have been in changing the tax code so less companies could get out of paying taxes, but any cut in the deficit is a good thing (provided it doesn't turn out to be a sham).

 

[Huckleman2000]

This is one of those press releases where you need to ask, "It shrinks compared to what?"

It's not the actual deficit that's shrinking, it's the projected deficit. That's not difficult to achieve, provided your projections are sufficiently large. As well, the article doesn't say whose projections the shrinkage is based on.

So tax receipts from corporations and rich people are up - all that means is that corporations and rich people are making a fucking shitload of money, and also keeping more of it than they ever have before. That means fuck-all to me, and the other 98-or-so-percent of us (and our heirs) for whom this economy sucks elephant dick.

 

[R. Richard]

This is one of those press releases where you need to ask, "It shrinks compared to what?"

It's not the actual deficit that's shrinking, it's the projected deficit. That's not difficult to achieve, provided your projections are sufficiently large. As well, the article doesn't say whose projections the shrinkage is based on.

So tax receipts from corporations and rich people are up - all that means is that corporations and rich people are making a fucking shitload of money, and also keeping more of it than they ever have before. That means fuck-all to me, and the other 98-or-so-percent of us (and our heirs) for whom this economy sucks elephant dick.

The article does quote the New York Times and, as S-Des says with tongue in cheek, the NYT is a known right wing rag.
"The projected US budget deficit unexpectedly has shrunk by some 100 billion dollars, thanks to an increase in tax revenue from corporations and wealthy Americans."

"The White House is on Tuesday to release figures showing the budget deficit to be about 100 billion dollars less than projected six months ago, the New York Times reported Sunday."

I don't care how much others make, I just concentrate on making what I can and keeping as much of it as the government will let me.

The point is, lower tax rate = higher tax collections. The more the rich make, the more people they have to hire to make still more. The Bush tax cuts are good for the most of us.

 

[Huckleman2000]

...The point is, lower tax rate = higher tax collections. The more the rich make, the more people they have to hire to make still more. The Bush tax cuts are good for the most of us.

No economist with any reputation believes in the Laffer curve.

You're smoking crack if you actually believe what you just wrote.

[edit to add]Here's a whole report debunking the ridiculous idea that tax cuts pay for themselves.

KEY FINDINGS IN THIS REPORT:

Despite recent statements by the President, Vice President, and certain Congressional leaders that tax cuts pay for themselves by stimulating economic growth, economists from across the political spectrum, including the Administration’s own former chief economist, strongly reject the notion that tax cuts pay for themselves.

[edit to add again] This article from Slate talks about these higher tax revenues, and how much they depend on the Alternative Minimum Tax, which isn't indexed to inflation. In other words, tax revenues are increasing because more upper-middle-class people are paying higher taxes.

 

[Zeb_Carter]

And anyone who believes that corporations pay taxes is smoking crack!

Corporation don't pay taxes, individuals do. You, me, everyone. We pay the taxes. Not only our own income taxes but those of the corporations.

Twenty-two cents of every dollar you spend on goods in the US is corporate income taxes.

Twenty-six cents of every dollar on new homes.

So raising the tax rate on corporations is a tax hike for you! Not them.

 

[Joe Wordsworth]

*raises hand*

I maintain corporations do, in fact, pay taxes. I've done it. It's been done. That, at least, stands firmly in the way of "they never do!!1!!1!haxors1!1"

 

[Zeb_Carter]

*raises hand*

I maintain corporations do, in fact, pay taxes. I've done it. It's been done. That, at least, stands firmly in the way of "they never do!!1!!1!haxors1!1"

But didn't you price your goods or services so as to re-coup the tax from the customer?

And if you didn't you are either ultraistic or a foolish business person.

And if your goods or services were priced so as to re-coup the tax then that check you wrote was on behalf of every customer you every had.

 

[Joe Wordsworth]

But didn't you price your goods or services so as to re-coup the tax from the customer?

And if you didn't you are either ultraistic or a foolish business person.

And if your goods or services were priced so as to re-coup the tax then that check you wrote was on behalf of every customer you every had.

If you are going to redefine "taxation" as the monies that exist independantly of the chain of product, pricing, fee, mobile materiel, etc. that an entity pays out of some kind of magically seperate "pocket"--you're stacking the deck, essentially, against not just corporations, but sole proprietorships, partnerships, etc. and quite beyond.

Corporations are hardly the only legal or business entities out there that charge money for things, the lowly shoe cobbler in rural America would be guilty--then--of passing his taxes along to the consumer. The chain of reason surrounding the notion that the pricing of a thing to compensate for taxation is "passing it along" entirely ignores the market.

Ridiculous or damning of every business on earth.

 

[dr_mabeuse]

But didn't you price your goods or services so as to re-coup the tax from the customer?

And if you didn't you are either ultraistic or a foolish business person.

And if your goods or services were priced so as to re-coup the tax then that check you wrote was on behalf of every customer you every had.

Couldn't you also not pass the tax on to the consumer and thereby price your product lower than your competitor's and thus sell more stuff and make more money?

 

[Zeb_Carter]

If you are going to redefine "taxation" as the monies that exist independantly of the chain of product, pricing, fee, mobile materiel, etc. that an entity pays out of some kind of magically seperate "pocket"--you're stacking the deck, essentially, against not just corporations, but sole proprietorships, partnerships, etc. and quite beyond.

Corporations are hardly the only legal or business entities out there that charge money for things, the lowly shoe cobbler in rural America would be guilty--then--of passing his taxes along to the consumer. The chain of reason surrounding the notion that the pricing of a thing to compensate for taxation is "passing it along" entirely ignores the market.

Ridiculous or damning of every business on earth.

But it is the truth. And the adage holds true,

"Corporate Entities do not pay taxes, Individuals do!"

The cobbler down the street knows how much he needs to make to be able to not only pay his taxes but to feed and house his family. Otherwise there would be no point in his being in business if he didn't plan for those things he would need to pay out from his gross profits.

Just as the mega corporation collects the taxes they will have to pay from the customer.

These taxes we pay on behalf of the corporations, big and small, are called imbedded taxes and as I have stated in previous posts, they comprise 22% of the price of the product. This does not include any state sales tax the merchant has to collect at the point of sale.

 

[Zeb_Carter]

Couldn't you also not pass the tax on to the consumer and thereby price your product lower than your competitor's and thus sell more stuff and make more money?

Sure...which means the stock holder will now be paying the taxes. Would you as a stock holder prefer to pay the taxes? See it has to come out of someones pocket. An individuals pocket. The corporations have no pockets.

 

[Joe Wordsworth]

But it is the truth. And the adage holds true,

"Corporate Entities do not pay taxes, Individuals do!"

The cobbler down the street knows how much he needs to make to be able to not only pay his taxes but to feed and house his family. Otherwise there would be no point in his being in business if he didn't plan for those things he would need to pay out from his gross profits.

Just as the mega corporation collects the taxes they will have to pay from the customer.

These taxes we pay on behalf of the corporations, big and small, are called imbedded taxes and as I have stated in previous posts, they comprise 22% of the price of the product. This does not include any state sales tax the merchant has to collect at the point of sale.

So, essentially, every taxed business enterprise is passing the buck along to the consumer... this is the crux of your point?

 

[Darkniciad]

The first article depends rather heavily upon ignoring the tech bubble and 9/11 in its analysis. Both events had strong economic impact, in opposite directions. It certainly presents data calling the premise into question, but the word "debunk" is way too strong. It treats the last 2+ decades as if they existed in a sort of vacuum with identical conditions unrelated to the tax cuts/increases. There is simply not enough data at this point to make such a concrete determination as supporters of either camp put forth.

No economist with any reputation believes in the Laffer curve.

You're smoking crack if you actually believe what you just wrote.

[edit to add]Here's a whole report debunking the ridiculous idea that tax cuts pay for themselves.



[edit to add again] This article from Slate talks about these higher tax revenues, and how much they depend on the Alternative Minimum Tax, which isn't indexed to inflation. In other words, tax revenues are increasing because more upper-middle-class people are paying higher taxes.

 

[JamesSD]

The point is, lower tax rate = higher tax collections. The more the rich make, the more people they have to hire to make still more. The Bush tax cuts are good for the most of us.

I'll go throwback from what Republicans said during the Clinton years:

"It's just a natural upturn in the economic cycle".


To be serious, Tax rates are complicated. To make a blanket statement that "lower tax rates mean higher taxes paid in" would be insane. At the same time, if the tax rate goes high enough, people have incentive to cheat on their taxes, when the benefit of doing so exceeds the perceived risk of being caught.

I would think tax cuts targeted at the middle and working classes would have the greatest positive impact on the economy, as they're the most likely just to turn around and put the money right back into the system.

 

[Huckleman2000]

The first article depends rather heavily upon ignoring the tech bubble and 9/11 in its analysis. Both events had strong economic impact, in opposite directions. It certainly presents data calling the premise into question, but the word "debunk" is way too strong. It treats the last 2+ decades as if they existed in a sort of vacuum with identical conditions unrelated to the tax cuts/increases. There is simply not enough data at this point to make such a concrete determination as supporters of either camp put forth.

Good grief! The administration's own top economists don't believe that tax cuts will pay for themselves through economic expansion! Why do you insist on holding onto this article of faith? The people who put through the tax cuts don't even believe it!

How did the tech bubble and 9/11 affect the equation? You speak as if the effects are self-evident. Many other things happened, too. Several recessions and expansions, many rate-changes by the Fed, globalization and displacement of industries, NAFTA, the Euro.... Why isn't comparing the tax rates with economic growth the best way of examining the effect of tax rates on economic growth? Especially when, as the report points out, "Despite the very different tax policies followed during these two decades, there was virtually no difference in real per-person economic growth in the 1980s and 1990s."

 

[Zeb_Carter]

So, essentially, every taxed business enterprise is passing the buck along to the consumer... this is the crux of your point?

Either them or the stockholders! Which are in the real world all individuals.

And don't try tell me there are corps out there without shareholders. Every corp, no matter the type, has at least one shareholder.

 

[Darkniciad]

Good grief! The administration's own top economists don't believe that tax cuts will pay for themselves through economic expansion! Why do you insist on holding onto this article of faith? The people who put through the tax cuts don't even believe it!

Uhm, I believe I closed my comment with There is simply not enough data at this point to make such a concrete determination as supporters of either camp put forth.

So exactly what article of faith am I clinging to? The data coming out from both camps, for and against, is skewed by agenda. When considered as a whole, there is simply not enough concrete data to say either approach is better or worse than the other, and what we're left with is "Bush sux", "Clinton sux"

 

[Huckleman2000]

Uhm, I believe I closed my comment with There is simply not enough data at this point to make such a concrete determination as supporters of either camp put forth.

So exactly what article of faith am I clinging to? The data coming out from both camps, for and against, is skewed by agenda. When considered as a whole, there is simply not enough concrete data to say either approach is better or worse than the other, and what we're left with is "Bush sux", "Clinton sux"

Data isn't skewed by politics, only its interpretation. You act as if you can't make a distinction, and since you can't, then economists can't either. It's complex, true, but there isn't even any debate between economists of either party - tax cuts don't pay for themselves. The idea that they can is simply a smokescreen by politicians to cover up the rape of the economy for themselves and their wealthy supporters.

I've given solid factual reasons not to buy into the administration's spin that increased tax revenues are somehow due to their tax cuts, and that these will eventually overcome the deficits they continue to run. To sum up, these facts are:

1. The deficit reductions in the initial article aren't deficit reductions at all, but rather reductions in projected deficits.
2. The economic growth projected as a result of tax cuts, by the administration's own economists, is not enough to overcome deficit spending.
3. Historical data does not support the notion that tax cuts will ever pay for themselves in the current range of nominal rates. Mathematical assumptions that would lead to this circumstance require absurd growth rates.
4. The Alternative Minimum Tax offsets the Bush tax cuts, increasingly on the backs of middle-class range incomes, calling into question the very contention that the additional tax revenues are largely attributable to economic expansion. Instead, there is evidence that the tax revenue is due to a disproportionate positive impact on the income of corporations and the wealthiest individuals.

These aren't arguments, they're facts. And all that you or anyone else has posted to counter them are lame statements of administration spin or an even more lame position that it's all politics.

 

[Pure]

to zeb,

Originally Posted by Joe Wordsworth
//So, essentially, every taxed business enterprise is passing the buck along to the consumer... this is the crux of your point? //


Zeb: Either them or the stockholders! Which are in the real world all individuals.

And don't try tell me there are corps out there without shareholders. Every corp, no matter the type, has at least one shareholder

P: i'm with Joe on this one. let's say, ftsoa, that every taxed business entity 'passes' along its tax in the form of increases in prices of its goods or services. what is supposed to follow? that no business entity should be taxed?

i'm afraid it's just a slogan 'corps don't pay taxes, people do,' depending on certain twists of stipulation, rather like 'planes don't cause plane crashes, only people do.'

it does, of course, follow, that if a corporation's taxes were reduced, they MIGHT pass along the savings so that we all pay less for its items.' BUT here's a further little twist--let's look at REALITY:

in this city recently, taxes on cab fares were reduced by 1%. guess what the average reduction of cab fares has been: 0%. i suppose this proves: 'corporations don't fail to 'pass along' tax reductions, only corporate directors do.'

the reverse is also commonly observed: if a corporation's product is suddenly getting a 5% tax, the price of the product typically goes up 8 or 10% --with appropriate PR blaming the government.

and perhaps this proves, in the REAL world, 'corporations' dont pass along taxes, they double pass 'em along, wherever possible. -- but wait it's not corporations, it's the corporate officers. big difference.'

 

[SweetPrettyAss]

Either them or the stockholders! Which are in the real world all individuals.

And don't try tell me there are corps out there without shareholders. Every corp, no matter the type, has at least one shareholder.

Not all shareholders are individuals. Some are other corporations and some are retirement funds and some are family trusts. Any kind of business entity can be a shareholder.

Some kind of taxes, like property tax and payroll taxes are normal business expenses and are passed along to consumers. Income tax is a different kind of tax. It is a percentage of the net profit of the business. An income statement will have a line near the bottom that says something like "Profit before income taxes" and the next line will be "income Taxes" and the bottom line will be "Net Profit after Income Taxes".

Selling prices are usually based on the cost of the goods being sold, plus a percentage of the total overhead, plus profit. Income tax on that profit is never figured into a selling price.

It is nonsense to say that the price of goods is 22% corporate income tax. The maximum corporate tax is 38% of net profit. In order for corporate income tax to be 22% of the selling price, the company would have to be extremely profitable. The net profit would have to be about 60% of their total revenue. No corporation is ever going to report such a large percentage of profit.

 

[R. Richard]

I'll go throwback from what Republicans said during the Clinton years:

"It's just a natural upturn in the economic cycle".

"The wind and the waves always seem to favor the skillful navigator."

To be serious, Tax rates are complicated. To make a blanket statement that "lower tax rates mean higher taxes paid in" would be insane. At the same time, if the tax rate goes high enough, people have incentive to cheat on their taxes, when the benefit of doing so exceeds the perceived risk of being caught.

I would think tax cuts targeted at the middle and working classes would have the greatest positive impact on the economy, as they're the most likely just to turn around and put the money right back into the system.

JFK cut taxes and the economy boomed. The elder Bush raised taxes and the economy weent into the tank. Clinton raised taxes and was bailed out by the dot.com boom. W cut taxes and the economy is booming.

In every instance in which taxes were meaningfully cut, the economy responded with good times. The evidence is overwhelming. Of course, evidence does not mean much to an economist.

 

[R. Richard]

It is nonsense to say that the price of goods is 22% corporate income tax. The maximum corporate tax is 38% of net profit. In order for corporate income tax to be 22% of the selling price, the company would have to be extremely profitable. The net profit would have to be about 60% of their total revenue. No corporation is ever going to report such a large percentage of profit.

To the contrary. A small corporation may have revenues that approach 100% of their total revenue. [Think an actor who has almost all expenses paid by the movie company.] A startup corporation can book stattlingly high priofits until the competition discovers how to produce competitive products at a reasonable price.

 

[Huckleman2000]

"The wind and the waves always seem to favor the skillful navigator."


JFK cut taxes and the economy boomed. The elder Bush raised taxes and the economy weent into the tank. Clinton raised taxes and was bailed out by the dot.com boom. W cut taxes and the economy is booming.

In every instance in which taxes were meaningfully cut, the economy responded with good times. The evidence is overwhelming. Of course, evidence does not mean much to an economist.

That really isn't true, R. Richard. Quite a lot happened between JFK and Bush the Elder, and before JFK. Moreover, a reduction in government deficits helped fund the dot-com boom. Investment capital has to go somewhere, after all, and if the government isn't buying it up there's a lot more for the private markets. As to economic stimulus, anyone can live better for awhile by running up their credit cards. That doesn't make it a sound fiscal policy.

Disparage the dismal science if you will, but your faith-based alternative doesn't pass the sniff test when subjected to the harsh reality of factual data.

 

[S-Des]

To the contrary. A small corporation may have revenues that approach 100% of their total revenue. [Think an actor who has almost all expenses paid by the movie company.] A startup corporation can book stattlingly high priofits until the competition discovers how to produce competitive products at a reasonable price.

Sorry, I was with you (sort of) until this one. As someone who had ownership in a small business (and currently owns another one), the situation you describe borders on ludicrous. There may be an example or two of a company making insane profits for a very short amount of time, but it's a straw argument. It's far outside the norm and doesn't last for long when it does happen. Let's stick to real examples if we're going to keep the discussion informative.

I'm speaking from my own experience and from what I've heard from individuals much smarter than I am. I'm not proud, I'll admit you're out of my area of expertise. If you can back up that quote with any statistical proof, I will apologize.