Divergent views on wealth distribution

[MrJayremmie]

You're kind of proving my point.

These Bush tax cuts are being blamed for our huge deficits, yet if your 2 Trillion over 10 years is correct, that is 0.2 Trillion per year. We have a deficit of $1.6 Trillion this year. So the Bush Tax cuts, which democrats and people like you blame for our deficits, would help with a very small portion of the deficit... ie: "not significant".

Like I said, the problem won't be fixed by tax increases. You can't start doubling peoples' tax rates, and even then it wouldn't cover our deficit.

It has to start with spending cuts, massive spending cuts.

I can see what you are saying, but I think 200 billion dollars a year is a great start.

I saw a great article that said we should try going to the Clinton rates and Gingrich spending levels (1999)

 

[Denny Crane]

I can see what you are saying, but I think 200 billion dollars a year is a great start.

I saw a great article that said we should try going to the Clinton rates and Gingrich spending levels (1999)

At Gingrich spending levels alone, we'd be running a surplus and able to pay off some of the debt.

We might be close to surplus at W's 2005 spending level.

 

[maxiep]

At Gingrich spending levels alone, we'd be running a surplus and able to pay off some of the debt.

We might be close to surplus at W's 2005 spending level.

What I'd like to see is a 30-50 year plan to pay our debt to zero.

 

[Denny Crane]

What I'd like to see is a 30-50 year plan to pay our debt to zero.

The debt actually grew under Clinton because the excess SS funds had to be invested somewhere and that somewhere happened to be T-Bills. And I'm sure you know that every T-Bill sold adds to the debt.

It isn't going to happen anymore, since SS is running a deficit (if not now, soon).

 

[Klinky]

It was the first article that showed the general conclusion that is generally accepted in the economic community: That there's a point where raising the capital gains tax results in diminishing returns in revenue.

This isn't very hard to figure out. Finding a monetary sweet spot for anything is hard. It could be a tax rate or a price for a product or service. You can price yourself too low & you can price yourself too high. You can set taxes too high or taxes too low. You can't hike tax rates forever, just like you can't expect home prices to boom forever.

It's sweet and all that you can arrive at specific circumstances in a Skinner Box where rates were lowered and revenues didn't go up,

I am glad you consider real world data akin to a Skinner Box...

but people a lot smarter than you and me have studied this phenomenon accounting for all the exogenous variables and they all arrive at roughly the same conclusion. In the world of economic research, that kind of general consensus is rare.

They came to the conclusion that it's possible to price something too high or too low? Isn't that a pretty basic economic assumption? My point was that capital gains tax revenue has more to do with the general health of the economy rather than the tax rate. Lowering capital gains taxes in a poor economy doesn't mean the economy is going to rebound or raise capital gains tax revenue in the short-term or long-term. If the economy does rebound in an unexpected fashion, it might be because of a bubble forming rather than sustainable growth.

Personally, I think capital gains shouldn't be taxed at all.

Profit is considered income. I think capital gains taxes shouldn't affect those below a certain income threshold, but no tax on any capital gains just creates a shelter. If the majority of your income comes from capital gains then you'd pay pretty close to $0 in taxes while everyone working 9 - 5 would be footing the bill.

We might be close to surplus at W's 2005 spending level.

Bush was running a deficit in 2005. Outlays were $2.47 trillion in 2005. Government revenue for 2010 & 2011 is estimated at $2.16 trillion & $2.17 trillion respectively. If we stuck to W's spending levels, didn't have an economic meltdown & weren't fighting two wars, perhaps we'd be in surplus town.

 

[Denny Crane]

Bush was running a deficit in 2005. Outlays were $2.47 trillion in 2005. Government revenue for 2010 & 2011 is estimated at $2.16 trillion & $2.17 trillion respectively. If we stuck to W's spending levels, didn't have an economic meltdown & weren't fighting two wars, perhaps we'd be in surplus town.

Now look at revenues for 2007. Obama didn't want to let a good crisis go to waste, and he's so hostile to the private sector, he drove down GDP and thus revenues.

 

[Klinky]

Now look at revenues for 2007.

It would be nice if imaginary home values could be sustained forever...

Obama didn't want to let a good crisis go to waste, and he's so hostile to the private sector, he drove down GDP and thus revenues.

Revenue was already down to $2.1 trillion by 2009.

 

[maxiep]

This isn't very hard to figure out. Finding a monetary sweet spot for anything is hard. It could be a tax rate or a price for a product or service. You can price yourself too low & you can price yourself too high. You can set taxes too high or taxes too low. You can't hike tax rates forever, just like you can't expect home prices to boom forever.



I am glad you consider real world data akin to a Skinner Box...



They came to the conclusion that it's possible to price something too high or too low? Isn't that a pretty basic economic assumption? My point was that capital gains tax revenue has more to do with the general health of the economy rather than the tax rate. Lowering capital gains taxes in a poor economy doesn't mean the economy is going to rebound or raise capital gains tax revenue in the short-term or long-term. If the economy does rebound in an unexpected fashion, it might be because of a bubble forming rather than sustainable growth.



Profit is considered income. I think capital gains taxes shouldn't affect those below a certain income threshold, but no tax on any capital gains just creates a shelter. If the majority of your income comes from capital gains then you'd pay pretty close to $0 in taxes while everyone working 9 - 5 would be footing the bill.



Bush was running a deficit in 2005. Outlays were $2.47 trillion in 2005. Government revenue for 2010 & 2011 is estimated at $2.16 trillion & $2.17 trillion respectively. If we stuck to W's spending levels, didn't have an economic meltdown & weren't fighting two wars, perhaps we'd be in surplus town.

[video=youtube;bU6m5UqLx9M]

 

[Klinky]

[video=youtube;bU6m5UqLx9M]

Hey you're the one saying that you don't understand how capital gains tax rates affect tax revenue & are just going off of what some unnamed smartypants economic geniuses have said... It would appear you also need the help of Seinfeld to do your insults for you too... Hmm...

 

[maxiep]

Hey you're the one saying that you don't understand how capital gains tax rates affect tax revenue & are just going off of what some unnamed smartypants economic geniuses have said... It would appear you also need the help of Seinfeld to do your insults for you too... Hmm...

Once again you're missing the point. I'm trying to be nicer in here, so why don't we just drop it.

 

[Denny Crane]

http://www.usatoday.com/news/washin...2-trillion-in-debt_n.htm?loc=interstitialskip

U.S. funding for future promises lags by trillions

The federal government's financial condition deteriorated rapidly last year, far beyond the $1.5 trillion in new debt taken on to finance the budget deficit, a USA TODAY analysis shows.

The government added $5.3 trillion in new financial obligations in 2010, largely for retirement programs such as Medicare and Social Security. That brings to a record $61.6 trillion the total of financial promises not paid for.

This gap between spending commitments and revenue last year equals more than one-third of the nation's gross domestic product.

Medicare alone took on $1.8 trillion in new liabilities, more than the record deficit prompting heated debate between Congress and the White House over lifting the debt ceiling.

Social Security added $1.4 trillion in obligations, partly reflecting longer life expectancies. Federal and military retirement programs added more to the financial hole, too.

Corporations would be required to count these new liabilities when they are taken on — and report a big loss to shareholders. Unlike businesses, however, Congress postpones recording spending commitments until it writes a check.

The $61.6 trillion in unfunded obligations amounts to $527,000 per household. That's more than five times what Americans have borrowed for everything else — mortgages, car loans and other debt. It reflects the challenge as the number of retirees soars over the next 20 years and seniors try to collect on those spending promises.