The Fiscal Cliff.....please explain it simply. - Page 3

Skeptic Ginger · 31st December 2012, 09:26 AM

Originally Posted by NewtonTrino

As someone who makes that kind of money I certainly can't afford to buy anything I want. I do know people who can but they mostly made their money through capital gains anyway.

If we really want to tax the rich we need to tax wealth, not income. 1% of wealth over $100M would probably bring in a lot cash.

That's as absurd as the argument, "taxing the rich won't put a dent in the deficit", and GW Bush's baloney that, "if you tax the rich they'll just find more loopholes".

These arguments are meant to look like actual arguments against raising the top tax rate, they are repeated like they are actual arguments against raising the top tax rate, but they are simply different issues. There is a name for that kind of answer, it's called a red herring.

Skeptic Ginger · 31st December 2012, 09:51 AM

Originally Posted by NewtonTrino

Let me run you through a simple though process. Imagine you are dentist who make a few hundred thousand a year. Your taxes go up by 10-20k a year.

Fallacy number one:
In order for your taxes to go up by 10K/yr, you'd need to earn $250,000 above the top tax bracket. Tax on your first $250K doesn't change. If the top tax goes up to 39% from 35% on income over $25K, you'd have to earn $500K to pay an additional $10K (4% of $250,000). To pay an additional $20K you'd need $750K in income. Gee, what a burden.

Originally Posted by NewtonTrino

You've got a kid in college that you are paying for and another one about to graduate high school. Do you hire that extra dental assistant or do you hold off?

Fallacy number two: You hire another assistant if there is work. The assistant allows you to see more clients and you earn more income, or, if he/she is a hygienist, he/she sees the patients and you get a cut. You don't hire employees because you have extra cash floating around and you don't not hire them if there is business and you need them.

Originally Posted by NewtonTrino

Also keep in mind the cost of business increases every year. Current employees want raises, equipment needs to be replaced etc. So if the choice is cut your lifestyle or don't hire more people which on do you do?

Fallacy number three: Those business expenses come out of your gross income. If the costs go up and your income goes down, you fall into the lower tax bracket or at least a smaller portion of your income is subject to higher taxes.

Originally Posted by NewtonTrino

In other words everyone saying this doesn't have any effect on hiring are wrong. The effect may be small but it's there.

IOW, you're living on that koolaid.

Originally Posted by NewtonTrino

Now let's talk about how the middle class are dramatically undertaxed for the level of services they seem to want... Take a look at the Canadian tax tables and deductions compared to the US for example.

Fallacy number four (multiple examples): People are already paying for health insurance. National health insurance systems get more for less. So the money you are talking about is already being spent.

Hurricane Sandy and hurricane Katrina costs much much more in damages than was saved on the infrastructure that would have prevented much of the damage.

A collapsed bridge still has to be replaced.

The deficit was significantly expanded by several unfunded wars.

And so on.....

Skeptic Ginger · 31st December 2012, 09:54 AM

Originally Posted by Startz

You asked a question, "Can you justify the claim..." I answered with "Sure." Meaning, "yes, I can justify the claim..." Sorry that you didn't understand that.

The Journal of Political Economy is arguably the leading academic economics journal.

So now people are supposed to read multiple journal volumes?

You can play post-it games all you want. The bottom line is you have not supported your claims.

Skeptic Ginger · 31st December 2012, 09:56 AM

Originally Posted by Tippit

I don't know what you're talking about with regard to "Ron Paul stuff". ...

Right.

NewtonTrino · 31st December 2012, 10:01 AM

Originally Posted by Skeptic Ginger

Fallacy number one:
In order for your taxes to go up by 10K/yr, you'd need to earn $250,000 above the top tax bracket. Tax on your first $250K doesn't change. If the top tax goes up to 39% from 35% on income over $25K, you'd have to earn $500K to pay an additional $10K (4% of $250,000). To pay an additional $20K you'd need $750K in income. Gee, what a burden.

This is just ignorant. $20k is $20k. That's college tuition for a kid.

Quote:

Fallacy number two: You hire another assistant if there is work. The assistant allows you to see more clients and you earn more income, or, if he/she is a hygienist, he/she sees the patients and you get a cut. You don't hire employees because you have extra cash floating around and you don't not hire them if there is business and you need them.

Wrong. Sorry but this is just plain wrong. It's not a binary thing it's a judgement call based on how you think things are going to go. Option #2 is have the current employees work harder until the business is built up instead of speculatively hiring someone. Or alternately actually letting someone go and having your current people work harder. Just because the money comes out of "profit" doesn't mean it's not real money. I have to make these kinds of decisions all of the time and it gets a lot more complicated when you are talking about doing things like product development where the money follows long after the work.

Quote:

Fallacy number three: Those business expenses come out of your gross income. If the costs go up and your income goes down, you fall into the lower tax bracket or at least a smaller portion of your income is subject to higher taxes.

Doing taxes is incredibly more complicated than that. Some things aren't fully deductible for example. The bottom line is that your "take home" pay is going to be effected either way because you have more money going out the door. I run a business, I know how taxes work and if you raise my taxes I have to spend less on the business to maintain the same income.

Quote:

IOW, you're living on that koolaid.

I'm simply pointing out the situation isn't nearly as black and white as you think. If you take money out of peoples pockets they will try to make it up elsewhere. This could easily be the difference between hiring someone and not. Note that I didn't claim that I knew the totality of this effect, just that it's ridiculous to say that there is ZERO effect as you seem to be doing.

Quote:

Fallacy number four (multiple examples): People are already paying for health insurance. National health insurance systems get more for less. So the money you are talking about is already being spent.

I personally look at our health insurance bids every year. This year it was basically unchanged. The 2 years before that it went up 50% per year. This is our business cost. We do not pass along any of the insurance cost to our employees and pay to cover their entire family without them shelling out any of it. The cost of health insurance could easily be the different between hiring someone and not.

Bottom line is that higher taxes = more money out of someones pocket = less money to spend in other areas = potential to cause less hiring.

daenku32 · 31st December 2012, 01:50 PM

Originally Posted by psionl0

The formula seems too simplistic to allow any conclusions to be drawn from it. I was just hoping that daenku32 would be able to expand on it.

It's what I attempted in my concise post. Example: "taxes on working and middle classes effect mostly strongly the C by bringing it down." This was in reference of what happens when you raise taxes on those who spend a vast majority of their income.

I wasn't trying to explain everything behind the letters. Which was the intent of "explaining it simply". Doesn't get much simpler than the GDP identity.

psionl0 · 31st December 2012, 03:43 PM

Originally Posted by Skeptic Ginger

So now people are supposed to read multiple journal volumes?

You can play post-it games all you want. The bottom line is you have not supported your claims.

I posted LINKS to the journal entry in question for you.

Admittedly it was lazy of Startz not to do so himself but it took all of 5 seconds to find them.

Random · 31st December 2012, 03:44 PM

Originally Posted by NewtonTrino

Let me run you through a simple though process. Imagine you are dentist who make a few hundred thousand a year. Your taxes go up by 10-20k a year. You've got a kid in college that you are paying for and another one about to graduate high school. Do you hire that extra dental assistant or do you hold off?

There are a lot of other things to take into account in the analysis but the idea that you can raise taxes and it won't have any effect on people because they are already "rich" is silly. The money comes out of the same pot and taxes are an expense like anything else.

Also keep in mind the cost of business increases every year. Current employees want raises, equipment needs to be replaced etc. So if the choice is cut your lifestyle or don't hire more people which on do you do?

In other words everyone saying this doesn't have any effect on hiring are wrong. The effect may be small but it's there.

Now let's talk about how the middle class are dramatically undertaxed for the level of services they seem to want... Take a look at the Canadian tax tables and deductions compared to the US for example.

Business taxes are based on the profits earned by the business. Wages are a tax deductible business expense. If the dental assistant will earn more money for the business than she costs in wages, she should be hired. If she will not make more money for the business than she earns in wages, than she should not be hired. The tax rate for the business profits is irrelevant.

Businessmen who avoid profitable business decisions because of the tax rate that they will pay on the profit should probably not be businessmen.

Skeptic Ginger · 31st December 2012, 03:50 PM

Originally Posted by NewtonTrino

This is just ignorant. $20k is $20k. That's college tuition for a kid.

You're dodging the issue again.

Is that extra $20K paid in taxes going to make the person who earned $750K spend less thus impact the demand side of the equation?

On the other hand, cutting unemployment and food stamps poor people need will definitely impact the demand side of the equation.

Originally Posted by NewtonTrino

Wrong. Sorry but this is just plain wrong. It's not a binary thing it's a judgement call based on how you think things are going to go. Option #2 is have the current employees work harder until the business is built up instead of speculatively hiring someone.

If your employees get all the work done, why would you hire someone else?

I have a small business. If I had more clients I'd hire someone. Hiring someone is not going to get me more clients. A better economy will.

Originally Posted by NewtonTrino

Or alternately actually letting someone go and having your current people work harder.

You don't think a small business owner would do this anyway if they could?

Originally Posted by NewtonTrino

Just because the money comes out of "profit" doesn't mean it's not real money.

You are changing the question again so you can justify the supply side ideology version. No one is saying the money isn't real. No one is saying $20K isn't a lot, though to me I'm sure it's more than $20K is to the Koch Brothers.

It costs money to wage wars. It costs money to build roads. Everyone benefits from educating the population. You seem to be saying we just shouldn't buy any of those things. I'm all for stopping oil company and farm subsidies and bringing the troops home. The Republicans won't do that. Instead they keep serving the koolaid that the deficit is all about redistributing the wealth, as if building a highway was a Commie-Pinko thing.

Originally Posted by NewtonTrino

I have to make these kinds of decisions all of the time and it gets a lot more complicated when you are talking about doing things like product development where the money follows long after the work.

R&D is a completely different ballgame than net profits vs employees. So again you change the discussion so you don't have to address the issues that don't fit with your ideology.

Yes, investing in R&D is a good thing. Right now a lot of large corporations are flush with cash. It's not lack of cash that is stopping them from investing in R&D. It's lack of a market for goods. The government could do a lot to invest in innovation, especially energy efficiency and non-fossil fuel energy. It would help the economy and we'd all benefit if the government did that.

Originally Posted by NewtonTrino

Doing taxes is incredibly more complicated than that. Some things aren't fully deductible for example. The bottom line is that your "take home" pay is going to be effected either way because you have more money going out the door. I run a business, I know how taxes work and if you raise my taxes I have to spend less on the business to maintain the same income.

Come on Newton, who are you kidding? I've run a successful small business as my only source of income for the last 21 years. If you aren't deducting everything you can then something's wrong with the way you do your books. Income tax only comes out of net profit. B&O taxes (in my state it's figured on gross income) are not affected by these federal income tax rates.

Originally Posted by NewtonTrino

I'm simply pointing out the situation isn't nearly as black and white as you think. If you take money out of peoples pockets they will try to make it up elsewhere.

Dodging the issue again, will it make a person who earns $500-$750K spend less thus impacting the demand side of the economy equation?

Originally Posted by NewtonTrino

This could easily be the difference between hiring someone and not. Note that I didn't claim that I knew the totality of this effect, just that it's ridiculous to say that there is ZERO effect as you seem to be doing.

Baloney. Employee wages come out of gross income, not net. The tax only applies to net.

Employers don't keep employees for charitable reasons. If there's a demand, you hire people. Your profit will go up and the increase in tax rate is not going to stop you. Lack of customers on the other hand, will.

Originally Posted by NewtonTrino

I personally look at our health insurance bids every year. This year it was basically unchanged. The 2 years before that it went up 50% per year. This is our business cost. We do not pass along any of the insurance cost to our employees and pay to cover their entire family without them shelling out any of it. The cost of health insurance could easily be the different between hiring someone and not.

Hasn't got a thing to do with net income. If your profits shrink, you aren't affected by the increased tax rate. If you are taking home $500K net profit, then you are not being squeezed by employee costs.

Originally Posted by NewtonTrino

Bottom line is that higher taxes = more money out of someones pocket = less money to spend in other areas = potential to cause less hiring.

This blanket ideology claim is part of the problem. It's a discussion blocker that stops critical analysis of the details that don't hold up to scrutiny.

Skeptic Ginger · 31st December 2012, 06:45 PM

Originally Posted by psionl0

I posted LINKS to the journal entry in question for you.

Admittedly it was lazy of Startz not to do so himself but it took all of 5 seconds to find them.

OK, so going back to the actual question, ignoring the complete waste of time in between:

Originally Posted by SG

Can you justify the claim that raising taxes on people who already have enough money to buy anything they want is going to change consumption?

I don't see that your links answer the question. They discuss a related issue, do the rich have a relative amount of savings?

That ain't the question. The question is, will raising taxes on the rich by a nominal 4% above what they are already paying make them consume less thus impacting the demand side of the economic equation?

You need to show they aren't already buying everything they want to buy and if they have a tiny fraction less in income they will spend less accordingly.

NewtonTrino · 31st December 2012, 06:56 PM

Look, if you don't conceptually get that the government taking a bigger slice of the pie is actual taking real money out of peoples pockets I don't know what else to say.

psionl0 · 31st December 2012, 07:37 PM

Originally Posted by Tippit

I suggest you read what you wrote, and then read what I wrote very carefully, and then perhaps re-consider your response. Second, are you implying that central banks only loan money to governments? Even given the evidence willingly provided by the perpetrators, we know that they make massive private loans all the time. When central banks use their legal counterfeiting power to make loans to governments, they enable profligate government spending. When they use it to make negligible-to-zero cost loans to select private entities who then use that capital to make interest bearing loans to governments to enable even more profligate spending, we have private looting of the public. Surely someone even as obtuse as you are can see that.

I'm well aware that governments keep borrowing money. I'm arguing that the source of private government credit should be a determining factor in determining its legitimacy. Assuming you understand the issue, which, to be quite honest I'm not sure that you do, you're claiming in essence that debts issued by glorified counterfeiters are sacrosanct, I am claiming the opposite.

Understanding the distinction between legitimate and illegitimate forms of government credit is crucial to understanding the phony "fiscal cliff", especially as government interest expense as a percent of government spending begins to exceed 10%.

If a criminal counterfeiter conspired with politicians and counterfeited 75% of the capital that makes up the national debt, would you be in favor of continuing to recognize that portion of the debt, and paying interest to the criminal? Would that be before, during, or after he is jailed?

Do you support debt repudiation under any circumstances?

I must be about the only poster who still reads your posts. I'm beginning to wonder why. You obfuscate your posts with so much jargon and double talk that no matter how I respond, you say that I'm not reading you properly.

You seem to be just reciting the debtor's creed: "When banks make loans they create the money out of thin air so I don't have to pay them back". This is just an attempt to get real goods and services for nothing then weaseling out of the debt by saying "I don't owe anybody anything". It is not a valid line of reasoning for individuals and it is not a valid line of reasoning for governments.

You know the facts:
- Governments borrow money by selling bonds to the highest bidder.
- The fed creates money by buying government bonds.
- The fed only monetizes a fraction of the government debt this way.
- Private banks can also buy bonds by creating money out of "thin air" (but they need excess reserves).
- Money is created (by both central banks and other banks) by making bookkeeping entries so it must appear on their balance sheets.

These facts are inconsistent with your claim that the fed is "creating" government debt. The fed obviously makes loans to other entities (the balance sheet says so). However, I don't see how they can make "massive, off-balance sheet loans" (unless they are secretly printing trillion dollar bills).

I agree that fractional reserve banking should be abolished.
I agree that governments should not be allowed to borrow money (you can't trust these clowns with the national credit card).
I would like to see the economic "experts" who keep saying that the government should borrow more money charged with treason.

But I don't understand you.

psionl0 · 31st December 2012, 07:43 PM

Originally Posted by Skeptic Ginger

OK, so going back to the actual question, ignoring the complete waste of time in between:I don't see that your links answer the question. They discuss a related issue, do the rich have a relative amount of savings?

That ain't the question. The question is, will raising taxes on the rich by a nominal 4% above what they are already paying make them consume less thus impacting the demand side of the economic equation?

You need to show they aren't already buying everything they want to buy and if they have a tiny fraction less in income they will spend less accordingly.

I presume that this is addressed to Startz and not me. The reference he quoted seems to actually support your position.

Skeptic Ginger · 31st December 2012, 08:03 PM

Originally Posted by NewtonTrino

Look, if you don't conceptually get that the government taking a bigger slice of the pie is actual taking real money out of peoples pockets I don't know what else to say.

I get it that "This blanket ideology claim is part of the problem. It's a discussion blocker that stops critical analysis of the details that don't hold up to scrutiny."

The government isn't pocketing the 'real money' they are recirculating it, which stimulates the economy better than letting the rich simply hoard more and more of it.

Tippit · 1st January 2013, 07:34 AM

Originally Posted by psionl0

I must be about the only poster who still reads your posts. I'm beginning to wonder why. You obfuscate your posts with so much jargon and double talk that no matter how I respond, you say that I'm not reading you properly.

It's no skin off of my back whether you read, or respond to my posts. I will keep on doing what I'm doing.

I asked you a specific question. Are there any circumstances in which you support debt repudiation?

Quote:

You seem to be just reciting the debtor's creed: "When banks make loans they create the money out of thin air so I don't have to pay them back". This is just an attempt to get real goods and services for nothing then weaseling out of the debt by saying "I don't owe anybody anything". It is not a valid line of reasoning for individuals and it is not a valid line of reasoning for governments.

Banks operating under a fractional reserve system are still operating under a set of rules, even if the rules are set by the money cartel. However, every time a private bank borrows from a central bank, you have money creation, or, as I like to call it, counterfeiting. In that context, banks who essentially have access to virtually unlimited counterfeit credit at virtually no cost have an advantage over the typical saver, which should be obvious. When they use this credit to acquire and drive up the price of financial assets, that's bad enough. But when they use counterfeit money to buy public debt that I, the taxpayer, am on the hook for, that's even worse, and the debts are illegitimate. As interest expense becomes an ever larger portion of government spending (it's already about 10%, even with anemic interest rates, due to the massive amount of debt), this problem will become dramatically worse, approaching Greek/Spanish levels.

Abolishing government borrowing would be a great solution to this specific problem, but even if we did that, we would still have an entity which has the legal right to counterfeit the public's money and loan it at interest, or simply acquire whatever (private) assets it wants, putting the rest of the market at a huge disadvantage. The Federal Reserve must be abolished. If you don't agree, you're simply wrong.

Quote:

You know the facts:
- Governments borrow money by selling bonds to the highest bidder.
- The fed creates money by buying government bonds.
- The fed only monetizes a fraction of the government debt this way.
- Private banks can also buy bonds by creating money out of "thin air" (but they need excess reserves).
- Money is created (by both central banks and other banks) by making bookkeeping entries so it must appear on their balance sheets.

These facts are inconsistent with your claim that the fed is "creating" government debt. The fed obviously makes loans to other entities (the balance sheet says so). However, I don't see how they can make "massive, off-balance sheet loans" (unless they are secretly printing trillion dollar bills).

Read what Bernie Sanders had to say about the $16T in loans provided by the Fed:

The Fed Audit

How much of that do you think wound up in sovereign credit around the world? Hmm...

Quote:

I agree that fractional reserve banking should be abolished.
I agree that governments should not be allowed to borrow money (you can't trust these clowns with the national credit card).
I would like to see the economic "experts" who keep saying that the government should borrow more money charged with treason.

But I don't understand you.

So, government borrowing is treasonous, but counterfeiting the public money, is just business as usual in psion world, apparently.

Startz · 1st January 2013, 08:35 AM

The article shows that the rich save part of their income, not all (on the margin). That means they also consume part of their income (on the margin).

NewtonTrino · 1st January 2013, 09:07 AM

Originally Posted by Skeptic Ginger

I get it that "This blanket ideology claim is part of the problem. It's a discussion blocker that stops critical analysis of the details that don't hold up to scrutiny."

The government isn't pocketing the 'real money' they are recirculating it, which stimulates the economy better than letting the rich simply hoard more and more of it.

Yes, taxing causes prosperity. I totally agree with you, makes total sense.

Why not raise taxes to 100%? After all the government will recirculate the money and everyone will be rich!

blutoski · 1st January 2013, 09:34 AM

Originally Posted by NewtonTrino

Yes, taxing causes prosperity. I totally agree with you, makes total sense.

Why not raise taxes to 100%? After all the government will recirculate the money and everyone will be rich!

This is the principle behind the Laffer Curve. The curve's values change over time, but taxation in a nation with benevolent government multiplies productivity up to a point, after which productivity declines.

The argument is about how to tax (what kind of activity or property, what percentage per income bracket) in order to obtain that maximum productivity.

Businesses are not like consumers: increasing a cost of production can actually push the enterprise over a mathematical threshold that triggers an expansion. Taxes are not the only cost of production; businesses deal with supplier cost increases all the time and responding with contraction of operations is actually a sign of mismanagement (think Al Dunlop, who destroyed Sunbeam by closing plants and terminating experienced staff, instead of leveraging the capital and expanding the product line) unless there are extraordinary circumstances.

In the macroeconomy, government revenue is more likely to be spent domestically, so tax increases can sometimes boost the economy by diverting some investment that would be going overseas, and most of the government's spending produces wages which is taxed again, which means a slightly lower tax rate is required overall due to expansion of the workforce. This multiplier effect is less proven in the current situation where much of the purpose of this change to revenue generation is intended to close the gap on borrowing, a larger portion of which is foreign ownership than in previous years when the models were developed.

Skeptic Ginger · 1st January 2013, 01:38 PM

Originally Posted by NewtonTrino

Yes, taxing causes prosperity. I totally agree with you, makes total sense.

Why not raise taxes to 100%? After all the government will recirculate the money and everyone will be rich!

In the past the top rate was something close to 90%, IIRC.

But your argument is a straw man. No one has said that there's no upper limit to the benefits of taxing the rich a little more. In addition, no one has suggested historical economic circumstances never vary. Right now the Republicans initiated several unpaid wars. Yes, the Democratic Party was gutless and went along, but that's not the thread topic. The issue is, given that, given the slowed economy that appears to be related to slow demand, the richest among us who benefitted much more than other income brackets during the unfunded wars simply need to pay more to bring the deficit down without stifling the little bit of recovery we do have.

daenku32 · 1st January 2013, 01:58 PM

Well, the bipartisan Senate bill is being rejected by the House Republicans. So there is not going to be any deal to now mitigate the fiscal cliff, as we've just gone over that, and we've hit the debt ceiling.

The man on TV saying that when stock market comes alive again tomorrow it'll force a another deal on each of these things.

But I doubt it. I just hope my brothers can keep their jobs, since the safety nets won't be there for them much longer.

psionl0 · 1st January 2013, 06:15 PM

Originally Posted by Tippit

I asked you a specific question. Are there any circumstances in which you support debt repudiation?

Sure. Where a debt is attributed to a person who did not consent to take on the debt, where the creditor did not live up to his part of the contract or where a debt is dishonestly inflated (the inflated part).

A few years ago, an ambulance service tried to say that I owed $700 for a service that I had refused. I had no compunction about putting a sticker over the envelope window that said, "No Contract, Return to Sender" and sending the letter back. After a couple of such letters, the ambulance service gave up.

I just can't think of a case where you sign on the dotted line then have no obligation.

Originally Posted by Tippit

Abolishing government borrowing would be a great solution to this specific problem, but even if we did that, we would still have an entity which has the legal right to counterfeit the public's money and loan it at interest, or simply acquire whatever (private) assets it wants, putting the rest of the market at a huge disadvantage. The Federal Reserve must be abolished. If you don't agree, you're simply wrong.

As long as there is a fiat system there will be a need for some form of central banking. The fed may be in need of reforms (especially to make it more transparent) but abolishing it would simply mean moving the printing presses into the government offices.

It is worth point out a fact that I forgot to remind you of:
- fed profits get returned to treasury.

Originally Posted by Tippit

Read what Bernie Sanders had to say about the $16T in loans provided by the Fed:

The Fed Audit

How much of that do you think wound up in sovereign credit around the world? Hmm...

The fed balance sheet shows that the fed's assets and liabilities each total less than $3T so this can't be $16T in outstanding loans. Of course, it the size of the true balance sheet was much larger than that published then this would be outright fraud and people should be jailed for that.

As I understand it, these were a number of bailout loans which (presumably) have been repaid but I don't feel like wading through a 266 page report to get the details.

Originally Posted by Tippit

So, government borrowing is treasonous, but ~~counterfeiting~~ manufacturing the public money, is just business as usual in psion world, apparently.

That's about the size of it.

Maybe in the future, a peerless electronic currency system will eliminate the need for banks and IOUs being used for money (which would still be the case even if gold was the currency) but you can be sure that the banks and politicians will fight that possibility to the bitter end.

Skeptic Ginger · 1st January 2013, 10:16 PM

House passed the Senate Bill!!!!! Obama to speak in a few minutes.

daenku32 · 2nd January 2013, 01:51 PM

Yes. I was wrong. Happily at that. I guess they really were afraid of what the stock market would do this morning if they didn't get it passed.

The Central Scrutinizer · 3rd January 2013, 05:41 AM

Originally Posted by daenku32

Yes. I was wrong. Happily at that. I guess they really were afraid of what the stock market would do this morning if they didn't get it passed.

Some of us were looking forward to it.

Hazel · 3rd January 2013, 06:17 AM

Originally Posted by daenku32

Yes. I was wrong. Happily at that. I guess they really were afraid of what the stock market would do this morning if they didn't get it passed.

Not wrong, perhaps? Just surprised? I was.

kevsta · 3rd January 2013, 07:43 AM

Originally Posted by The Central Scrutinizer

Some of us were looking forward to it.

were you thinking about some bottom-fishing?

edit: and pity anyone stupid enough to still be stuck in short over the break..

"Ye Olde 450pt Gap Up" (Dow) on open, straight past their stops and into ye olde margin call. you have to admire the brilliance really.

The Central Scrutinizer · 3rd January 2013, 08:03 AM

Originally Posted by kevsta

were you thinking about some bottom-fishing?

No, I don't bottom fish. Just looking for extra savings on shares that were already on sale - "save an additional 10% this week only!".

31st December 2012, 09:26 AM	#81
Skeptic Ginger formerly skeptigirl Join Date: Feb 2005 Location: Shifting through paradigms Posts: 40,628	Originally Posted by NewtonTrino As someone who makes that kind of money I certainly can't afford to buy anything I want. I do know people who can but they mostly made their money through capital gains anyway. If we really want to tax the rich we need to tax wealth, not income. 1% of wealth over $100M would probably bring in a lot cash. That's as absurd as the argument, "taxing the rich won't put a dent in the deficit", and GW Bush's baloney that, "if you tax the rich they'll just find more loopholes". These arguments are meant to look like actual arguments against raising the top tax rate, they are repeated like they are actual arguments against raising the top tax rate, but they are simply different issues. There is a name for that kind of answer, it's called a red herring.
	__________________ (*Tired of continuing to hear the "Democrat Party" repeatedly I've decided to adopt the name, ~~Pubbie Party, Repubs~~ "Republics" and Republic Party in response.)

31st December 2012, 09:51 AM	#82
Skeptic Ginger formerly skeptigirl Join Date: Feb 2005 Location: Shifting through paradigms Posts: 40,628	Originally Posted by NewtonTrino Let me run you through a simple though process. Imagine you are dentist who make a few hundred thousand a year. Your taxes go up by 10-20k a year. Fallacy number one: In order for your taxes to go up by 10K/yr, you'd need to earn $250,000 above the top tax bracket. Tax on your first $250K doesn't change. If the top tax goes up to 39% from 35% on income over $25K, you'd have to earn $500K to pay an additional $10K (4% of $250,000). To pay an additional $20K you'd need $750K in income. Gee, what a burden. Originally Posted by NewtonTrino You've got a kid in college that you are paying for and another one about to graduate high school. Do you hire that extra dental assistant or do you hold off? Fallacy number two: You hire another assistant if there is work. The assistant allows you to see more clients and you earn more income, or, if he/she is a hygienist, he/she sees the patients and you get a cut. You don't hire employees because you have extra cash floating around and you don't not hire them if there is business and you need them. Originally Posted by NewtonTrino Also keep in mind the cost of business increases every year. Current employees want raises, equipment needs to be replaced etc. So if the choice is cut your lifestyle or don't hire more people which on do you do? Fallacy number three: Those business expenses come out of your gross income. If the costs go up and your income goes down, you fall into the lower tax bracket or at least a smaller portion of your income is subject to higher taxes. Originally Posted by NewtonTrino In other words everyone saying this doesn't have any effect on hiring are wrong. The effect may be small but it's there. IOW, you're living on that koolaid. Originally Posted by NewtonTrino Now let's talk about how the middle class are dramatically undertaxed for the level of services they seem to want... Take a look at the Canadian tax tables and deductions compared to the US for example. Fallacy number four (multiple examples): People are already paying for health insurance. National health insurance systems get more for less. So the money you are talking about is already being spent. Hurricane Sandy and hurricane Katrina costs much much more in damages than was saved on the infrastructure that would have prevented much of the damage. A collapsed bridge still has to be replaced. The deficit was significantly expanded by several unfunded wars. And so on.....
	__________________ (*Tired of continuing to hear the "Democrat Party" repeatedly I've decided to adopt the name, ~~Pubbie Party, Repubs~~ "Republics" and Republic Party in response.)

31st December 2012, 09:54 AM	#83
Skeptic Ginger formerly skeptigirl Join Date: Feb 2005 Location: Shifting through paradigms Posts: 40,628	Originally Posted by Startz You asked a question, "Can you justify the claim..." I answered with "Sure." Meaning, "yes, I can justify the claim..." Sorry that you didn't understand that. The Journal of Political Economy is arguably the leading academic economics journal. So now people are supposed to read multiple journal volumes? You can play post-it games all you want. The bottom line is you have not supported your claims.
	__________________ (*Tired of continuing to hear the "Democrat Party" repeatedly I've decided to adopt the name, ~~Pubbie Party, Repubs~~ "Republics" and Republic Party in response.)

31st December 2012, 09:56 AM	#84
Skeptic Ginger formerly skeptigirl Join Date: Feb 2005 Location: Shifting through paradigms Posts: 40,628	Originally Posted by Tippit I don't know what you're talking about with regard to "Ron Paul stuff". ... Right.
	__________________ (*Tired of continuing to hear the "Democrat Party" repeatedly I've decided to adopt the name, ~~Pubbie Party, Repubs~~ "Republics" and Republic Party in response.)

31st December 2012, 03:44 PM	#88
Random Master Poster Join Date: Jul 2001 Location: Massachusetts Posts: 2,464	Originally Posted by NewtonTrino Let me run you through a simple though process. Imagine you are dentist who make a few hundred thousand a year. Your taxes go up by 10-20k a year. You've got a kid in college that you are paying for and another one about to graduate high school. Do you hire that extra dental assistant or do you hold off? There are a lot of other things to take into account in the analysis but the idea that you can raise taxes and it won't have any effect on people because they are already "rich" is silly. The money comes out of the same pot and taxes are an expense like anything else. Also keep in mind the cost of business increases every year. Current employees want raises, equipment needs to be replaced etc. So if the choice is cut your lifestyle or don't hire more people which on do you do? In other words everyone saying this doesn't have any effect on hiring are wrong. The effect may be small but it's there. Now let's talk about how the middle class are dramatically undertaxed for the level of services they seem to want... Take a look at the Canadian tax tables and deductions compared to the US for example. Business taxes are based on the profits earned by the business. Wages are a tax deductible business expense. If the dental assistant will earn more money for the business than she costs in wages, she should be hired. If she will not make more money for the business than she earns in wages, than she should not be hired. The tax rate for the business profits is irrelevant. Businessmen who avoid profitable business decisions because of the tax rate that they will pay on the profit should probably not be businessmen.
	__________________ ...So, the next time you find yourself desperately Googling for some factual example that proves your argument is right, and failing to find even one, stop. See if you can put the brakes on and actually say, out loud, "Wait a second. If the things I'm saying in order to bolster my argument are consistently wrong, then maybe my argument is also wrong." -Cracked

31st December 2012, 10:01 AM	#85
NewtonTrino Illuminator Join Date: Jul 2007 Location: Bothell, WA Posts: 3,782	Originally Posted by Skeptic Ginger Fallacy number one: In order for your taxes to go up by 10K/yr, you'd need to earn $250,000 above the top tax bracket. Tax on your first $250K doesn't change. If the top tax goes up to 39% from 35% on income over $25K, you'd have to earn $500K to pay an additional $10K (4% of $250,000). To pay an additional $20K you'd need $750K in income. Gee, what a burden. This is just ignorant. $20k is $20k. That's college tuition for a kid. Quote: Fallacy number two: You hire another assistant if there is work. The assistant allows you to see more clients and you earn more income, or, if he/she is a hygienist, he/she sees the patients and you get a cut. You don't hire employees because you have extra cash floating around and you don't not hire them if there is business and you need them. Wrong. Sorry but this is just plain wrong. It's not a binary thing it's a judgement call based on how you think things are going to go. Option #2 is have the current employees work harder until the business is built up instead of speculatively hiring someone. Or alternately actually letting someone go and having your current people work harder. Just because the money comes out of "profit" doesn't mean it's not real money. I have to make these kinds of decisions all of the time and it gets a lot more complicated when you are talking about doing things like product development where the money follows long after the work. Quote: Fallacy number three: Those business expenses come out of your gross income. If the costs go up and your income goes down, you fall into the lower tax bracket or at least a smaller portion of your income is subject to higher taxes. Doing taxes is incredibly more complicated than that. Some things aren't fully deductible for example. The bottom line is that your "take home" pay is going to be effected either way because you have more money going out the door. I run a business, I know how taxes work and if you raise my taxes I have to spend less on the business to maintain the same income. Quote: IOW, you're living on that koolaid. I'm simply pointing out the situation isn't nearly as black and white as you think. If you take money out of peoples pockets they will try to make it up elsewhere. This could easily be the difference between hiring someone and not. Note that I didn't claim that I knew the totality of this effect, just that it's ridiculous to say that there is ZERO effect as you seem to be doing. Quote: Fallacy number four (multiple examples): People are already paying for health insurance. National health insurance systems get more for less. So the money you are talking about is already being spent. I personally look at our health insurance bids every year. This year it was basically unchanged. The 2 years before that it went up 50% per year. This is our business cost. We do not pass along any of the insurance cost to our employees and pay to cover their entire family without them shelling out any of it. The cost of health insurance could easily be the different between hiring someone and not. Bottom line is that higher taxes = more money out of someones pocket = less money to spend in other areas = potential to cause less hiring.

31st December 2012, 01:50 PM	#86
daenku32 Graduate Poster Join Date: Dec 2002 Posts: 1,982	Originally Posted by psionl0 The formula seems too simplistic to allow any conclusions to be drawn from it. I was just hoping that daenku32 would be able to expand on it. It's what I attempted in my concise post. Example: "taxes on working and middle classes effect mostly strongly the C by bringing it down." This was in reference of what happens when you raise taxes on those who spend a vast majority of their income. I wasn't trying to explain everything behind the letters. Which was the intent of "explaining it simply". Doesn't get much simpler than the GDP identity.

31st December 2012, 03:43 PM	#87
psionl0 Illuminator Join Date: Sep 2010 Location: 31°58'S 115°57'E Posts: 4,792	Originally Posted by Skeptic Ginger So now people are supposed to read multiple journal volumes? You can play post-it games all you want. The bottom line is you have not supported your claims. I posted LINKS to the journal entry in question for you. Admittedly it was lazy of Startz not to do so himself but it took all of 5 seconds to find them.

31st December 2012, 03:50 PM	#89
Skeptic Ginger formerly skeptigirl Join Date: Feb 2005 Location: Shifting through paradigms Posts: 40,628	Originally Posted by NewtonTrino This is just ignorant. $20k is $20k. That's college tuition for a kid. You're dodging the issue again. Is that extra $20K paid in taxes going to make the person who earned $750K spend less thus impact the demand side of the equation? On the other hand, cutting unemployment and food stamps poor people need will definitely impact the demand side of the equation. Originally Posted by NewtonTrino Wrong. Sorry but this is just plain wrong. It's not a binary thing it's a judgement call based on how you think things are going to go. Option #2 is have the current employees work harder until the business is built up instead of speculatively hiring someone. If your employees get all the work done, why would you hire someone else? I have a small business. If I had more clients I'd hire someone. Hiring someone is not going to get me more clients. A better economy will. Originally Posted by NewtonTrino Or alternately actually letting someone go and having your current people work harder. You don't think a small business owner would do this anyway if they could? Originally Posted by NewtonTrino Just because the money comes out of "profit" doesn't mean it's not real money. You are changing the question again so you can justify the supply side ideology version. No one is saying the money isn't real. No one is saying $20K isn't a lot, though to me I'm sure it's more than $20K is to the Koch Brothers. It costs money to wage wars. It costs money to build roads. Everyone benefits from educating the population. You seem to be saying we just shouldn't buy any of those things. I'm all for stopping oil company and farm subsidies and bringing the troops home. The Republicans won't do that. Instead they keep serving the koolaid that the deficit is all about redistributing the wealth, as if building a highway was a Commie-Pinko thing. Originally Posted by NewtonTrino I have to make these kinds of decisions all of the time and it gets a lot more complicated when you are talking about doing things like product development where the money follows long after the work. R&D is a completely different ballgame than net profits vs employees. So again you change the discussion so you don't have to address the issues that don't fit with your ideology. Yes, investing in R&D is a good thing. Right now a lot of large corporations are flush with cash. It's not lack of cash that is stopping them from investing in R&D. It's lack of a market for goods. The government could do a lot to invest in innovation, especially energy efficiency and non-fossil fuel energy. It would help the economy and we'd all benefit if the government did that. Originally Posted by NewtonTrino Doing taxes is incredibly more complicated than that. Some things aren't fully deductible for example. The bottom line is that your "take home" pay is going to be effected either way because you have more money going out the door. I run a business, I know how taxes work and if you raise my taxes I have to spend less on the business to maintain the same income. Come on Newton, who are you kidding? I've run a successful small business as my only source of income for the last 21 years. If you aren't deducting everything you can then something's wrong with the way you do your books. Income tax only comes out of net profit. B&O taxes (in my state it's figured on gross income) are not affected by these federal income tax rates. Originally Posted by NewtonTrino I'm simply pointing out the situation isn't nearly as black and white as you think. If you take money out of peoples pockets they will try to make it up elsewhere. Dodging the issue again, will it make a person who earns $500-$750K spend less thus impacting the demand side of the economy equation? Originally Posted by NewtonTrino This could easily be the difference between hiring someone and not. Note that I didn't claim that I knew the totality of this effect, just that it's ridiculous to say that there is ZERO effect as you seem to be doing. Baloney. Employee wages come out of gross income, not net. The tax only applies to net. Employers don't keep employees for charitable reasons. If there's a demand, you hire people. Your profit will go up and the increase in tax rate is not going to stop you. Lack of customers on the other hand, will. Originally Posted by NewtonTrino I personally look at our health insurance bids every year. This year it was basically unchanged. The 2 years before that it went up 50% per year. This is our business cost. We do not pass along any of the insurance cost to our employees and pay to cover their entire family without them shelling out any of it. The cost of health insurance could easily be the different between hiring someone and not. Hasn't got a thing to do with net income. If your profits shrink, you aren't affected by the increased tax rate. If you are taking home $500K net profit, then you are not being squeezed by employee costs. Originally Posted by NewtonTrino Bottom line is that higher taxes = more money out of someones pocket = less money to spend in other areas = potential to cause less hiring. This blanket ideology claim is part of the problem. It's a discussion blocker that stops critical analysis of the details that don't hold up to scrutiny.
	__________________ (Tired of continuing to hear the "Democrat Party" repeatedly I've decided to adopt the name, ~~Pubbie Party, Repubs~~ "Republics" and Republic Party in response.) Last edited by Skeptic Ginger; 31st December 2012 at 03:57 PM.*

31st December 2012, 06:45 PM	#90
Skeptic Ginger formerly skeptigirl Join Date: Feb 2005 Location: Shifting through paradigms Posts: 40,628	Originally Posted by psionl0 I posted LINKS to the journal entry in question for you. Admittedly it was lazy of Startz not to do so himself but it took all of 5 seconds to find them. OK, so going back to the actual question, ignoring the complete waste of time in between: Originally Posted by SG Can you justify the claim that raising taxes on people who already have enough money to buy anything they want is going to change consumption? I don't see that your links answer the question. They discuss a related issue, do the rich have a relative amount of savings? That ain't the question. The question is, will raising taxes on the rich by a nominal 4% above what they are already paying make them consume less thus impacting the demand side of the economic equation? You need to show they aren't already buying everything they want to buy and if they have a tiny fraction less in income they will spend less accordingly.
	__________________ (*Tired of continuing to hear the "Democrat Party" repeatedly I've decided to adopt the name, ~~Pubbie Party, Repubs~~ "Republics" and Republic Party in response.)

31st December 2012, 06:56 PM	#91
NewtonTrino Illuminator Join Date: Jul 2007 Location: Bothell, WA Posts: 3,782	Look, if you don't conceptually get that the government taking a bigger slice of the pie is actual taking real money out of peoples pockets I don't know what else to say.

31st December 2012, 07:37 PM	#92
psionl0 Illuminator Join Date: Sep 2010 Location: 31°58'S 115°57'E Posts: 4,792	Originally Posted by Tippit I suggest you read what you wrote, and then read what I wrote very carefully, and then perhaps re-consider your response. Second, are you implying that central banks only loan money to governments? Even given the evidence willingly provided by the perpetrators, we know that they make massive private loans all the time. When central banks use their legal counterfeiting power to make loans to governments, they enable profligate government spending. When they use it to make negligible-to-zero cost loans to select private entities who then use that capital to make interest bearing loans to governments to enable even more profligate spending, we have private looting of the public. Surely someone even as obtuse as you are can see that. I'm well aware that governments keep borrowing money. I'm arguing that the source of private government credit should be a determining factor in determining its legitimacy. Assuming you understand the issue, which, to be quite honest I'm not sure that you do, you're claiming in essence that debts issued by glorified counterfeiters are sacrosanct, I am claiming the opposite. Understanding the distinction between legitimate and illegitimate forms of government credit is crucial to understanding the phony "fiscal cliff", especially as government interest expense as a percent of government spending begins to exceed 10%. If a criminal counterfeiter conspired with politicians and counterfeited 75% of the capital that makes up the national debt, would you be in favor of continuing to recognize that portion of the debt, and paying interest to the criminal? Would that be before, during, or after he is jailed? Do you support debt repudiation under any circumstances? I must be about the only poster who still reads your posts. I'm beginning to wonder why. You obfuscate your posts with so much jargon and double talk that no matter how I respond, you say that I'm not reading you properly. You seem to be just reciting the debtor's creed: "When banks make loans they create the money out of thin air so I don't have to pay them back". This is just an attempt to get real goods and services for nothing then weaseling out of the debt by saying "I don't owe anybody anything". It is not a valid line of reasoning for individuals and it is not a valid line of reasoning for governments. You know the facts: - Governments borrow money by selling bonds to the highest bidder. - The fed creates money by buying government bonds. - The fed only monetizes a fraction of the government debt this way. - Private banks can also buy bonds by creating money out of "thin air" (but they need excess reserves). - Money is created (by both central banks and other banks) by making bookkeeping entries so it must appear on their balance sheets. These facts are inconsistent with your claim that the fed is "creating" government debt. The fed obviously makes loans to other entities (the balance sheet says so). However, I don't see how they can make "massive, off-balance sheet loans" (unless they are secretly printing trillion dollar bills). I agree that fractional reserve banking should be abolished. I agree that governments should not be allowed to borrow money (you can't trust these clowns with the national credit card). I would like to see the economic "experts" who keep saying that the government should borrow more money charged with treason. But I don't understand you.

31st December 2012, 07:43 PM	#93
psionl0 Illuminator Join Date: Sep 2010 Location: 31°58'S 115°57'E Posts: 4,792	Originally Posted by Skeptic Ginger OK, so going back to the actual question, ignoring the complete waste of time in between:I don't see that your links answer the question. They discuss a related issue, do the rich have a relative amount of savings? That ain't the question. The question is, will raising taxes on the rich by a nominal 4% above what they are already paying make them consume less thus impacting the demand side of the economic equation? You need to show they aren't already buying everything they want to buy and if they have a tiny fraction less in income they will spend less accordingly. I presume that this is addressed to Startz and not me. The reference he quoted seems to actually support your position.

31st December 2012, 08:03 PM	#94
Skeptic Ginger formerly skeptigirl Join Date: Feb 2005 Location: Shifting through paradigms Posts: 40,628	Originally Posted by NewtonTrino Look, if you don't conceptually get that the government taking a bigger slice of the pie is actual taking real money out of peoples pockets I don't know what else to say. I get it that "This blanket ideology claim is part of the problem. It's a discussion blocker that stops critical analysis of the details that don't hold up to scrutiny." The government isn't pocketing the 'real money' they are recirculating it, which stimulates the economy better than letting the rich simply hoard more and more of it.
	__________________ (*Tired of continuing to hear the "Democrat Party" repeatedly I've decided to adopt the name, ~~Pubbie Party, Repubs~~ "Republics" and Republic Party in response.)

1st January 2013, 07:34 AM	#95
Tippit Graduate Poster Join Date: Jul 2007 Posts: 1,982	Originally Posted by psionl0 I must be about the only poster who still reads your posts. I'm beginning to wonder why. You obfuscate your posts with so much jargon and double talk that no matter how I respond, you say that I'm not reading you properly. It's no skin off of my back whether you read, or respond to my posts. I will keep on doing what I'm doing. I asked you a specific question. Are there any circumstances in which you support debt repudiation? Quote: You seem to be just reciting the debtor's creed: "When banks make loans they create the money out of thin air so I don't have to pay them back". This is just an attempt to get real goods and services for nothing then weaseling out of the debt by saying "I don't owe anybody anything". It is not a valid line of reasoning for individuals and it is not a valid line of reasoning for governments. Banks operating under a fractional reserve system are still operating under a set of rules, even if the rules are set by the money cartel. However, every time a private bank borrows from a central bank, you have money creation, or, as I like to call it, counterfeiting. In that context, banks who essentially have access to virtually unlimited counterfeit credit at virtually no cost have an advantage over the typical saver, which should be obvious. When they use this credit to acquire and drive up the price of financial assets, that's bad enough. But when they use counterfeit money to buy public debt that I, the taxpayer, am on the hook for, that's even worse, and the debts are illegitimate. As interest expense becomes an ever larger portion of government spending (it's already about 10%, even with anemic interest rates, due to the massive amount of debt), this problem will become dramatically worse, approaching Greek/Spanish levels. Abolishing government borrowing would be a great solution to this specific problem, but even if we did that, we would still have an entity which has the legal right to counterfeit the public's money and loan it at interest, or simply acquire whatever (private) assets it wants, putting the rest of the market at a huge disadvantage. The Federal Reserve must be abolished. If you don't agree, you're simply wrong. Quote: You know the facts: - Governments borrow money by selling bonds to the highest bidder. - The fed creates money by buying government bonds. - The fed only monetizes a fraction of the government debt this way. - Private banks can also buy bonds by creating money out of "thin air" (but they need excess reserves). - Money is created (by both central banks and other banks) by making bookkeeping entries so it must appear on their balance sheets. These facts are inconsistent with your claim that the fed is "creating" government debt. The fed obviously makes loans to other entities (the balance sheet says so). However, I don't see how they can make "massive, off-balance sheet loans" (unless they are secretly printing trillion dollar bills). Read what Bernie Sanders had to say about the $16T in loans provided by the Fed: The Fed Audit How much of that do you think wound up in sovereign credit around the world? Hmm... Quote: I agree that fractional reserve banking should be abolished. I agree that governments should not be allowed to borrow money (you can't trust these clowns with the national credit card). I would like to see the economic "experts" who keep saying that the government should borrow more money charged with treason. But I don't understand you. So, government borrowing is treasonous, but counterfeiting the public money, is just business as usual in psion world, apparently.
Tippit Graduate Poster Join Date: Jul 2007 Posts: 1,982	__________________ "This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard." - Alan Greenspan 1966

1st January 2013, 08:35 AM	#96
Startz Critical Thinker Join Date: Nov 2004 Location: Santa Barbara, CA Posts: 388	The article shows that the rich save part of their income, not all (on the margin). That means they also consume part of their income (on the margin).

1st January 2013, 09:07 AM	#97
NewtonTrino Illuminator Join Date: Jul 2007 Location: Bothell, WA Posts: 3,782	Originally Posted by Skeptic Ginger I get it that "This blanket ideology claim is part of the problem. It's a discussion blocker that stops critical analysis of the details that don't hold up to scrutiny." The government isn't pocketing the 'real money' they are recirculating it, which stimulates the economy better than letting the rich simply hoard more and more of it. Yes, taxing causes prosperity. I totally agree with you, makes total sense. Why not raise taxes to 100%? After all the government will recirculate the money and everyone will be rich!

1st January 2013, 09:34 AM	#98
blutoski Philosopher Join Date: Jan 2006 Location: Vancouver BC Canada Posts: 5,991	Originally Posted by NewtonTrino Yes, taxing causes prosperity. I totally agree with you, makes total sense. Why not raise taxes to 100%? After all the government will recirculate the money and everyone will be rich! This is the principle behind the Laffer Curve. The curve's values change over time, but taxation in a nation with benevolent government multiplies productivity up to a point, after which productivity declines. The argument is about how to tax (what kind of activity or property, what percentage per income bracket) in order to obtain that maximum productivity. Businesses are not like consumers: increasing a cost of production can actually push the enterprise over a mathematical threshold that triggers an expansion. Taxes are not the only cost of production; businesses deal with supplier cost increases all the time and responding with contraction of operations is actually a sign of mismanagement (think Al Dunlop, who destroyed Sunbeam by closing plants and terminating experienced staff, instead of leveraging the capital and expanding the product line) unless there are extraordinary circumstances. In the macroeconomy, government revenue is more likely to be spent domestically, so tax increases can sometimes boost the economy by diverting some investment that would be going overseas, and most of the government's spending produces wages which is taxed again, which means a slightly lower tax rate is required overall due to expansion of the workforce. This multiplier effect is less proven in the current situation where much of the purpose of this change to revenue generation is intended to close the gap on borrowing, a larger portion of which is foreign ownership than in previous years when the models were developed.
	__________________ "Sometimes it's better to light a flamethrower than curse the darkness." - Terry Pratchett Last edited by blutoski; 1st January 2013 at 09:53 AM.

1st January 2013, 01:38 PM	#99
Skeptic Ginger formerly skeptigirl Join Date: Feb 2005 Location: Shifting through paradigms Posts: 40,628	Originally Posted by NewtonTrino Yes, taxing causes prosperity. I totally agree with you, makes total sense. Why not raise taxes to 100%? After all the government will recirculate the money and everyone will be rich! In the past the top rate was something close to 90%, IIRC. But your argument is a straw man. No one has said that there's no upper limit to the benefits of taxing the rich a little more. In addition, no one has suggested historical economic circumstances never vary. Right now the Republicans initiated several unpaid wars. Yes, the Democratic Party was gutless and went along, but that's not the thread topic. The issue is, given that, given the slowed economy that appears to be related to slow demand, the richest among us who benefitted much more than other income brackets during the unfunded wars simply need to pay more to bring the deficit down without stifling the little bit of recovery we do have.
	__________________ (*Tired of continuing to hear the "Democrat Party" repeatedly I've decided to adopt the name, ~~Pubbie Party, Repubs~~ "Republics" and Republic Party in response.)

1st January 2013, 01:58 PM	#100
daenku32 Graduate Poster Join Date: Dec 2002 Posts: 1,982	Well, the bipartisan Senate bill is being rejected by the House Republicans. So there is not going to be any deal to now mitigate the fiscal cliff, as we've just gone over that, and we've hit the debt ceiling. The man on TV saying that when stock market comes alive again tomorrow it'll force a another deal on each of these things. But I doubt it. I just hope my brothers can keep their jobs, since the safety nets won't be there for them much longer.

1st January 2013, 06:15 PM	#101
psionl0 Illuminator Join Date: Sep 2010 Location: 31°58'S 115°57'E Posts: 4,792	Originally Posted by Tippit I asked you a specific question. Are there any circumstances in which you support debt repudiation? Sure. Where a debt is attributed to a person who did not consent to take on the debt, where the creditor did not live up to his part of the contract or where a debt is dishonestly inflated (the inflated part). A few years ago, an ambulance service tried to say that I owed $700 for a service that I had refused. I had no compunction about putting a sticker over the envelope window that said, "No Contract, Return to Sender" and sending the letter back. After a couple of such letters, the ambulance service gave up. I just can't think of a case where you sign on the dotted line then have no obligation. Originally Posted by Tippit Abolishing government borrowing would be a great solution to this specific problem, but even if we did that, we would still have an entity which has the legal right to counterfeit the public's money and loan it at interest, or simply acquire whatever (private) assets it wants, putting the rest of the market at a huge disadvantage. The Federal Reserve must be abolished. If you don't agree, you're simply wrong. As long as there is a fiat system there will be a need for some form of central banking. The fed may be in need of reforms (especially to make it more transparent) but abolishing it would simply mean moving the printing presses into the government offices. It is worth point out a fact that I forgot to remind you of: - fed profits get returned to treasury. Originally Posted by Tippit Read what Bernie Sanders had to say about the $16T in loans provided by the Fed: The Fed Audit How much of that do you think wound up in sovereign credit around the world? Hmm... The fed balance sheet shows that the fed's assets and liabilities each total less than $3T so this can't be $16T in outstanding loans. Of course, it the size of the true balance sheet was much larger than that published then this would be outright fraud and people should be jailed for that. As I understand it, these were a number of bailout loans which (presumably) have been repaid but I don't feel like wading through a 266 page report to get the details. Originally Posted by Tippit So, government borrowing is treasonous, but ~~counterfeiting~~ manufacturing the public money, is just business as usual in psion world, apparently. That's about the size of it. Maybe in the future, a peerless electronic currency system will eliminate the need for banks and IOUs being used for money (which would still be the case even if gold was the currency) but you can be sure that the banks and politicians will fight that possibility to the bitter end.

1st January 2013, 10:16 PM	#102
Skeptic Ginger formerly skeptigirl Join Date: Feb 2005 Location: Shifting through paradigms Posts: 40,628	House passed the Senate Bill!!!!! Obama to speak in a few minutes.
	__________________ (*Tired of continuing to hear the "Democrat Party" repeatedly I've decided to adopt the name, ~~Pubbie Party, Repubs~~ "Republics" and Republic Party in response.)

2nd January 2013, 01:51 PM	#103
daenku32 Graduate Poster Join Date: Dec 2002 Posts: 1,982	Yes. I was wrong. Happily at that. I guess they really were afraid of what the stock market would do this morning if they didn't get it passed.

3rd January 2013, 05:41 AM	#104
The Central Scrutinizer Penultimate Amazing Join Date: Dec 2001 Location: The White Zone Posts: 42,278	Originally Posted by daenku32 Yes. I was wrong. Happily at that. I guess they really were afraid of what the stock market would do this morning if they didn't get it passed. Some of us were looking forward to it.
	__________________ If I see somebody with a gun on a plane? I'll kill him.

3rd January 2013, 06:17 AM	#105
Hazel Graduate Poster Join Date: Aug 2010 Location: Just outside of St. Louis also Posts: 1,229	Originally Posted by daenku32 Yes. I was wrong. Happily at that. I guess they really were afraid of what the stock market would do this morning if they didn't get it passed. Not wrong, perhaps? Just surprised? I was.
	__________________ Disbelief in magic can force a poor soul into believing in government and business. (Tom Robbins, 1976)

3rd January 2013, 07:43 AM	#106
kevsta RBL CHeck Failed Join Date: Jun 2007 Location: in the shadows Posts: 2,484	Originally Posted by The Central Scrutinizer Some of us were looking forward to it. were you thinking about some bottom-fishing? edit: and pity anyone stupid enough to still be stuck in short over the break.. "Ye Olde 450pt Gap Up" (Dow) on open, straight past their stops and into ye olde margin call. you have to admire the brilliance really.
	__________________ "The world will soon wake up to the reality that everyone is broke and can collect nothing from the bankrupt, who are owed unlimited amounts by the insolvent, who are attempting to make late payments on a bank holiday in the wrong country, with an unacceptable currency, against defaulted collateral, of which nobody is sure who holds title." - Anonymous Last edited by kevsta; 3rd January 2013 at 07:48 AM.

3rd January 2013, 08:03 AM	#107
The Central Scrutinizer Penultimate Amazing Join Date: Dec 2001 Location: The White Zone Posts: 42,278	Originally Posted by kevsta were you thinking about some bottom-fishing? No, I don't bottom fish. Just looking for extra savings on shares that were already on sale - "save an additional 10% this week only!".
	__________________ If I see somebody with a gun on a plane? I'll kill him.