It’s the spending, stupid.
All this talk about “cost to the government of tax cuts for the rich” is just neo-Marxist class warfare and envy.
30 thoughts on “It’s Not The Tax-Rate Cuts”
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It’s the spending, stupid.
All this talk about “cost to the government of tax cuts for the rich” is just neo-Marxist class warfare and envy.
Comments are closed.
Holy formatting problems, Batman! (at least, on IE… On FireFox, the image is shrunken down to fit in the normal confines of the blog column, but on IE, it’s full-size, and thus screws everything up…)
Is that better?
Much.
Thanks! 🙂
Yes, a banana is longer than an apple, which is what this graph is doing. The deficit is the difference between spending and income.
Since this chart doesn’t show either income or the deficit, it’s useless.
“About $700 billion of those tax cuts are for people who typically are millionaires and billionaires, and on average would get $100,000 in tax relief—$700 billion that we don’t have, we’d have to borrow in order to provide these tax cuts. And 98 percent of Americans wouldn’t see any benefit from it.”
Lovely. Because, you know, they’ll just buy another yacht or whatever. They’d never actually invest it and create jobs with it.
Obama said at a recent rally that rich people don’t spend money, implying that is why they don’t deserve to keep it.
@ Chris, you are correct the deficit is the difference between spending and income. The graph shows that the biggest effect on the deficit comes from spending and not tax cuts. Taxing the rich doesn’t mean that spending will go down.
Give the government more money and they will spend more money.
The graph also shows that the middle class receive more tax relief than the rich, contrary to what the left has said for the last 10 years.
Actually it seems like the rate cuts nearly cover the interest payments on the debt. That seems pretty major to me. Something that would cover around 10% of global federal spending is certainly not insignificant.
Bush already tried the logic of doing tax rate cuts to boost the economy. It failed. Ireland did the same thing by betting on low taxes and it also failed. Tax rate cuts are not a panacea.
The US and Europe need to improve their infrastructure and lower their salaries to better compete with China. Everything else is fluff.
On the graph above, the “rich” = 2% of Americans. The middle class = 98% of Americans. On any per-capita basis, the “rich” receive a disproportionate share, especially since they will also benefit from the lower tax rates for the middle class.
Regarding spending – it’s not going down, unless one guts social security and medicare. Nobody, including the Republican in their Pledge to America, is proposing that. So no matter who wins, spending is not going down.
Bush already tried the logic of doing tax rate cuts to boost the economy. It failed.
It did? Who knew?
On any per-capita basis, the “rich” receive a disproportionate share, especially since they will also benefit from the lower tax rates for the middle class.
Gee, that wouldn’t be because they’re the ones who pay most of the taxes, would it?
Actually, I’m with Chris on this one. When Beverly Hills and Malibu are Democratic party strongholds, it’s clear those folks aren’t feeling the pain. I’d go for those old 90 percent brackets of the 30s and 40s – especially for the “creative class” rich who don’t run businesses that employ large numbers of people.
Yes we can!
A moot point anyway, because as Chris should know, for all the Democrats big talk about taxing the rich, they never did actually put their name on a vote to increase income tax from those evil rich guys making $250,000/yr, did they?
I don’t know why it’s “Neo-Marxist envy” to point out that the rich pay more taxes because they can afford to. The rich buy more cars, planes, and boats because they can afford to. That’s rather the definition of being rich.
At any rate, it’s hard to complain about the deficit:
1) While using a graph that doesn’t show the deficit
2) Then asking that 2% of the population get a special break from dealing with the problem.
K – no the Democrats didn’t vote, which I don’t like or agree with. But not voting means all the tax cuts come off in 2011. That should please the deficit hawks.
But not voting means all the tax cuts come off in 2011. That should please the deficit hawks.
It would only please deficit hawks who are sufficiently economically illiterate as to believe CBO scores, not those who recognize that increasing tax rates doesn’t necessarily increase revenue, and that it’s insane to do so in the worst economy since the Great Depression.
Since this chart doesn’t show either income or the deficit, it’s useless
Interesting how your mind works Chris. Almost forty two trillion dollars of spending is useless information? 4.5 trillion in interest, which is nothing but a drag on the economy, is useless information?
… 2% of the population get a special break…
Define special? It isn’t the governments money until they steal it. Stealing it is Obamas current proposal. So they break without resolving this issue… keeping business to deal with the uncertainty, because they don’t want it to adversely affect their election prospects.
Yeah, that’s special.
So who is going to cut that spending? Here’s tea party darling Rand Paul promising to protect Social Security and Medicare (2 of the 3 biggest slices of that $41T pile of future spending), and attacking his opponent for daring to cut Medicare waste.
The GOP lives in a fantasy land where the problem is “spending” in general, but not any spending in particular, because spending in particular (especially the big items) is popular with voters, lobbyists, contributors, or all of the above. It’s an all-dessert, no-vegetables diet: tax rate cuts for everyone, no cuts to popular programs, and we’ll let voodoo economics and our children take care of the debt.
those who recognize that increasing tax rates doesn’t necessarily increase revenue
It’d be wonderful if we really could reduce income tax rates (or leave them at their current level) without forgoing revenue. It’d be better than a free lunch, it’d be a delicious free lunch with money on top. Every politician would rush to support tax rate cuts — money for the voters, and fiscal responsibility, all rolled into one. All gain, no pain.
It’d also be nice if eating ice cream made you thinner and healthier.
It’d be wonderful if we really could reduce income tax rates (or leave them at their current level) without forgoing revenue. It’d be better than a free lunch, it’d be a delicious free lunch with money on top. Every politician would rush to support tax rate cuts — money for the voters, and fiscal responsibility, all rolled into one. All gain, no pain.
I get the feeling you think it can’t be done.
Jim makes a good point,
“The GOP lives in a fantasy land where the problem is “spending” in general, but not any spending in particular, because spending in particular (especially the big items) is popular with voters, lobbyists, contributors, or all of the above. ”
It certainly wont be easy and any cuts in SS or Medicare will have the Dems running commercials about Republicans wanting to kill Grandma. After all they all ready do that even when the Dems were the ones that voted to cut Medicare in the health care bill.
But Jim is right when it comes down to what specifically will be cut. There are lots of worthy causes and how do you decide which ones are more worthy than others? It is a very subjective process. How will the candidates elected by the Tea Party handle the challenge?
Who knows but if they don’t do better than the current crop lets vote them out too.
I figured out what was really wrong with this graph. The $3,000 billion labeled “middle class tax cuts” isn’t just for the middle class – it’s for everybody. Everybody, rich and poor, gets a tax cut on the first $250K of income. The “rich” then get an additional cut of $700 billion, on top of the $3,000 billion for everybody.
It is a special deal for the rich.
The GOP lives in a fantasy land where the problem is “spending” in general
Jim, you must have missed the part where the GOP was part of the problem… but that’s why you don’t get the tea party.
The fantasy you propose is that you can increase spending and suddenly it becomes sacrosanct. Your presumption is that there are no adults, which is to some extent true. That’s why we need these ‘extremists’ to do the cutting.
We may not get there in one step but if this nation is to endure the attempt must be made. The real thing you don’t get is that the tea party is not just angry, they are educating themselves… so when you speak, all they hear is waa.. waa.. waa.
It’d be wonderful if we really could reduce income tax rates (or leave them at their current level) without forgoing revenue.
Say hello to wonderful then, it’s been proven… but you’ll make an argument regarding deficits that is totally irrelevant.
It is a special deal for the rich people that employ other people.
FTFY.
Everybody, rich and poor, gets a tax cut on the first $250K of income.
How are the poor getting a tax cut when they don’t pay anything to begin with?
Jim, you must have missed the part where the GOP was part of the problem…
If the Dems are part of the problem, and the GOP is part of the problem, who’s left to be the solution? It certainly isn’t the tea party or self-described libertarians — see the Rand Paul commercial above.
Say hello to wonderful then, it’s been proven…
Feel free to point out that “proof”. And an explanation for why such flaming liberals as Paul Ryan (“I’m not one of these people who says that all tax cuts pay for themselves.”) don’t believe your proof.
It is a special deal for the rich people that employ other people.
If you employ other people in a small business you pay them with pre-tax dollars. So the lower tax rate on income beyond $250k is only a special deal for money that you don’t spend employing other people.
If you employ other people in a small business you pay them with pre-tax dollars. So the lower tax rate on income beyond $250k is only a special deal for money that you don’t spend employing other people.
That’s weak even for you. If they decide to grow the business, or start a new one, with their own capital investment, the result is they hire more people. But you’d rather the money go into the great maw, because…
Well, because it just FEELS right dammit!
Curt – if you start or grow a business, the capital investment is a tax-deductible cost. Tax-deductible costs reduce the amount of income you pay taxes on.
Shorter = starting a business reduces your personal income tax by the amount you spend starting the business.
In fact, because business expenses are paid with pre-tax dollars, higher tax rates actually favor small business investment over personal consumption. Imagine that you are a small business owner making a $1m/year profit, and the marginal tax rate is 40%. If you spend $100,000 on a new car, you’re out $100,000. If you spend $100,000 on a new employee to take over some of your workload, you’re only out $60,000 net, since you’ve cut your income tax bill by $40,000.
The higher the tax rate, the cheaper that employee becomes (to you, the business owner) compared to the car.
The higher the tax rate, the cheaper that employee becomes
Awesome. So what’s wrong with a top rate of 99%?
100% Curt. The government will give you what you need.
Also, I don’t think absurdity works on these guys.
After I typed that I realized it should have been 110%: Employees become their own little profit-centers.
But yeah, absurdity is lost on them.