White House Gives In On Bush-Era Tax Cuts

fixed, damn I was tired when I wrote that.

indeed, was tired. Fixed now.

I hear how people whine over paying taxes for poor people, yet they don't realize they have to pay taxes regardless poor people get help or not, and if poor people don't get help from taxes, guess who's shoving all that money in the pockets? no, they aren't going to invest it to make the world a better place, no they aren't giving it back to you, yes they are going to somehow shove it down their pockets.

More or less, you are right, (typically).

Hypocrisy at its finest.

I thought that was Republicans touting 2010 as a referendum on smaller government when so many voted because the government isn't doing enough to stimulate job (and thus economic) growth :O

Nothing says hypocrisy like we oppose auto bailout that saved an jobs and an industry that is now turning profits for 81b, but we support tax cuts to people making over $250k that will cost $700b a year (that figure only accounts for the $250k+ extension).

If you truly support free market principles then that's fine, oppose the bailout. It was a reasonable stance imo. But people wanting smaller government AND the government to generate jobs are kidding themselves thinking opposing the auto bailout would do any good for their situation with more people out of work to compete against them for jobs, with more people that have no income to stimulate economic growth.

That is some damn good hypocrisy :(

Are these numbers even accurate? even if by chance they are, lol.

Too bad that the tax cuts create jobs. Obama's people need to take some economics courses, and realize that you're losing cash by way of the tax cuts, but since business will expand and people will spend more you the taxes back in sheer volume. /facepalm.

prove it. Prove that they won't take the money to their overseas interests and say "*** you America," just because they live here, doesn't mean they want to invest here.

Um... wasn't that the principle behind the Bush tax cuts to begin with. Pretty sure it didn't work out that way since they did add to the debt. Tax cuts do help create jobs (says the CBO) but even the CBO admits they are low on the list of efficient ways to stimulate job growth. I'll find the link, one sec.

Prove that they wont. Prove that Obama won't try to spend it on something worthless? You can't. Most of economics is theory and prediction.

There were more factors than just that. The Tax cuts didn't create the deficit spending did. If you spend less and cut taxes then you create jobs and have a stronger budget. Obama's problem is he wants to keep tax cuts and keep spending.

People who keep repeatedly mentioning how tax cuts create jobs, provide proof and cite sources. Right now you are merely parroting political talking heads who know this makes them sound good to voters.

During a recession/depression companies do not want to spend money hiring people or investing in infrastructure because they feel this is risky. In order to combat this governments provide some sort of stimulus (many different ways to do this as bailouts, New Deal, etc) to show that their country is not a risky place and the encourage private businesses to invest. This is part of John Maynard Keynes's models that were developed during the Great Depression.

Going back to these tax cuts -that have been in place for a few years- they have not provided more jobs. Just by keeping them in place does not miraculously provide new jobs. In fact these tax cuts are for individuals and not businesses so I'm super confused as to how people think this will automatically create jobs.

These tax cuts are provided to increase spending.....you know to make people go out and buy stuff.

However, people have not been doing that, they have been saving because they feel the country has too much risk and they want to keep their money. Which brings into play the whole "paradox of saving" but that is something else.

So you want the country to get better then go spend your money! This has been the mantra from the US government since John F. Kennedy in the 1950's. It's why every year, every president encourages people to go out and buy stuff during the xmas season. This is a consumer driven economy, not a product driven economy.

Obama wants to keep tax cuts for people making under $250k. What exactly do Republicans want to cut? I'm curious because I may be for it too but I never hear them say what they want cut because they're afraid to lose their fear-based voters if they say anything.

I feel like I might be getting something mixed up here so correct me if I am wrong...

On the CBO's front page it says the 2010 deficit was $1.3t, letting the cuts expire for the upper class is not going to thrust them into the middle class... $700b off $1.3t is over half the deficit for 2010 for example. I agree that's not enough, we would still be adding $600b a year onto the debt.

I want to hear why these cuts will be devastating to the upper class who live comfortably and will probably invest the money anyway... and I want to hear what we should cut because I agree spending does need reduced. I hear nothing about what should be cut though, beyond the wasteful spare parts program the military has.

I think the military should have spending cut drastically, it is such a huge amount of our budget... We're spending far more than we were during the Cold War and have no global power that opposes us (maybe China for those of you with Xenophobia) with power projection (China doesn't have blue water navy) and any incentive to want to go to war with us (US is as important to China as they are to us).

I don't see how the military spending keeps going up when we're not fighting conventional wars. Can it really be more costly to occupy countries with developing governments than to fight conventional wars? Some money is being wasted on our military I think.

I think you mean the "paradox of thrift". Also the tax cuts for $250k and over affect small businesses who are taxed within that bracket.

Also here is information on tax cuts and deficit:

http://www.american.com/archive/2007/november-december-magazine-contents/guess-who-really-pays-the-taxes

http://www.ncpa.org/pub/ba641

Here's this:

a recent study by Christina D. Romer, one of President Obama's top economic advisers, found that a dollar of tax cuts raises gross domestic product (GDP) by about $3, more than twice the effect of a dollar increase in government spending

Let me know when you want more.

Let me put this in perspective for you. My uncle who has no education owns a private construction company. He makes about $1,000,000 a year in income but pays most of that out to his many employees. If he had taxes raised he would have to cut wages and or fire employees. It is better for him, in this example, to have those tax cuts in place so he can keep people employeed and continue to expand. He isn't a minority either. Most small businesses bring in similiar figures.

Actually, if you read her study (a draft easily available) what they proposed is that economists might try to account for the intent of the legislature that puts the tax change into effect (since mapping the effects of tax changes on an economy is essentially impossible, freely admitted by the authors).

They classified these as two types (exo- and endogeneous), with endogeneous being legislature done to counteract specific economic behaviors, and exogeneous being legislature done not to counteract specific economic behaviors.

Again, what they are trying to study is if the intent behind a tax change has an effect on the tax change impact on the economy.


Things to note: page 8, last paragraph,

Also, the quote you are looking for, on page 41:

By the basis of the study, if you are trying to counteract the current slump this does not apply.

Another tidbit:
Last but not least:


Again, please provide proof. You may win a Nobel prize in economics if you can reliably show the effects of publicly elected officals' legislated tax changes on an economy without any caveats, such as trusting politicians statements at face value.

Unless I am misinformed, the tax cuts are for personal taxes, not companies/incorporates/businesses.

I highly doubt he takes in $1mil USD as personal income, and then expenses his workers.

What is his personal income (how much does he pay himself)?


Why would he need to cut wages or fire employees, as these tax changes are on personal income and are carried by the employees themselves (unless they also pertain to employer tax matching)?

He may need to increase wages in order to retain employees; if he has the contracts in place and can use the people, he can either renegotiate existing contracts or roll wage increases up into the pricing for outgoing estimates on new contracts.

I was misinformed; it appears that they do impact some businesses, but I can't find the cutoff.

Still, there is a lot you can do to offset an increase in tax. Your uncle may now find a reason to buy a new piece of equipment and use it to reduce the businesses tax burden.

If an increase in taxes is going to force you to cut wages and/or fire people, then you need some assistance with your business. Talk with your accountant and see what options are available. But quite frankly, you won't get rid of the people that allow you to perform the contracts you have.

I have a very limited knowledge in economics. However, liberal economic theory is the most commonly used. If you're asking for how government disenvolvement promotes private sector growth then you're talking about an economist known as http://en.wikipedia.org/wiki/Arthur_Laffer

The Laffer curve is basically economic theory that shows there has to be a balance between high taxation and low taxation. Many people think that conservatives want to cut all taxes but in fact they are looking for the "ideal range"

http://en.wikipedia.org/wiki/Laffer_Curve

That's why we had record unemployment after the taxcuts were inacted in 2001? People who say taxcuts spur economical growth don't know what they're talking about honestly.

LOL. You clearly don't understand that economics are subjective and not just black and white. Sometimes they do and sometimes they don't. That's why there are many economic theories and approaches to each situation. You clearly don't know what you're talking either.

It means the same thing, look it up.


Federal Income Tax Brackets For 2010 – Based On Taxable Income

Rate	Married filing jointly	Most Single Filers
10%	Not over $16,750	Not over $8,375
15%	$16,750 - $68,000	$8,375 - $34,000
25%	$68,000 - $137,300	$34,000 - $82,400
28%	$137,300- $209,250	$82,400 - $171,850
33%	$209,250 - $373,650	$171,850 - $373,650
35%	Over $373,650	Over $373,650

Yep, the the people who make $373,650 a year pay 35%. Personally I feel more for the middle class but hey.



Pretty much the same news article as above. With the same mis-context quote too.


http://www.econ.berkeley.edu/~cromer/RomerDraft307.pdf

On page one she starts her abstract telling you what this paper is about. She uses tax data from 1947-2006 and then she uses reports about why this these tax cuts/increases are happening. Those values that are then quoted all over the web is not just empirical data analyzed but also "interrupted".

You're missing the point v.v

What point exactly? I think those who are wealthier should be taxed more and I feel more for the middle class who pay only 7-10% less than the "rich". Which means they have less of a real income to use.

I'm not sure about the business tax because I can't find any figures. I'll look for more of those tomorrow.

Maybe when you start working you'll understand my point. Paying taxes suck. But they are necessary to live in society. Do we need to reduce spending? Yes, after we get the situation under control. Do you think the economy is under control?

As to your Uncle who has an income of 1 million, that would be incorrect. When putting together an income statement you must deduct ALL expenses (equipment, depreciation, salaries, taxes, etc) before you have an "income". On top of that he didn't make all the 1 million on his own, otherwise no sense in having employees. Also, businesses have A LOT of deductions they can take and incentives from the government that "normal" citizens can't use. If isn't already using an accountant tell him to get one.

Personally I think the tax system needs an overhaul. It is needlessly complicated.

The Laffer Curve is essentially an optimization thought experiment: for given inputs and conditions, how can you get the maximum output (in this case, how can you achieve the most tax revenue).

There will not be going to be a static point (or even a static range) that can be considered optimal given a dynamic, unstable system.

At least one of Laffer's articles is attempting to directly correlate "high" tax rates/hikes as being sole sources for aggravating existing economic woes ( Great Depression, for one)

This definitely doesn't even go into how socioeconomic benefits affect the willingness for people to pay taxes. For example, I personally am willing to pay 100% of taxes if it means keeping alien invaders from annihilating the human race.
(*edit: clarification: I will pay 100% of my income in tax. I don't make enough to cover everyone ><)

Economic liberalism is a stance involving regulation of markets, not taxation.

Taxation != regulation.

Ok, I found some information on how small businesses would be effected by the re-enactment of these taxes. It's not specifically spelled out in this bill that business owners have to pay more taxes. The problem is with how the IRS defines businesses.

This article gives the broad points:

http://www.businessweek.com/magazine/content/10_40/b4197030541676.htm

Here is what the senator has on his website:

http://mcconnell.senate.gov/public/index.cfm?p=PressReleases&ContentRecord_id=9ca6fdc1-04a1-4cc2-a69f-82718eb0b6d4&ContentType_id=c19bc7a5-2bb9-4a73-b2ab-3c1b5191a72b&Group_id=0fd6ddca-6a05-4b26-8710-a0b7b59a8f1f

As of right now I can't find the senate memo or paper that was written on July 12th 2010 but I will look tomorrow. running a fever and going to bed.

Well right now you're not debating facts, you're debating your ideology. I can't argue your ideology because quite frankly it doesn't matter to me.

Renew the cuts for people under 250k.
Let them expire for people over 250k.
It's not going to create jobs, or lose jobs, minimal effect on jobs at most.

/thread