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Discussion: (42 comments)

  1. Max Planck

    Your cuts didn’t bring us any growth. By your reckoning, our economy should be booming. Instead, you wrecked our national balance sheet, even to the point of affecting our national security.

    Your ideas are proven worthless. And I doubt if even YOU believe them.

    Senator Hatch gave a brilliant speech this morning. You do recall he championed Medicare Part B without bothering to fund it.

    Now we WILL fund it.

    1. Jon Murphy

      Your cuts didn’t bring us any growth.

      Your grasp on history is tenuous. In 2001, when the tax cuts were passed, Real US GDP was $11.4 trillion. Now, it is $13.6 trillion, a gain of 19.8%. But, knowing your coming objection, let’s take out the 4 Obama years. Real US GDP in the depth of the recession was $12.7 trillion. This is a gain of 11.6%.

      So, even after the worst recession since the Great Depression, US economic growth was still higher than 2001.

      Same story for Employment, Wages, Industrial Production, and Trade.

      Not really sure where you are seeing “no growth” ’cause it sure as Hell ain’t in the statistics.

      1. Look at page 26 of this:

        http://www.whitehouse.gov/sites/default/files/omb/budget/fy2013/assets/hist.pdf

        and look at the revenues and outlays – especially the “on-budget” (which excludes FICA/SS).

        and tell me what happened…

        revenues were increasing but so was spending, then in 2009 spending jumped….

        what was that increased spending – spent on ?

        the problem with tax cuts is there is no Plan B if the increased revenues are insufficient …do not keep pace.. with the increased spending…

        what do you do .. when you are 16T in debt and still have a significant deficit?

        cutting taxes does not seem to make sense ….

        but also note – despite the fight going on about the fiscal cliff – that the middle/establishment GOP believes that increased revenues are needed…

        but they want them to come from tax reform instead of marginal rates…

        but as the right side of the GOP has said: “what difference does it make if you are still increasing taxes whether by closing loopholes or increasing the marginal rate… it’s still taking more taxes, right?

        1. Jon Murphy

          The spending jump in 2009 was due to the stimulus, Cash for Clunkers, and probably a run-up to the Census.

          For the record, I am not talking about cutting taxes (well, I have in the past, but not for this particular scenario). Neither are the Republicans. The GOP plan is to raise revenues by closing loopholes. This includes eliminating the deductions on the super-rich and corporations. It is increased tax revenue, and it could be called “taxing more taxes” (I don’t see it that way; I see it as ending subsidies, but I guess po-tay-to, po-tah-to).

          But it is quite impossible to close a deficit through taxes alone. The reason for this is simple: taxes alter people’s behaviors. Just as a tax on cigarettes discourages smoking or a tax on carbon reduces emissions, a tax on income will reduce taxable income. People will look for tax havens (maybe move their money off-shore), they may do more work “under the table”, or they may simply reduce their work all together (I understand the theory behind this last option, but in reality I don’t see it as very viable). So, because of the nature of people, it is hard to estimate how much revenue a tax increase will actually bring in. A general rule of thumb is to assume tax revenues around 18% of GDP.

          Any serious plan to address a deficit would have to consider spending cuts. My problem with both sides’ plans are they do not address real spending cuts. All they talk about is slowing the growth of spending. That doesn’t help the problem.

          Imagine you have a checking account. For some reason, you end up disastrously overdrawn. You go to the bank to get a plan in place. The bank tells you to increase your income (revenue) and decrease your spending. After a few years, your debt to the bank has grown. You go back to the bank and say “I don’t understand what the problem is. My income increased by 2% a week. But now, instead of spending increasing 5% a week, it only increases 4% a week.” You see the problem here? You’ve not really cut your spending. You just slowed it.

          You are right that a tax cut, all else held equal, will not help the deficit problem. No one has ever made that claim.

          But it is important to remember that a deficit or debt is, by definition, a spending problem. In order to finance current consumption beyond what your revenues allow, you need to borrow from future consumption. Therefore, when the future comes, you will need to consume less (since your consumption has already occurred).

          There are perfectly legitimate reasons for government debt (just war is one of them), but one must remember that every penny spent today is one less penny to spend tomorrow.

          There will be a time of reckoning when the government cannot pay back its debt because of past spending. That time is not now. This fiscal cliff is not it.

          There needs to be serious discussion in Washington about what we can really do without. Do we need to be spending as much money on the military as we do? Do we need to give energy companies subsidies? Do we need to have a large military presence on every continent? Do we need 7 different intelligence agencies? Do we need the Patriot Act?

          Until this serious conversation happens, we will just keep kicking this can down the road. This conversation will be repeated over and over again until Judgement Day. And even then it will be repeated.

      2. Max Planck

        “Your grasp on history is tenuous.”

        Your grasp on reality is non-existent.

        “So, even after the worst recession since the Great Depression, US economic growth was still higher than 2001.”

        Once again, the pud-pulling with the numbers and time frames. You really think you know your stuff, don’t you?

        The only person you’re kidding is yourself.

        1. Jon Murphy

          One simple question:

          What number(s) do you see to suggest there has been no economic growth since 2001 (the Bush Tax Cuts, which I assume you are referring to when you say “your cuts”)?

          1. Max Planck

            Your numbers don’t mean sh&t.

            THESE NUMBERS DO. WELCOME TO THE NEW AMERICAN SERFDOM, BROUGHT TO YOU BY THE HERITAGE FOUNDATION, GEORGE BUSH, AND “FELLOW” AND “SCHOLAR” GLENN HUBBARD:

            http://www.bizjournals.com/charlotte/blog/morning-edition/2012/12/corporate-profits-hit-all-time-high-as.html

            You really fancy yourself the clever guy don’t you? Keep it up, little boy.

          2. Jon Murphy

            So, you are saying that there has been no growth because the wage/gdp has fallen?

            Thank you, now that wasn’t so hard now was it?

            But this trend is hardly new. It has been going on for at least 50 years.

            However, I counter. That number, in and of itself, means nothing.

            When we look at household consumption, we see increased standards of living. Even in the relatively short time period from 2001-now, living standards for every class has risen. The consumption inequality gap has shrunk lately. More people are are living with goods they didn’t have just a few years ago. Things like smart-phones, computers, multiple cars, better quality food, etc etc. The true measure of well-being is the standard of living.

            I must say, I find it surprising you are taking this position, though. It directly contradicts your earlier narrative about the great success of Obama and the Stimulus. According to you, there has been no economic growth in the past decade or so. Yet, you also claim that Barack Obama is growing the economy.

          3. Max Planck

            Typically, your answer reflects your intellectual depth.
            Your narrative is asinine.

            Try these numbers.

            http://www.businessinsider.com/truth-about-taxes-12-12#

            And tell me how you rejoice in “growth” when wages decline, jobs are less plentiful, and more people fall into poverty. And there is more to an economy than the number and quality of toys people possess.

            I pity you.

          4. Jon Murphy

            I mean, to me income means nothing in terms of economic well-being and growth. After all, if my wages stay the same, but I can buy more with them, what does it matter?

            Rich and poor are not defined in terms of income, but consumption. The rich aren’t rich because they earn a lot of money, but because they consume more. The poor are poor because they consume less (this is also why I favor disbanding the income tax in favor of a consumption tax, specifically a VAT).

            I think, to really show whether or not there is economic stagnation, one needs to look at labor hours per consumption. How much time does a worker need to afford a dozen eggs? A car? Gasoline? That sort of thing. Income is a means, not an end in itself. People work to put food on the table. If the cost of that food is declining (in terms of labor), then what does it matter what wages are?

            According to the chart I showed you, wages-per-GDP were highest around 1960. Well, I submit to you that everyone in this country, regardless of their station in life, is better off today than they would have been in 1960 at inflation-adjusted wages).

          5. Max Planck

            “Rich and poor are not defined in terms of income, but consumption. The rich aren’t rich because they earn a lot of money, but because they consume more. The poor are poor because they consume less.”

            Well, there you have it, folks.

          6. err… Jon… did you really mean that?

          7. Jon Murphy

            And tell me how you rejoice in “growth” when wages decline, jobs are less plentiful, and more people fall into poverty.

            Well, I’ve answered the wages thing (I don’t care about income), jobs are more plentiful, and I contend the poverty rate is ill-measured (it’s measured by income. See my post about income).

            I rejoice in growth because I see people bettering themselves every day. In inflation-adjusted dollars, I make less than my father did at my age, but my standard of living is significantly higher. Where before my father had to work over a month to buy a new TV, I can do it in just about a day. Where before nearly a quarter of my father’s income went to food, mine is closer to 10%. Where before my dad had to work a day to afford the clothes on his back, I can do it in 5 hours.

            Costs are falling. That is why I rejoice. And as long as each generation can live better than the last, I will continue to rejoice.

          8. Max Planck

            This is truly beyond silly. And again, your answers reflect your immaturity.

            I knew cab drivers who could send their kids to law school without bankrupting the father or the son. Today, that’s not possible. Neither is decent health care affordable.

            You go enjoy playing games on your IPhone. To those of us with real mortgages, the stewardship of raising children, and maintaining their health insurance- in other words, the things that REALLY matter besides the cost of flat screen TVs made under slave labor conditions in Shenzen Province: I offer you a hale and hearty
            “Go %%%% yourself” from America’s adults.

            You’re living in a giant Ponziconomy, and you’re a willing stooge for it.

          9. Jon Murphy

            I agree with you that there is more to well-being than what toys people possess. But money isn’t it.

            Life, happiness, leisure, family, love, friends, and faith. All these things are more important than toys. But they are rather hard to measure, aren’t they? ;-)

            Money does not buy happiness. I was just as happy (possibly more so) when I was a monk with a vow of poverty. Money doesn’t buy family. Money doesn’t buy love (although you can rent it).

            The solution is not “just give them more money.” No, that never accomplishes anything. Money is not a resource. People cannot live under money. They cannot eat it. They exchange it for things they can consume (thus my definition of rich and poor).

            It’s the whole “give a man a fish, you feed him for a day. Teach a mean to fish, you feed him for a lifetime,” sort of thing. Sure, we can just shovel money on top of the poverty problem, but that won’t make it go away. It will only perpetuate it, and this conversation over taxes and social justice will just perpetuate until Kingdom Come. What we really should do to solve poverty in this country (and around the world) is to attack the cause of it. Let’s teach people skills. Let’s make it easier for them to get jobs. Let’s free people from the bonds of poverty.

            At our disposal right now, we have the ability to end world hunger. Can you imagine it, Max? Within our lifetime, we can eradicate hunger! All we would need to is throw open US trade and tear down our trade barriers on food.

            In my lifetime, Max, nearly 700 billion people have been lifted out of poverty worldwide (according to the World Bank). Trade is the reason for this. If we throw open our markets, how many more could we lift out of poverty? We could redefine poverty, Max. In our lifetimes. Right here, right now! We can accomplish God’s work. All we need do, Max, is trade.

            But these arguments about “he should pay more!” are counter-productive. We are getting nowhere. This is our equilivent to playing a fiddle while Rome burns. We could accomplish so much if we just work together, instead of against each other.

          10. Max Planck

            Again, childish:

            “In my lifetime, Max, nearly 700 billion people have been lifted out of poverty worldwide (according to the World Bank).”

            There are only 7 billion people in the world, Sparky. Which World’s Bank were you checking with, because it wasn’t Earth’s.

            ” Trade is the reason for this. If we throw open our markets, how many more could we lift out of poverty? We could redefine poverty, Max. In our lifetimes. Right here, right now! We can accomplish God’s work. All we need do, Max, is trade.”

            Rubbish. All we did was transfer the jobs we USED to have to the millions who “raised themselves out of poverty.” Again, your youth and lack of historical perspective prevent you from making any rational judgments of history OR the present.

            The apparel industry was the #1 employer in New York City in the year I was born. Today, it barely fills up a few building of office space. Throughout the nation, hundreds of thousands knitted, weaved, cut, sewed and manufactured millions of garments for the world. It is almost all gone, including the electronics industry that once played such a large role in our economy.

            All of that manufacturing- including for the most basic of needs, clothing- went overseas. Our wealth was transferred to other lands. That’s not “creation.” That’s TRANSFER. And you can’t tell the difference.

          11. Jon Murphy

            There are only 7 billion people in the world

            Forgive my typing error. That should have been million, with an “m”.

            Our wealth was transferred to other lands.

            I knew with enough prodding I’d find out where all your fallacies sprung from.

            Trade does not transfer value from one person to another. It creates it. This is the single indisputable iron foundation of economics and the human condition: any voluntary trade will only take place because both parties benefit from it. Trade is not a zero-sum game. If that were the case, no one would trade. Trade allows for specialization.

            Do you grow your own food? Cut your hair? Make all your clothes (and the necessarily materials)? Do you generate your own electricity? Provide your own Internet? Your own sewer?

            If your answer is “yes”, then my question is “why”.

            If your answer is “no”, then my question is “why”?

            If trade is such a bad thing, why do you participate in it? If one is truly wealthiest when he does not trade, when why not just hole yourself up in a cave. You’ll be richest then.

            I do not expect an answer from you on this. If you wish to discuss, then I will. But know this:

            The entire discussion will be predicated on the iron law of economics: voluntary trade only exists when both parties benefit. I will not be discussing law this as it would be akin to arguing whether or not the Earth is round. Any conversation will be on the grounds that this law is understood. I will not seek to justify this law to you. If you seek justification, then you can read some Paul Krugman, David Ricardo, Adam Smith, John Maynard Keynes, Greg Mankiw, Ben Bernanke, or countless others. When you accept this law in the same manner you do gravity, then we will pick up this conversation.

            Until then, good-bye and good luck.

          12. Max Planck

            “Forgive my typing error. That should have been million, with an “m”.”

            Then there were the two extra zeroes you added on- all courtesy of the World Bank of course.

            You just need to grow up, that’s all.

          13. Max Planck

            “The entire discussion will be predicated on the iron law of economics: voluntary trade only exists when both parties benefit.”

            This is another stupid remark. Yours is the triumph of blind doctrine- and an intellectually baseless one at that- over reality.

            Spare me your silly pieties. Learn how the world works.

          14. Jon Murphy

            This is another stupid remark. Yours is the triumph of blind doctrine- and an intellectually baseless one at that- over reality.

            Spare me your silly pieties. Learn how the world works.

            Said the pope to Galileo.

          15. Jon Murphy

            err… Jon… did you really mean that?

            Do I really mean what?

          16. ” Rich and poor are not defined in terms of income, but consumption. The rich aren’t rich because they earn a lot of money, but because they consume more. The poor are poor because they consume less”

            don’t you consume less when you have less and consume more when you have more?

          17. Jon Murphy

            don’t you consume less when you have less and consume more when you have more?

            Strictly speaking, yes.

            But, as the old saying goes: “what good is money if you don’t spend it?”

            Money doesn’t equal wealth. It is rather useless until one uses it to consume.

            Let me try to demonstrate what I mean.

            Let’s assume that Bill Gates uses his vast fortune to feed and clothe and house all the poor in America (all for no cost to the poor). I think we’d all agree that the poor are suddenly better off. Yet, their income has not changed. They are consuming more.

          18. this is sorta like holding your elbow a certain way, eh?

          19. Jon Murphy

            Haha I guess so!

        2. Ah, Maxie. You can do whatever the hell you want with taxes. You’re not getting more revenue and you’re not going to live better.

          Tax rates have fluctuated wildly. The top marginal income tax went gyrated between 91% and 28% in the second half of the 20th century. Yet, the government collected a steady average of 18% of gdp and a steady ratio of revenue to median household income. Raising ta rates – especially on top earners who are flexible and politically connected – has never yielded more tax revenue. Only growth has and for that you need lower rates to encourage investment.

          The already rich will stay rich and the not yet rich will find no reason to try.

          1. Max Planck

            “Ah, Maxie. You can do whatever the hell you want with taxes. You’re not getting more revenue and you’re not going to live better.”

            I believe we WILL get “more revenue” and that is the whole point of the exercise. I never claimed, and no one else has, that raising taxes to cure the excesses of the prior administration will make anyone “live better.” DO try to keep up here, will you?

            “Tax rates have fluctuated wildly. The top marginal income tax went gyrated between 91% and 28% in the second half of the 20th century. Yet, the government collected a steady average of 18% of gdp and a steady ratio of revenue to median household income. Raising ta rates – especially on top earners who are flexible and politically connected – has never yielded more tax revenue. Only growth has and for that you need lower rates to encourage investment. ”

            And of course, with the lowest rates of the post war era, maybe we’ve been “encouraged” a bit TOO much given the results of the policies you blindly advocate.

            “The already rich will stay rich and the not yet rich will find no reason to try.”

            Well then, by that logic, why not raise rates back to 1950s levels? After all, as you said, no one will really pay then anyway, “I won’t live better,” and it won’t help pay down the deficit.

            Pick a number. Any number at all.

          2. the funny thing is that there is no real difference between increasing marginal rates and closing loopholes – they both seek to increase revenue and they both have the same impact on those they affect.

            But Methinks, as usual, just hand-waves away what happened on Reagan and Clinton.. where marginal rates and tax loopholes were both messed with – and as a result, revenues DID increase – and in Clinton’s case enough to balance the budget.

          3. Max Planck

            This is how stupid things are in Washington. FOR THE SAKE OF APPEARANCES, Boehner and Co. don’t want to “raise rates,” and thus please Grover Norquist (which is the most perverse thing I have seen in my life) but they’re happy to lop off thousands in your mortgage interest deduction, and don’t be surprised if Muni bond deductions are capped at 28% as part of a package.

            Its like a bunch of six year olds dividing up their Halloween stash. And Petho-ca-ca-de-toro pretends this is real “tax policy.”

          4. Max Planck

            Erickson of RedState.com now demanding Boehner’s replacement, as Tea Party birdbrains get shut out of committee positions and GOP reps cracking under strain of demand for higher tax rates on Romneyites.

          5. can you hear that mournful whistle in the distance but fast approaching… train wreck…train wreck! who will avert?

      3. Max Planck

        “Costs are falling. That is why I rejoice. And as long as each generation can live better than the last, I will continue to rejoice.”

        Just to tie a few threads together. Last month, there was a fire in a Bangladesh apparel factory, which supplies clothing to Wal-Mart and some other American retailers. One hundred and twelve workers were killed, their means of escape blocked by their employers. In a scenario that was eerily similar to the Triangle Shirtwaist Fire in New York that launched the labor movement in this country, we should acknowledge that what is going on here in this forum- and indeed, in this country- is a re-litigating of what are 19th century social problems.

        This is what the Republican Party has degenerated into. The repeated attempts at the erasure of human dignity by those who claim to be the ones who champion it. They dare call themselves “Christians.”

        We are reliving the struggles of our grandparents. So are the immigrants the GOP has been crapping on (while they did nothing to stop their entry, as it effectively suppressed labor costs for factory owners and food processors.)

        Mr. Murphy may indeed be “rejoicing” over the low costs of the closet loads of gadgets he can buy, thinking this makes for a “higher standard of living.”

        Unfortunately, that “standard” is built on the dead bodies of the Foxcnn workers who committed suicide working in rabbit warren conditions, and the charred bodies of those sewing machine operators in Bangladesh.

        This isn’t “economics.” This isn’t “free markets.” This is the imposition of indentured servitude, and it’s happening right here in this country too, in ways too numerous to mention.

        The apeothis of this social structure was represented by none other than Mitt Romney, who saw industries merely as little more than a barrel of grapes to extract juice from, and walk away leaving the crushed skin.

        History will write, as it did after World War II, the Civil War, and our own Revolution:

        We got by just by the skin of our teeth.

        I would hate to see an America where a sh&tkicker like Romney and his imperious wife, and the scum who backed them, ruled the nation.

        A society is not a balance sheet. And humans are not to be treated as “costs” or “assets” or “capital.”

  2. I don’t know many people who are more in favor of low(er) taxes than I am, but I hate reading arguments in favor of lower taxes that are inconsistent with conservative values, today’s political environment and common sense economics.

    As I’ve said before, there should be no favoritism in the tax code. If we’re going to tax income, income is income and should be taxed at the same rate. Why should someone investing cash get a lower tax rate on the proceeds than someone investing cash and time by going to school on the proceeds from their investment?

    We also shouldn’t be favoring those who do the ‘politically correct’ thing with their money. We should be indifferent to whether someone saves their money, spends their money or gives their money away. Earning the money gives you the right to do with it as you want, and government should be rendering judgment (through the tax code) on their decisions.

    Politically, it is a non-starter. I’m sure you haven’t forgotten how Romney got pummeled for paying a lower overall rate than Joe Sixpack?

    You continually ignore the fact that the lion’s share of the so-called investments that get the lower tax break are not in fact investments, but are rather simply bets made on the future price of stocks. Accordingly, my buying Apple stock does NOTHING to further investment in other companies. And since it’s a bet, going back to my first point, why should someone betting on the price of Apple stock pay a lower rate than someone betting on the Super Bowl winner?

    You also ignore the real world consequences of taxes on so-called investment income. The tax rate has very little to do with the amount of money ‘invested’. 401(k) plans are taxed at ordinary rates when the cash is withdrawn, yet people put billions into their plans every year (the reason they don’t put even more in is because the lack the cash, not because they’re discouraged by the tax rate). Real ‘investors’ (those putting money into start up companies, etc.) are motivated more by whether the company will succeed than what the tax rate is when they cash out at their million-to-one payout.

    And finally, your example is just silly. Even after the tax, Patient still has more money to spend than Impatient. Not as much as if there was no tax at all, but still more, and Patient can decide whether that is enough to make it worthwhile for him to defer the gratification of spending his $100. And why not include ‘Worker’ who goes out and earns another $100. He has to pay $20 in tax on that income, leaving him with only $80. Why should the guy who sits around and does nothing keep more of the $100 in income than the guy who goes out and does something worthy with his time?

    1. You continually ignore the fact that the lion’s share of the so-called investments that get the lower tax break are not in fact investments, but are rather simply bets made on the future price of stocks.

      You don’t seem to understand that this is exactly what investment is. Stock is just fractional ownership of a company. When you invest in a start-up you’re simply betting that the value of the start-up will grow to more than you invested in it. Same thing.

      The tax rate has very little to do with the amount of money ‘invested’. 401(k) plans are taxed at ordinary rates when the cash is withdrawn, yet people put billions into their plans every year..

      For decades before the cash is withdrawn, the investments grow tax free. That’s huge. Do the math (geometric return) for an investment growing tax free at 7% vs. 5.6% with a 20% tax rate. The difference is staggering.

      Real ‘investors’ (those putting money into start up companies, etc.) are motivated more by whether the company will succeed than what the tax rate is when they cash out at their million-to-one payout.

      Nope. If the required return on an investment is 15% and taxes reduce that return to 10%, then the investment doesn’t get done. Period. It’s that simple. Investors are in the business of making money by maximizing their return for a given level of risk.

      Why should the guy who sits around and does nothing keep more of the $100 in income than the guy who goes out and does something worthy with his time?

      Because he didn’t sit around and do nothing. He worked, paid taxes on that money and then, instead of consuming his earnings, he deferred consumption, took a risk and invested in the hopes of being able to consume more in the future. If he is not adequately compensated for that deferment and that risk, then he will consume his whole paycheck today.

      The end result is less investment in the very businesses that create wealth and jobs.

      Deferred consumption should not be taxed at all. It simple distorts the risk/reward of investments and stumps growth. As does a corporate tax.

      1. I’m distinguishing between what I see as two different definitions of the word ‘investment’. The first is when I put money into a company which uses the money to build their business. The second is when I put money into some instrument which I hope will gain in value.

        While the latter includes all of the former, the former does not include all of the latter.

        My buying a lottery ticket is the latter, I’m buying a piece of paper I hope will be worth more than I paid for it. My buying a share of Apple is the same thing.

        My argument is that these types of ‘investment’ do nothing to create jobs or provide entrepreneurs with the funds to start a business, they are simply bets on pieces of paper exchanged among bettors. As such, they shouldn’t be included in discussions about job creation, business development, etc.

  3. Max Planck

    “And why not include ‘Worker’ who goes out and EARNS another $100. He has to pay $20 in tax on that income, leaving him with only $80. Why should the guy who sits around and does nothing keep more of the $100 in income than the guy who goes out and does something worthy with his time?”

    Which points up where AEI’s “values” really are. They love capital but they piss on labor. So the idle rich are rewarded more for sitting on their assets while someone who busts his ass to put food on the table gets raped.

    That is the sham of the AEI and their backers. There is nothing moral or “American” or even “Enterprising” about this propaganda mill.

    1. “They love capital but they piss on labor. So the idle rich are rewarded more for sitting on their assets while someone who busts his ass to put food on the table gets raped.”

      Max,

      The issue i have with your statement is that if someone is busting their ass to put food on the table, they are probably not even paying taxes. Realistically if they “have” to bust their ass in order to provide food, they are likely being subsidized by the tax system.

      If there are situations where someone can barely afford to provide food, but they are being taxed at more than 15% Effectively, can you please provide an example for my understanding?

      1. Max Planck

        “The issue i have with your statement is that if someone is busting their ass to put food on the table, they are probably not even paying taxes. Realistically if they “have” to bust their ass in order to provide food, they are likely being subsidized by the tax system.”

        Pray tell, how are they being “subsidized” by the tax system?

  4. I “love” these ideas about growth when we already have 16T in debt and a structural deficit from the last time we changed our policies to “grow”.

    so two questions:

    1. – how much money will the new way bring in?

    2. – what is plan B if it fails and we go deeper into debt?

  5. .

  6. James,

    you are confusing financial investment with physical investment.

    And personal consumption and corporate consumption.

    You are also making aggregation errors between personal utility maximization an the economy as a whole.

    You are also ignoring the multiplier – which is fine – but to not understand how a modern economy can be consumption driven – which is almost certainly true – seems wrong as well.

    You also don’t understand that the economy as a whole cannot really physically save, unlike in simple economies.

    You don’t consider that the government is spending as well as taxing – and presumably on good things that actually are investments.

    1. Max Planck

      Registered GOP mongoloids who live in Blue States are finally coming to grips with the idea that cutting deductions, as opposed to merely raising marginal rates may affect the poor dears personally. Hence, Ben Stein’s epiphany on CBS this morning. Something about killing off a nascent housing recovery- where did I hear that before?

      He can thank his lucky ass that Romney didn’t get elected- cutting marginal rates BY ITSELF has the seed of an effective tax hike in it, and of course, Romney’s plan was to DO BOTH.

      Thank God the GOP’s reign of terror is unraveling right before our eyes. All that’s left is the coming humiliation of Boehner, Cantor and worst of all, McConnell.

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