Higher Taxes = More Government Receipts?

Discussion in 'Politics, Religion, Social Issues' started by fivepoint, Feb 20, 2011.

  1. fivepoint macrumors 65816

    fivepoint

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    #1
    I've read a few posts here recently suggesting that we should DRAMATICALLY increase tax rates on the 'rich' (take more money from those who earned it, for distribution to those the government decides are more worthy) to pay for government programs, deficits, etc.

    So... do higher taxes result in more government receipts? Ummm... no. At least, not according to U.S. history.

    [​IMG]

    Once again everyone, the problem is not INCOME... the problem is SPENDING. We have a spending problem, and we've got to get serious about slashing our spending.
     
  2. dmr727 macrumors G3

    dmr727

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    #2
    I don't necessarily disagree with this, but where would you propose that we make the cuts? I assume your proposed cuts will fix the entire deficit without the need to increase taxes?
     
  3. fivepoint thread starter macrumors 65816

    fivepoint

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    #3
    Here's what I would do.
     
  4. Ugg macrumors 68000

    Ugg

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    #4
    Could you please justify the explosive income inequality in the USA and how it relates to your graph?

    Forbes

    It can't all be because Americans are lazier than every before in history. Maybe it's because US corporations simply have no sense of patriotism or loyalty to the country that allowed them to become so wealthy. It's more efficient to buy a country with junkbonds, gut it by selling off its assets and firing its employees and then sell it on to an unsuspecting public while asking for and receiving massive tax breaks.
     
  5. fivepoint, Feb 20, 2011
    Last edited: Feb 20, 2011

    fivepoint thread starter macrumors 65816

    fivepoint

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    #5
    I'm fascinated by your focus on 'equality of results' instead of equal opportunity and actual results. Such measurements are worthless because they are solely focused on equal results (equal mediocrity and/or poverty) instead of improved results/opportunity. It's like someone who would prefer the entire class get C's instead of a few F's, a few D's, a lot of C's and B's, and a few A's.

    We know that wealth is created each and every day and that it's not a stagnant number to be split up between the members of society like a pie... suggesting that the more pie person A has, the less pie person B has. Such an accusation is utterly ridiculous and provably false. The fact is that new pie (wealth) is created each and every day through entrepreneurship, free markets, basic commerce. By focusing on 'equality' instead of growth and opportunity for all members of society, you're virtually ensuring everyone is 'equal' in poverty.

    A much better model of measurement of a system is the overall standard of living of a society. We know from history that free markets, entrepreneurship, and governments which allow wealth creators to keep more of what they earn, is the best system to create more prosperity for the society as a whole.


     
  6. hulugu macrumors 68000

    hulugu

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    #6
    Well, it seems that lowering taxes also does not result in more government receipts which has been one of the primary arguments for the lowering of taxes. This seems to indicate that the Laffer Curve doesn't exist.

    I'd argue that this rather simple graph tells us that the changing tax policy has failed to keep up with rising incomes especially at the higher-end of the income rates, indicating that conservative policies were successful at keeping the wealthiest from paying more taxes, while liberal polices were successful at keeping the poorest from paying more taxes.

    Our current problem is two-fold: tax policy has failed to keep up with the changing income of Americans and budgetary policies have failed to keep up with the first, thus our immense debt.
    To fix this problem, we might reasonably use both levers: higher taxes and lower spending to achieve what we want.

    It's like slowing down a car with a manual transmission, you can use just the brakes or just the gears, but you're better off using both to ease down.
     
  7. Eraserhead macrumors G4

    Eraserhead

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    #7
    Looks like Clintons tax rises did increase receipts.
     
  8. FreeState macrumors 68000

    FreeState

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    #8
    Yep, and that would be because he did as you stated, he raised taxes and cut spending at the same time.

    Anyone who has run a business or a household will tell you, when your short on funds you cut spending and try to increase revenue, you must do both.
     
  9. Rodimus Prime macrumors G4

    Rodimus Prime

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    #9

    Umm you should look at history. Last time income and wealth disparity was this bad we had this little thing known as the great depression.

    If the pay scale gets to top heavy it comes crashing down.

    It is big time out of line and CEO are massively over paid for the job they do.
     
  10. skunk macrumors G4

    skunk

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    #10
    According to your chart, the problem you have is neither income nor spending, but tax avoidance and tax evasion.
     
  11. rdowns macrumors Penryn

    rdowns

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    #11
    Yes, you've told us that dozens of times. What you fail to address each time you regurgitate it is what your plan is for the tens of millions of unemployed your plan would create.
     
  12. iShater macrumors 604

    iShater

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    #12
    Neighbors and churches to address it all.
     
  13. Ugg macrumors 68000

    Ugg

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    #13
    Despite your florid and heated rhetoric, you've obviously failed to explain why income equality is so enormous during a period of supposed tax equality. Obviously, the only reason for such disparity is that the foxes have been allowed to rule the hen house and have been gobbling up all the eggs for themselves instead of letting the hens choose for themselves.

    It's time to unschackle the US from its corporate overlords. Unfortunately, the Koch funded tea party, Ayn Rand hypocritical libertarians refuse to face reality.
     
  14. fivepoint thread starter macrumors 65816

    fivepoint

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    #14
    Exactly, but I keep getting asked, don't I? So I post a simple link to it... I guess the question is, what's your problem with that?

    Tens of thousand of unemployed? Ok... well, first of all I'd eliminate corporate taxes (just a consumer tax anyway which simply adds bureaucracy and cost of doing business to our companies today), I'd dramatically lower the cost of doing business by reducing regulations as well, meaning a large increase in business growth across the country. I'd slowly decrease and eventually eliminate the minimum wage so that high schoolers could get jobs again and we wouldn't have such massive unemployement with young adults and people in highly urban areas. The end result of these policies combined with the ones on the other post would be the biggest growth in the private sector in 50 years, massive growth in GDP and considerable reduction in umemployment over the long term.
     
  15. NT1440 macrumors G4

    NT1440

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    #15
    So you're fine with corporations being treated as individuals in the eyes of the law, yet they don't have to contribute anything to society even though they by far use more resources than actual people? Have you thought this through at all?

    You want the entire tax burden to be shifted onto just the people while the vast, vast majority of money is held by business?

    You want business to be able to do whatever they want and strip the country of any and all resources, use all the infrastructure they want, and don't want them to have to contribute at all to the country?

    You sound like a corporatist through and through. How can you seriously say you care about this country when you advocate ideas that would let business do anything without sharing the burden?

    Of course, maybe you just haven't thought this idea through at all and instead are just parroting it along?
     
  16. chrmjenkins macrumors 603

    chrmjenkins

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    #16
    Your graph suggests the optimal tax rate is between 70 and 50%. Even given the nearly exponential rise in income equality, I'll happily agree with the lower end of your graph and say we put it at 50% to start.

    Glad we could agree.
     
  17. fivepoint thread starter macrumors 65816

    fivepoint

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    #17
    I thought you were going to block me? Ah well, at least you're asking relevant/substantive questions this time.

    Your working under the false assumptions that corporate taxes are paid by corporations and not by individuals. If a corporation sells a product for $A, and the cost to build is $B, then their profit is $A-$B. If a tax is added to the corporation, additional cost is added to $B. There's the face-value cost, which we'll call $C, and there's an extra hidden cost (the cost of implementation, compliance, etc.) which we'll call $D. So now, the company's profit is $A-($B+$C+$D). The result is lower profit margins. However, companies aren't willing to accept lower profit margins, especially in the situation where B+C+D is > A. So, what they do instead is tack C and D onto the price of the product. Consequently, the end result is this: Price for the customer (A+C+D) - cost to the company (B+C+D). So, the end result is that the company makes the exact same amount of money as before, and the customers end up paying the tax and associated compliance costs... not the company. Corporate taxes are a farce, they're a consumption tax on civilians pure and simple. So, who is it again that hasn't thought this idea through, and is simply parroting it along?

    I'm anything but a corporatist. Unlike Liberals and Neo Cons I think all government subsidies, handouts, bailouts, should all be immediately eliminated to let the free market decide winners and losers. This is the opposite of corporatist. Capitalist on the other hand would be a great description.
     
  18. chrmjenkins macrumors 603

    chrmjenkins

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    #18
    Of course, your analysis ignores E, which is the rise in executive pay and bonuses over the years. With E where it was in the 60's or 70's, B wouldn't matter near as much. (Ignoring the fact that an overwhelming majority of B is avoided by the large corporations through tax evasion)
     
  19. skunk macrumors G4

    skunk

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    #19
    You would allow corporations to do whatever they like, unregulated, and to pay no taxes on their profits. You may not be a corporatist in the dictionary sense of the word, but the corporations have no truer friend in their war on the people.
     
  20. fivepoint thread starter macrumors 65816

    fivepoint

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    #20
    There is no 'E', because It's already built into B. I'm sorry you're under the faulty impression that this is even a significant number relative to B. It's a cost of doing business and of having the best possible leaders in your organization... but it's next to meaningless in the grand scheme of things. Now, if you want to talk about cost of raw materials, total labor compensation, etc. then you're getting into real important numbers. Anyone who has worked in a medium or large sized business knows this... clearly you haven't.


    Unregulated? No.
    Taxes? I already explained that they don't pay them anyway. Their customers do.
    War on the people? Fascinating business model. I've never heard of that approach being successful. Usually business attempt to provide valuable goods and services in hopes that potential customers become real customers instead of buying their competitor's goods. Weird.
     
  21. skunk macrumors G4

    skunk

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    #21
    And I have several bridges I can sell you.
     
  22. NT1440 macrumors G4

    NT1440

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    #22
    So your logic can be used to show that if there were no taxes on corporations, we would see the same products for cheaper, right?

    Somehow I don't trust that the elimination of the corporate taxes would make the boardrooms go "now we can finally lower our prices!". I'd fully expect them to just pocket the money.

    Again, by your logic, where would the lost tax revenues come from if you cut the tax rates on corporations to 0%? If we supposedly just pay for the taxes anyway, should we just shift them directly onto the individuals? Would you rally against that tax hike? After all, its not really a hike if we're just paying it anyway through other means. Just shift it upfront over to citizens and stop this "farce" right? Would you advocate for such a thing seeing as its all semantics anyway? :confused:
     
  23. Thomas Veil macrumors 68020

    Thomas Veil

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    #23
    I'd like to see this whole argument made using some unbiased source. The OP's chart says, "Source: White House Office of Management and Budget and The Tax Foundation" and is put out by Heritage.org.

    Well, some of the stats may have come from M&B, but we all know better than to take Heritage Foundation information on its face. As for the Tax Foundation, Wiki has this to say:

    Pardon me if I don't trust that chart, ya know?
     
  24. fivepoint thread starter macrumors 65816

    fivepoint

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    #24
    First of all, it's not my 'logic', it's just the facts. The way things work. Basic economics. Basic free market theory.

    As for the price reductions, you're kind of looking at it backwards... but at any rate the companies wouldn't lower costs it out of good will, they'd do it because their competitors are lowering prices, or they want to prevent new competitors from cropping up, or they want to build momentum and sell more widgets at a reduced price. Common sense.

    I would advocate that the corporate taxes are replaced by nothing personally, as I think the size of government has to be reduced drastically... but yes if you wanted to replace them and essentially change nothing, you'd simply increase sales tax rates to compensate. The same people would be paying in the end. In addition, the system would be more efficient because the company wouldn't have to spend as much time/money on compliance issues. So, you'd get more bang for your buck... you could get the same tax receipts at a lower rate that way.
     
  25. chrmjenkins macrumors 603

    chrmjenkins

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    #25
    Ah, a negative appeal to authority. I was wondering when the first formal fallacy would crop up.

    Really?

    If that were the case, I'd imagine CEO salaries to go down accordingly with profits I'd also imagine that CEOs wouldn't get bonus packages for steering their companies into crisis. You'd also think this top talent wouldn't indiscriminately risk their company's futures.

    I'd also like to hope lists such as this wouldn't exist.

    Finally, the myth that it is pocket change, and many other myths are rubbish (pdf warning)
     

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