Joe the Plumber repeats the bogus frame
I caught Maher's rather weak "interview" with Joe the Plumber this past Friday. I was disappointed that Maher didn't roast him for throwing up the usual outworn conservative meme that Obama (or liberals in general) want to raise taxes so he (we) can give money to the undeserving, free-loading poor. Maher should have reframed that. First of all, the tax increase is minuscule, and it comes after Bush cut taxes several times for the wealthy. Second, the best reason for raising taxes on the rich is to invest that money in America. Build roads, bridges, schools, hospitals . . . improve quality of life for everyone through education, health care, the environment, transportation, etc. It's not about "punishing success". It's about the smart allocation of public funds. For the public, for once. What a concept! Actually take public funds and spend it for the public, not for private gain.
Conservative ideology wants us to believe that if we just cut taxes, everything will be great. Even though it has never worked before, in the entire history of America, they want us to believe that suddenly, for the first time, rich folks will take their tax cuts and create jobs. He talked again about how cutting taxes will bring American jobs back. I wish Maher had schooled him in history and math. Basically, if you give a corporation a choice between X and Y, and they can only choose one, corporations will choose X. X being the ability to ship jobs overseas and pay workers 10 cents on the dollar. Y being tax reduction. Even if you cut corporate rates to zero (2/3rds of American corporations paid just that in the last decade anyway), corporations would still ship jobs overseas, because paying 10 cents on the dollar is better than paying zero in taxes. Not to mention the fact that they don't have to pay health care costs overseas, and the regulatory structure is even more lax there than it is here.
It's not taxes, Joe. Taxes aren't the issue. Cutting them won't save jobs, create jobs, or bring jobs back. Taking tax dollars from rich folks will, if that money is spent wisely. Building roads, bridges, hospitals creates jobs here. You can't outsource them. Building up our green infrastructure creates jobs here. You can't outsource infrastructure work. Creating a smart electrical, energy and transportation grid creates jobs here. You can't outsource infrastructure work.
FDR did the right thing. But we actually need to go beyond what he did. Invest virtually all of our budget into creating a 21st century nation. Build it here. This won't happen if the private sector alone is involved. There isn't enough immediate profit in the deal for them. The government has to do it, cuz it doesn't have to make a profit. It can invest without worrying about that. For our future. We all benefit, including the rich.
Finally, when the Joe the Plumbers of this world talk about how they love this country, they need to be held accountable for that empty rhetoric. Nothing they propose would benefit this country. It just benefits roughly 1% of it. Time to counter that nonsense passionately, with confidence and intensity. Our Media should do it, but they won't, cuz they're a part of that 1%.
Joe the Plumber doesn't realize he's being used. The proverbial useful idiot. I just wish more in the Media would counter that and expose it and expose the puppet masters once and for all.
Conservative ideology wants us to believe that if we just cut taxes, everything will be great. Even though it has never worked before, in the entire history of America, they want us to believe that suddenly, for the first time, rich folks will take their tax cuts and create jobs. He talked again about how cutting taxes will bring American jobs back. I wish Maher had schooled him in history and math. Basically, if you give a corporation a choice between X and Y, and they can only choose one, corporations will choose X. X being the ability to ship jobs overseas and pay workers 10 cents on the dollar. Y being tax reduction. Even if you cut corporate rates to zero (2/3rds of American corporations paid just that in the last decade anyway), corporations would still ship jobs overseas, because paying 10 cents on the dollar is better than paying zero in taxes. Not to mention the fact that they don't have to pay health care costs overseas, and the regulatory structure is even more lax there than it is here.
It's not taxes, Joe. Taxes aren't the issue. Cutting them won't save jobs, create jobs, or bring jobs back. Taking tax dollars from rich folks will, if that money is spent wisely. Building roads, bridges, hospitals creates jobs here. You can't outsource them. Building up our green infrastructure creates jobs here. You can't outsource infrastructure work. Creating a smart electrical, energy and transportation grid creates jobs here. You can't outsource infrastructure work.
FDR did the right thing. But we actually need to go beyond what he did. Invest virtually all of our budget into creating a 21st century nation. Build it here. This won't happen if the private sector alone is involved. There isn't enough immediate profit in the deal for them. The government has to do it, cuz it doesn't have to make a profit. It can invest without worrying about that. For our future. We all benefit, including the rich.
Finally, when the Joe the Plumbers of this world talk about how they love this country, they need to be held accountable for that empty rhetoric. Nothing they propose would benefit this country. It just benefits roughly 1% of it. Time to counter that nonsense passionately, with confidence and intensity. Our Media should do it, but they won't, cuz they're a part of that 1%.
Joe the Plumber doesn't realize he's being used. The proverbial useful idiot. I just wish more in the Media would counter that and expose it and expose the puppet masters once and for all.
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I'm not sure I saw the same "> interview.
I think Maher did drive the point home, ("If Obama is a socialist, Eisenhower must be Stalin"). I thought it was a fairly clever interview.
April 4, 2009 9:26 PM | Reply | Permalink
Oops, ALWAYS preview
=D
This is the link to the interview.
April 4, 2009 9:31 PM | Reply | Permalink
That was a good line. True.
But I still think he let him off the hook with the frame as mentioned above. I hear that constantly from "conservatives". Apparently, they think the only reason why progressives could possibly advocate for higher taxes on the rich is to "punish success" and reward slackers.
A smart, progressive allocation of public resources FOR the public is the real reason for increasing the tax rate. That, and the issue of fairness. Plus the gap between rich and poor, etc. etc. I have actually never, ever run across a progressive -- politician or private citizen -- who reasons the way conservatives think they do.
Along with the widening gap between rich and poor, there seems to be a widening gap between conservatives and reality.
April 4, 2009 11:00 PM | Reply | Permalink
You said the tax increase is "miniscule" but it is often cited as one way of paying for Obama's massive budget. How do you define "minscule"?
And why should such a small percentage of the population pay for everybody's roads, bridges, etc? I agree we need to have good infrastructure but maybe more people should share the cost.
If you cut corporate tax rates you will see companies look to grow (and hire additional people). For a lot of companies labor isn't enough of a cost for them to "outsource". There are examples in history where tax cuts have been followed by job growth. There's lots of other things that influence an economy, but it's hard to say that tax cuts have never worked
PS - who cares what Joe the Plumber says anyway?
April 5, 2009 8:43 AM | Reply | Permalink
1% of New Yorkers provides 50% of city revenue.
But hey, for the confiscators like the author of this post, that's probably too low.
April 5, 2009 2:21 PM | Reply | Permalink
Obama's tax increase is roughly 3%. It takes the tax rates back up to the Clinton levels. Which makes them far, far lower than they were during the period of 1947-1973, when America had it's longest growth period. Tax rates during that time started at 91% for the top, and never went below 70%. The economy hummed.
Since that time, wages for the average Joe and Jane have fallen or gone stagnant. With all of the tax cuts pushed on us by the right, embraced by too many people in both parties, wages and the overall standard of living for MOST Americans have not improved. OTOH, profits for huge corporations have soared, CEO pay has soared, the gap between rich and poor has exploded.
Tax cuts did NOT help 99% of the American population. They helped about 1%. Jobs STILL were sent overseas at ever increasing rates, and wages stagnated for most of us. On top of that, our Debt soared.
(The Debt was roughly one trillion when Carter left office. Reagan tripled it. Dubya doubled what he inherited. Tax cuts did that.)
Thing is, proponents of those tax cuts can not point to one single benefit for America. They just spout Grover Norquist (and now, Joe the Plumber) nonsense.
Any middle class person who supports tax cuts for the rich is a fool. Period. End of story. They are NOT in the best interest of the vast majority of us.
April 6, 2009 1:31 AM | Reply | Permalink
So when Kennedy slashed top tax rate from 90% to 70% the economy didn't hum even more? Tax revenues soared despite the cut in taxes. They grew by over 30%.
But you say that tax cuts never do anything good?
April 6, 2009 5:34 AM | Reply | Permalink
No. The economy did not perform better after his tax cuts than it did before. Though, later, under Johnson, America had it's best overall economic performance under any American president since the Great Depression. Why? Cuz Johnson spent a ton. He invested in America. It worked. Government spending worked.
Also, during that time, corporations paid roughly 25% of all taxes. They now only pay approximately 7%. That puts even more of the tax burden on individuals. Yet "conservatives" are always clamoring for even MORE tax cuts for them. In the 1960s, companies paid better wages, outsourced far, far, far less, and they were taxed MORE.
Later, they get their tax cuts, wages go down and they ship jobs by the millions offshore.
Some deal, eh?
And, no. Tax cuts never, ever, ever result in more revenue to the Treasury. It's physically, logically, mathematically impossible. Tax cuts REDUCE revenue to the Treasury. But when the economy itself is growing, tax receipts go up. It's not the tax cuts. It's the growth of the economy. And from 1947- 1973, our economy grew at it's longest sustained clip ever. All during a time of much higher taxes for individuals and corporations.
April 6, 2009 11:52 AM | Reply | Permalink
So it was just a coincidence that in 1965 and 1966 as the top rate fell from 90% to 70% that unemployment fell? And it's just a coincidence that the growth rate of tax revenues increased as the tax rates came down? How do you prove that tax cuts didn't play a part in this increased revenue stream?
You say it's "not the tax cuts, it's the growth of the economy" that results in more revenues. But maybe it's the lower rates that encourage businesses and individuals to take more risk and grow their businesses.
If somebody decide to slash the corporate tax I think you would see a lot of people decide it's a good time to start a new business or expand their current one.
April 6, 2009 9:23 PM | Reply | Permalink
If you look at the graph from the link below, you'll notice that unemployment rates rose and fell often across the decades. There is no link to tax cuts, as unemployment rose and fell with tax cuts, tax hikes, and taxes remaining the same. You can't cherry pick a couple of years to make your point. You need to actually establish a pattern across time. I can point to just as many years when unemployment rose after tax cuts.
As for revenues: Tax revenues to the Treasury fell for the first three years of Bush's presidency, after he cut taxes. Revenues to the Treasury did not meet or exceed Clinton levels until 2005. That's a terrible record, not seen in American history since WWII.
And if tax cuts create jobs as you and other "conservatives" so often claim, why did Bush have the worst job-creation tenure of any president since WWII? His net total for eight years? 1.45 million. Clinton's? Roughly 21 million. And Clinton raised taxes. Does that mean raising taxes creates jobs? No. Not necessarily. Unless you target spending with the new revenues in the right way. But it certainly proves that tax cuts aren't necessary, at all, to create jobs. The facts tell us the economy did better when tax rates were much higher. Again, that proves, beyond a shadow of a doubt, that low rates aren't necessary for the economy to do well. By definition.
http://www.uspolicy.com/images/unemrate.gif
Another excellent comparison graph from the New York Times. Notice the best economic performances. They occurred primarily under Dems, and the more liberal, the better:
http://tinyurl.com/bpnvo6
April 6, 2009 11:48 PM | Reply | Permalink
There are a number of examples where tax cuts were followed by decreases in unemployment. I gave you one example with Kennedy. There are other examples.
If you look at an entire presidential term, that's too long of a time period (ie 8 years in Bush's case). Eight years is a long time and lots of other things happen to the economy in that time. Things happen under an administration that spill over to another president. Obama for example gets punished because of what he inherited. So did Reagan.
Rather than look at administrations, look at actual policies that were implemented. Bush saw strong declines in unemployment in the years following his tax cuts of 2001 and 2003. But by 2007 and 2008 there were big job losses. But after 3 or 4 years other things are going to be affecting the economy (such as a war or a housing crunch).
As for revenues, again, revenues soared when Kennedy cut taxes. You don't seem to disagree with this or have any data that disproves it. They also soared when Reagan cut taxes. You mentioned Bush - when he cut taxes in 2003, tax receipts as a share of GDP went from 1% in 2003 to 1.5% in 2004, 2% in 2005 and over 2.5% in 2006. It was the highest level in 20 years. So cutting taxes resulted in the government increasing their tax revenues as a share of GDP.
April 7, 2009 6:15 AM | Reply | Permalink
Again, you're wrong. Revenues did not soar after the tax cuts of the 60s. That is a false claim. Revenues increased pretty much nonstop during the period I mentioned, from 1947-1973. Most of that time, the top rate was 91%, and corporations paid more than they do today. You have no proof that tax revenues increased at a higher rate after tax cuts than they did before.
Second. Your stats on Bush are also incorrect. Go to whitehouse.gov and look up the revenue flow. Revenues to the Treasury actually declined for Bush's first three years. He enacted tax cuts right away, in 2001. Revenue declined in 2001, 2002, and 2003, and did not exceed Clinton levels until 2005. Again, that is an awful record, not seen since WWII.
Prior to this recent downturn, the American economy pretty much always grew. A couple of blips here and there. But the default was growth. With tax cuts, without them, and with no change. There is no pattern of tax cuts creating more growth or revenue than without those tax cuts. And no legitimate, respected economist believes that tax cuts do what you and others claim they do.
If they increased revenues to the Treasury, then why do they always produce record deficits? By definition, if they were as magical as voodoo believers think they are, they would create SURPLUSES, not record deficits. Just do the math.
Again, deal with the facts. Why, if tax cuts are so magical, did our debt climb most when they were employed? Why does the GOP own 90% of our debt? Why did the economy perform so much better when tax rates were higher? Deal with the facts. Look at the history. You're pushing a bogus argument without foundation in facts or evidence.
April 7, 2009 12:37 PM | Reply | Permalink
I checked your figures again here:
http://www.gpoaccess.gov/usbudget/fy09/pdf/hist.pdf
(Look at page 26 for actual numbers, and then 28 for percentage of GDP. Notice other spikes in revenue, like 1959-1960. The top rate was 91%)
Your share of GDP numbers are waaaaay off, btw, and they should have been a red flag for you right off the bat. Our yearly budget was in the 2-3 trillion range across the Bush years. His last budget was 3.1 trillion. The GDP that year was roughly 13 trillion. So the budget was more than 20% of GDP. Where on earth did you get your figures of 1%, 1.5%, 2% and 2.5%? Pulling them out of your . . . hat?
Notice the Kennedy years. The receipts as a percentage of GDP remained roughly the same. They didn't soar. Not by any stretch of the imagination. They actually declined slightly from 1963-1965.
April 7, 2009 1:05 PM | Reply | Permalink
If you graph the data you sent me, you can see that the slope of the revenue line increases as the tax rate falls. See the link below. You'll see that tax revenues soared when tax rates were cut.
http://www.heritage.org/Research/Taxes/images/bg1443cht3.gif
I didn't mean to imply that tax revenues are the ONLY tool in the toolkit that can influence the economy. But it is certainly one effective tool to stimulate a sluggish economy.
Your logic of saying that the economy goes up and down no matter what tax rates are doesn't make sense to me. If you want me to prove that every time the economy grew more than average, that it was associated with tax cuts that would be impossible. Sometimes the Yankees win due to good pitching and sometimes it's due to good hitting. But every time they win it doesn't have to mean that they scored 10 runs. Sometimes it will be because of the pitching.
I don't agree that the economy is a "random walk" that sometimes goes up and sometimes goes down independent of policy decisions. The economy does respond to both spending and tax cuts.
I am not "cherry picking a couple years". If you agree with me about these years of the Kennedy era, we can move on and discuss Bush and Reagan.
PS - why didn't you respond to my latest question on your theory that Paul Ryan is raising taxes on the working poor?
April 7, 2009 8:27 PM | Reply | Permalink
Mike, here's the link again.
http://www.gpoaccess.gov/usbudget/fy09/pdf/hist.pdf
If you go to page 22, or type in 26 in the search bar, you'll see the historical tables. Look at the whole range of data. There are times when tax receipts jumped in huge amounts well before taxes were increased, and well after them. There are times when tax receipts fell after tax cuts, and before them. There is no one to one correspondence to be derived from that data that tells us tax cuts increase revenues. Why? Because it's physically, logically and mathematically impossible.
Not sure why you don't understand that. By definition, tax cuts cut revenue. Some say that tax cuts spur growth. But how does it do that? They would answer by putting more money into the hands of the people. Okay. Now, take this a step further. The government is nearly a quarter of our economy. It's a huge influence on it. Its spending makes nearly one quarter of all economic activity. So, if we ever cut SPENDING, dollar for dollar with tax CUTS, there would be no net multiplier impact. It would be a wash. As in, the money the government sent back out in rebates (or cut from tax receipts) would be canceled out by withdrawing an equal amount of cash from its own spending. The economy itself would not gain any net cash.
Tax cuts create deficits, because government never, ever, ever cuts spending in accordance with tax cuts. That means it has to borrow to make up for the deficits. And there's where the potential for stimulus comes in. Because that's added cash being injected into the economy.
Tax cuts + deficit spending = borrowing NEW cash to inject into the economy.
We never get tax cuts + spending cuts = no deficits and no additional borrowing. If we ever did, that would prove that tax cuts have zero stimulative impact on their own.
That's just math, logic and common sense.
As for Ryan. I answered you several times. His 10% tax rate would be in addition to the working poor's FICA tax. Right now, they pay only FICA, after they get their refunds. Ryan would increase their tax burden.
April 8, 2009 1:03 AM | Reply | Permalink
There's no evidence that Ryan's plan is to have people who fall below the tax threshold today to start paying federal taxes
April 8, 2009 5:58 AM | Reply | Permalink
I am not saying that every jump in tax revenues must be accompanied by a cut in the tax rate. There are lots of other levers that push and pull on the economy. But that doesn't mean that changes in tax rates don't affect the economy. If that logic was true then you'd also argue that a big increase in taxes (say back to the 70% era) wouldn't discourage businesses from expanding or someone to try to start a new small business. Yeah, that's it, if tax rates don't matter then let's just crank them back up to 90% and see what happens...
I am not saying that X causes Y. I am saying that tax cuts can help the economy grow. It's not the only thing that will help the economy grow. But it's a major factor.
You are selectively misinterpreting many things I am saying. As for tax hikes, I did not say that tax hikes would have to cause revenues to fall on absolute terms. Tax hikes can cause revenues to grow more slowly than they otherwise would have if the tax rate had been left alone. The inverse is true for tax cuts.
As for Clinton - you seem to be forgetting that he also cut taxes during his presidency. This also had a very large impact on the economy during the 2nd half of the 1990s
Lowering the tax rate will encourage businesses or individuals who are looking at that marginal decision to invest the money rather than put it under their mattress. Tax cuts can help encourage the overall pie to grow, so even at lower tax rates you take in more dollars of tax revenue than you would have if the tax rate hadn't changed.
Do you run a business? If you did you might appreciate that individuals and corporations respond to changes in costs. Have you ever seen a business lower the price at which they sell a product? Why would a business ever do this? It might hurt their revenue? But of course more people might buy the product so the volume increases offset the price cuts.
April 8, 2009 6:29 AM | Reply | Permalink
When and how did Clinton cut taxes? I don't remember that at all.
Also, and you keep missing this . . . if low tax rates were so essential for businesses, why did they flourish when they were much, much higher?
Now, to me, I think 91% was ridiculously high for individuals. So was 70%. Of course, wealthy people never paid that much. They found ways around that.
The key thing to watch, however, is the supply-side crowd will never be satisfied with the rates. They could be 5% and they'd scream for them to be cut to 3%, trotting out the same old nonsense about how cutting taxes will incentivize people to invest.
History tells us that it doesn't work. Trickle down doesn't work. And Kennedy's plan, BTW, wasn't trickle down. There's a good article in Slate about that.
http://www.slate.com/id/2093947/
It was really targeted toward consumers (demand-side), not business owners and the wealthy.
But the key here is where were the rates when he proposed cutting them? Are today's rate even on the same planet? Even using your own logic, even using the tired old logic of the trickle down crowd, would a cut from 35% have the same impact as a cut from 91%?
I'd be interested in your answer.
April 8, 2009 12:24 PM | Reply | Permalink
No a cut from 35% to 20% may not have the same effect as the cut from 90+ to 70, but it could still give a boost to the economy. It could increase the pie and bring in more revenue than prior years, just like in the Kennedy example.
April 8, 2009 6:17 PM | Reply | Permalink
PS - who is "Mike"?
April 8, 2009 6:53 AM | Reply | Permalink
Addendum: Notice the huge jump in tax receipts 1950, 1951 and 1952, for example. The Heritage foundation cherry picked its spots to make its own point. It completely ignored periods of time when the same jumps in revenue occurred WITHOUT tax cuts. Again, I could grab several years of time, section it off, and show tremendous tax receipt increases far removed from any tax cuts. I could section off any number of years to show that tax cuts had a negative impact on tax receipts.
The problem with your argument is that you're not looking at the entire sweep of our economic history. In order to show that X causes Y, you have to show that Y happens ONLY when X occurs. Otherwise, you're completely ignoring a whole host of potential factors for the increase in revenues, and just clinging to one.
Also, if tax cuts increase revenue to the Treasury, using your logic, then tax HIKES would reduce that revenue. Clinton raised taxes and receipts went up every single year of his presidency, and he balanced the budget three times, and nearly a fourth.
Lastly: Keep in mind tax receipts declined for Bush's first three years and his last. He had declines in four out of eight years, after several deep tax cuts, and he always ran huge deficits. Jobs increased by a miserable 1.45 million under his watch, the worst performance since WWII.
April 8, 2009 1:18 AM | Reply | Permalink
To respond to your question, my percentages were the ratio of tax revenues to GDP. I was not referring to the size of the budget as a percentage of GDP - not sure why you read it that way
See the data in the link below.
http://www.heritage.org/research/features/budgetchartbook/fed-rev-spend-2008-boc-R3-Corporate-Income-Tax-Cuts-Boost.html
I didn't pull it out of my hat, as you suggested.
April 7, 2009 9:42 PM | Reply | Permalink
MCB,
You meant the ratio of change, then. Not just the ratio of tax receipts to GDP. Cuz, that ratio should be close to or the same as the budget to GDP.
The Heritage foundation, as a right wing "think tank", cherry picks. They conveniently leave out the fact that Bush cut taxes in 2001 as well. They conveniently leave out the fact that revenues to the Treasury declined for his first three years (and his last), starting his presidency (in a sense) in 2003 instead.
That's cherry picking at it's finest.
Honest. If you want objective source material for this discussion, you should avoid the Heritage foundation. It is extremely biased and has a very pro-corporate, low-tax agenda.
April 8, 2009 12:14 PM | Reply | Permalink
No, not quite. That data is CORPORATE tax receipts as a percentage of GDP. That ratio is around 1-2% for the last 10-20 years. That's an important distinction because Bush cut the corporate tax rate in 2003.
Stop talking about the effectiveness of the 2001 tax cuts, because 9/11 came along and changed any impact that those tax cuts could have made
As for Clinton, in 1997 the capital gains tax rate was lowered from 28% to 20%. New child tax credits were also established. And the death tax exclusion was raised from $600,000 to $1million.
April 8, 2009 6:25 PM | Reply | Permalink
MCB,
Again, there is no established link between tax cuts and increased revenue to the Treasury. Corporate tax cuts guarantee nothing. Business profits, until recently, skyrocketed for other reasons. Deregulation saved them a ton. Outsourcing American jobs saved them a ton. Keeping wages stagnant since 1973 saved them a ton. Tax cuts don't spur new business. Companies open up regardless, make deals regardless, outsource regardless. They would be fools to wait until tax cuts occurred. Will their competition wait? Nope. Tax cuts are just gravy for them. Nice gravy, to be sure, but gravy all the same.
As I've mentioned several times now, overall economic performance was better when taxes were higher. Since the huge tax cutting ethos took hold, wages have been stagnant, new job creation has been lowered, our debt has skyrocketed, and America is losing its competitive edge in industry after industry.
Why on earth do you think a tax cut would help matters? After all of the tax cutting has failed so OBVIOUSLY. Why on earth would you want corporations to pay an even lower share of the overall tax burden? It's gone from roughly 30% after WWII to roughly 7% today. As I mentioned, the GAO found that 2/3rds of American corporations (and nearly the same amount of foreign companies) paid zero taxes in the last decade. Do you want them to pay less than zero?
Also, if cutting taxes brings in more revenue, why the deficits? Why the explosion of debt each and every time tax cutter gain power? By definition, if you set record deficits after you cut taxes, then those tax cuts aren't increasing revenues to the Treasury. By definition.
Again, revenues to the Treasury declined in four out of eight years under Bush.
Tax cuts CREATE deficits.
April 8, 2009 7:20 PM | Reply | Permalink
No established link yet? We've shown that the Kennedy, Reagan and Bush tax cuts helped spur the economy
Businesses and individuals clearly do respond to tax cuts. Why would you ignore that fact?
Cause and effect isn't so simple when there's lots of moving pieces happening to influence the economy.
Again, your logic is like saying I only win a baseball gaming if I pitch well. But of course it could be due to others factors like I hit well.
What is your day job? Do you run a business?
April 9, 2009 1:40 AM | Reply | Permalink
MCB, you're the person claiming there is a link between tax cuts and economic growth. The onus to prove that is on you, not me. You actually destroy your own premise when you admit to multiple variables in play. You (and the Grover Norquist crowd) have chosen just one variable, however. Tax cuts.
You and supply-siders claim that A (tax cuts) cause B (growth) and C (increased tax receipts). The onus is on you to prove that. You haven't and you can't. I immediately destroy your argument when I can shows that B and C occur far, far, far more often when A is not in the picture.
I have.
Look at the long history of our economy. Notice how often growth spikes and revenue spikes. Notice, in comparison, the rare times when tax cuts coincide with that growth and increase. For every year that growth and/or tax receipts increase after tax cuts, you can find dozens of years when tax cuts weren't in the picture at all, and growth and tax receipts went up.
By definition, you can't claim that A causes B and/or C if B and C occur far, far, far more often without A.
That's just incontrovertible evidence against your claims.
I'll give you another analogy:
Take a hypothetical season by Kobe Bryant. It's late in the season, and he's already had a dozen games wherein he scored more than 50 points. His scoring over the season has ranged from 10 to 80 points. Suddenly, he decides to change his sock color from white to blue. The next few games he scores 50 or more points.
Using your logic, you would claim the new socks caused the high scores. You would make that claim because you completely ignored the fact that he scored 50 or more a dozen times prior to changing his sock color. You want to promote the change in sock color, so you say it's a cause and effect thing. You ignore the history.
That's what you (and supply-siders) do when it comes to tax cuts.
And, again, you ignore the patterns that ARE observable. As in, whenever supply siders have been in power and made their tax cuts for the rich, our deficits have exploded. That IS a one to one correspondence. The one you cling to is extremely weak, because there are literally dozens upon dozens of times when economic growth and spikes in tax receipts occurred without tax cuts. Actually, we have dozens of cases when it's occurred with tax increases.
April 9, 2009 1:48 PM | Reply | Permalink
Silly analogies about umbrellas and socks.
As for your initial point, you're the one who in your original rant said that "tax cuts won't save jobs, create jobs or bring jobs back". I am simply disagreeing with that premise and saying that tax rates do matter. Tax cuts can help the economy grow and create new jobs. I've given examples in prior comments where tax cuts have been followed by periods of decreasing unemployment.
You claim that the onus is on me to prove this. I think there's an equal onus on you to prove your original point that tax cuts don't impact jobs.
I don't understand why having multiple variables shoots down my view. Economic growth and jobs can be influenced by many factors. But to say that because we've had good economic growth in high tax rate periods that lowering taxes won't impact anything is just silly logic.
My iPod example is a perfect analogy and it's very applicable to tax rates as well. Lowering someone's marginal cost to do something, whether it's buying an iPod or starting a new business, will increase the number of people buying iPods or starting new businesses
April 9, 2009 8:07 PM | Reply | Permalink
One thing I forgot to mention - Rep. Ryan's recent budget proposal has a tax cut for the middle class too. Families making $50,000 will see a decent drop in their tax bill.
April 5, 2009 9:52 AM | Reply | Permalink
Ryan's proposal would raise taxes on the working poor. It would cut taxes by 10% on the wealthy at a time when our deficits are already exploding.
You can not be serious about cutting the deficit if you also propose to cut taxes. The two are in direct opposition.
April 6, 2009 1:33 AM | Reply | Permalink
How does it raise taxes on the working poor? Can you put some numbers around it? Someone who makes $50,000 a year in 2008 of taxable income paid approx 13% as an effective rate. Ryan's proposal has that person paying 10%. That's not even including the drop in cap gains if that person owns any stocks or bonds in their savings account.
Why do you say the proposal would raise taxes?
April 6, 2009 5:30 AM | Reply | Permalink
Do you consider someone who makes 50K the working poor? They're far from it.
Ryan's proposal has the lowest tax rate at 10%. The working poor pay just FICA, typically. Minimum wage folks, for instance, tend not to have any Federal taxes. They fall below that threshold and are just taxed through FICA. Under Ryan's proposal, they would get an increase in their taxation by 10%, roughly, depending (obviously) on their earnings.
Beyond that, please explain how cutting the taxes of the rich is going to cut the deficit. Bush doubled the national Debt, BECAUSE of his three major tax cuts. He never presented a balanced budget to Congress. Not even close. He set records for deficits. How on earth do you (and Ryan) figure cutting taxes even more dramatically will improve our deficit situation? It would set new records for highest deficits and be several times higher than Obama's proposals. With nothing to show for it. No investment in this country. Nada. Just more of the same failed trickle down policies of the past.
Thanks, but no thanks.
April 6, 2009 11:59 AM | Reply | Permalink
Sorry I was focused on middle class I guess. But do you admit that Ryan's tax proposal benefits more than just 1% of the country as you suggest above?
As for the working poor, could you please show me where Ryan is proposing an increase in the working poor's FICA tax?
I have read his proposal and did not see such a reference. If I missed it I am curious to see where he is increasing their FICA taxes by 10%
Here's the link in case you haven't read it.
http://www.house.gov/ryan/
April 6, 2009 8:55 PM | Reply | Permalink
I never said he was proposing an increase to FICA. I said the working poor typically pay JUST FICA, after their refunds. So Ryan is slapping an ADDITIONAL 10% on them. They'll have their FICA tax PLUS Ryan's new 10% tax.
And you still won't respond to the fact that his proposal would bankrupt us. Bush doubled the debt with his tax cuts and his wars. Ryan and the GOP want to slash taxes far, far more than Bush. Please tell me how they're going to cut the deficit while slashing taxes far more than Bush ever did.
The math doesn't work.
April 6, 2009 11:53 PM | Reply | Permalink
Why do you say that Ryan is slapping an extra 10% tax on them? I never heard him say that people who don't make enough and/or have enough deductions to not pay federal taxes today would start paying them under his plan?? You're just assuming that someone who under the current tax code doesn't owe federal will now start to? It's not obvious to me what you're assumption is based on.
I don't think this will bankrupt. This alternative plan is lower spending than the Obama/Pelosi plan. It looks to lower growth in spending. Deficits aren't just driven by the size of the revenue line, they're also driven by the size of the expense line.
April 7, 2009 5:53 AM | Reply | Permalink
I think you have a profound misunderstanding of conservative ideology. Or maybe you deliberately misrepresent it, because you imply that Joe the Plumber is the spokesperson for conservatives.
I think there are several issues in the argument you make, but the biggest one is the hypocrisy of hiding behind the "public".
The public consists of individuals, real people.
Yet you want to confiscate from a small group for the presumed benefit of everyone else. You imply that this small group consists entirely of crooks thiefs and liars because populism is the only way you can make your argument.
But the truth is that the vast majority of Americans want to become rich, successful and accomplished. Most Americans believe that the current Porkulus is going to waste money. Most Americans believe that taxes are too high. The public believes that Government is usually inefficient and wasteful.
April 5, 2009 2:18 PM | Reply | Permalink
Actually, Lalo, MOST Americans believe that rich people are taxed at too low a rate. And when the question is put to them in the right way, such as:
Would you like to see taxes go up on the wealthiest Americans so that we can have better schools, a cleaner environment, better healthcare and better infrastructure . . .
Most people will say yes.
If, it's put to them like Fox does, that higher taxes will prevent people from becoming wealthy (which is obviously a lie) . . . then the percentage goes down. But it's still in the 40s.
In reality, raising taxes on the wealthy won't hurt them. They'll still be wealthy. For example, if someone has the chance to make a million dollars and is faced with the Obama tax rate of 39% or the Bush tax rate of 35%, do you think he or she is worried about the difference?
Not if they're sane.
Your after tax earnings (without dealing with deductions and writeoffs):
$610,000
$650,000
Someone making that much money isn't going to sweat 40K. Not to mention, they probably have more than enough deductions and writeoffs to pay considerably less. The IRS found that during Bush's eight years, the wealth for the top 1% doubled, while their tax burden was cut by a third. Most wealthy people pay roughly 17%, after various deductions and tax accountants are factored in.
As for corporations. The GAO found that 2/3rds of American corporations paid zero in taxes in the last decade. And you want to cut their taxes even more? Below zero?
Yeah, that's the way to cut the deficit.
April 6, 2009 1:46 AM | Reply | Permalink
Lalo, a follow up on your "most Americans" falsehoods.
The latest CBS/NYT poll says that 74% are in favor of taxes being raised on people making more than 250K.
(Personally, I think Obama missed a huge chance by not drawing an even greater contrast. I think he should have chosen a higher number to start with for the tax hike. Say, 500K. That would have made it more than 98% of the population making less. Even though 95% do make less than 250K, I think many Americans believe they can some day work their way up to that mark. 500K is less in their range of vision.)
http://www.nytimes.com/2009/04/07/us/politics/07poll.html?hp
The rest of the poll looks pretty good for Obama and the Dems as well, and pretty bad for the GOP and conservative ideology in general. "Most Americans" do not agree with you and your fellow conservatives about most things.
April 7, 2009 2:16 PM | Reply | Permalink
MCB,
I think I'm gonna move on. Doesn't look like you and I will ever change one another's mind on this one.
Suffice it to say, just because you see a spike in tax revenues, doesn't mean it was because taxes were cut. As I mentioned, you can find all kinds of those spikes in times without any tax cuts at all, and much, much higher rates.
It's a bit like this: You open your umbrella and it starts to rain. You say to yourself, the umbrella was the cause of the downpour.
Obviously, it wasn't.
Cause and Effect can't be established unless you show that the effect only occurs when you present your cause. If the effect occurs when all kinds of other factors are in play, you haven't established that link, and you can't claim it as the cause. You certainly shouldn't base policy on that.
Bottom line for me: No legitimate economist believes that tax cuts increase revenue. They actually laugh at the suggestion. There is no proof that it happens. Even Bush's own economists say that tax cuts never, ever pay for themselves.
I know you don't want to believe that. But it's true. It's just math and logic. If tax cuts increase revenue, we'd have surpluses by now and no debt . . .
Hang in there.
April 8, 2009 7:48 PM | Reply | Permalink
The economy is driven by a lot of variables, not just tax cuts. Your thinking is not logical - how can you believe that every time X happened, it must have been accompanied by Y in order for Y to cause X? If only the world was that simple. We can't hold all the other variables that influence our economy constant, change one and see what happens.
Instead of your silly umbrella analogy, go back to my example of selling a product (say Apple iPods). Lets assume that Apple has had good sales growth of 10% each year from 2001-2008 and during that period there have been years when the price of an iPod has gone up and other years where it's gone down.
Apple today announces a price cut to $90. At the end of 2009 sales grow by 10%, just like they had historically. It would be plausible for someone like me to think that the price cut helped Apple grow its sales in 2009.
But according to your X's and Y's statement, it is impossible for the price cut to be a cause of the revenue growth because there were other years of 10% revenue growth when the price of an iPod was flat or rising.
That reasoning does not make any sense. How can you say that the iPod price cut didn't matter?
April 9, 2009 8:03 AM | Reply | Permalink
There is a plausible argument to make that lowering prices increases sales. Tax cuts aren't the same thing, especially when it comes to corporations and wealthy people. Those tax cuts have been made in the past with no strings attached. There is nothing to prevent the wealthy from spending money in other countries, and they often do. That doesn't help our economy at all. There is nothing preventing businesses from taking their tax cuts and continuing on with outsourcing jobs. They do exactly that. There is nothing preventing those corporations from taking those tax cuts and cutting the work force anyway. That is exactly what occurred. You are NOT looking at reality. You and the supply-siders think in mythical terms. You have mistakenly gotten it into your head that if businesses receive tax cuts, they're going to pour money back into THIS economy. There is no evidence to support that myth. It didn't happen. Corporations, the very same corporations who have received so many tax breaks, deregulation, and outright subsidies, have cut their workforce. They have bled jobs and shipped them overseas.
Supply-side OBVIOUSLY did not work. And our debt soared in a direct, one to one correspondence WITH those tax cuts.
It's been an absolute failure, and you're asking for more of the same. Wake up, MCB. Wake up.
April 9, 2009 1:55 PM | Reply | Permalink
Here's what you said above - "In order to show that X causes Y, you have to show that Y happens ONLY when X occurs." (UPPER CASE emphasis was yours) But now you're saying that it doesn't always apply. Hmm...
And you want tax cuts to have strings attached? Yikes So if I keep more of my earnings I have to spend it based on what the government tells me?
If I take a trip to Paris then it doesn't help our economy? Last time I checked the world was global and didn't have walls. I would probably fly there on an American airline. My trip to Paris would put money in French people's pockets. The French hotel might even sell Coca-Cola, not just Perrier. And those French companies have subsidiaries here in the US. And those French people take trips to the US and stay in our hotels.
Same thing for corporations. IBM might take their tax cut and build a new plant in Germany. But BMW is also building plants in the US and employing lots of Americans. (The foreign car companies employ about 100,000 people in the US while the Big Three employ about 250,000. So foreign car companies employ about one-third of Americans that work for auto OEMs.)
Your argument is that the Bush tax cuts didn't help unemployment because in 2008 and 2009 companies started shedding jobs. Well a lot of time has passed between the 2001 and 2003 tax cuts and the situation we are in today. You conveniently ignore that unemployment declined from being in the 6% area in 2003 to 5.4% at the end of 2004, 4.8% at the end of 2005 and 4.4% at the end of 2006. So I would think that it's plausible that the tax cuts helped lower unemployment during this period. Obviously not the only cause but certainly a significant factor. I can't prove it and I'm sure you'll say that unemployment was at 4.4% when taxes where much higher. But I have already pointed out the illogical nature of your reasoning.
Corporations are cutting their workforces today because we are in a severe recession. But these companies grew their workforces in 2004-2006 after the Bush 2003 tax cuts. Tax cuts have helped get us out of prior recessions and they can help get us out of this one.
I could tell you that revenues boomed when Reagan cut taxes but you'll say that revenues also grew in prior years at the higher tax rates. You'll ignore the fact that tax revenues went from roughly $600 billion in 1981 to almost $1 trillion in 1989. Not surprising that all this additional tax revenue was accompanied by a big drop in unemployment, from over 10% in 1983 to 7% in 1986 and under 6% when Reagan left office.
So maybe tax cuts didn't cause the increased deficit as much as increased spending caused the deficit to soar? Tax cuts did not drive the deficit.
So what is your day job? If you ran a business you might understand that people and companies respond to changes in marginal rates. They respond when the price of an iPod changes. And they respond when the tax environment changes.
April 9, 2009 5:59 PM | Reply | Permalink
MCB,
Again, you're ignoring history. Job creation under Bush totaled 1.45 million net. Net job creation under Clinton totaled more than 20 million. Clinton inherited a huge deficit. Bush inherited a huge surplus. If you're going to say that tax policies impact the economy, Clinton's tax policies had OBVIOUSLY far better results. It's not even close.
Clinton balanced the budged three years, and almost a fourth. Bush never balanced the budget and set records for most new debt of any president in our history. Tax receipts under Bush fell for four out of eight years. Remember, he inherited a huge surplus. Tax receipts never declined under Clinton, and he inherited a huge deficit.
You mention the increase in tax receipts under Reagan. Again, you ignore history. Take a look at the link I provided. Pick any decade. You'll see similar or better results. For instance, from 1950 to 1958, tax receipts went from (in millions) $39,443 to $79,636. From 1970 to 1978 they went from $192,807 to $463,302. Even during the Great Depression, looking at the years from 1933 to 1941, they went from $1997 to $8712. In fact, tax receipts went up for FDR every single year, with just one exception: 1939.
Reagan's performance, when compared with other eight year periods, in no big deal. It's nothing to hang your hat on, if you're trying to make a point about tax cuts and revenues.
Finally, I suggest you read this article. It's an excellent take down of your position.
http://www.washingtonpost.com/wp-dyn/content/article/2006/05/14/AR2006051400806.html
From that article:
Another excellent article cited in that link:
http://www.cbpp.org/cms/?fa=view&id=165
April 9, 2009 8:31 PM | Reply | Permalink
It's funny how you're critical of me using Heritage as a "right-wing" source but then you go and show me articles from CBPP, which even the NYTimes describes as "left-leaning"
April 9, 2009 9:07 PM | Reply | Permalink
MCB, here's some more from the article I linked to:
http://www.cbpp.org/cms/?fa=view&id=165
http://www.cbpp.org/images/cms/3-8-06tax-f1.jpg
April 9, 2009 8:34 PM | Reply | Permalink
Stop comparing administrations. Look at a particular tax cut and compare the periods prior to the cut versus after the cut. In many cases after the tax cuts, unemployment rates went down.
As for tax receipts, you are missing the point. You claim that the tax cuts drove deficits. I would agree with you if the tax cuts caused a drop in revenues or significantly less revenue than we'd otherwise have taken in if the tax rate hadn't gone down. But the tax revenues under Reagan were still very strong and can't be blamed for the deficits. Spending should be blamed for the deficits.
Thanks for your postings. I've read plenty of articles that already expressed that point of view. I doubt you've read many articles by the other side.
And what is your day job? I bet you don't run a business...
April 9, 2009 8:52 PM | Reply | Permalink
Stop comparing administrations? You are. Your whole thing is to show that voodoo economics works in the way you claim it works. Your entire premise rests on the claim that tax cuts improve our economy and increase our tax receipts. The way to disprove that beyond a shadow of a doubt is to show you the multitude of times when our economy has done just as well or better without tax cuts. That completely and utterly destroys your attempt to draw a link. You have not shown cause and effect. You haven't even come close. I have, however, demonstrated a direct connection between supply-side economics and record deficits and debt. I also showed you that under Bush, job creation was abysmal, even with those tax cuts you see as so important.
They did NOT help our economy. It's obvious. No sane person could possibly assert that his tax cuts were effective. Just look at the results. Compare those results with Clinton who RAISED taxes.
Comparing administrations is actually a great way to destroy your argument. But it's not the only way. I gave you the other way as well. The articles I posted included Bush's own economic advisers, as well as McCain's. No credible economist believes in the free-lunch, voodoo economics you're pushing. No credible economist even believes that tax cuts pay more than a fraction of their cost. They are a net loss.
Some more from the article posted:
April 9, 2009 9:10 PM | Reply | Permalink
I've shown you three instances where our economy was in bad shape and tax cuts helped get us recover: Kennedy in 1964, Reagan in 1981 and Bush in 2003.
PS - Clinton lowered taxes in 1997. You keep forgetting that.
April 9, 2009 9:29 PM | Reply | Permalink
As for my day job. That's irrelevant. Having a business in no way makes a person an economist. I guarantee you I've read more about the economy than most business persons, and more about politics and policy. If you add "right wing" to the designation of "business person", than I'm a thousand times more knowledgeable than they are.
They and their politics created this mess, along with idiot Democrats who went along with them. You, apparently, want these same failed policies of the past to continue.
April 9, 2009 9:18 PM | Reply | Permalink
I'm not going to bother with that comment. That would be a big waste of my time trying to explain to you what caused this crisis. It wasn't tax cuts, that's for sure.
I bet you're a college professor.
April 9, 2009 9:23 PM | Reply | Permalink
I am not comparing administrations. You were the one that brought up that silly NYTimes link. I am simply showing you instances where taxes were cut and unemployment fell.
And I never suggested that tax cuts pay for themselves. I am trying to make the simple point that changes in the tax rates affect people's behaviors. A lower tax rate will encourage people or companies to invest more. That will expand the base and help get back some of the lost revenue by cutting the rate.
I don't think tax cuts need to fully pay for themselves. They would be providing tax relief to individuals and companies during this very tough recession and they would create the incentives for companies to hire and individuals to work harder
April 9, 2009 9:20 PM | Reply | Permalink
There's absolutely no use in continuing this debate. You're truly impervious to logic, history, facts and evidence. You keep trotting out nonsense, I knock it down, you ignore it, and trot out more nonsense. When I post actual, concrete, historical data, you ignore it or call it "silly".
You claim Reagan's tax cuts caused revenues to soar. I show you several decades when that occurred without tax cuts. You ignore it. FDR. for instance, had a better record of increasing revenues, and he had to deal with the Great Depression.
You claim that cutting taxes encourages businesses to invest and create jobs. I've shown you repeatedly that that didn't happen. Bush had the worst jobs record of any president in the last 70 years. Wages remain stagnant. Tax revenues declined for four out of his eight years. He set records for highest domestic and trade deficits. Many eras in American history, with far higher taxes, had far greater economic growth and far, far better records when it came to deficits and new debt.
You're clinging to a myth. A voodoo, free-lunch myth. And it's just what the rich and powerful want you to believe. That you should work hard on their behalf to cut their taxes, even though that hurts MOST Americans and dramatically increases our debt. The lower their taxes go, the higher yours will eventually have to be.
If you really are a "middle class" Bill, then your support of the wealthy is more than bizarre. It goes against your own best interests and the interests of your family. Period. End of story.
April 10, 2009 12:12 PM | Reply | Permalink