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Clinging to a belief without evidence. Reducing taxes increases growth

  1. Josak profile image61
    Josakposted 5 years ago

    http://s3.hubimg.com/u/7174274_f248.jpg
    A report from the Congressional Research Service finds there is no correlation in American history between economic growth and the lowering of taxes but that lower taxes on the rich do increase the wealth gap (how surprising). Given the complete lack of evidence for this belief why is it still considered a truism?
    http://www.nationaljournal.com/domestic … s-20120917
    http://graphics8.nytimes.com/news/busin … conomy.pdf

    1. prettydarkhorse profile image63
      prettydarkhorseposted 5 years ago in reply to this

      . that is easily understandable, easy Math

      20% percent of the US population own 80% of the wealth here.

      Now if you increase the tax on the 20% it means the 80% can increase their financial worth. smile

    2. profile image0
      JaxsonRaineposted 5 years ago in reply to this

      1 - Lowering personal taxes without lowering corporate taxes is the real problem... you can't encourage growth by eliminating one of the smaller obstacles, and leaving the larger ones.

      2 - Charts like this don't really mean anything. They 100% do not account for, anything really. For example, this tries to pin the dot-com bubble bust on Bush's tax cuts, which really doesn't work.

      Switch to a territorial tax system, and eliminate corporate taxes, then watch what happens.

      1. Josak profile image61
        Josakposted 5 years ago in reply to this

        I recommend you read the report, which is not at all summed up in the graph, it covers most of what you are addressing with the relevant data.

        1. profile image0
          JaxsonRaineposted 5 years ago in reply to this

          I don't see anything in the index or through search that addresses any of that. Care to point me to a section?

          1. rhamson profile image77
            rhamsonposted 5 years ago in reply to this
            1. profile image0
              SassySue1963posted 5 years ago in reply to this

              Okay I only got so far in your source because of this statement:

              "Data from a CBO report released on August 13 indicate that the tax cuts will exacerbate income inequality by boosting the after-tax income of high-income households far more than that of middle- and low-income households."
              You'll notice the "far more". Well, no kidding. You do realize that if I make $10 and you make $100 and I cut taxes by 20% across the board, you'll save more than me correct? However, take note that I am still saving money as well. You also realize that this report is dated as well? And not even really speaking of either horse in this race?

              1. rhamson profile image77
                rhamsonposted 5 years ago in reply to this

                I can only lead you to the trough. If you think it not pertinent I can't help you. The piece speaks for itself.

            2. profile image0
              JaxsonRaineposted 5 years ago in reply to this

              A quick search, I don't see anything that actually addresses my concerns. Want to point me to a page?

              1. rhamson profile image77
                rhamsonposted 5 years ago in reply to this

                Same as before. I can only lead you to the piece if you haven't the interest to read the whole thing I cannot help you.

                1. profile image0
                  JaxsonRaineposted 5 years ago in reply to this

                  Right...

                  So, I skim over a report, the summary, and search for relevant keywords. You insist that it addresses my concerns, but can't be bothered to substantiate your claim in any form.

                  I don't read everything on the internet... that would be a huge waste of time. A study like this would be useless if it doesn't adjust for other factors, so I'm not going to bother reading it unless it does.

                  Two people have claimed that it does, but can't be bothered to quote it, or show where. It's no skin off my back, people make a lot of unsubstantiated claims online.

                  1. rhamson profile image77
                    rhamsonposted 5 years ago in reply to this

                    As I said your lack of interest is what makes your statements unfactual and therefore opinion. But you are welcome to your opinion. If your attitude is one of not letting the facts get in the way of a good story I applaud your effort even though it lacks evidence to support your argument. Sorry to bore you.

      2. Quilligrapher profile image91
        Quilligrapherposted 5 years ago in reply to this

        Hi Jaxson.

        Your statement suggests that you believe taxes can some how encourage growth. All of the historical data, however, says this is a false notion. The analysis introduced by Josak makes two things perfectly clear: (a) taxes serve only as an instrument for generating revenue for the government or as a mechanism for delivering incentives for some policies; and, (b) they have little or no affect on the economy and the GDP. Tax increases enacted by Presidents Reagan, Bush I, and Clinton were all followed by increased economy activity. In contrast, Jaxson, President G.W. Bush cut taxes twice and the economy did not grow; it declined. Contrary to the claims of a few, the GDP responds mostly to the influences of the global marketplace. We are indeed living in a global economy. In the years following WWII, the manufacturing base in the US was a dynamic force accounting for 40% of our economy. Today, after all the tax cuts in recent decades and the effects of NAFTA, we have seen the economy slow down considerably. We have watched the shrinking gains being channeled to a much smaller and more privileged segment of our society. {1}

        Just compare today’s reality to what existed in the last century. Between 1921 and 1971, average incomes in the US grew by $30,533 with 70% of this prosperity going to the bottom 90% of the population and 30% into the pockets of the richest 10%.  Since 1971, however, the winds of fortune have shifted dramatically. From then until 2008, average incomes have grown by $12,026 and all of this new wealth accrued to the richest 10% while incomes for the bottom 90% declined. “The remarkable gains of the (broadly-defined) "middle class" in the middle of this [the 20th] century stopped cold in the last quarter of the 1900s.” {2}

        I find no causal relationship, Jaxson, between reduction of taxes and GDP growth. Do you?
        http://s2.hubimg.com/u/6919429.jpg
        {1} http://www.nationaljournal.com/domestic … s-20120917
        {2} http://www.theatlantic.com/business/arc … rs/262221/

  2. Mighty Mom profile image90
    Mighty Momposted 5 years ago

    It's like Chinese water torture, that trickle down, trickle down, trickle down mantra.

    Here's another interesting misconception about Rs vs Ds and the economy.
    And (can't resist) sneaking in another baffling comment by Romney:

    "My own view is if we win on Nov. 6, there will be a great deal of optimism about the future of this country," Romney told supporters. "We’ll see capital come back," he continued. "Without actually doing anything, we’ll actually get a boost to the economy."

    An analysis in 2008 found that the average annualized return for the Standard & Poor's 500 Index (and its pre-1957 predecessor, the S&P 90)
    since 1929 was 0.4% under Republican presidents and 8.9% under Democratic presidents.

    President Obama hasn't hurt that trend.
    The S&P 500 has risen about 70% since he took office.

    Right. But the economy is horrible.

  3. JSChams profile image60
    JSChamsposted 5 years ago

    http://s1.hubimg.com/u/7177520_f248.jpg

    1. Mighty Mom profile image90
      Mighty Momposted 5 years ago in reply to this

      Kudos for posting a graphic.
      Not sure if it's just my browser, but I can't read it.
      I'm hardly alone in still blaming Bush for the economy that crashed when he he was still president:

      (CBS News) When President Obama delivers a major campaign speech on the economy today in Ohio, some in his party are concerned it will be too backward looking, with allusions to the presidency of George W. Bush. But according to a new Gallup poll, that message may resonate with voters.

      More than three years after Mr. Obama took office, 68 percent of Americans still say former President Bush deserves a great deal or a moderate amount of blame for the struggling economy, according to Gallup. Just 52 percent say the same about Mr. Obama.

      And even though economic indicators have kept alive concerns about the pace of the recovery, the poll suggests that independents are more likely to blame Mr. Bush than Mr. Obama -- and even more so now than they were last September.
      In September, Gallup found that 60 percent of independents blamed Mr. Obama for the economy. Now, just 51 percent said Mr. Obama deserves blame, while 67 percent said Mr. Bush does.

    2. profile image0
      JaxsonRaineposted 5 years ago in reply to this

      Really, you've hit it on the head there.

      People point to someone on the other side to blame.

      D's blame Bush, with a D congress, for the crash. Then they blame the R senate, under Obama, for the slow recovery.

      R's blame the D congress under Bush, then they blame Obama, with an ornery R senate/congress, for the slow recovery.

      The truth is much more complicated, you have to take into consideration all branches to really understand what is going on. The problem is, total control is rare, and short-lived, so trying to find any useful information is almost impossible.

      It's never going to change either, I'm afraid.. There will always be someone to blame.



      More absurdities. Clinton gets credit for balancing the budget(which he didn't actually balance), with an R congress(the guys in charge of the budget). Clinton also had the dot-com bubble, with skyrocketing revenues, to help.

      Then Bush gets the dot-com bubble pop, a major terrorist attack, and the hotly-contested wars to deal with.

      All we ever hear is that Clinton was great and Bush sucked.

      1. Josak profile image61
        Josakposted 5 years ago in reply to this

        The two wars he created... and of course Bush had the housing Bubble to help his economic growth... which was still terrible. But I agree we should have a no excuses thread, and compare the results of recent policy, conservatives don't complain about the last two years of Democrat control of congress in the Bush presidency, liberals don't blame the conservative congress we have now etc etc.

        1. profile image0
          JaxsonRaineposted 5 years ago in reply to this

          Well, it's very important to look at every congress as well, instead of just the president.

          But, inevitably the story will always be the same. R's introduce a bill meant to do X, which also does Y. D's like X, but hate Y, so they introduce their own bill to do X and Z. R's hate Z. They all vote against each other, and spend all their time saying 'Congressman R voted against jobs' 'Congressman D voted against jobs'.

          Probably the single most important thing we could do would be to demand that every bill be just a bill with no piggybacking, no earmarks, no hidden agenda.

        2. kathleenkat profile image82
          kathleenkatposted 5 years ago in reply to this

          Okay, you say that. I don't doubt that the wars were Bush's idea. But, the POTUS can't just go to war without anyone else agreeing, too. There are three branches of the government that need to agree on decisions like that. Perhaps its hard to think rationally after you've watched your fellow citizens get slaughtered? I would have gone to war with the scumbags if I were in charge! All I am saying, is at the time, striking back was the general agreement. Now that we have hindsight, perhaps it wasn't the most prudent course of action. But we will never really know, will we?

          1. JSChams profile image60
            JSChamsposted 5 years ago in reply to this

            Not only that , they agreed to Iraq based on the same intel they had gotten from The Clinton's in the previous administration.

            1. Josak profile image61
              Josakposted 5 years ago in reply to this

              Except Clinton didn't want to go to war with Iraq, he was at worst going to bomb weapons installations, that's because Clinton was a reasonable president.

          2. Josak profile image61
            Josakposted 5 years ago in reply to this

            Well actually Bush did just go to war and yes he can do that but then he needed congressional approval to continue the war and for further resources which he got, many Democrats were bullied into voting for that, there were cries that it was unpatriotic not to. I can understand Afghanistan though invasion was certainly not the answer, targeted strikes makes more sense, but Iraq was a monstrous mistake.

  4. JSChams profile image60
    JSChamsposted 5 years ago

    http://s3.hubimg.com/u/7179830_f248.jpg

    1. Josak profile image61
      Josakposted 5 years ago in reply to this

      You may have heard of this recession business, it's been quite the hot topic, the biggest recession since the depression they say, they say it's responsible for the hardship we see, and I am just looking here... ah it started under Bush. Nice try though.

      1. profile image0
        SassySue1963posted 5 years ago in reply to this

        You may have heard of this Congress thing, the body that actually passes legislation, the housing bubble that burst under Bush. The Dems held Congress from 2006-2010 and the housing bubble, that got its start under Clinton. You also might have heard of the Carter years. That debacle that the Democrats created, and Reagan, who turned it around in only one term. No, it wasn't all peaches and cream but all economic indicators were moving upward and people felt the recovery, which is why he won his re-election bid by a landslide. Nice try though. smile

        1. Josak profile image61
          Josakposted 5 years ago in reply to this

          Sorry but I don't play the excuses game with the blame congress business, a president owns his period and the failures are his or not his Obama owns this period regardless of who is in congress and vice versa.

          As for Carter is laughably irrelevant and historic, you may have heard of the fastest period of economic growth on the modern American age... under Clinton and you may have heard that poverty has fallen radically under every Democrat president except for Carter in the modern age and risen or stayed essentially the same in every Republican term see how irrelevant this is?

          The topic was the current recession, keep up. smile

          1. profile image0
            SassySue1963posted 5 years ago in reply to this

            Actually, the topic is concerning taxes and effect on growth. Carter is only irrelevant to the Democrats because 1. it was a mess they created all on their own, and 2. they want to claim no one could have made a difference in one term.
            If Obama owns it, then let him own it. You just shifted the blame to Bush. Which is it then? Obama owns it or it's all Bush's fault?

            1. Josak profile image61
              Josakposted 5 years ago in reply to this

              Yes taxes vs growth and the professional independent findings are... reducing taxes does not in any way increase growth.

              Obama absolutely owns what occurs in his presidency (with how long policies take to kick in taken into account) if Obama had inherited a stable unemployment rate and suddenly raised it then he would be responsible but rather he inherited a skyrocketing unemployment rate and stopped it.

              If someone inherits a fast growing economy and then crashes it and if that same person gets a great economy and slows it right down even before the crash then he owns that.

        2. JSChams profile image60
          JSChamsposted 5 years ago in reply to this

          The reason I posted that graph is you always get these things and then you look out the window where people are actually living.........

      2. JSChams profile image60
        JSChamsposted 5 years ago in reply to this

        Nope. Guy on the right said he would solve it by now. Nice try though.

  5. AJReissig profile image80
    AJReissigposted 5 years ago

    I don't know where there data came from, but if your plot tax revenue vs gdp, lower tax rates result in greater tax revenue to the federal government. It is real simple to plot yourself (so you don't have to rely on someone else playing with the data). All of the data you need can be obtained from the IRS website.
    I'm sure you will point out that those who published the reports were COMPLETELY Objective...

    1. Josak profile image61
      Josakposted 5 years ago in reply to this

      The CRS is independent yes but I am more than willing to look at info you actually present. I posted my link from an independent source with the full report and the charts to prove it from professional economists. Something similar from you would be great.

      1. AJReissig profile image80
        AJReissigposted 5 years ago in reply to this

        Do as I suggested.  Go to IRS.government and download tax revenue data and and gdp data, then plot it yourself...then you know that what you see had not been manipulated to fit an idea. Just because an economist wrong an article or drew a graph doesn't keen there is no bias...they have an axe to grind just like anyone else.

        1. Josak profile image61
          Josakposted 5 years ago in reply to this

          Just from what you're saying there is already a problem revenue and GDP has to be calculated by capita and to the exclusion of inflation, if it's not it introduces endless variables that skew the results. That's just for starters.

          1. AJReissig profile image80
            AJReissigposted 5 years ago in reply to this

            So what your really saying is that you only want to see a graph of data that's been manipulated.  In that case, I can't help you, although I am sure.there are.plenty of liberal think tanks that can provide you with cooked numbers to make your point.

            1. Josak profile image61
              Josakposted 5 years ago in reply to this

              No what I am saying is if you don't account for inflation and capita then the results are invalid, that's why professional economists spend time working over the figures and listing in accurate form what they are doing so you can follow their process.

              For example say there is a tax decrease and then inflation goes up 3% that year. Without the tax reduction having any result it looks like revenue just went up 3% but it didn't the same amount of wealth was accumulated see?

              This is important stuff if you want accurate results, if you ignore it the results mean nothing at all.

              Simple stuff.

              That's why I list independent sources which have been independently verified and with the report available so that anyone can read what they did in full.

              Don't be insulting just because you were wrong.

              1. Uninvited Writer profile image81
                Uninvited Writerposted 5 years ago in reply to this

                And Romney said he will lower taxes, raise the military budget, yet balance the budget ...

                1. Josak profile image61
                  Josakposted 5 years ago in reply to this

                  Yeah no wonder he hasn't explained how yet.

 
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