I found this at forbes.com it made some interesting points that now seem even more applicable:
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Commentary
Tax Breaks For The Wealthy Do Boost Economy
Alex Brill and Chad Hill, 10.27.10, 12:50 PM EDT
Congress is biting the hand that feeds long-run economic growth by raising tax rates on the rich.
Once again, tax policy is playing a central role in the election campaigns across the country. While almost all politicians appear to favor the extension of tax cuts for low- and middle-income households, a political fight has erupted over the fate of the top income tax bracket rate and the tax rate on dividends and capital gains. A host of arguments has been heard--some sensible and some less so. One particularly troubling idea that has emerged is summed up by a recent statement by President Obama, who argued, "These [high-income taxpayers] are folks who are less likely to spend the money, which is why economists don't think tax breaks for the wealthy would do much to boost the economy."
This increasingly popular narrative is based on the troubling implication that the only way to positively impact the economy is through changes in consumer spending. While this simplistic theory would strike any Economics 101 student as preposterous, the behavior of Washington in recent years aligns with this sentiment. It is alarming that the President and so many other politicians in Washington are disparaging saving. But Washington's culture of spending ever-increasing amounts of borrowed funds without any serious strategy to tackle our unsustainable fiscal outlook is reflected in political rhetoric that encourages our middle-class families to spend more, more and more. And the government's extensive web of safety-net programs leaves most families feeling little need to build their own rainy day fund or retirement nest egg. Lost is a culture of thrift, both in Washington and across the households of our country.
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Saving is not the practice of the wealthy stashing money under plump mattresses. Rather, when we save, we defer consumption to the future, allowing our savings to be invested in productive ways that lead to long-term economic growth. In short, my savings account is your investment fund. Our collective savings are the funds available for investing in stocks, bonds and other securities that allow businesses access to the capital they need to grow. Firms use these funds to start or expand businesses and to buy machinery and other physical capital.
The logic espoused by this spending-cult mentality denies the role of saving, or, at the very least, relegates it to the backseat. It also belittles the virtue of thrift. Future living standards depend in large part on the willingness of the current generation to save for the future. And the willingness of individuals across the income and demographic spectrums to save depends on the value placed on self-reliance and personal responsibility. Deemphasizing the importance of saving--whether through taxing the returns to saving or through rhetoric that suggests that economic prosperity will result from more consumption--is dangerous. Long-term, sustainable economic growth--the kind that comes from businesses and individuals saving, investing, hiring workers and growing businesses--must not be discarded in favor of increased consumer spending.
Because much of the savings that can drive investment and economic growth over time comes from the relatively small fraction of individuals in the top income tax bracket, permitting a tax increase on high-income earners would be a significant disincentive for savings. Our colleague Alan Viard recently cited Internal Revenue Service data for 2007 revealing that households with incomes above $200,000 received 47% of the taxable interest income, 60% of the dividends and a staggering 84% of the net capital gains reported on tax returns.
When Congress returns to Washington for the scheduled lame-duck session they may finally address the looming tax increases scheduled to take effect on Jan. 1, 2011. This decision will affect not only the near-term outlook for the economy but savings and investment decisions for the long-run as well. Consumer spending has its place, but it is not the answer to every economic question. By disparaging investment and in particular the taxpayers who account for most of that investment, Congress is biting the hand that feeds long-run economic growth.
Alex Brill is a research fellow and Chad Hill is a Jacobs Associate at the American Enterprise Institute. Brill previously served as chief economist and policy director to the House Ways and Means Committee.
except historically speaking it DOES NOT boost the economy, and economies that tax more are doing far better then we are, so yes argue all you want about a parties bulleti points or such specific limited focus arguements, in reality it just isn't true.....
we HAVE BEEN reducing rates on the rich for the last 60 years and in return we have a smaller middle class, do we need to see the rich not taxed at all before we see any of this trickle down? when will supporters of this policy admit defeat? the answer is never, they don't want a middle class, they want the rich and the peasants.
I suspect the problem is spending, we (collectively) have voted for a lifestyle we (collectively) can't afford. It's easy to play with some rich guy's money, maybe a bit too easy?
I suspect the problem is spending, we (collectively) have voted for a lifestyle we (collectively) can't afford. It's easy to play with some rich guy's money, maybe a bit too easy?
the bigger issue is that we need to get over this tea party line of thinking and realize the rich in america are rich because of america and as such they should be willing to pay for the system that allowed them to become rich but wasn't taxed appropriatly at the time to fund the system.
we could easily have a surplus if we eliminated the bush tax cuts and raised taxes on the rich 4%, and economically speaking based of history it will improve the economy as well, money in the hands of the middle class moves around MUCH faster then money at the top.
we aren't talking about "kill the rich" just a fair tax rate that pays for the government that helped make them as rich as they are. we as a country have among the lowest tax rates on the wealthy of the developed countries, please don't act like people are as ignorant here as fox news viewers. we would be FAR better off raising tax rates on the wealthy and paying down the deficit then if we cut entitlement spending to do the same, I want a string economy and for that we need higher taxes and not spending cuts.
the bigger issue is that we need to get over this tea party line of thinking and realize the rich in america are rich because of america and as such they should be willing to pay for the system that allowed them to become rich but wasn't taxed appropriatly at the time to fund the system.
we could easily have a surplus if we eliminated the bush tax cuts and raised taxes on the rich 4%, and economically speaking based of history it will improve the economy as well, money in the hands of the middle class moves around MUCH faster then money at the top.
we aren't talking about "kill the rich" just a fair tax rate that pays for the government that helped make them as rich as they are. we as a country have among the lowest tax rates on the wealthy of the developed countries, please don't act like people are as ignorant here as fox news viewers. we would be FAR better off raising tax rates on the wealthy and paying down the deficit then if we cut entitlement spending to do the same, I want a string economy and for that we need higher taxes and not spending cuts.
No, IMO we would be far better off with a flat tax and everyone paying the exact same percent. Everyone from the rich to the poor pays their fair share. You would have a much more diverse and thus healthier source for tax revenues and everyone carrys their own weight.
No, IMO we would be far better off with a flat tax and everyone paying the exact same percent. Everyone from the rich to the poor pays their fair share. You would have a much more diverse and thus healthier source for tax revenues and everyone carrys their own weight.
well you know what they say about opinions.... name one developed country where that works, would you want to live there?
a flat tax is all about shifting more burden to the people making $70k and less (roughly), plus a tax rate that high will essentially drive up the wages for the people at the bottom as welfare will be far more profitable then working and having it all taxed away. our current system IS essentially a flat tax where the top tax rate is our flat tax rate and it is decreased at lower income levels which is similar to how most "flat tax" schemes will supposedly not burdern the poor "too much" while giving the rich a huge tax break
you don't want a strong economy, you want a class society of haves and have-nots. a string society is based on the size of the middle class, this will finish what republicans want and destroy the middle class.
...the rich in america are rich because of america and as such they should be willing to pay for the system that allowed them to become rich .
So what exactly has America provided to the "rich" that has not been provided to everyone else?? And if the benefits (not earned, but provided by america) are the same, then why should the so called "rich" pay more for it?
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Originally Posted by RedJeepXJ
.... money in the hands of the middle class moves around MUCH faster then money at the top....
Well that just doesn't make much sense.... Are you saying that middle class people spend more than rich people??? Maybe that's the problem right there! Duh! You don't spend yourself into becoming rich!
So what exactly has America provided to the "rich" that has not been provided to everyone else?? And if the benefits (not earned, but provided by america) are the same, then why should the so called "rich" pay more for it?
Well that just doesn't make much sense.... Are you saying that middle class people spend more than rich people??? Maybe that's the problem right there! Duh! You don't spend yourself into becoming rich!
well yeah, the poorer you get the more money you have to spend to survive, a minimum wage worker would easily spend a good portion of their income on food, while a billionaire would spend very little. college/school/daycare/food/housing all cost money, increase taxes on the poor and something has to give... increase it on the rich and that is not so much the case.
and say what you want about spending if everyone was super conservative about money our economy as a whole would come to an absolute screaching halt, our economy is driven by consumer spending, take that away and our economy is gone.
well yeah, the poorer you get the more money you have to spend to survive, a minimum wage worker would easily spend a good portion of their income on food, while a billionaire would spend very little. college/school/daycare/food/housing all cost money, increase taxes on the poor and something has to give... increase it on the rich and that is not so much the case.
and say what you want about spending if everyone was super conservative about money our economy as a whole would come to an absolute screaching halt, our economy is driven by consumer spending, take that away and our economy is gone.
Ah, you are talking about the PERCENTAGE of money they have vs. spent... I see. So again, we are back to they should pay a much higher percentage simply because thay have generated more income for themselves.... Well that sounds fair.
What if when you went to the store to buy something you had to show your pay stub for them to determine the price you were going to pay? Fair? I don't think so.
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Originally Posted by Eddie_T
Is it time to invoke "the beer drinker's parable" again!
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