CRS finds no correlation between top marginal tax rates and economic growth

[.blank cd]

Pretty deep read for some of you....

http://graphics8.nytimes.com/news/business/0915taxesandeconomy.pdf

[Echonova]

Pretty deep read for some of you....

http://graphics8.nytimes.com/news/business/0915taxesandeconomy.pdfI haven't read it yet, but I can tell from the link it's going to be good.


Not gonna have time to read all that until tomorrow night.

[.blank cd]

TL;DR- "Does lowering taxes on rich people really stimulate the economy? Meh, not really"

[bu villain]

I haven't read it yet, but I can tell from the link it's going to be good.

Are you saying the CRS is not a valid source?

[Vteckidd]

Pretty deep read for some of you....

http://graphics8.nytimes.com/news/business/0915taxesandeconomy.pdf
Not going to read all of it, but, read first 4-5 pages.

1. Totally SOME truth to that statement that cutting marginal tax rates at the top doesnt stimulate the economy on its own. Totally truth in that statement. Im also not in a total "we absolutely cannot raise taxes period" mode either. I believe there are numerous better ways to attack the problems we have and ill get to that in a moment.

2. Study completely leaves out and averages periods of time with different economic climates. You cant compare post WW2 boom , reagan 80s with the 2000s, that saw 9/11, Katrina, 2 major wars, and an economic collapse. Ive been consistent on this. Taking snapshots from the 40-50s and comparing it with the 90s or 80s just is half assed. 2 different societies, technologies, global systems, etc.

3. I can show you 100+ research papers that show trickle down does work, better than anything we have ever seen so far. It does need to be improved.

4. The same group did a study that showed that letting the Bush Tax cuts expire on the top earners would amount to 70-100 billion dollars. I ask you, if that is what is keeping us from ecnomically improving, why dont we just print that money and spend it? Youre asking me to believe that a country that runs 1+ TRILLION dollar deficits is hinging on 70-100 billion dollars in extra tax revenue? Its 1/10th of the DEFICIT we are already spending. Wouldnt it make more sense to cut 100 billion out of the budget than to tax a specific group, a group that is proven to hire and create jobs?

5. I disagree with the subject line of the statement in whole. People spending money they earn is economic growth. You cant have a business without workers, and you cant have workers without a business.

6. I believe the responsible thing to do, is to allow the bush tax cuts to expire and end. Its more of a social message to me that tax cuts designed to expire, WILL EXPIRE. it proves accountability. Congress finally does what it says it will do. THEN, they need to go further and address loop holes and deductions and remove them from the top earners, in trade, lower corporate rates, keep capital gains at 15% for now.

7. The middle class doesnt need any tax relief, they are paying a disproportionate amount of their share as it is, and many collect refunds for taxes they never pay. We should figure out what social programs work, and what dont, and limit those. There is no need for 99 weeks of UE checks. We should be giving people jobs, not UE checks

[Echonova]

Are you saying the CRS is not a valid source?
Oh no... You misinterpreted my sarcasm. I spend all day dealing with the EPA and their documents, I've never seen the government produce a document that was exactly an "easy" or "fun" read. That's all I meant.


So far, I'm 2 pages in and I was right.

[bu villain]

Oh no... You misinterpreted my sarcasm. I spend all day dealing with the EPA and their documents, I've never seen the government produce a document that was exactly an "easy" or "fun" read. That's all I meant.


So far, I'm 2 pages in and I was right.


Gotcha. I work closely with the NRC so I feel you. Yeah if reading these sorts of studies was easy and fun, think how informed the average citizen would actually be.

[bu villain]

Vteckidd hit on an important point that many people often lose sight of. Economic data is usually buried in so much noise that it is very difficult to draw any meaningful conclusions from it. You can't just compare two variables (taxation and GDP) for the last 50 years and prove cause and effect relationships. There are countless other factors like the ones Vteck mentioned (wars, natural disasters, technologic advances). These can't be ignored. This is why you can find evidence to support just about any position you happen to prefer.

[BanginJimmy]

I dont believe low taxes is the silver bullet that will get economy rolling again. Regulation and uncertainty is FAR more of a drag. Companies, especially small and medium sized ones, have no clue what Obamacare is going to do to their bottom line. They are going to spend the next 5 years looking for and testing ways to reduce their exposure to it. This will absolutely slow growth. Tax rates of all kids are being used as a political football and have been for 3 years. When a company doesnt know what their tax rate is going to be next year, they arent expanding this year. A friend of mine is a small business owner and needs 4 or 5 people for new contracts he earned. He has hired only 2 in the last year because he expects to see his tax rates go up and the added people will cut into his profit margin. Instead, he is stacking cash and sub contracting some of the more basic work.

I'm with Vtec in that I'm not totally against raising taxes, but that comes with a HUGE condition. Every state and especially DC need to get the spending under control first. Until there is an honest effort with real progress made on that front, no amount of taxation will make the slightest difference.

[Vteckidd]

Id like to see an honest bipartisan study that shows what tax revenues could look like should the Bush Tax Cuts expire. Everything ive seen amounts to 100 billion TOPS. Remember , the years that saw the MOST revenue flowing in were under Bush/Clinton when tax revenue peaked

http://www.fundmasteryblog.com/wp-content/uploads/2010/06/heritage-spending-revenue-gap-6-2010.jpg

You can see where 9/11 happened , the .com bubble, clinton cutting capital gains, bush tax cute, and 08 economic collapse play in. The spending is what is driving the deficits, not the tax revenue

[BanginJimmy]

Id like to see an honest bipartisan study that shows what tax revenues could look like should the Bush Tax Cuts expire. Everything ive seen amounts to 100 billion TOPS. Remember , the years that saw the MOST revenue flowing in were under Bush/Clinton when tax revenue peaked.

You know this wont happen though. Whoever falls on the 'losing' side will simply call it partisan and rip apart ever piece of methodology or assumption that was used.

No amount of analysis is needed to know that spending is the problem, not revenue.

Even at an annual 4% rate of revenue growth from Bush's high (2009) the estimated 2012 deficit would be 1.165T. How much would it take to cover the entire deficit? Only about 13.5% annual revenue growth to the feds since 2009.