Published: Thursday, May 24 2012 12:00 a.m. MDT
I find the double speak contained in this article mind bending. As a proof
point to the fact that money will flee the country if taxes are raised, it sites
the example of Mit Romney and his holdings in the Cayman Islands. Here is the
problem with the authors argument... we already have historically low tax rates,
and yet people like Mit are still shoving moving off shore to hide from taxes.
Exactly how low does the author want taxes to be before people like Mit
don't hid funds in off shore accounts. We are already at historical
lows.... what is the answer - no taxes for the rich?Second point.
As a percent of GDP, the US already has one of the highest debt level
percentage to income than any westernized nation (about 103 percent of gdp)
This is higher than Spain (84 percent) and about the same as Ireland. Only
Greece is higher. The majority of Europe, even with their heavy government
services spending, averages between 40 percent (Norway) and 85 percent (England,
Germany, France...). This issue isn't too high taxes on the
rich, it is the system is just fundamentally broken.
Why do the conservitives think we should be giving entitlements to the
wealthiest of Americans. Someone earning over $250000 a year does not need a tax
break on their capital gains income. Mitt said he will give everyone a tax break
on interest earned and capital gains. I don't know about you all but my
interest earned last year was about $100 so thanks for nothing. Most of what
I'm able to save goes into a retirement account and I won't see any
income for years to come. Everyone should pay their fair share of taxes. The tax
system should be made simpler. We need a balanced budget but not at the expense
of education, infrastructure, the environment, and the saftey net programs our
society relies on.
When he was running in 2008 Obama said that he would raise taxes even if it
meant lower revenues. For some people "fairness" is more important than
revenue. He will cut off our collective noses to spite our face.@Bluedevil: You are right about one thing, taxes aren't the biggest
problem. The part of the system that is most broken is the spending side of the
equation. Fix entitlement spending and the deficit looks far less problematic.
It's wrong to rob anyone, rich or poor, but it's despicable to rob a
poor working man, and take away his ability to provide food and shelter for his
family. There is really no need to rob anyone, however, and we would all be
better off if politicians would quit robbing us all to "provide" us
with, or to perpetuate, myriad micro-managing bureaucracies and a state of
An excellent article about the difference between tax rates vs tax revenues.
More revenue is produced by lowering rates. When a store wants to make more
money, it doesn't raise its prices (tax rates), it lowers prices, and makes
more money through volume.Incentives matter. We should want to
promote hard work, and creativity and innovation. Productivity should be
rewarded. I've seen this work well. When you remove the incentive for
bonuses people won't work as hard as they could.Corporations
don't pay taxes, only people pay taxes. Any corporation has to recover all
of its costs from its customers. The cost of taxes is passed through to its
Invisible Hand - problem with your hypothises that this is just a spending
problem is that when compared to our peer countries (yes, I know, USA has no
peers), we provide lower services already, and yet our debt level is higher.
The problem is much deeper than that. They have socialized medicine, deeply
funded transport, etc... and yet have lower debt levels.Wish I had
the silver bullet answer.. but I know it isn't as simple as just cut
programs. We know that corrilary doesn't work.
The CBO disagrees. Revenue charts for the 2000s show that revenue dropped after
the Bush tax cuts were passed.
IF tax cuts increased revenue then it'd be a no-brainer to pass them.
We'd get lower taxes AND more money to spend. That'd be perfect,
everyone would support it. Heck while we're at it why not lower taxes to
0%, then that'll generate the most revenue so we could buy everyone in
america a pony. Oh wait... that's not how it works. Haven't
conservatives ever learned that saying about things that sound too good to be
Liberals love to point out a time in the past when the highest tax rates were
higher they are now (e.g. 90% in 1920, 75% in 1961, etc.) as proof that current
tax rates are lowest they have been for a long time. (BTW, I just made up those
numbers so don't google them).The truth is, almost no one ever
paid those high rates. Once tax rates go above a certain percentage (15%, 20%,
25% ???) rich people have an ever increasing incentive to try and avoid them.
They will hire accountants and tax attorneys to find ways to move their money
into investments or countries where tax rates are lower.The whole
article is pointing out the obvious behaviour that is happening every day all
around the world - raise your tax rates and money will move away from you (just
like stores and prices).If we want to stop people like Romney from
opening foreign bank accounts, the Facebook guy from renouncing his US
citizenship and moving to Singapore, or companies like GE from shifting profits
to overseas subsidiaries, then make tax rates reasonable and competitive here.
Demonizing them or trying to shame them won't work.
This article doesn't prove that lowering tax rates, in our day, will
actually increase revenue. Really, your source is from the 20s? No economists
have written about it since? I find that hard to believe. The biggest problem
is that we have a low rate on capital gains. The flaw with trickle-down
economics is that the wealthy don't spend the money they have, but horde
it. The trick is to encourage spending and active earning, rather than simply
storing money and collecting interest. Raise the tax rate on capital gains and
income, and build in tax shelters that help stimulate the economy: investment
in company expansions, upgraded equipment for manufacturing, etc. The offshore
bank account thing can be countered as well with a duty placed on international
money transfers. They can store some money in a tax haven, but if they wish to
use it, they pay the government for the transaction. We've used tarriffs
to support domestic manufacturing and farming, there's no reason we
can't do the same for domestic banking.
The idea that tax cuts decrease deficits is an urban conservative myth. Just
check out the numbers over the last 25 years. Clinton raised taxes to cut the
deficit, and "W" cut taxes and it RAISED the deficit. Ever since
Reagan, conservatives have developed an "entitlement mentality" and
don't feel that they have to pay their fair share to support this
Not a good idea to invoke Mellon, father of the Great Depression. What a bizarre
little hall of heroes Mr. Sowell has.
Its not just Liberals/Democrats...it was Adam Smith himself who said the system
will only work if you have a progressive tax system. He was the father of all
this capitalist mess. If he understood it, how come the "conservative"
side doesn't get it.No one - not a single person - is arguing
that cost constraint also need to be part of the solution. As we see in Spain,
constraint is what has plunged that economy into a tail spin- even though their
actual debt level ratios are lower then our own. It has to be a balanced
approach. And that balance means weaning the government off of long term debt,
balancing revenue with spending, while still providing liquidity and stimulas to
the markets. You can't just save your way into growth.If the
goal is to shrink the economy, then fine, give everyone a tax break. Decreased
taxes does not equate to increased consumption... by any measure.It
has to be balanced - which means compromise. But we know compromise is now
associated with socialism by some and is completely off the table.
@BlueDevil: My biggest priority is a balanced budget. I think we should have
taxes tied to programs so people can see where their money is going. You want a
war in Iraq war? Pay for it with an Iraq War Tax. You want to extend
unemployment insurance indefinitely? Levy a bigger tax to pay for it. Medicare
is insolvent? Raise the tax until it's paid for. When people see their
taxes going up they can either say "Good, I love having more government in
my life" or they will call their representative and insist on cutting
programs because deficit spending is NOT a sustainable solution.
This article, and many of the comments highlights exactly why this country needs
to stop taxing income, and adopt a federal sales tax. Then, everybody pays, and
there are no loop holes. When people think they can get around the tax by buying
goods from outside the US, then you charge an incoming shipping tax. Not only
will it encourage more domestic spending, it will put everyone on a level tax
level. Sure, there are some details to work out, but I think that's the
only way to ensure that everyone pays the same. If they do continue
to tax income, then it should be set rate for everyone, and do away with all the
little exceptions, deductions, etc... Then we could stop dumping SO much funding
into the IRS, one of the most bloated government entities there is.
It seems to me that everybody ought to pay their fair share in such a way that
total revenues are enough to cover total expenses. If you agree with that, do
you think folks like Warren Buffett and Mitt Romney are paying his fair
share?If this article is true and folks like Mitt Romney would
rather invest their money offshore than be forced to pay their fair share of
taxes here, what does it say about their patriotism? Does Romney love money
more than America?
To "UtahBlueDevil" the father of this capitalism mess that we are in is
not Adam Smith, it is his ideas that keeping things going. There is not a
single person who you could say caused this mess. The cause of the mess is
Progressivism and the unending efforts to use tax money to give to people to buy
future votes.To those of you who think that taxing the rich is
bright idea, look at the CBO estimate. They say the "Buffet tax" will
raise $47 billion over 10 years. With deficits of $1.3 Trillion, raising taxes
on the rich has virtually no effect.To those who don't think
tax cuts work, history proves you wrong.After the Bush tax cuts, tax
revenues INCREASED from $1.78 to $2.56 Trillion over 4 years. Under Reagan tax
revenues went from $326 to $549 billion. Under JFK tax revenues went from $117
billion to $153 billion. Under Harding the tax rates on the wealthy were
dropped, which lead to INCREASED tax revenues from the rich.
Liberal Math Logic:Given:2001 - Tax Revenues = $1.9
Trillion, Spending = $1.8 Trillion (Surplus = $128 Billion)ten years
later2011 - Tax Revenues = $2.3 Trillion, Spending = $3.6 Trillion
(Deficit = $1.3 Trillion)Therefore: Bush tax cuts caused the
deficit!!!Never mind that tax revenues increased by $400 Billion
during those ten years (revenues were even higher in 2005, 2006, and 2007)Never mind that spending more than doubled during that time. Tax cuts are the
Invisible Hand - absolutely... I think a huge problem is it has gotten so
complex and conveluted, no one knows where the moneys flows and why.
Transparancy needs to be part of any solution - which is something we don't
I guess the rich should just pay a zero in taxes. Then they can reinvest their
savings into giving me a job even though there is weak demand. If
this was the situation then us regular folk could no only foot the entire tax
bill for the nation but we could still the honor of dying in their wars so they
can become even more wealthy.
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