Comments about ‘Letter: Compromise not necessarily the answer on tax cuts issue’

If the Bush tax cuts become permanent, when and how are we going to balance the budget? We conservatives need to answer that question. We can't erase our debt solely by gutting Social Security, Medicare, and Medicaid. Even if the numbers worked mathematically, it could never be accomplished politically. So how do we fix our debt? Maybe we could reduce our bloated military spending? Where's the mainstream Republican arguing for that? So that's off the table. And now that we consider an expiration of a temporary tax cut a tax hike (which Republicans swear to never allow) we're at an impasse as far as fiscal sanity is concerned. We can blame President Obama all we want, but until we're willing to give somewhere, we have to admit that as a group, we conservatives also contribute to the ongoing debt crisis. To be sure, there are plans for debt reduction that don't require tax hikes, but Ron Paul was the only presidential candidate who proposed such a plan, and he was derided as "too extreme". So what is it? Does debt matter or does it not?

Well Scott,

Five plus four may not equal seven and it never will.

But, in our quest to curb deficits, a 10 to 1 spending cuts to tax increases would be a GREAT deal. But the right of the GOP would is against it and will go after any Republican who voted for it. Grover has made sure of that.

I sure hope we dont get a Grover on the left with a pledge to NEVER cut entitlement spending.

Tax cuts? Our Tax rates are the lowest in 60+ years and have been at these levels for 10 years.

Yes, the wealthy pay most of the taxes. But, to be fair, they are making most of the money. In the economic downturn, most people saw their wealth shrink.

Not so for the top. They managed to increase theirs.

Compromise may not ALWAYS be the answer, but it is in most cases.

The lack of compromise either preserves the status quo of absurdly low tax rates for the wealthy, lower revenue, and higher deficits, or it gives us a tax increase for the middle and lower class. Kind of dumb, wouldn't you think? Politics is about compromise. Don't want compromise? Move to a totalitarian state.

The simplistic answer to increase revenues is to increase taxes. Does that always work? Look at history and see when tax revenues increased the most. Was it when tax rates were highest or was it when tax rates were lowest? Surprise! It was when tax rates were lowest.

How can that be? Lower tax rates should mean less revenue. In reality, higher revenue comes because MORE PEOPLE ARE WORKING. When tax rates go down, businessmen risk their money. New businesses require more workers. More workers paying income tax means more revenue.

Lower tax rates will not necessarily translate into more businesses being created. There also has to be STABILITY. A businessman will not risk his money when the White House continually threatens to raise his taxes or saddle him with healthcare penalties, or stack all kinds of unknown regulations on his business.

Obama has created a threatening environment for business. He continuously tells us that he is going to raise taxes, that we will be punished for working hard, that we will be punished for hiring people and not providing them HIS IDEA of healthcare.

The President is the obstacle, not the tax rate.

A failure to compromise in this case will result in an automatic tax raise for everyone, which the Republicans agreed to, yet now want to back away from. The author is, in effect, asking the Democrats to capitulate to the Republican position. Why should they? Once again, Democrats would lose all leverage if they did so.

"Look at history and see when tax revenues increased the most."

Yes Mike, lower tax rates have shown to increase revenue and growth.

But, one must cherry pick the extremes to use history to justify that claim.

When the top tax rate is reduced from 90%, good things happen.

Similarly, when the top tax rates are reduced from 70%, good things happen.

Can you show me where reducing the top tax rate from 39% to 36% spurred the economy?

There is room for compromise. And I support that. Every rich person is not a job creator.
How about lowering the tax rate for those who actually create jobs and higher people?

The richest of our country make money off of money. Some create jobs, some dont.

Buying stock in Apple does not create jobs.

Opening a grocery store does.

See the difference? How about we drop the all or nothing approach and look for real solutions.

Bush should have revoked the tax cuts the day he declared an unfunded war and unfunded mediare prescription benefits.

Conservatives attack liberals for wanting freebies, but they don't want to offer even one cent of taxes or their own benefits to help balance the budget.

@Mike Richards
"Look at history and see when tax revenues increased the most. Was it when tax rates were highest or was it when tax rates were lowest? Surprise! It was when tax rates were lowest."

The non-partisan CBO has scored the tax cuts as causing 4 trillion in deficit due to lost revenue over the next 10 years. The Bush tax cuts have been in place for the worst job creation decade since the stat was tracked, and when wealth for the bottom 60% was stagnant and didn't increase. That doesn't lead to more tax revenue. The only reason that by 2007 revenue was higher than in 2000 was because of population growth and inflation.

Is "leverage" the goal? I certainly hope not. Our Congress has been charged to handle a few enumerated duties. Everything beyond those basic duties is to be passed to the States or to the People. That concept is simple. Read the Constitution and see for yourself which duties we have assigned to Congress.

Revenue is not the problem. Spending is the problem. Congress has greatly exceeded its authority by venturing into areas that belong to the States or to the People. The federal government employs 2,500,000 people to handle those extra duties.

We've lost all perspective.

Government can't balance its books until people become workers. Government can't pay people to be idle. Government workers can't be paid to keep people on the dole. Government workers can't justify their own jobs by showing that people can't live without their help.

Reduce spending. Reduce government handouts. People must learn that working is necessary.

Government has made us a nation of babies who look to Washington for our milk.

Mike Richards,

Reference lower tax rates creating more tax revenues. The math is not there. No serious economist (including David Stockman, Reagan' Budget Director) believes that is the case.

Why? Let us say you have a $1,000,000 dollar economy and a 20% tax rate. Your current tax receipts are $200,000. If you cut the tax rate to 15%, the economy has to grow to 33.3% to $1,333,333 to break even. A phenomenal growth rate.

Also, if this were true then the ideal tax rate would be 1%. At that rate, we should be raking it in because nearly all the incentive is in the marketplace, right? But we know that would not work.

The truth is there is a "sweet spot" with taxation (as with most things). A range of rates within which there is still plenty of incentive but also some reasonable collection. We are already below the Reagan rates so we are likely already within the "sweet spot" and it is just a matter of a bit more or less.

I know there are expenses that bother you. I am just talking about tax rates and the economy. Nothing else.

The reality is that moderately higher taxes will actually help the economy. There are reasons for this, including a lower demand for credit by the government makes more credit available for the private sector. There are other reasons, too. Amazing, isn't it, how facts and reality defy the logic of the right wing.

People who do not own and operate businesses don't have a clue about creating jobs and generating revenues.

Let's take a non-government example. Let's say that you are one of the hardest working, highest producing workers at your company and that you're paid a commission. Let's say that your boss comes to you and tells you that because you work so hard and because you produce so much, he's going to dock your pay 8% so that those who sit idly at their desks can get a raise. How does that "incentive" affect your performance? Will you work harder to make up that 8% or will you walk away from that job?

That's what the government is doing. It's telling those who work hardest that they are going to be penalized for working hard. What an incentive builder!

If every able bodied man was working and paying revenues to the government instead of taking revenues from the government, how much money would the government need to provide its enumerated services?

Use a flat tax so that no one looses incentive. Fairness counts, even in government.

Perfect letter Joe Blow. I still don't understand the uncertainty argument. If I own a business that has enough demand to increase my production yet because of possible taxes my profit on that increased production will only be 97% of my previous profit why wouldn't I take the 97%?
The answer of course is..I would take the 97%. I only refuse to increase production if I don't have the demand to support it.

So "Twin Lights", where exactly is that "Sweet Spot" you are talking about? Everyone (including us die-hard conservatives) agrees that a 1% tax is too low and everyone (including die-hard liberals) agrees that 99% is too high, but what is a reasonable tax rate for all those "Rich millionaires". Please give me a real number!

Every time you ask those who are calling for more taxes on the rich what the tax rate should be, they avoid the question. The answer is always just "more". Why?? Because when you ask the man on the street what anyone's fair share of taxes should be, they always seem to answer with a lower number than rich people are currently paying. That doesn't play well with the argument that the rich should pay more.

A few facts:

" First, you should expect tax revenues to go up each year due to economic growth and inflation, even if tax rates stayed the same. Second, there's not a straight line between tax rates and tax revenues. You can raise taxes the same year the economy tanks and get less revenue, or you can cut taxes during a time of economic growth and get more revenue. And those changes in the economy aren't necessarily caused by what the government is doing with tax rates, the upturns could be due to new inventions and innovations, and the downturns could result from financial panics and real estate bubbles that have little to do with tax rates. And economists have to go to quite a bit of trouble to separate out the effects of tax policy from other things happening in the world."
(politifact2012)

"National Bureau of Economic Research working paper found virtually no supply-side effect from cuts in the top tax rate since 1975. ..there was no significant increase in output resulting from them; hence there would be little negative output effect from raising the top rate."
(Bruce Bartlett, Reagan/H.W. Bush administrations )

If there were any correlation between how hard people work and how much money they make, then I can see some value to suggesting it's not fair for wealthy folks taxes to go up. No such correlation exists. We're not talking about raising taxes on the hardest working, most effective business people. In fact, we're not talking about fairness, or morality at all. We're talking about maximizing federal revenues. Period.

The fact is, people don't like paying taxes, and people do like benefiting from government programs. We need to grow up.
A good place to start would be closing Hill Air Force base. That would hurt Utah, you say? It would eliminate Utah jobs? No doubt about it. But those are not the questions we should be asking. We should ask 'what exactly do we want our military to do, can it do less, and how essential is HAFB to those responsibilities. Then cut. Ruthlessly.

JoeCapitalist2,

Please note that my prior post had nothing to do with millionaires. Only reference taxation and economic growth.

The top marginal rate (just as a bogie) was 50% or more for the first six years of the Reagan Presidency. It dropped to 38.5% in 1987 and to 28% in 88 and 89. Then it rose to 38.6% for most of the Clinton years and has been at 35% since 2003.

Given the economic expansion during the first few Reagan years (with rates at 50%) I assume 50% is a viable top rate. I am not promoting that rate. Simply noting that we had strong growth with that rate. So, a top marginal rate less than 50% should suffice for economic expansion purposes.

Again, I am not proposing a 50% rate. I am simply noting that the data appears to support a rate as high as 50% being associated with significant economic expansion.

Mike Richards,

Agreed that there are incentive issues with a progressive tax (not saying that makes it bad, just that there are issues) but you have not addressed my post.

Mike,

OK, lets turn that around.

Are you sure that when the Bush Tax cuts went into affect that people instantly became more productive?

Can you tell me why those (ex Mitt) who make $20,000,000 off of investments should pay 0 taxes?
Or in todays world 15%? vs the guy who goes to work every day and pays 30%?

THAT type of scenario is why the middle class is shrinking and the top is accumulating more and more of the wealth.

Do you think that the massive collection of wealth at the top is good for our country?
That is a yes or no question.

Raise tax revenue and cut spending, particularly in the military. It's the only way to ever balance the debt.

@J Thompson
"Revenue is not the problem. Spending is the problem."

When we're taking in less revenue (in terms of GDP percentage) than almost any time in the past century (if not the lowest) and we're spending more than almost any time in the past century (if not the most)... that means both are problems. Two things caused the trillion dollar deficits. The Bush/Obama tax cuts which are valued at about 300 billion a year in lost revenue and the spending (especially the doubled defense spending over the past decade) that amounts to the rest.

"People must learn that working is necessary."

Where exactly are these jobs coming from again?

@Mike Richards
"Use a flat tax so that no one looses incentive"

So your argument is that raising taxes on the rich decreases incentive for them to work hard... but raising taxes on the poor is a good thing and increases their incentive for them to work hard?