does anyone know the history of income tax rates in america?

how many high paying jobs offer voluntary overtime?

the middle class blue collar jobs with voluntary overtime are with people who likely have a significant need for that money.

not only that obviously most of the jobs with such overtime will be in a much lower tax bracket. is that 3% extra tax on the overtime from 25% to 28% really going to make a big difference?

 

Missing the point. glynch says that middle class workers won't work more for incrementally more money. That the proletariat isn't motivated by making additional profit from their labor. If he had ever worked at a business that offered voluntary overtime and seen the mad rush for any overtime offered, he would know that this is patently false.

For reference, most of the hourly workers at my plant make over $100,000/year with overtime.

 

and its not a good comparison because overtime is VOLUNTARY as you keep pointing out. of course if someone can take a few extra bucks home week to week they will.

 

I see no reason why the tax cuts should come with cuts in spending if the point is to have an expansionary fiscal policy. Running a deficit in slow times is a key idea in Keynesian economics.

I agree that the relation between tax cuts and economic growth isn't always very clear (not much in economics is), especially since they tend to be used to counter preexisting trends in the economy.

I agree that supply-side economics has typically been more associated with wishful thinking than actual science. However, it is true that a person who receives a higher wage because of tax cuts will tend to work more. That's not where supply-siders went wrong.

 

That's certainly true - I guess my point is that tax cuts financed by deficit spending are similar in effect to spending increases. Both will have effects on the economy simply by injecting more money into the system. But that seems obvious: if you borrow someone else's money and give it to me, I will be better off in the short term. But it's unclear whether tax cuts (ie, taking less money out of salaries) is any better than government spending as a means of stimulating the economy. On one hand, tax cuts are more efficient by letting the markets work their magic. On the the other hand, government spending lets you put the money wherever you (as the gov't) think it can most quickly stimulate the economy. For example, with the most recent rebate checks, lots of people argue that much of it will just go to savings. If, instead, the government spent $150 billion on works projects, it definitively creates jobs, etc. Not sure which has a more useful impact strictly from an economic stimulus perspective.

To test it out, you'd need to test out a combo of higher taxes + higher spending vs. lower taxes + lower spending. I guess this is what has to be done at the state and local levels since they have to have balanced budgets, so there should be some research out there on this. (you could also compare different countries, but you introduce way too many variables there)

 

I'm not saying that they won't work the overtime-- just that the marginal tax rate enters their decision as to whether to work overtime.

The Bush tax cuts for instance don't really kick in much at the measly level of 100K. Also the tax cut ideology usually is based on the idea that business owners/ CEO's will work that much harder. These folks aren't motivated in the same way as hourly workers IMHO.

I'm not sure that whether workers at a plant put in voluntary overtime really helps the economy more than say hiring additional workers who would not work overtime.

It is good to be discussing something besides the daily Obama McCain "gotcha" stuff.

 

So Vik, do you buy the idea that the Reagan level cuts have been that good for the economy as a whole as opposed to the take home of the upper few percent?

 

Interesting. A good point.

How about it, Vik, the only real economist on the bbs.

 

Which plant, and what positions do they work? (...pen ready....)

 

dude, the biggest kept secret in the job market is how much plant/refineries workers make. my mom's first cousin was one of the first black men to get a really good job at a refinery, he left with $1MM in savings (in 1985), he was also very thrifty.

if people around this country knew how much money these guys make there would be rioting over oil prices.