Majority of Americans Concerned about Cuts Willing to Raise Taxes on Rich

He can. I clicked "find more posts by dennis2112" and perused a few while sipping a beverage - accordingly am hanging in there with my 56.6k call.

 

Tax rates went down during the Reagan years, but the actual amount paid in taxes increased. Keep in mind that he closed numerous loopholes that allowed people to avoid paying taxes. There is a lesson there for a current leaders: you can be remembered for cutting taxes by just lowering the marginal rates even though you actually increase peoples' tax burden by eliminating deductions.

Now there was definitely an increase in debt during those years because he spent more than he received.

 

HELL YEAH MFR's

If it's a curse to live in interesting times then I'm must be a zombie already.
The wave of popular upheaval on this planet is better than anything Spielberg could have imagined.

 

Actually, if you look at the real numbers, you will see that tax revenues went down for the first two years after Reagan's tax cuts before beginning to rise again at the same rate they were rising before.

Go look at the numbers again. Here is a source you couldn't possibly claim is biased against Reagan...

http://www.heritage.org/research/reports/2001/03/the-real-reagan-economic-record

Halfway down, the chart with the federal revenues line goes down for two years before rising again. There is a bullet point just below the chart which reads...

"From 1950 to 1973, real economic growth in the U.S. economy averaged 3.6 percent per year. From 1973 to 1982, it averaged only 1.6 percent. The Reagan economic boom restored the more usual growth rate as the economy averaged 3.5 percent in real growth from the beginning of 1983 to the end of 1990."

So, Reagan (if you want to attribute the business cycle entirely to Reagan) brought real growth up to just under what it was from 1950 to 1973, a time in which the top marginal tax rate never dropped below 70%. Or in other words, he was better than Carter and Ford, WOO-HOO!

Reagan's policies began the debt explosion, started the "deficits don't matter" mindset, and set the stage for where we are today. I don't believe that rates should go back up to 70% (unless we want to seriously step up debt repayment), but it should be obvious that we will not eliminate the deficit, much less the debt, without raising tax rates.

 

Uh Reagan RAISED taxes and reallocated the AMT to hurt the middle class all while cutting the top rates for the rich.

Critics of "Reaganomics" claim it failed to produce much of the exaggerated gains some supply-siders had promised. Krugman later summarized the situation: "When Ronald Reagan was elected, the supply-siders got a chance to try out their ideas. Unfortunately, they failed." Although he credited supply-side economics for being more successful than monetarism which he claimed "left the economy in ruins", he stated that supply-side economics produced results which fell "so far short of what it promised," describing the supply-side theory as "free lunches". Krugman and other critics point to increased budget deficits during the Reagan administration as proof that the Laffer Curve is wrong. Supply-side advocates claim that revenues increased, but that spending increased faster. However, they typically point to total revenues even though it was only income taxes rates that were cut while other taxes, notably payroll taxes were raised. That table also does not account for inflation. For example, of the increase from $600.6 billion in 1983 to $666.5 billion in 1984, $26 billion is due to inflation, $18.3 billion to corporate taxes and $21.4 billion to social insurance revenues (mostly FICA taxes). Income tax revenues in constant dollars decreased by $2.77 billion in that year. Supply-siders cannot legitimately take credit for increased FICA tax revenue, because in 1983 FICA tax rates were increased from 6.7% to 7% and the ceiling was raised by $2,100. For the self employed, the FICA tax rate went from 9.35% to 14%.The FICA tax rate increased throughout Reagan's term, jumping to 7.51% in 1988 and the ceiling was raised by 61% through Reagan's two terms. Those tax hikes on wage earners, along with inflation, are the source of the revenue gains of the early 1980s.

This necessitated the annual AMT patch which was the largest portion of the stimulus package at 70 Billion for last year.

Another recent critique of Reagan's policies stem from Tax Reform Act of 1986 and its impact on the Alternative Minimum Tax (AMT). The tax reform would ostensibly reduce or eliminate tax deductions. This legislation expanded the AMT from a law for untaxed rich investors to one refocused on middle class Americans who had children, owned a home, or lived in high tax states. This parallel tax system hit middle class Americans the hardest by reducing their deductions and effectively raising their taxes. Meanwhile, the highest income earners (with incomes exceeding $1,000,000) were proportionately less affected, thereby shifting the tax burden away from the richest 0.5% to poorer Americans. In 2006, the IRS's National Taxpayer Advocate's report highlighted the AMT as the single most serious problem with the tax code.

Bullsh!t that every economist except Laffer has shot to hell.

"You are smart people. You know that the tax cuts have not fueled record revenues. You know what it takes to establish causality. You know that the first order effect of cutting taxes is to lower tax revenues. We all agree that the ultimate reduction in tax revenues can be less than this first order effect, because lower tax rates encourage greater economic activity and thus expand the tax base. No thoughtful person believes that this possible offset more than compensated for the first effect for these tax cuts. Not a single one"

Andrew Samwick, who was Chief Economist on Bush's Council of Economic Advisers from 2003-2004

"The specific set of foolish ideas that has laid claim to the name "supply side economics" is a crank doctrine that would have had little influence if it did not appeal to the prejudices of editors and wealthy men"

Paul Krugman

The economist John Kenneth Galbraith noted that supply side economics was not a new theory. He wrote, "Mr. David Stockman has said that supply-side economics was merely a cover for the trickle-down approach to economic policy—what an older and less elegant generation called the horse-and-sparrow theory: If you feed the horse enough oats, some will pass through to the road for the sparrows." Galbraith claimed that the horse and sparrow theory was partly to blame for the Panic of 1896.

Nobel laureate economist Milton Friedman agreed the tax cuts would reduce tax revenues and result in intolerable deficits, though he supported them as a means to restrain federal spending.

Before President Bush signed the 2003 tax cuts, the left-wing Economic Policy Institute (EPI) released a statement signed by ten Nobel prize laureates entitled "Economists' statement opposing the Bush tax cuts", which states that:

“Passing these tax cuts will worsen the long-term budget outlook, adding to the nation’s projected chronic deficits. This fiscal deterioration will reduce the capacity of the government to finance Social Security and Medicare benefits as well as investments in schools, health, infrastructure, and basic research. Moreover, the proposed tax cuts will generate further inequalities in after-tax income."

"An example of fad economics occurred in 1980, when a small group of economists advised Presidential candidate, Ronald Reagan, that an across-the-board cut in income tax rates would raise tax revenue. They argued that if people could keep a higher fraction of their income, people would work harder to earn more income. Even though tax rates would be lower, income would rise by so much, they claimed, that tax revenues would rise. Almost all professional economists, including most of those who supported Reagan's proposal to cut taxes, viewed this outcome as far too optimistic. Lower tax rates might encourage people to work harder and this extra effort would offset the direct effects of lower tax rates to some extent, but there was no credible evidence that work effort would rise by enough to cause tax revenues to rise in the face of lower tax rates. … People on fad diets put their health at risk but rarely achieve the permanent weight loss they desire. Similarly, when politicians rely on the advice of charlatans and cranks, they rarely get the desirable results they anticipate. After Reagan's election, Congress passed the cut in tax rates that Reagan advocated, but the tax cut did not cause tax revenues to rise."

Gregory Mankiw

http://en.wikipedia.org/wiki/Supply-side_economics

Pull your head out of Rush or Beck's butt and do some research.

 

so true there got to be some compromise.

 

Be careful... you might cause some coronaries amongst The Faithful, or give them a stroke from getting hit over the head with the truth once too often. Just so the newer folks will know, two of the more enjoyable things I've done in my life was voting against Ronnie Reagan.

 

One thing I really don't understand about the American economy is that back when universal suffrage was first proposed somewhere in England or whatever, wasn't the biggest fear of the landowners that the poor (the majority) will rise up and vote tax upon tax on the rich? Where has this opportunity, this chance for the majority to use the system to their advantage, where has that gone?

 

Actually, tax revenue only went down in one year (1983), it was close to flat, but up slightly in 1982. Considering the recession and the tight money policy during that time-period, it is impossible to explain the reasons for changes over a short time period. Overall tax revenue grew during the Reagan years, which is what I was saying.

I am not arguing with you on this point. I do not attribute the business cycle entirely to Reagan, but I think he gets some limited credit. After all, I am sure you agree that generally, but not always, the government spending more than it takes in does result in expansion.

Our area of disagreement is that I think that a simple straight forward tax law with low rates that avoids multiple loopholes is better and fairer, especially to the middle class. When you have lots of loopholes it is only the rich who get to take advantage of them. You seem to prefer very high rates, but with lots of loopholes.

I agree that Reagan's spending policies were bad as have been the policies of subsequent presidents and congresses. There should be an expansionary bias in fiscal policy, but the government needs to reign in spending during good years to fortify our fiscal position for bad years. When years like 2008 come along we need to be in a good fiscal position to spend like a drunken sailor. Unfortunately, we were not in a good fiscal position.

 

Overall tax revenue has grown every year in modern history with the exception of the two periods that saw large tax cuts (the beginning of the Reagan and Bush the younger administrations). This is because of economic growth, which always causes tax revenues to rise. Saying "overall tax revenue grew during the Reagan years" is like saying "the sky is blue" or "water is wet." Historically, tax revenue has not gone down in modern history except during the times I mentioned above.

No, I would take out all the loopholes AND raise rates, at least until we have retired a significant portion of the debt. Actually, if I were Emperor of America, I would scrap the income, capital gains, dividend, estate, and corporate taxes altogether in favor of a consumption tax. The only portion of the current tax system I would keep is the payroll tax, though I would remove the cap on payments.

We weren't in a good position because at the first sign of surplus, Bush cut taxes to unsustainably low levels rather than paying down the debt.

 

Absolutely absolutely correct!!!

The loopholes Reagan closed were massive. Everyone thought they were getting a tax cut...and technically, rates were cut. But people found they were paying far more in taxes than they had prior, because deductions for all sorts of things were eliminated entirely.

I'm not arguing for or against Reagan with this...that's just the way it was.

 

We agree on more things than we disagree on. I agree about a consumption tax. I would eliminate all payroll taxes, eliminate all income taxes for people making less than $1,000,000 (to pick a high arbitrary figure), and all corporate income taxes for companies making less than $25,000,000 (just to pick a nice high figure). The graduated rates would be low, but there would be no deductions, credits, or exemptions.

I would also eliminate the different accounting rules. Not everyone realizes this, but every public company must keep at least two sets of books: one for the SEC and for the IRS. The two agencies have different rules so you keep separate books. Some companies (e.g., health care companies) must keep three sets of books. Not only would unifying the standards simplify matters, it would make things more transparent. A company could no longer report a huge profit, but pay no taxes.

 

If you do away with the income and corporate tax structure altogether, then you could do away with the second set of books at the same time.

Here is how I would do the consumption tax...

http://coffeepartyblogger.blogspot.com/2011/02/isnt-it-time-for-consumption-tax.html

 

Gynecologist Ron Paul can be entertaining on economics if you don't take him too seriously. Ah the good old days before 1913@!!!!

 

Crazy stuff. The people who pay all the taxes don't want their taxes raised. Go figure!

Anyhow...change the tax code, lower taxes, raise effective tax rates, broaden the tax base. It won't happen, but it's what I want.

 

People pay little tax are WILLING to have people pay most taxes to pay even more.

It makes perfect sense.