Should the new majority let Bush's tax cuts expire?

you selectively did not mention that Reagan later on did increase tax, as a mean to reduce the deficit.

Clinton initially raised taxes; the increased revenue significantly reduced the huge deficit he inherited from Bush Sr. So impressed were the venture capitalists w Clinton's ability to reduce the derficit that they put their $$$$ on the line to incubate the silicon valley, which paved the way to develop a new industry---plenty of high-paying jobs.

The avg hourly wage skyrocketed during the Clinton era; thus taxes collected help to reverse the huge federal deficit to a sizeable surplus. I personally am against high taxes. but, facts are facts, Clinton's tax hike did lead to a robust economy---where both the avg hoursly wage and GDP increased. wealth was being distributed to all.

under Bush, the avg hourly wage has decreased, while the GDP has increases. this means wealth is restricted to selected components of the economy.

 

Existing tax rates when Reagan cut rates and when Bush cut rates were also very different. I personally am of the belief that taxes were a serious drag on the economy when Reagan cut taxes, but it was not really an issue when W cut them.

 

you do not consider this a drag on the economy?

• pissing away a sizeable federal budget surplus away in his first 7 months in office

• generatingg 4 consecutive largest federal budget deficits in US history

• declining avg hourly wage

• venture captialists sitting the $$$ on the sideline unwilling to risk their $$$ on the US economy.

 

how does that have anything to do with what ottomaton just said??

 

I won't disagree at all that at present the W tax cuts are irresponsible. I think they were helpful when they were initiated, but have now outlived their usefulness, especially with the amount of $$ we are spending on our failed foreign policy initiatives.

However, the tech bubble and the associated rises in wages related to that have little to do with Clinton. And if it did, no Clinton supporter would want to take credit for it. The tech bubble was a complete waste of money. People invested money to create jobs that were never needed. We were funding a bubble that was totally unsustainable because there was nothing supporting that segment of the economy.

And for the record, PE and VC money is being put to work right now at very strong levels. Nobody's scared to put money to work - except for those of us in the industry that are beginning to see the same structural problems that existed in 2000. There's way too much money chasing bad deals. The same problem that existed in 2000.

There' plenty of stats out there, but here's a quick note from the NYT:

"Indeed, the business, once a relatively small, clubby industry, was flooded with cash and newcomers during the Internet boom — and not much has changed since. Despite years of poor returns since the collapse of Nasdaq, the number of venture firms has declined only slightly, to 866 last year from 943 in 2001. The amount of capital under management was $261 billion last year, a record, according to the National Venture Capital Association. "

Other stats from the NVCA:
About $10-12B was invested in 1997. ~$17B in 1998. ~$20B in 1998. ~$55B in 1999. $106B in 2000. $40B in 2001. And about $20B/year since then. 1999, 2000 and 2001 weren't signs of faith in the Clinton administration. Ask and VC worth his/her salt and they'll tell you - it was idiocy.

By the way, where'd you get the hourly wages info? I've never seen that type of stat and would love to know details about it. I feel like that would be a difficult thing to measure, but would like to see more about it.

 

Hmm. I guess I'm the only one in the room who thinks the tax cuts haven't gone far enough?

Cut spending on education, foreign aid, and social programs to help with debt. Luckly the party in power in Congress are the right guys for the job... jk jk

And yes, I'm idealist. The chances of these programs getting cut is 0% under either political party. So we are back to square one.

 

if not Clinton, who ?

you'll recall, the lousy economy was the reason that Bush Sr., who once had enjoyed an approval rate of 90+%, was fired by the American people.

Inasmuch as Clinton inherited a SH***Y economy from GHB, the economy successes during Clinton's 8 years had everything to do his policies.

how so ?

There' plenty of stats out there, but here's a quick note from the NYT: ....

way to side-step.

using the same source, compared the VC activities during GHB's last 3 yrs with Clinton's first 3 yrs. then draw your own conclusion.

 

I don't correlate economic activity with the president. I just checked, and the economy was showing some strong signs of life at the end of Bush version 1's term. That wasn't because he had great economic policies, anymore than because Clinton had great economic policies that spurred the economy. We live in an economy that has a business cycle. He got hit with the cycle. And it began to turn at the very end of his term. Is that because he was an economic genius. No...it's a timing issue.

But, if you do want to say the tech bubble was inspired by Clinton's administration, can you also explain to me what was good about the tech bubble? Why is it a good thing that people threw billions of dollars to fund company's who really didn't do jack?

I'm not sure what data you were using that showed huge VC activity in the first 3 years of clinton's administration. It's true that over the period of the late 90s the VC communitiy became much more developed, but the president didn't develop the VC community or even inspire it. The data that I have from NVCA for VC activity for 92-94 is minimal at best. It was a tiny industry in those times. That's not Bush or Clinton's fault...it was just a tiny industry.

And I'm not sure what I side-stepped. I was simply pointing out that VC and PE activity is pretty hot, which seemed to be contrary to your assertions.

 

Dude, you really should read his post before reply.

 

no poll?


the tax cuts obviously worked... or maybe he was lucky that the economy grew anyway.



i say let them expire, i'd rather have him balance the budget.

 

Let them expire and focus new tax cuts that are more beneficial towards the working and middle classes. Bush's mentality that a tax cut (for the wealthy) solves everything is irresponsible. Cutting taxes while at war was part of his strategy to insulate Americans from the gravity of Iraq. Instead of tax cuts, he should have emphasized the need for sacrifice while at war. But that notion fell victim to his disastrous strategy of running the war (occupation) like a continuous campaign event instead of doing what it took to create order and stability (like sending enough troops).

BTW, I'm not saying Bush should have raised taxes instead of cutting them. But cutting them while spending on the war and domestic programs like a "drunken sailor" was just plain stupid. He was rewarding a large segment of his political base at the expense of the country.

 

The words of a responsible conservative. I agree completely. Let's balance the budget and then we can look at tax rates.

 

40% of my paycheck is already taken away from me, i hope democrats don't raise taxes. The government already takes away so much....maybe if they just spent less I could take home more.

Why should I be forced only to get 60% of what i work for? It's like I'm working for the gov't 20-25 hours a week.

Maybe Dems should think about that before raising people's taxes.

 

The tax cuts on capital gains and dividends have been huge contributors to why the Dow is at record levels and the Nasdaq has rallied so far since the tragedy of 9-11. If the Democrats do not renew the tax cuts, simple financial logic tells you that the markets will reverse a large piece of these gains. Boiling it down to terms that the unwashed masses here can understand, stocks are valued by the future expected benefit which arises from owning them. This can come from either dividend streams or capital appreciation (stock price increases). When you alter the tax rate, you alter both of these factors. Raising taxes lowers the future expected benefit from owning stocks, which subsequently reduces the value of the stocks. This is finance 101, boiled down to its simplest form for your benefit.

With half of American families owning stocks in one form or another, decreasing the value of their retirement accounts and personal accounts will not be popular. This isn't a rich vs. poor issue. This is half of America we are talking about.

 

i feel you pain.

that said, Let's dispense w the convenient rhetorics, Rep also raised taxes; Nixon, Reagan did, Bush Sr. did.

Rep should think about the added tax burden on the middle class before they pass legislations affording corporations tax loopholes, such that multi-billion conglomerates such as Haliburton, Accenture, Tyco---generating > hundreds of millions in profit---are not subject to US income tax laws.

• Yet earmarks added to the Homeland Security Act added language that these non-US taxpayers are allowed to participate in US taxpayer-funded US Government contracts. The non-US taxpayer, Halliburton, won a huge (not open to competitive bid from others) Gov contract in Iraq and proceeded to over-bill the US Gov
  
  Kinda like illegal aliens using US taxpayer-funded social programs. come to think of it, a sizeable # of the illegal aliens pay taxes.

Think about this vivid eg of corporate welfare whenever the slick politicians, such as W, say that they raise no tax.

once you make that correlation, you'd get a full view of the economy.

the economy signals during Bush Sr.'s last few year included rising unemployment, rising cost of living, stagnant GDP growth. are these the economic signals to which you've alluded. ?? these were the reasons that the US voters fired Bush Sr in favor of the repeat-offender (Adultery) from Arkansas.

dude, you should apply yourself and learn what "drag on the economy" means

 

corporations make up such a small amount of the gov't revenues anyway - that it wouldn't make much difference but i see your point. i just don't think we need to give up more then 40% OF A paycheck. granted that includes city and state taxes...and social security, but it's too much already. i'd rather see the gov't spend money more efficiently, end wasteful programs then increase taxes.

the war on iraq, pork, and other things just make little sense. i was a republican until they decided that balancing the budget was no long necessary. but i think it would be a huge mistake to raise taxes on working professionals such as myself. it will definitely swing me to vote republican in 2008

 

I wish that you would not be so intellectually dishonest.

Clinton took office w the Dow trading in the high 3000s. one of his first act was to raise taxes to reduce the rising federal budget deficit. When Bubba left office, the DOW was over 10,000. The DOW increased almost 200 % during his term. The DOW and NASDAQ hit new highs close to 10 times.

The DOW has increased ~ 20 % in W's first 6 years. and you're jumping hoops over this pedestrian accomplishments, while dismissing the 200% increase during Clinton's time.

yes, indded, half of American families owning stocks in one form or another. This isn't a rich vs. poor issue. This is half of America we are talking about. if the performance of the DOW is indication of the wellness of the US economy, do the math:

• the pedestrian increase of 20% under W vs the 200% increase under Clinton.

 

it does make a difference.

do the math.

Tyco, Halliburton, Accenture make profit close to or more than 500 million each year. the avg American makes less than < 50K. these conglomerate together = 30,000+ avg american taxpayer. now, apply the same math to to conglomerate, getting the picture ?

 

Since Bush implemented his tax cuts on divendends to spur business activity under the argument it would increase tax revenue.....corporate tax revenue increased from $131 billion to $300 billion this year. Individual tax revenue is still about one trillion dollars.

So actually, Bush policy has nearly tripled corporate tax revenue.

I think you should research and get a foundation of the facts before making some of the argument that you are making....