T Nation

Bush's Tax Cuts

I just looked at some numbers. I make ~$65,000 a year. Larry Ellison (CEO of Oracle) makes about $20-40 million a year. Under Bush’s Proposed tax plan With the corporate tax breaks and cuts, Larry Ellison would pay a lower percentage of his income in tax than I would.

In a country where 80% of the wealth is controlled by 1% of the population, Bush is proposing a tax cut in which 50% of the money would go to the highest 1% of the population.

Does anyone else find this ridiculous?

  Welcome to the republican ideology!

  What, you thought  the 'Republicans take from the poor to give to the rich' saying was just a hyperbole?

  See, the democrats believe in taxing rich and poor alike. If you're goin to receive a tax refund, you'll receive the same ammount if you're a multimillionaire, as if you're the average Joe. Why? Because this will stimulate economy, since its the average joes in this world who will put that money to good use by buying more food, getting a vacation, getting a new tv...

 Republicans,on the other hamd, believe in stimulating the economy from the other end. They give back more money to the rich and businesses, as this will give them extra money to hire one extra person, which will reduce unemployment, and in the end get more money circulatin, as that person will now be spending more money in food, clothes, car payments, etc.

  The only difference is where they apply the stimulus to the economy - stimulate businesses to hire more people, purchase new equipment, or cut layoffs; or stimulate all the average joes to buy a little more food than usual, get new clothes, a new tv, pay off the credit card debt, go buy a dixie chicks cd just so you can watch it burn, or use it to pay for an education. The goal is to make sure it circulates and goes around.

  If businesses cant afford to hire a new employee, therell be one extra person who wont be able to make money go around, because he has none. So you need to give businesses a break to stimlulate economy.

  If the average joe doesnt have a lot to spend, he'll buy strictly only what he needs to get by, and there wont be a lot of money goin'round - which in turn will lead to reduced profits for businesses, drive down stock values, and cause lay-offs as an atempt to resume profitability and drive those stock values back up ( which is what united airlines has been doing - with a multimillion dollar negative profit in recent years, they need to cut expenses by laying off employees who now wont have money to spend; if, theoretically, they got all the money they need to cover that deficit, they would not only keep their employees, their stock value would be closer to the previous 100 dollars/share, instead of the current 99 cents/share- which would stimulate the economy as stockholders wouldnt be trying to sell it all at once when there arent enough buyers around.

  Since money is limited, you can either give more to businesses and less to the joes, or give more to the joes and less to the businesses.

Well said Diesel23!!!

To ThaRealest,

Could you please expand on exactly how you came up with those numbers? I’m not arguing, I’m just really curious as to how you got them. Thanks.

Some serious crack is being smoked here.
Democrats do not believe in taxing poor and rich “alike.” They believe in higher percentages for the rich. Republicans, on the other hand, favor at least letting tax percentages be equal for everybody… not the least reason being that the poor tend to use more of the public money.

I take back the ‘crack’ comment. I was cranky.

Ok, this argument is tired, tired, tired. Anybody with the slightest bit of intelligence should not being using it.

Ok, example here. Say person A makes $50 million a year. Person B makes $10,000 a year. Person A gets a tax cut of 1%, and person B gets a tax cut of 50%. Person A saves $500,000, while person B saves $5,000.

So now you can claim that person A got 99% of the tax break while the person B only got 1%!!! The horror!!! If you look at it very superficially, you could get caught in that trap. The fact is that person A got a 1% cut, while person B got a 50% cut.

Of course most of the money saved will come from the rich. They have the money. It’s not a horribly difficult concept.

Which leads me to another point. What exactly is the reason that the government is entitled to more of the rich’s money than the middle class or poor? And don’t give me this “because they have it” BS. This isn’t a socialist country. Redistribution of wealth has proven time and again to fail miserably. Our entire economy is based on free enterprise where people EARN their money and should be free to do what they choose with it.

“The Democrats tax the rich and poor equally.”

Quick Fact

The tax table for Single Taxpayers in 2002 in America is such:

$6,000 to $27,950 of income-tax is 15%

$307,050+ of income-the tax is 38.6%

Let’s do the math, shall we?

38.6 minus 15 equals 23.6…Hmmm, that sure is equal.

Yes people who make more should pay more in taxes…slightly. But 40%!!! That’s almost half of an annual income! It’s like getting a divorce every April 15th!!

DocT is a good example that, contrary to a certain post last week, lifting weights does not make everyone go stupid.

Correct me if I’m wrong, but don’t the rich ALSO pay MOST of the TAXES? Then wouldn’t it make sense if they got a bigger break than you?

 Damn, got caught smoking crack again. Damn you to hell!!!!

Look, I’m from the mind set that all taxes are evil. Even if I don’t get the break, I’m happy as hell that someone is getting it!

I want to give credit to DocT for his fine response above. Also, I want to add a bit to Diesel’s explanation above.

Firstly, the type of “stimulus” generally favored by the Democrats and explained by Diesel above doesn’t really provide much stimulus at all. The reason is that people are not stupid. A one-time payment is not going to cause them to change behavior, especially if they view the economic circumstances as bad. A one-time credit or rebate will get stuffed in a bank account or a mattress more often than spent on a vacation or a T.V.

Secondly, I thought I would try to present a simple explanation as to why tax cuts on capital gains and earned income ARE stimulative, albeit not immediately. What reductions in those tax rates effect is basically a reduction in the cost of investing and earning. Those with basic economic understanding realize that lowering the cost of something while the demand for it remains the same means more of that something will be “purchased.” In this case, lowering the marginal tax rates on the next dollar earned for income or the next dollar made from investment will stimulate more dollars to be risked in investments and more effort to be exerted in earning the next dollar.

Those investments lead to business expansion in the way Diesel laid it out above, and the extra effort to earn the next dollar leads to productivity gains, especially to workers who have been incentivized via bonuses or who work in areas such as sales, or in entrepreneurs and small-business owners.

The “income tax” should be abolished. The real purpose for it’s existence is to gain more power over the public. I watched a man on Hannity and Colmes last April 15th. His name was Irwin Schiff. He said that the “income tax” is not compulsory and therefore one does not have to pay unless one wants to. Of course it is more complicated than what I just printed but I have looked over his website and purchased one of his books titled “The Federal Mafia” A judge just recently banned the book. As I was watching the Hannity and Colmes program I noticed how desperate the two pundits were when trying to defeat Mr. Schiff in a debate over the legality of the “income tax”. Mr. Schiff kept shutting them down time and time again. They looked absolutely pathetic. That is when I decided to look over his website and purchase one of his books. If anyone is interested here is the website www.paynoincometax.com Peace.

It’s called trickle-down economics. A proven economic strategy. Bubble-up economicst is also a fuctional economic strategy. There are inherent problems with both. I like trickle-down slightly better because the imediate beneficiaries actually have a job, where as in the bubble-up model imediately benifits many low-lifes that won’t get a fucking job. Pick your evil, I guess. I am not really outraged about it as long as the economy improves. I would like to see a flat tax and the tarring-and-feathering of all IRS employees.

Alright, since Pat brought up the flat tax I’d like to hear some opinions on it. How exactly would it work? (Yes, I know, everyone is charged the same tax percentage). But how do we make it balance out so the gov’t is still taking in roughly the same amount?

Example: currently, those making the big bucks are charged nearly 40%. Obviously, that percentage would drop substantially if a flat tax was instituted. However, the person making $15k per year’s taxes would increase. So if the rich are paying less taxes, and the poor are paying more, who’s making up the difference?

One proposal I’ve heard is to abolish corporate write-offs: no more loopholes for them. Is this the system people speak of when they endorse a flat tax? I’m asking the question because I’ve never fully understood the concept… although I like the sound of it more and more as my salary goes up. :slight_smile: