T Nation

Obama and the Bush Tax Cuts

Obama has yet again changed his tune on policy, this time reversing himself on the repeal of Bush’s tax cuts:

[i]Democrat Barack Obama says he would delay rescinding President Bush’s tax cuts on wealthy Americans if he becomes the next president and the economy is in a recession, suggesting such an increase would further hurt the economy.

Nevertheless, Obama has no plans to extend the Bush tax cuts beyond their expiration date, as Republican John McCain advocates. Instead, Obama wants to push for his promised tax cuts for the middle class, he said in a broadcast interview aired Sunday.

“Even if we’re still in a recession, I’m going to go through with my tax cuts,” Obama said. “That’s my priority.”

What about increasing taxes on the wealthy?

“I think we’ve got to take a look and see where the economy is. I mean, the economy is weak right now,” Obama said on “This Week” on ABC. “The news with Freddie Mac (FRE) and Fannie Mae (FNM), I think, along with the unemployment numbers, indicates that we’re fragile.”[/i]

http://apnews.myway.com/article/20080907/D93228880.html

An interesting conundrum - one of Obama’s main themes is how awful the economy really is…as he continues to paint this bleak picture of “dust bowl” proportions with the state of the economy, he now reinforces the need to keep the tax cuts in place.

As one commentator put it, every promise made by Obama has an expiration date. But more importantly, how does the Left respond to this? And even more importantly, if tax cuts create the kinds of economic benefits we need to fend off recessions and the like, what is the argument for raising taxes outside of a recession, when we could enjoy the same economic benefits?

Let’s not cut spending. If we are in a recession (we are not) why does the gov’t continue to spend like the economy booming?

I would love to see tax cuts but spending needs to cut first.

Now c’mon, everyone knows that if people get a government check for $600 this stimulates the economy, but taxing them extra thousands of dollars per year in no way slows the economy. Nor does cutting their taxes by $600 a year or more do anything to stimulate the economy.

Why Obama is even saying that repealing tax cuts might not be appropriate during a slowdown (or he probably says recession) just does not fit in with the overall philosophy.

Everyone knows that the upper 50% of income earners who pay 97% of the income taxes are just not paying their fair share, the weasels: where income tax relief is needed is for those paying no or very little income taxes (that is, fairness requires their receiving cashable checks called “tax credits” in excess of taxes actually paid or due). This is the fair way to have “tax relief.”

In contrast, reducing income taxes for those that pay the vast bulk of the taxes – still having them pay tons, but not at as high a rate – would constitute “giveaways for the rich” and, as Mr Mackey would say, “That would be bad.”

This is Taxes 101. I can’t imagine why a change now.

This is sounding like “I spoke against the tax cuts, before I spoke for them.” Ideally, everyone will feel Obama spoke for them, I guess.

He’s gotten tangled up in the higher tax/lower revenue – lower tax/higher revenue thing twice now.

First in the debates where Charlie Gibson through back the fact that bush got more revenue after lowering cap gains. I can’t remember his response … uhhh perhaps?

Then the other night in the oreilly interview … the same thing. He was a little better prepared for oreilly but he still didnt answer the question. He just denied it.

Obama is fading and it won’t be close.
He is a rockstar. Preaching nothing. Bush evil bad. “change” good.
Debates are going to be interesting though. Him with his um’s and aaaah’s and McCain’s vanilla delivery, on the veep side Palin and foot-in-mouth are going to be more watched than the ticket toppers.
tax rate decrease equals more tax revenue? No shit. has been proven over, and over, and over, and over.

Wait… so he does something you agree with (to an extent) and you hate him for it?

Though I suppose if McCain suddenly decided to be for universal health care, the left would start calling bandwagoning all over the place.

Hmmm…

So, is it more important for a candidate to do what he believes is right, or for said candidate to stick to his previous word? How can we tell what’s genuine and what’s political?

Gah.

I glanced through a book that was attempting to show the fallacy of the trickle down economics, and how lowering tax rates really do not work.

Interestingly his argument attempting to find a fallacy with it simply did not work, and in fact I thought made the whole thing look more logical.

He said the whole philosophy started with the extreme example of: “What happens with a 100% tax rate?”

The result was obvious, with no money for investments, or for employees, or even a reason to work. Very negative for the economy.

A bell curve works real well for this, there is an optimum tax rate. My belief is that if we lower taxes, and revenue increases, then the tax rate was too high, and negatively affecting the economy.

Now there must be a time factor connected to this idea. The extra money must be allowed to work through the economy to get the benefits.

But it must be stated that the budget must be kept under control. Something that has only occurred for a couple of years under a Republican controlled congress.

The cut in capital gains resulted in a massive influx of taxes, and the controlled spending (3% increase limit) resulted in very positive results for the economy, and for the treasury.

It’s funny nobody remembers this. Perfect example of how to run the government budget, and everybody forgets.

Unfortunately so did the people who put it in place. Suddenly politics as usual was back, and the idea of spending the “future revenue” was a good idea.

What a bullshit loophole. They weren’t spending “this budget’s” money, but the projected future revenue".

We finally had fairly good economic policies in place, and they blew it bad.

[quote]The Mage wrote:
I glanced through a book that was attempting to show the fallacy of the trickle down economics, and how lowering tax rates really do not work.

Interestingly his argument attempting to find a fallacy with it simply did not work, and in fact I thought made the whole thing look more logical.

He said the whole philosophy started with the extreme example of: “What happens with a 100% tax rate?”

The result was obvious, with no money for investments, or for employees, or even a reason to work. Very negative for the economy.

A bell curve works real well for this, there is an optimum tax rate. My belief is that if we lower taxes, and revenue increases, then the tax rate was too high, and negatively affecting the economy.

Now there must be a time factor connected to this idea. The extra money must be allowed to work through the economy to get the benefits.

But it must be stated that the budget must be kept under control. Something that has only occurred for a couple of years under a Republican controlled congress.

The cut in capital gains resulted in a massive influx of taxes, and the controlled spending (3% increase limit) resulted in very positive results for the economy, and for the treasury.

It’s funny nobody remembers this. Perfect example of how to run the government budget, and everybody forgets.

Unfortunately so did the people who put it in place. Suddenly politics as usual was back, and the idea of spending the “future revenue” was a good idea.

What a bullshit loophole. They weren’t spending “this budget’s” money, but the projected future revenue".

We finally had fairly good economic policies in place, and they blew it bad.[/quote]

People always forget. How many people even know that Clinton took over an economy that had 5% growth in the 4th quarter of 1991? Probably less than 5%.

How many people remember all the things that happened in the last yr of Clinton? Like:

The dot com bubble bursting
The Nasdaq falling by 50%!
The Dow down nearly 30%!

All that happened in less than 12 months. And then in 2001 all the corp earnings scandals broke. Enron, Worldcom, Adelphia, etc. all came out - but it took place under Clinton. Did they blame him?

Economic downturns happen. Someone should ask that clown Obama if he is going to eliminate the business cycle once and for all.

That’s basically what he is promising. After all, he says Bush has run this economy into the ground. So I assume he will pull it out and keep it there for as long as he is around.

Yep, sounds like he will end the business cycle. Maye he is the messiah.

[quote]flyboy51v wrote:
He’s gotten tangled up in the higher tax/lower revenue – lower tax/higher revenue thing twice now.

First in the debates where Charlie Gibson through back the fact that bush got more revenue after lowering cap gains. I can’t remember his response … uhhh perhaps?[/quote]

I don’t remember the answer verbatim but it summed up as, yes revenues will be lower as a result but I am going to double the capital gains tax to 30% be more “fair.”

There was another recent interview that said the same thing, that tax rates should be raised even at the cost of reducing revenue, to be more fair.

There was a psychological study done a while back, in which people played a game in which they actually received some real money at the end according to how much they won in the game, and their behavior was studied.

In the game, their options included being able to spend their own money to result in other players having less. There was a bidding type thing so that a market mechanism determined how many dollars you had to pay to make another player lose some amount, say to lose $100.

The game did not offer rewards for outcompeting other people, not even announcing who won the most or anything like that. The only motivation for paying to reduce someone else’s take-home amount was to make sure that that person took home less, not because it got the player anything himself in any way.

The sad outcome was that a very high percentage of people, somewhere around half (I don’t recall) were found to be willing to spend quite a bit of their own money to make sure other players took home less.

For example, taking home $20 less themselves for the sake of making sure another specific person took home $100 less. (I don’t remember the exact ratio.)

So while it may seem foreign to you or me, indeed there are people that even knowing it will result in less money for them and less money for everyone overall will want to raise taxes on others, just to make sure these others have less.

A substantial percentage of the voting population will have this psychology.

[quote]dhickey wrote:
If we are in a recession (we are not) why does the gov’t continue to spend like the economy booming? [/quote]

Because kids (and future generations in general) don’t get to vote.

[quote]Bill Roberts wrote:

I don’t remember the answer verbatim but it summed up as, yes revenues will be lower as a result but I am going to double the capital gains tax to 30% be more “fair.”

There was another recent interview that said the same thing, that tax rates should be raised even at the cost of reducing revenue, to be more fair.

There was a psychological study done a while back, in which people played a game in which they actually received some real money at the end according to how much they won in the game, and their behavior was studied.

In the game, their options included being able to spend their own money to result in other players having less. There was a bidding type thing so that a market mechanism determined how many dollars you had to pay to make another player lose some amount, say to lose $100.

The game did not offer rewards for outcompeting other people, not even announcing who won the most or anything like that. The only motivation for paying to reduce someone else’s take-home amount was to make sure that that person took home less, not because it got the player anything himself in any way.

The sad outcome was that a very high percentage of people, somewhere around half (I don’t recall) were found to be willing to spend quite a bit of their own money to make sure other players took home less.

For example, taking home $20 less themselves for the sake of making sure another specific person took home $100 less. (I don’t remember the exact ratio.)

So while it may seem foreign to you or me, indeed there are people that even knowing it will result in less money for them and less money for everyone overall will want to raise taxes on others, just to make sure these others have less.

A substantial percentage of the voting population will have this psychology.[/quote]

I think their called Democrats. (Couldn’t resist.)

I heard about this study, and have wondered if it is inherent in our nature, or learned. I believe it’s the latter.

[quote]lixy wrote:
dhickey wrote:
If we are in a recession (we are not) why does the gov’t continue to spend like the economy booming?

Because kids (and future generations in general) don’t get to vote.[/quote]

What in the hell does that even mean?

[quote]rainjack wrote:
lixy wrote:
dhickey wrote:
If we are in a recession (we are not) why does the gov’t continue to spend like the economy booming?

Because kids (and future generations in general) don’t get to vote.

What in the hell does that even mean? [/quote]

You also illustrate a good point here that could answer the question: The masses are dumb.

[quote]lixy wrote:
rainjack wrote:
lixy wrote:
dhickey wrote:
If we are in a recession (we are not) why does the gov’t continue to spend like the economy booming?

Because kids (and future generations in general) don’t get to vote.

What in the hell does that even mean?

You also illustrate a good point here that could answer the question: The masses are dumb.[/quote]

I am asking for clarification. You ask no fucking question you baby-raping piece of shit.

[quote]The Mage wrote:
I heard about this study, and have wondered if it is inherent in our nature, or learned. I believe it’s the latter.[/quote]

While it wouldn’t prove whether inherent to our nature or not, it would be interesting to re-run the study on chimps, using food instead of money. Would any chimps give up any of their own food to make sure their fellow chimps got less?

I expect not.

Of course, this just begs for a Chimpy McHitler line, but I can’t think of one.

I would also tend to doubt that that behavior would show up in primitive tribal human groups. That is pure guessing, but it’s my guess. If nothing else, the other tribe members would probably beat such a person up on learning of it, so that would tend to discourage having such a rotten attitude.

So I would tend to agree, it’s probably a learned behavior.

[quote]Bill Roberts wrote:
Now c’mon, everyone knows that if people get a government check for $600 this stimulates the economy, but taxing them extra thousands of dollars per year in no way slows the economy. Nor does cutting their taxes by $600 a year or more do anything to stimulate the economy. >>>[/quote]

Very first thing outta my mouth to my wife when I heard about the rebates. “It never occurs to these pickpockets to just let us keep it in the first huh?”

This post was flagged by the community and is temporarily hidden.

[quote]thunderbolt23 wrote:
And even more importantly, if tax cuts create the kinds of economic benefits we need to fend off recessions and the like, what is the argument for raising taxes outside of a recession, when we could enjoy the same economic benefits?
[/quote]

If you honestly don’t know the answer to this question, you might want to look it up.

The economy has grown over the last 10 years. Yet incomes for the majority of americans have stagnated. Why has this happened? Is it acceptable? Should we try to spread growth over a society? Have trickle-down economics worked if most people aren’t better off when an economy is growing?

[quote]Gambit_Lost wrote:
The economy has grown over the last 10 years. Yet incomes for the majority of americans have stagnated. Why has this happened? Is it acceptable? Should we try to spread growth over a society? Have trickle-down economics worked if most people aren’t better off when an economy is growing? [/quote]

This doesn’t seem right. Where did you see economic growth of the nation vs. average wage stats?