Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

[St. Clown]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

Looks like the Cypriot government is looking to join the thievery business: http://www.foxnews.com/world/2013/0...om-banks-as-eu-takes-aim-at-russian-deposits/

It's a pretty small country, and if they end up with a reputation that says they're not welcoming or respectful of foreign assets, and thus making its way to a broader reputation of foreigners in general, that economy is going to absolutely crash. Going down in blazes. Tourism and foreign owned bank assets. That's all they have going for them there.

 

[FreshFish]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

While a certain amount of "progressive" income tax rates is widely accepted, "too much" reliance on the highest earners is often counter-productive. It's been seen more than once at the state level in particular: if you raise the top rate on the highest earners "too much" you actually lose revenue, since the highest earners either can adjust the form in which they declare income (by shifting assets from one asset class to another) or they can merely take up residence in another state for at least 183 days of the year (and file non-resident returns for a partial year).

More importantly, the highest priority of a tax code generally should be to promote economic growth: lower rates on a growing economy generate more revenue than higher rates in a stagnant economy (which has been too painfully clear the past four years! at least to anyone with eyes to see and ears to hear, I do realize that there is a considerable amount of willful blindness and turning a deaf ear underway these days )

 

[unofan]

While a certain amount of "progressive" income tax rates is widely accepted, "too much" reliance on the highest earners is often counter-productive. It's been seen more than once at the state level in particular: if you raise the top rate on the highest earners "too much" you actually lose revenue, since the highest earners either can adjust the form in which they declare income (by shifting assets from one asset class to another) or they can merely take up residence in another state for at least 183 days of the year (and file non-resident returns for a partial year).

More importantly, the highest priority of a tax code generally should be to promote economic growth: lower rates on a growing economy generate more revenue than higher rates in a stagnant economy (which has been too painfully clear the past four years! at least to anyone with eyes to see and ears to hear, I do realize that there is a considerable amount of willful blindness and turning a deaf ear underway these days )

You mean those last 4 years when rates were historically low? Those rates?

 

[FreshFish]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

You mean those last 4 years when rates were historically low? Those rates?

Do not know what you mean. Federal income tax rates from 2003 through 2012 were the same throughout the entire period, no?

Meanwhile, it is pretty clear that we are going through a sub-par recovery compared to historical norms. I suppose the fact that there's been class warfare rhetoric throughout the entire "recovery" is merely coincidence, and to the devoted faithful there is no correlation between attacking "the rich" for all our problems and their reluctance to invest as they have historically done??

Do you ever think for yourself or merely react with the party line du jour?

 

[unofan]

Do not know what you mean. Federal income tax rates from 2003 through 2012 were the same throughout the entire period, no?

Meanwhile, it is pretty clear that we are going through a sub-par recovery compared to historical norms. I suppose the fact that there's been class warfare rhetoric throughout the entire "recovery" is merely coincidence, and to the devoted faithful there is no correlation between attacking "the rich" for all our problems and their reluctance to invest as they have historically done??

Do you ever think for yourself or merely react with the party line du jour?

So you're admitting historically low rates occurred during a period of stagnant recovery?

I don't get your point. You're arguing against high rates during a stagnant economy, but use low rates as your example.

And I'd point out that the GOP had no problem raising taxes when necessary (such as to pay for wars) as recently as Bush Sr. It wasn't until they all took the Grover pledge that they became the party of no more taxes. It's not my fault the gop would rather bow down to an idiot with a 5th grade philosophy than act responsibly.

 

[FlagDUDE08]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

So you're admitting historically low rates occurred during a period of stagnant recovery?

I don't get your point. You're arguing against high rates during a stagnant economy, but use low rates as your example.

And I'd point out that the GOP had no problem raising taxes when necessary (such as to pay for wars) as recently as Bush Sr. It wasn't until they all took the Grover pledge that they became the party of no more taxes. It's not my fault the gop would rather bow down to an idiot with a 5th grade philosophy than act responsibly.

The economy pretty much became stagnant in 2001, when not only had the tech bubble burst, but the country was also attacked. Fishy has a point, he just messed up the dates. Sure, we tried to recover during the Dubya years (I'm sure many people forgot the historically low federal funds rates in late 2001 and 2002, went down to 1%), but as we saw through commodity prices, nothing was really improving, it was just inflating.

Maybe the lesson to take from what has happened in the last 20 or so years is, instead of continuously trying to grow, let's actually just try to work with what we have.

 

[St. Clown]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

So you're admitting historically low rates occurred during a period of stagnant recovery?

I don't get your point. You're arguing against high rates during a stagnant economy, but use low rates as your example.

And I'd point out that the GOP had no problem raising taxes when necessary (such as to pay for wars) as recently as Bush Sr. It wasn't until they all took the Grover pledge that they became the party of no more taxes. It's not my fault the gop would rather bow down to an idiot with a 5th grade philosophy than act responsibly.

You know better than to make that argument. There's more to getting an economy going than simply the tax rates. Raising tax rates will create just one more hurdle in the way of getting real GDP growth going again.

 

[unofan]

You know better than to make that argument. There's more to getting an economy going than simply the tax rates. Raising tax rates will create just one more hurdle in the way of getting real GDP growth going again.

That's fine, but then you need to stop worrying about the budget deficit. You get to close the budget gap, or encourage job growth. You can't do both at the exact same time.

Praising paul Ryan's budget for closing the deficit one second and then whining about taxes hurting gdp growth the next just makes you (in the royal sense) appear conflicted. Because the spending cuts in Ryan's budget would hurt gdp growth as much or more than the equivalent in higher taxes.

 

[FlagDUDE08]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

That's fine, but then you need to stop worrying about the budget deficit. You get to close the budget gap, or encourage job growth. You can't do both at the exact same time.

Praising paul Ryan's budget for closing the deficit one second and then whining about taxes hurting gdp growth the next just makes you (in the royal sense) appear conflicted. Because the spending cuts in Ryan's budget would hurt gdp growth as much or more than the equivalent in higher taxes.

Even the left is conflicted. Sure, they can agree to cut defense, but gosh help if you even think about touching the PPACA. The converse is also true with the right. Even with the Taxmageddon bill from before, it didn't touch a single one of the left's pet projects. And don't tell me they're funded, or else we wouldn't be running trillion dollar a year deficits right now.

 

[FreshFish]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

You get to close the budget gap, or encourage job growth. You can't do both at the exact same time.

That makes no sense at all and actually is undermined by plenty of empirical data. Look at the late 1990s for one example, the federal government ran a surplus and there was plenty of job growth. The Coolidge Presidency is an even better example, government spending actually declined in real terms and job growth was very good.

You can start with opinion and twist facts or you can start with data and see what it indicates. Apparently there is no possibility of constructive dialog between people who refuse to see the world as it is and those who find opportunity in noticing what actually is going on.

Money in private hands is almost always more productive than money spent by government, if only because of accountability. If a person fails in business, they are out of a job; if a person fails as a government manager, s/he often gets promoted merely on the basis of longevity. How often do any government bureaucrats ever get fired for failure to perform on the job?

 

[Patman]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

That's fine, but then you need to stop worrying about the budget deficit. You get to close the budget gap, or encourage job growth. You can't do both at the exact same time.

Praising paul Ryan's budget for closing the deficit one second and then whining about taxes hurting gdp growth the next just makes you (in the royal sense) appear conflicted. Because the spending cuts in Ryan's budget would hurt gdp growth as much or more than the equivalent in higher taxes.

Budget deficits matter because national debt makes the whole society poor. The way you encourage growth is by getting out of the way of people... provide them a reason to put their money in resources and people. In other words, clear the ****ing road. It isn't a problem with the actual number of dollars, its a problem of the flow of dollars from the inefficient and non-employing to the efficient and employing.

Shoveling around gov't money is a false boost because you will need to pay it back at some point with interest. You only do so in the HOPE that your societal gains will outpace compound interest. As we've seen in recent history, it isn't doing so. The Eurozone proves that in spades.

GDP growth is needed but it can't be expensed by inflation. I think you're mistaking the idea that somehow the government can create value. It can only put resources into a system and usually does so poorly on the best of terms. You are surely not going to do it in a busted gunked up system we've allowed. Fact is, that gov't usually spends money in a very slow and ignorant manner subject to social whims rather than efficiency.

---

As an aside, I'm glad we've stop concerning ourselves with all the fraud and waste in the system... or do we not go after these bugaboos? If you think taxes are sacred, that's nothing compared to some of the other cows. There are a lot of things NOT to defend in our current system... why not go after those for a change instead of the "everything is sacred" approach?

 

[unofan]

That makes no sense at all and actually is undermined by plenty of empirical data. Look at the late 1990s for one example, the federal government ran a surplus and there was plenty of job growth. The Coolidge Presidency is an even better example, government spending actually declined in real terms and job growth was very good.

You can start with opinion and twist facts or you can start with data and see what it indicates. Apparently there is no possibility of constructive dialog between people who refuse to see the world as it is and those who find opportunity in noticing what actually is going on.

Money in private hands is almost always more productive than money spent by government, if only because of accountability. If a person fails in business, they are out of a job; if a person fails as a government manager, s/he often gets promoted merely on the basis of longevity. How often do any government bureaucrats ever get fired for failure to perform on the job?

And I can point to hoover trying to balance the budget during the depression or current European austerity measures as evidence it doesn't work like you think.

Most government actions are going to be dwarfed by the overall economy. We're inherently talking about the margins, and all the moreso in healthy economies when private spending is strong. Take the sequestration- no one is saying it'll single handedly take us back into a recession. What economists are saying is that it will take up to a 1/2 percent off the growth rate. Whether that turns a 3% rate to 2.5 or a .25% rate to -.25 remains to be seen and will depend on numerous other factors. What economists all agree on, though, is that sequestration will have a negative impact. Of course, those numbers are free to be spun in hundreds of ways, since there's no way to prove it one way or the other, since we don't get to try it in an isolated setting or run it multiple times.

So with regards to the 90s, you can claim the budget caused the good economy, but it's far more likely the economy was going strong regardless of the government's acts. Economic theory would say that balancing the budget by cutting spending probably shaved something off the top of the gdp, but that is not only ok but preferable under a Keynesian model because you want to smooth the cycle, shrinking booms and busts alike. You're also supposed to pay down debt in good times to help maintain spending in lean times.

What you don't want to do is put the brakes on in a weak economy. Implementing a policy that cuts GDP growth by 1% is fine if the growth would otherwise be 5-6%. It's less fine if we're turning 1.5% growth to .5% growth. So again, you can push for a balanced budget, or job growth policies, but not both at once.

 

[Rover]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

unofan is dead on about austerity vs growth. While there's always a balance, you don't send the economy into a rececssion in order to balance the budget unless the consequences of not doing so (hyperinflation, devalued currency, etc) are forcing you to.

What right leaning economists never tend to include in their dire warnings is that the US has nothing to do with Greece, Cyprus, the Vatican, or anywhere else. It is the world's largest economy, 2.5 times as big as China, and its currency is the one the world turns to for deposits and trade. Therefore, a more balanced approach to bringing down deficits while increasing growth is allowable where for other countries it may not be. For a variety of reasons, the US can play by a different set of rules.

Try implementing the Ryan budget for example and you'll make the Great Depression look like the roaring 90's. Furthermore, only in fantasyland will voters willingly accept this drastic reduction in their standard of living. Simply put, they'll revolt, hopefully only at the ballot box, and reverse all of these actions immediately. Any student of history can tell you that bad economic times of the 30's gave rise to some of the worst regimes the world has ever known (Japan, Germany, Italy) while this was staved off in American by FDR's brilliant New Deal program.

But at the end of the day, we have a solid test case for the kind of austerity conservatives want to bring to the US. Its called England, and its been a disaster. Public policy has pushed the country, a very similar one to the US economy, into a needless double digit recession. That in turn has caused the govt to push back the point where the budget will be balanced, despite cuts, because the revenue has been stiffled. Nobody can seriously argue Great Britain is better off because of this. To implement that in America? No thanks.

 

[FlagDUDE08]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

And I can point to hoover trying to balance the budget during the depression or current European austerity measures as evidence it doesn't work like you think.

Most government actions are going to be dwarfed by the overall economy. We're inherently talking about the margins, and all the moreso in healthy economies when private spending is strong. Take the sequestration- no one is saying it'll single handedly take us back into a recession. What economists are saying is that it will take up to a 1/2 percent off the growth rate. Whether that turns a 3% rate to 2.5 or a .25% rate to -.25 remains to be seen and will depend on numerous other factors. What economists all agree on, though, is that sequestration will have a negative impact. Of course, those numbers are free to be spun in hundreds of ways, since there's no way to prove it one way or the other, since we don't get to try it in an isolated setting or run it multiple times.

So with regards to the 90s, you can claim the budget caused the good economy, but it's far more likely the economy was going strong regardless of the government's acts. Economic theory would say that balancing the budget by cutting spending probably shaved something off the top of the gdp, but that is not only ok but preferable under a Keynesian model because you want to smooth the cycle, shrinking booms and busts alike. You're also supposed to pay down debt in good times to help maintain spending in lean times.

What you don't want to do is put the brakes on in a weak economy. Implementing a policy that cuts GDP growth by 1% is fine if the growth would otherwise be 5-6%. It's less fine if we're turning 1.5% growth to .5% growth. So again, you can push for a balanced budget, or job growth policies, but not both at once.

Did you happen to look at HOW Hoover tried to balance the budget? The Hawley-Smoot Tariff Act. Did it work? Anybody? Anybody? Lesson learned: You cannot just simply raise taxes to get yourself out of a downward economy. For the liberal trolls, emphasis upon the word SIMPLY.

 

[unofan]

Did you happen to look at HOW Hoover tried to balance the budget? The Hawley-Smoot Tariff Act. Did it work? Anybody? Anybody? Lesson learned: You cannot just simply raise taxes to get yourself out of a downward economy. For the liberal trolls, emphasis upon the word SIMPLY.

Tell me where anyone has ever said raising taxes will improve the economy. I would love to see that.

 

[FlagDUDE08]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

Tell me where anyone has ever said raising taxes will improve the economy. I would love to see that.

Well, you spent the whole post whining that cutting spending will cut GDP and won't balance the budget; what other choices do you have?

Sequestration is like when Canada went on strike in that one South Park episode and the citizens got coupons to Bennigan's. It doesn't do a gosh darn thing. Once those morons on the left understand that their communist health policies are what are REALLY killing the country and need to be eliminated, THEN we might be able to get somewhere. It's reminding me of that stubborn Greek chef on last week's Kitchen Nightmares. They have to downsize the menu, but he doesn't want to cut anything.

 

[unofan]

Well, you spent the whole post whining that cutting spending will cut GDP and won't balance the budget; what other choices do you have?.

Where did I say it wouldn't balance the budget?

This is a nice strawman you're building.

 

[FlagDUDE08]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

Where did I say it wouldn't balance the budget?

This is a nice strawman you're building.

You're talking about all this stuff about balancing the budget, but then whining about how we can't bring GDP growth down because the economy is weak.

In other news, looks like Paul Ryan's budget passed in the House: http://www.syracuse.com/news/index....ington_house_repu_1.html#incart_river_default

 

[unofan]

You're talking about all this stuff about balancing the budget, but then whining about how we can't bring GDP growth down because the economy is weak.

In other news, looks like Paul Ryan's budget passed in the House: http://www.syracuse.com/news/index....ington_house_repu_1.html#incart_river_default

Yep. That's a wonderful strawman you've built for yourself. It must be nice arguing against something that was never said or even implied.

 

[Rover]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

You beat me to it unofan. Who -ever- implied that raising taxes boosts the economy? Rather what people on the left tend to argue is that there's a certain level of funding that's needed, largely via taxes, to operate the government sufficiently. The idea that citizens will just happily accept massive cuts to their health care spending, especially in their senior years, is ludicrous. The trick to cutting spending isn't to cut needed programs, its to make them run better. Changes to entitlements that make the work better or maintain service levels at lower cost should be focused on like a laser beam. Ridiculous neo-conartist circle jerk plans like Ryan's budget need to be laughed out of the discussion, which the public just did in the last election.