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[balladofwindfishes]

Is it just me or do Dems grow balls at the ODDEST of times?

They know most of America wants the rich's taxes to go up, especially in their districts.
The people wanted the Bush tax cuts to go away, really badly. Polls were very strongly opposed to extending it.

A good politician would use this opportunity to try and trap the GOP into admitting that they either

1. Want the rich to share in the burden (which means they have to be for ending subsidies, raising taxes, ending loopholes; if they aren't, the Dems can run a campaign on them lying)
2. Want the rich to not share in the burden (look like absolute jerks, and have them go on record for it, the Dems can run a successful campaign pinning the GOP as the party that only cares about the wealthy)

 

[BigSicily]

Gotdamn it! Why can't the GOP be a little bit more responsible?

To some extent, they are -- that is, if you look at just the numbers and dynamics of our current budget. Forget about the ideology, labels and our silly little tribalistic instinct to fight for 'our' side and just look at the facts as presented by the CBO:

The GOP is holding out because, conceptually, raising taxes is equivalent to 'solving' the problem by the following solution:

Which, as you can see, really isn't a solution at all. Yes, there can be mild spending cuts as proposed by several democrats (many in good faith), but they are dramatically too small. Realistically, they are overwhelmed as the CBO projections will underestimate the debt increase if history is any indication as borrowing costs will increase. A single disruptive event can trigger such a disruptive event. Then there is the question of Obama's healthcare costs, if they scale as the chief actuary of Medicare claims, we're in huge trouble.

And this isn't even getting into the 'controversial' aspects of economic policy, such as what happens when the GDP variable (which the Y-axis is a % of) itself shrinks due to a change in tax policy. The CBO's Doug Elmendorf just testified that per dollar of revenue, increasing marginal rates on the rich have a larger effect (bang-for-buck, if you will) than anywhere else in the revenue distribution.

It isn't all just a game of brinkmanship as PantherLotus has eloquently laid out, although much of it -- sadly -- is.

 

[thekad]

The CBO's Doug Elmendorf just testified that per dollar of revenue, increasing marginal rates on the rich have a larger effect (bang-for-buck, if you will) than anywhere else in the revenue distribution.

Link?

 

[balladofwindfishes]

Haven't we had charts in this thread or an older poligaf that showed that tax rates have absolutely no effect on the GDP, and it's remained relatively stable through the last 50 years despite dramatic tax changes since then.

Because that would tell me that your second chart actually isn't that bad of a solution.

 

[PhoenixDark]

Yes they do. Democrats believe that decades of "government is the problem" Reaganisms will stick to the idiots actually repeating it when it goes down, and Republicans believe their own myths that the public will never blame the party out of power, that Obama is Hoover (or Carter or w/e meme you're repeating at this very moment).

The real cynic notes that in either case, it doesn't matter. When the shit hits the wall it will be like every other time the shit hits the wall. The wealthiest survive.* Oh sure, a couple will bite the bullet. Maybe one or two goes down with the ship. Who cares? Their children will still be the wealthiest people in the history of the world. And those that do actually burn are still friends with the other wealthiest people in the history of the world.



*And surely you know that the wealthiest are the ones in charge, right?

A default benefits no one, which is why it won't happen. Wall Street would implode.

 

[BigSicily]

Link?

Sure. My apologies. I did see that you, gcubed and empty_vessel couldn't find the quote, but I'm somewhat busy with real-world work and forgot to respond. Because I love you so much, I transcribed the exchange!

Not to be a bitch, but I truly think Google hurts people's research ability. All House Budget Committee meetings are on C-SPAN and I provided the date. It was John Yarmuth's (D - Kentucky) back-and-forth with Elmendorf at 1 hour and 5 minutes into the House Budget Committee meeting.

The entire quotation was:

Yarmouth: There's been a fair amount of conversation already about the impact of marginal tax rates. When you make those statements, that they reduce economic activity, do you assume marginal tax rates across the entire population and do you break it down as to the impact on economic activity of raising the marginal tax rates on people making over $250,000/year and then over a million dollars a year and is there a difference in the impact, economic impact, of those increases?

Elmendorf: Uh, so, congressman, we do look at the effects on a variety of income catagories -- I don't know exactly what they are, off hand -- Uhm, and we try to apply historical evidence about what we think the responsiveness would be; and you can see some of this analysis in the testimony we did for the Senate Budget Committee last fall about the different ways in which to extend the tax provisions. Some of those senarios we studied, we assume that all of the expiring provisions were extended -- that did, infact, occur at the end of last year -- and other scenarios we looked at only the tax provisions upto a certain point in the income distribution and not above that. I don't have those results at hand...

Yarmouth: Is it safe to say that, if you raise the marginal tax rate from 35% to 39.6% on people making over a million dollars a year that it will not have a huge drag on the economy, versus, extending the marginal rates on the other 99% of the population?

Elmendorf: Well, there's a question about the total impact and the total impact per dollar of revenue. So, there are many more people in the rest of the distribution, much more income earned, and thus changes in the marginal tax rates below that threshold will have a larger aggregate effect on the economy. But, per dollar of revenue lost, the effects are generally, uh, larger at the top of the income distribution because the changes in marginal tax rates -- uhm, are, uh, well they are... less revenue is given up, in a sense, relative to the change in the incentives. So, in terms of the distortion to the economy, per dollar of revenue lost, that is not smaller at the top than it is at the bottom; but it depends on the precise nature of the tax policy.

 

[Loudninja]

Republicans agree to revenue increases

(Reuters) - One day before a crucial U.S. budget meeting between the White House and congressional leaders, a high-ranking senator said Republicans have agreed to including significant revenue increases in a deficit-reduction framework.

"If you add up all of the revenues that we Republicans have agreed to, it's between $150 billion and $200 billion," said Senator Jon Kyl, the No. 2 Republican in the Senate.

Kyl said two possible ways to bring additional revenue to the government would be through sales of government property and additional fees for government services,

http://www.reuters.com/article/2011/07/06/us-usa-debt-idUSTRE7646S620110706

 

[PhoenixDark]

Republicans agree to revenue increases

http://www.reuters.com/article/2011/07/06/us-usa-debt-idUSTRE7646S620110706

“If the president wants to talk loopholes, we’ll be glad to talk loopholes,” Cantor said at his weekly roundtable with reporters. “We’ve said all along that preferences in the code aren’t something that helps economic growth overall. But listen, we’re not for any proposal that increases taxes, and any type of discussion should be coupled with offsetting tax cuts somewhere else.”

http://www.washingtonpost.com/busin...deal/2011/07/06/gIQAAMFk0H_story.html?hpid=z1

 

[balladofwindfishes]

"Remove loopholes
Cut taxes to make up the difference"


Haha, the GOP is like some kind of hair brain schemer from a sitcom.

 

[BigSicily]

Haven't we had charts in this thread or an older poligaf that showed that tax rates have absolutely no effect on the GDP, and it's remained relatively stable through the last 50 years despite dramatic tax changes since then.

Because that would tell me that your second chart actually isn't that bad of a solution.

Much to the contrary. That's something of a progressive-economic myth. I just posted above a quote from the non-partisan Congressional Budget Office's director who claims it has a larger effect per marginal dollar. That said, it's been established in economic theory and literature over the past half-century.

The contention, as Christina Romer recently pointed out in an op-ed, is that while her own work has shown that increasing taxation has a notable effect on GDP growth; there are questions if the multiplier is larger on tax changes or direct government spending. She presumes a 1.5 multiplier on direct spending. I, and many conservative and libertarian economists, dispute this. As an example, with revelations like today's that Obama's broadband infrastructure build-out cost roughly $349,234/house over all surveyed states and around $7,000,000/household in Montana (median household income ~45,000) (link), it seems hard to make work.

The tax surcharge imposed in 1968, as Romer admits, had a chilling effect on a booming GDP.

 

[Amir0x]

it's insane to me how never raising taxes has become this rallying call for Republicans. i am not sure how they ever think we'll really aggressively cut the deficit without some major taxes.

 

[balladofwindfishes]

The tax surcharge imposed in 1968, as Romer admits, had a chilling effect on a booming GDP.

Doesn't look very chilling to me

Looks like steady growth, even in times when tax rates were identical between the years

 

[BigSicily]

it's insane to me how never raising taxes has become this rallying call for Republicans. i am not sure how they ever think we'll really aggressively cut the deficit without some major taxes.

Perhaps you should study the problem. Just spend some time, for starters, reading about Hauser's Law. Then look at the graphic I posted above. Ask yourself, given the historic structural economic trends in the United States economy, for better or worse, what's different now?

And you'll see that the problem is that although GDP, in absolute terms, is back to pre-recession levels (link), spending has increased from a histrically acceptable 20% to 25% of GDP.

Yes, revenues are down significantly as a percentage of GDP (18% historic -> 15%), but they are expected to rebound in a growing economy in line with Hauser's Law.


Revenue is a short-term problem given positive growth. Spending is a long-term structural problem -- just ask Europe.

 

[BigSicily]

Doesn't look very chilling to me

Looks like steady growth, even in times when tax rates were identical between the years

Exactly! It's "chilling" in terms of the economy's velocity.

It was instituted because the economy was over-heating, as I stated. Christina Romer, former head of Pres. Obama's Council of Economic Advisor's -- no conservative by any means -- just admitted as much in a recent op-ed as well showing it quite definitively in her 2007 paper on supply-shocks.

 

[balladofwindfishes]

Exactly! It's "chilling" in terms of the economies velocity.

It was instituted because the economy was over-heating, as I stated. Christina Romer, no conservative by any means, just admitted as much in a recent op-ed as well as her 2007 paper on supply-shocks.

I don't know what an economic velocity is, but as far as growth goes, it looks like the line is merely moving with inflation.

I actually couldn't find a GDP line chart factored for inflation. I have a hunch it's probably a straight horizontal line.

 

[Oblivion]

Is it just me or do Dems grow balls at the ODDEST of times?

As much as I enjoy seeing Dems act like how they're SUPPOSED to be like, let's be real. This shit is just kabuki theatre. Dems could fucking destroy Republicans utterly if they went after them hard, but they choose not to cause they're beholden to the same richies that the Reps are.

 

[TacticalFox88]

As much as I enjoy seeing Dems act like how they're SUPPOSED to be like, let's be real. This shit is just kabuki theatre. Dems could fucking destroy Republicans utterly if they went after them hard, but they choose not to cause they're beholden to the same richies that the Reps are.

What benefit do the Dems get out of being beholden to the rich? I'd rather have the other 98 percent of the income spectrum on my side.

 

[Hitokage]

What benefit do the Dems get out of being beholden to the rich? I'd rather have the other 98 percent of the income spectrum on my side.

Labor is dead, and they aren't interested in reviving their old power base.

 

[Oblivion]

"Remove loopholes
Cut taxes to make up the difference"


Haha, the GOP is like some kind of hair brain schemer from a sitcom.

Once again, to further bolster my previously mentioned theory, one does not lose such an argument unless one WANTS to.

Also: See BigSicily.

 

[Hitokage]

Hauser's Law is the taxation equivalent of models that produced AAA rated CDOs.

 

[Chichikov]

Howser law?
Again?
How many times do we need to see supply side economics fall on its fucking face before you guys start thinking about reevaluating your convictions?

p.s.
In case you guys missed that post.

 

[Oblivion]

What benefit do the Dems get out of being beholden to the rich? I'd rather have the other 98 percent of the income spectrum on my side.

Obama's second largest political contributor was Goldman friggin Sachs. I think that's all that needs to be said.

 

[BigSicily]

I don't know what an economic velocity is, but as far as growth goes, it looks like the line is merely moving with inflation.

So, we're talking about the derivative. The rate of change in a variable: how fast it's increasing. In the late 1960s, the increase in output was quickly getting larger and expected to continue doing so for a long time. They instituted a tax surcharge.

Imagine you're in a car doing down hill, look at yor speedometer and see the numbers 2,3,6,11,20... and you look up and see the hill extends for sometime. You don't know what to do, so you pull a Fred Flintstone and push down your feet and hope for the best. Yet, you keep on increasing in speed -- 21,22,23,24... -- but, at least the rate of increase has stopped.

So, after your eventually stop and collect the data, build a few models and run the regressions: you find that the tax surcharge was responsible for slowing the rapid increase. It blunted the quick increase, leaving the over-heating economy in a state of linear growth.


Now, the question is if these results can be generalized? Will the same chilling effect occur if we apply the equivalent of a tax surcharge on an already slow and perhaps contracting economy? Nobody knows the definitive answer to this.

 

[balladofwindfishes]

but between 1935 and 1950 the income tax rates were the highest they have ever been, and yet the GDP increased the fastest it's ever increased.

 

[Escape Goat]

but between 1935 and 1950 the income tax rates were the highest they have ever been, and yet the GDP increased the fastest it's ever increased.

baby boomers started getting jobs?

 

[BigSicily]

Hauser's Law is the taxation equivalent of models that produced AAA rated CDOs.

So, we can base our views on 60 years of empirical observations or your witty and very profound ad-hominem.

Why should we dismiss 60 years of observations that fit a nice predictive heuristic/model, not in favor of a better model or because of negative evidence, but out of blatant ideology?

 

[Chichikov]

but between 1935 and 1950 the income tax rates were the highest they have ever been, and yet the GDP increased the fastest it's ever increased.

No, that was other factors.
Same as it was other factors all the other times when cutting taxes did shit all but raise deficits.
It's always something else.
Fucking communist uncontrolled variables, always fucking up supply side economics.

But mind you, had the GDP actually shrank during those years it would've been proof positive that tax cuts work.

 

[Hitokage]

So, we can base our views on 60 years of empirical observations or your witty and very profound ad-hominem.

Why should we dismiss 60 years of observations that fit a nice predictive heuristic in favor of blatant ideology?

Don't use latin terms you don't understand.

 

[BigSicily]

Apparently you prefer misusing latin terms.

Besides, the latin is used to describe the type of informal logic by which you're trying to deny me the right to make a case for my position. The use of latin is merely descriptive of the concept.

I bet you also think Chalmer's p- zombies only apply to actual zombies. *roll*

 

[Hitokage]

How nice of you to enlighten me in the ways of pottery, or language--same thing.

 

[Chichikov]

Besides, the latin is used to describe the type of informal logic by which you're trying to deny me the right to make a case for my position. The use of latin is merely descriptive of the concept.

I bet you also think Chalmer's p- zombies only apply to actual zombies. *roll*

You really don't need to double down on every mistake you make, especially if it's something so stupid, small and irrelevant to the discussion at hand.
Seriously man, it's like watching Bachmann or Palin trying to explain a gaffe.
And much like those ladies, you embarrass yourself when you do so, much more than the original slip of the keyboard could ever do.

 

[Jackson50]

Go Crazy-lady!

The establishment could be forced to have to deal with her. They dealt with Palin, the can handle Bachmann. Of course she'll lost badly but that is what happens when your base is filled with superstitious and paranoid nuts.

They dealt with Palin, but she was not the presidential nominee. As the actual nominee, Bachmann would diminish the party's prospects of defeating Obama. They will not allow it. She would be a disaster.

 

[Jason's Ultimatum]

but between 1935 and 1950 the income tax rates were the highest they have ever been, and yet the GDP increased the fastest it's ever increased.

Weren't we manufacturing everything in this country? Exporting, too? I'm sure there are other variables, too, like the New Deal, stronger unions, and building a lot of shit during WW2.

Kyl said two possible ways to bring additional revenue to the government would be through sales of government property and additional fees for government services,

Oop, tax increase!

 

[Chichikov]

Oop, tax increase!

If it's regressive, the GOP can work themselves into voting for it.

 

[GhaleonEB]

Doesn't look very chilling to me

Looks like steady growth, even in times when tax rates were identical between the years

The big difference is in what portions of the population benefited from the GDP expansion, which has been anything but uniform over the years. The generation of wealth counts equally toward GDP whether one person or a million earn it. EV has posted plenty of graphs in that department.

 

[balladofwindfishes]

Weren't we manufacturing everything in this country? Exporting, too? I'm sure there are other variables, too, like the New Deal, stronger unions, and building a lot of shit during WW2.

The big difference is in what portions of the population benefited from the GDP expansion, which has been anything but uniform over the years. The generation of wealth counts equally toward GDP whether one person or a million earn it. EV has posted plenty of graphs in that department.

So then the tax rate really is fairly unrelated to the GDP then?

Because that's what the numbers are telling me. And I put more faith in the hard numbers rather than the opinions of some "fair and balanced" economists.

 

[Chichikov]

The big difference is in what portions of the population benefited from the GDP expansion, which has been anything but uniform over the years. The generation of wealth counts equally toward GDP whether one person or a million earn it. EV has posted plenty of graphs in that department.

Also -

"Too much and too long, we seem to have surrendered community excellence and community values in the mere accumulation of material things. Our gross national product ... if we should judge America by that - counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage. It counts special locks for our doors and the jails for those who break them. It counts the destruction of our redwoods and the loss of our natural wonder in chaotic sprawl. It counts napalm and the cost of a nuclear warhead, and armored cars for police who fight riots in our streets. It counts Whitman's rifle and Speck's knife, and the television programs which glorify violence in order to sell toys to our children.

"Yet the gross national product does not allow for the health of our children, the quality of their education, or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages; the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage; neither our wisdom nor our learning; neither our compassion nor our devotion to our country; it measures everything, in short, except that which makes life worthwhile. And it tells us everything about America except why we are proud that we are Americans."

Just to show how much the left has fallen in this country.

 

[ToxicAdam]

but between 1935 and 1950 the income tax rates were the highest they have ever been, and yet the GDP increased the fastest it's ever increased.

If you are going to play that simpleton game of correlation = causation, then lets go by the metric of government spending as a percentage of GDP.



http://www.usgovernmentspending.com/us_20th_century_chart.html


Let's roll back spending below the 30 percent mark and watch the economy boom like the 40's and 50's. Herpderp

 

[GhaleonEB]

So then the tax rate really is fairly unrelated to the GDP then?

Because that's what the numbers are telling me. And I put more faith in the hard numbers rather than the opinions of some "fair and balanced" economists.

I'm much less versed in the relationship between GDP and tax rates than I am with the increased stratification of wealth in the US as tax rates on the upper incomes have fallen.

Honestly, I'm also much less concerned about it. GDP is pointless if the gains are not going to new jobs for the population or to increased living standards for them. The story of the past decade has been flat wages and rising costs (mostly healthcare) for the working class, and a sharp increase in those below the poverty level; all of the gains have gone to a small handful at the top.

If the benefits of increased GDP are not shared among the population, but gobbled up by a few as has been the case, then it might as well not exist at all.

 

[balladofwindfishes]

If you are going to play that simpleton game of correlation = causation, then lets go by the metric of government spending as a percentage of GDP.
http://www.usgovernmentspending.com/us_20th_century_chart.html
Let's roll back spending below the 30 percent mark and watch the economy boom like the 40's and 50's. Herpderp

I was specically replying to a post that said that high taxes caused the growth of the GDP to slow down dramatically.

The entire point of my post what that high taxes isn't a cause and effect relationship on the GDP

 

[Hitokage]

The big difference is in what portions of the population benefited from the GDP expansion, which has been anything but uniform over the years. The generation of wealth counts equally toward GDP whether one person or a million earn it. EV has posted plenty of graphs in that department.

Indeed. One shouldn't take the underlying assumptions from the use of such metrics for granted. Same for the tax figures. It makes the difference between a healthy society and one rotting at its core.

 

[ToxicAdam]

I was specically replying to a post that said that high taxes caused the growth of the GDP to slow down dramatically.

The entire point of my post what that high taxes isn't a cause and effect relationship on the GDP

Oh sorry, I've just seen that exact argument made so many times in these threads, I assume it was just another round of it.

 

[BigSicily]

The big difference is in what portions of the population benefited from the GDP expansion, which has been anything but uniform over the years. The generation of wealth counts equally toward GDP whether one person or a million earn it. EV has posted plenty of graphs in that department.

This is a separate point from what was being discussed -- the effects of 1968's tax surcharge on aggregate GDP. It could be true, could be false: but it is certainly unrelated.

PS. Chichikov, If I'm wrong then I'll say I'm sorry. Hitokage, instead of addressing my point, attacked the argument by trying to ridicule it. This is not proper behavior, I would presume doubly so if that red-name indicates he is a moderator as I'm guessing it does.

 

[Byakuya769]

It's hard to take seriously people who use the projection in spending growth as a blunt tool for hammering their taxation preference. All those lovely graphs are merely showing exploding healthcare costs and our hesitance to use the various proven models across the world to avert them. You don't want higher taxes trailing ever increasing spending, FINE. Get serious about doing something concerning healthcare.

 

[Jason's Ultimatum]

BTW, I had no idea Bachmann's husband compared gays to barbarians, and they should be discipline. Stay classy.

 

[Hitokage]

PS. Chichikov, If I'm wrong then I'll say I'm sorry. Hitokage, instead of addressing my point, attacked the argument by trying to ridicule it. This is not proper behavior, I would presume doubly so if that red-name indicates he is a moderator as I'm guessing it does.

 

[GhaleonEB]

This is a separate point from what was being discussed -- the effects of 1968's tax surcharge on aggregate GDP. It could be true, could be false: but it is certainly unrelated.

To the extent that GDP is being used as a measure of the health of the nation's economy as it is in this discussion, my point is important because using GDP in that way masks the impact of the policies being discussed. The implication is, look no impact to top line GDP. And you may be right.

But just below that top line, enormous damage is being done. That is entirely relevant to the conversation.

 

[PantherLotus]

Hey look it's BigSicily! I was beginning to think something had happened to him.

 

[Amir0x]

good times, good times

 

[Matt]

Then there is the question of Obama's healthcare costs, if they scale as the chief actuary of Medicare claims, we're in huge trouble.

Wait, why are you using the CBO's numbers in one context, but then ignoring how they predict that the ACA will help to lower healthcare spending throughout the system?