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View Full Version : INCONVENIENT TRUTH OF THE DAY 02/22/12 PART DEUX!



LWW
02-22-2012, 06:23 AM
Raising taxes to confiscatory levels decreases gubmint revenue, thereby leaving less money for social programs ... and the poor and middle class end up as sacrificila lambs on the funeral pyre of the misguided left's idea of what is "FAIR." (http://www.telegraph.co.uk/finance/personalfinance/consumertips/tax/9097219/50p-tax-rate-failing-to-boost-revenues.html)

Soflasnapper
02-22-2012, 12:49 PM
No, this is all part of the right's austerity worship, and 'leaving less money for social programs' is already done on the social program spending side itself, as a result of that very austerity.

The left is more associated with Keynesianism than austerity, and that economic theory would call for continuing spending on social programs AND maintaining lower tax rates (or instituting them), for as long as the economy is in recession.

And 50% is not a confiscatory rate. How dare you criticize Reagan's preferred top rate (the rate his signature tax cut plan took them to, and kept them at, for 6 years)? Actual and true confiscatory rates did not decrease this country's revenue when they were at their post-WWII levels of 93%, or when they were at the 73% where JFK dropped unearned income to.

LWW
02-22-2012, 02:24 PM
It's a shame you can't review anything honestly.

Reagan was able to get to a 50% ... it was not his "PREFERRED RATE" as you claim.

Oh ... what flooded the treasury? A 28% top rate with nearly all deductions removed.

Oh ... what did Obama's debt commission suggest? What's that? The same type of deal? But ... I already knew that.

Soflasnapper
02-22-2012, 05:25 PM
Yes, it WAS his preferred rate.

He stated that in his testimony before the Congress as a private citizen, and that was what he wanted in his tax rate cut.

If you know of any evidence that he pushed for a still lower top rate, but had to in the end settle for this rate against his will or preference, please share it.

Obama's debt commission suggested NOTHING, as it was not able to gain the supermajority required by its terms of organization to affirm their report as its mandate called for.


Oh ... what flooded the treasury? A 28% top rate with nearly all deductions removed.

Well, no, not exactly, and not at all, really. These additional parts of the reform, and other things not really part of any tax cut, also pumped up the revenues.

The BOTTOM rate was raised from 11% to 15%. On everybody.

The capital gains tax rate increased from as max of 20% to 28%, because it was eliminated.

The investment credit was entirely eliminated for businesses, and they had their depreciation schedules lengthened (thereby owing more each year).

Forcing families to supply the Social Security numbers of their dependent children of over age 5 found 7 million fewer dependent deductions to be filed that next year (a welcome reduction in fraud, but neither a result of the dropped top rate, nor a particularly welcome procedure, as it caused families to need to get SS #s for infants, once fully phased in).

50% of all Social Security income (for persons earning about $36k or more in retirement) became taxable, when it had been tax free before. The taxable limit of earned income to which the payroll tax applied was pushed up in phases, and the rate applied to that tax pushed up by ~50%.

Previously deductible consumer interest payments (as for credit cards, or auto loans) were disallowed, causing the unsheltering of all such interest payments from income tax (and that was when credit card interest rates were still super high, i.e., very costly).

The preferred pass-through treatment of passive loss investments was sharply curtailed, so the various gas and oil leasing limited partnerships lost their business model (causing shut downs in drilling), and the REITs similarly lost their limited partnership passive loss pass-throughs, which swiftly tanked the commercial real estate market when they sold off their positions and demand was lessened, substantially causing the S&L crisis. From this alone, we really should book a $500 billion to $1 trillion loss against whatever revenues were gained (briefly), as that was the cost of the 30-year financed payoff of the S&Ls.

Lastly, and most importantly, although the tax reform was allegedly and maybe really tax revenue neutral, the dirty secret was that in the short run, it was designed to create more revenue than the baseline before, i.e., in the first year, it was a revenue gainer.

And really that's all we see. A one-year spike in total revenues in '87 of 11%, not a lot more of an increase than the couple 10%s seen in the years before, and then a DECLINE in the increase to just 6.4%, year over year. Some part of the 11% increase that ONE YEAR was people who were able to do so, deferring '86 income to '87, since they knew the top marginal rate would be lower. (A trick available only one time, unfortunately.)

LWW
02-23-2012, 04:17 AM
TRANSLATED:

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Soflasnapper</div><div class="ubbcode-body">I WISH ... I WISH ... I WISH IT WASN'T TRUE ...</div></div>

LWW
02-23-2012, 04:23 AM
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Soflasnapper</div><div class="ubbcode-body">Yes, it WAS his preferred rate.

He stated that in his testimony before the Congress as a private citizen, and that was what he wanted in his tax rate cut.

If you know of any evidence that he pushed for a still lower top rate, but had to in the end settle for this rate against his will or preference, please share it.</div></div>

How about reality? Does that work for you?

Obviously not.

<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">The changes to the federal tax code were much more substantial. The top marginal tax rate on individual income was reduced from 70 percent to 28 percent. The corporate income tax rate was reduced from 48 percent to 34 percent. The individual tax brackets were indexed for inflation. And most of the poor were exempted from the individual income tax. These measures were somewhat offset by several tax increases. An increase in Social Security tax rates legislated in 1977 but scheduled for the eighties was accelerated slightly. Some excise tax rates were increased, and some deductions were reduced or eliminated.</div></div>
Facts, they are such stubborn things. (http://www.econlib.org/library/Enc1/Reaganomics.html)

Soflasnapper
02-24-2012, 03:48 PM
I know you are a lot younger than I am, so I'll give you a pass for not knowing the details of the Reagan '80s personally to realize why you're wrong.

Niskanen is telescoping history, and obscuring rather than revealing the time sequence (short piece, didn't want to cludge up the narrative, I presume, since he knows the truth I'm sure, if you don't. As Reagan's economic team leader from '81-'85, what was the top rate? For that matter, in '86, or '87? '81-'86, it was 50%. '87, 38%).

Yes, the '86 tax simplification bill reduced the top marginal rate from 50% to 28% (but in two steps). That was the Bradley/Gephardt bill that did it. (Note, two Democrats were the leads, one in the Senate, one in the House. They had proposed this in 1982, as the Fair Tax Act, and it went nowhere.)

Here's the bill's tick-tock (http://articles.philly.com/1986-05-18/news/26050966_1_tax-code-tax-rates-fair-tax)

Reagan decided out of self-defense to pick up the bill's content and make his own proposal (as the linked article describes). It also went nowhere from '84 until '86, when Bill Bradley finally got it pushed through. Note also, the GOP was still in the majority in the Senate through the end of '86, but this bill was not named after a Republican, because the Republicans didn't author or sponsor it.

The facts are that Reagan was satisfied with the 50% rate, and didn't move a bill to change the top rate still lower, for six years, when the Democrats finally did.

cushioncrawler
02-24-2012, 04:04 PM
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Soflasnapper</div><div class="ubbcode-body">......The left is more associated with Keynesianism than austerity, and that economic theory would call for continuing spending on social programs AND maintaining lower tax rates (or instituting them), for as long as the economy is in recession.......</div></div>The left and Obama are not Keynesian.
Keynes' medicine woz a bottle of non-funded gov spending.

The usofa iz argueing about uzing bottles of funded gov spending.
So, when the argueing finishes, no matter who wins, everyone loozes.
mac.
Americadagrateizgowandownin8.

JohnnyD
02-25-2012, 12:55 AM
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: LWW</div><div class="ubbcode-body"><div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Soflasnapper</div><div class="ubbcode-body">Yes, it WAS his preferred rate.

He stated that in his testimony before the Congress as a private citizen, and that was what he wanted in his tax rate cut.

If you know of any evidence that he pushed for a still lower top rate, but had to in the end settle for this rate against his will or preference, please share it.</div></div>

How about reality? Does that work for you?

Obviously not.

<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">The changes to the federal tax code were much more substantial. The top marginal tax rate on individual income was reduced from 70 percent to 28 percent. The corporate income tax rate was reduced from 48 percent to 34 percent. The individual tax brackets were indexed for inflation. And most of the poor were exempted from the individual income tax. These measures were somewhat offset by several tax increases. An increase in Social Security tax rates legislated in 1977 but scheduled for the eighties was accelerated slightly. Some excise tax rates were increased, and some deductions were reduced or eliminated.</div></div>
Facts, they are such stubborn things. (http://www.econlib.org/library/Enc1/Reaganomics.html)

</div></div> Great post Sir LWW......

LWW
02-25-2012, 05:10 AM
You must remember the mantra of the O-cult JohnnyD ... "Just because you can prove that something is true doesn't mean that you have proved something is true,"