PILOT SPIN
Spin Zone => Spin Zone => Topic started by: Little Joe on May 08, 2020, 08:01:54 AM
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I fully understand the concept of lower taxes results in greater profit and higher tax revenue. But there are some limits to that theory.
These CoronaVirus "relief" bills where Congress is throwing trillions of dollars, and the President is passing them are just unbelievable to me. But let's just assume they were necessary and right. Now, how do we pay for that?
I don't believe that leaving taxes low or even lowering them more will generate near enough revenue to pay for them.
And I don't think we should just extend the debt for another 50 to 100 years so our (your) children and grand children and great grand children will have to pay for them.
This may be the first time in my life that I might agree to a "temporary" (don't laugh) tax increase. It might be 10 or 15 year temporary, but I see no other way of paying this off. And it shouldn't be just a "tax the rich" solution. Everybody has to pay. After all, (almost) everyone except the moderately rich and up got those stimulus checks.
Tell me where I am wrong and I might even agree with you. I really want to.
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Well, an argument can be made and supported that lower taxes creates a better environment for business and individuals to have more to spend and invest, and use to GROW THE ECONOMY. A growing, larger economy generates MORE overall Tax Revenue even at lower Tax Rates.
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Wrote this all wrong, let me try again...
The tax rate vs economic benefit is a Laffer curve.
At a 0% rate, the tax revenue is 0. At 100% tax rate, the revenue is 0. Somewhere between there is a maximum point of tax revenue. So we know there is at least one point that maximizes tax revenue for the government..
The point to consider though is whether maximum tax revenue for the government equates to a maximum benefit for The People. I think what benefits us is significantly lower.
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You need an economy to collect tax revenue so raising taxes without completely reopening the economy would be insane. But I’m assuming you mean after we reopen.
Look at what Trump’s tax cut did to heat up the economy and that happened very fast. A tax hike would have the reverse effect just as quickly. There is a range within which this works. Outside that range it doesn’t, in other words a tax rate of 0 will not increase revenue, nor will 1%, or 2%, but at some point, it will. Likewise a tax rate of 100% will not increase revenue, it will completely destroy the economy.
But what is the range within which a tax hike will decrease revenue and a cut increase? There is no universal agreement. There are way too many variables and confounding factors but for the sake of argument let’s say it’s in the neighborhood of 10% - 60%. As long as we are within this range, paradoxically, Trump should cut taxes even more to recover from this deficit.
BUT.... it won’t work and that’s because the real problem is spending. Somehow we have to reign in spending and that means shrinking government, and that would be a miracle I don’t think even Trump is capable of. I’m not real sure he even grasps how big a problem this is.
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Wrote this all wrong, let me try again...
The tax rate vs economic benefit is a Laffer curve.
At a 0% rate, the tax revenue is 0. At 100% tax rate, the revenue is 0. Somewhere between there is a maximum point of tax revenue. So we know there is at least one point that maximizes tax revenue for the government..
The point to consider though is whether maximum tax revenue for the government equates to a maximum benefit for The People. I think what benefits us is significantly lower.
Laffer curve, yeah that’s what I meant. :)
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BUT.... it won’t work and that’s because the real problem is spending. Somehow we have to reign in spending and that means shrinking government, and that would be a miracle I don’t think even Trump is capable of. I’m not real sure he even grasps how big a problem this is.
Why don't you write him another letter? ;)
But I still don't think the tax cuts will generate enough revenue to pay off the fantastical spending in the relief bills. Perhaps lower the tax rates, but THEN tack on an additional "Covid excise tax" that everyone pays.
Alternatively,
This might give us (Trump) more ammunition and incentive to entice American manufacturers and other businesses to return to the US. I wish I could figure out how to do that. Laws? Tax incentives? Appeals to patriotism? Tarriffs? Revoking citizenship (just sort of kidding here) of corporate officers that offshore jobs.
The problem I think we need to face up to and address is that all this new spending on top of the ridiculous deficit we already have needs to be dealt with. I just don't think lowering taxes will be enough to generate enough additional revenue. Unless Until we finally commit to reducing spending. ::)
How about the US open a "Go Fund Me" type program where people can donate money. It has worked really really well in a few small cities and towns around here. How about doing it on a national scale. I would give back my stimulus, plus a little more.
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China owns a huge amount of our debt. How about telling them “Hey, since you bastards unleashed your virus, and won’t take responsibility, how about we just cancel what we owe you to make up for our losses”.
Have a nice day, assholes.
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Why don't you write him another letter? ;)
But I still don't think the tax cuts will generate enough revenue to pay off the fantastical spending in the relief bills. Perhaps lower the tax rates, but THEN tack on an additional "Covid excise tax" that everyone pays.
Alternatively,
This might give us (Trump) more ammunition and incentive to entice American manufacturers and other businesses to return to the US. I wish I could figure out how to do that. Laws? Tax incentives? Appeals to patriotism? Tarriffs? Revoking citizenship (just sort of kidding here) of corporate officers that offshore jobs.
The problem I think we need to face up to and address is that all this new spending on top of the ridiculous deficit we already have needs to be dealt with. I just don't think lowering taxes will be enough to generate enough additional revenue. Unless Until we finally commit to reducing spending. ::)
How about the US open a "Go Fund Me" type program where people can donate money. It has worked really really well in a few small cities and towns around here. How about doing it on a national scale. I would give back my stimulus, plus a little more.
It’s really hard to entice manufacturing back here as long as the U.S. has such different working conditions from other places such as minimum wage laws, child labor laws, pollution control laws, OSHA regulations, environmental regulations and so on. Goods can be made so much more cheaply elsewhere that you can’t get the American consumer to pay the price of something made here when they can buy it for 1/4 the price when it’s made overseas.
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It’s really hard to entice manufacturing back here as long as the U.S. has such different working conditions from other places such as minimum wage laws, child labor laws, pollution control laws, OSHA regulations, environmental regulations and so on. Goods can be made so much more cheaply elsewhere that you can’t get the American consumer to pay the price of something made here when they can buy it for 1/4 the price when it’s made overseas.
Recently Gov Baker (MA) gave a press conf at a Fall River company that makes sewing machines (Merrow). Merrow converted part of their manufacturing capability to making PPE. One thing the Merrow bigwig said was that they couldn't compete with the China labor rate (yes, he said "China") but transporting the PPE from Fall River to places in Massachusetts was quite inexpensive and simple... especially during quarentine times. This whole fustercluck has highlighted the need for domestic production capability.
Edit: I recently purchases a pair of New Balance walking shoes... I made sure I purchased one of the models they make in the US, even though it was quite a bit more than the crap imported from wherever.
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Well, an argument can be made and supported that lower taxes creates a better environment for business and individuals to have more to spend and invest, and use to GROW THE ECONOMY. A growing, larger economy generates MORE overall Tax Revenue even at lower Tax Rates.
^^^^^This!
/thread
;D
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Why don't you write him another letter? ;)
But I still don't think the tax cuts will generate enough revenue to pay off the fantastical spending in the relief bills. Perhaps lower the tax rates, but THEN tack on an additional "Covid excise tax" that everyone pays.
Alternatively,
This might give us (Trump) more ammunition and incentive to entice American manufacturers and other businesses to return to the US. I wish I could figure out how to do that. Laws? Tax incentives? Appeals to patriotism? Tarriffs? Revoking citizenship (just sort of kidding here) of corporate officers that offshore jobs.
The problem I think we need to face up to and address is that all this new spending on top of the ridiculous deficit we already have needs to be dealt with. I just don't think lowering taxes will be enough to generate enough additional revenue. Unless Until we finally commit to reducing spending. ::)
How about the US open a "Go Fund Me" type program where people can donate money. It has worked really really well in a few small cities and towns around here. How about doing it on a national scale. I would give back my stimulus, plus a little more.
Joe, if we could believe that future tax increases would be used SOLELY to pay down our massive debt, I could possibly support that. But you and I both know that any future tax increases will be used SOLELY to grow the Federal government. They is unsustainable. The only way to even try to get there is to starve the beast.
Look what happened when this “sudden” 880-page $2+ Trillion Bill was foisted by Congress, in which BOTH houses passed on a voice vote so no one would be on the record supporting this spending free for all.
With this suddenness, how did these jewels get into the bill so quickly?
https://thefederalist.com/2020/03/31/10-insanely-wasteful-spending-items-in-the-coronabailout/
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China owns a huge amount of our debt. How about telling them “Hey, since you bastards unleashed your virus, and won’t take responsibility, how about we just cancel what we owe you to make up for our losses”.
Have a nice day, assholes.
I’ve often thought this was a potential solution. Dangerous, but worth considering. Japan entered WWII for less of an economic impact.
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I’ve often thought this was a potential solution. Dangerous, but worth considering. Japan entered WWII for less of an economic impact.
Japan was clearly looking to expand its empire.
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So here comes Nancy's next boondoggle: https://www.cnbc.com/2020/05/12/coronavirus-updates-house-democrats-unveil-3-trillion-relief-bill.html
My fear are the spineless republicans who will vote for this disaster.
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So here comes Nancy's next boondoggle: https://www.cnbc.com/2020/05/12/coronavirus-updates-house-democrats-unveil-3-trillion-relief-bill.html
My fear are the spineless republicans who will vote for this disaster.
^^^^^^That's the Six Foot Fecal Spray of "relief" bills! >:(
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So here comes Nancy's next boondoggle: https://www.cnbc.com/2020/05/12/coronavirus-updates-house-democrats-unveil-3-trillion-relief-bill.html
My fear are the spineless republicans who will vote for this disaster.
"House Democrats released their latest bill Tuesday designed to blunt the coronavirus pandemic’s devastating effects on the economy and health-care system. "
yup - pushing another 3 trillion dollars of spending (deficit spending) will really help counter the effects on the economy caused by the gross over-reaction to COVID-19.
Gotta love the liberals, don't try to fix anything, just throw lots of OPM at it.