Tax Breaks - Really Working?

[Black Aeronaut]

Okay, here's the graphs...
Employment during the Clinton and Bush Jr. Administrations.  Keep in mind, the figures on the left represent jobs in the thousands. (120,000 = 120,000,000)

As I said before, pretty straightforward growth, save for a brief sputter in 2001. (Does the Bureau of Labor Statistics go by fiscal years?) But, in 2007 the Recession really started to hit, and you can see how things started to get bad in 2008.
Now, here's a closer look at Bush Jr's second term and Obama's current administration.

Epic.  By Obama's first year he managed to stop the recession dead in it's tracks.  Since then, things have been touch-and-go...
Norway, the problem with your analogy is that it doesn't really apply to what's happening now.  It's more like right after the Poor Men gets to see what they were gonna have they get thrown out after the Rich Man whispered something in the matre d's ear (this would be the political lobbyists pushing for the reduction in social benefits), then has the Middle Class men pick up the tab of the Poor Men, then the Rich Man gives the Middle Class Men the steak and potatoes (again, reduction in social benefits) while he takes the shrimp scampi away in doggy bags (Bush tax Cuts).
If you can show me solid figures, though, I'll gladly take your argument more seriously.  But right now, I'm mainly concerned with where these people are morally justified in asking for more money when it appears that they're just pocketing it.  The figures I posted are not mere analogies - they are facts.  We've lost more than 7 million jobs and we need to do something to bring those jobs back and then some.

[Dartz]

That's funny.... Steak and spuds are normally the more expensive choice here, compared to the shrimp (or lobster). Funny how a different cultural basis changes things like that. Came across as the middle-class being squeezed to fatten the rich, while feeding the poor.

To half re-iterate what I said earlier... it's quite clear the trickle-down economics, or whatever you call it... just doesn't work. Tax breaks for the wealthy are used by the wealthy to make themselves even more wealthy, not to create business and jobs. Tax breaks do have their place, when they're tied to specific goals and ideas (Build Factor in with high unemployment, receive tax benefits. Provide healthcare for employees, write it off your tax). Tax breaks for the sole benefit of putting more money in the hands of people who have more money already are self defeating.

Generally, people will just hold onto it and use it to make themselves wealthier.... and it's easy enough to do that without building factories or doing things which create jobs. There's enough money created in Wall Street through the sole virtue of being pushed around and around and around in ever more confusing manners.

You've got to start at the bottom.

Also remember, who's going to suffer more?
A) 20k a year. Looses 20% in tax. Pays 6k to the state, and is left with 16k to see to his own needs
b) 50k a year. 40% in tax. State gets 20k out of him. He's left with 30k to himself.
c) 100l+ a year, 50% in tax. State takes 50k. He's left with 50k.

While that's a bit arbitrary and off the top, it illustrates the point. The wealthy have far more capacity to pay, and just not feel it. But... those on 20k and 50k are the one's who're supporting the bottom of the economy. They're the ones buying all the little white goods that keep things going. Rich people don't buy 20 new Chevrolets... they buy an armoured Bentley.... but I guarantee those 20 Chevrolets will have a far more positive benefit on the economy. Because somebody's got to build them. Those people have to be paid. And those people being paid a wage will then go out and buy their own car/computer/whatever.

If you've got the people at the bottom buying, selling and generally turning over, they'll feed back into the top. You get them buying by making them secure. Put them in a stable residence, get more free cash into their hands somehow (either buy reducing their tax burden, or somehow reducing their outgoings.).

How much more money would you have id you didn't have to pay for Health Insurance say? Deduct maybe an addition to the tax that's assumed to provide a decent Healthcare system from the state... chances are, unless you're super-healthy... you'll find yourself better off with more cash in hand, and less outgoings to worry about. Now, what'll you do with that cash? Go out and buy stuff. Or, you might buy Health Insurance anyway... which is going to be a good deal cheaper as the State is providing a viable alternative, so people don't have to buy insurance. That's how it works here, and it's something that works far better. Per Capita, our government spends less on Healthcare than the US, but in general we're better off. Isn't that funny?

When you've got the people at the bottom steady.... you're going to push everything up.

Otherwise, you're just lifting the people at the top. Which is fine for them.... sure, isn't that exactly what they want? It's Power and Influence. It's always about power and influence.

One other thing. The State is answereable to me. A Private company, is answerable to it's shareholders.
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--m(^0^)m-- Wot, no sig?

[Epsilon]

The only proof that you need that tax breaks do not create jobs is the fact that GE paid no taxes last year (and even got a tax credit) and yet has cut one fifth of their overall workforce in the last few years.
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Epsilon

[robkelk]

Single examples rarely make for good arguments, if only because one's opponent can say "one case isn't statistically significant".

So mention that http://www.oil-price.net/en/articles/Ho ... n-2009.php]Exxon pays no US tax, as well.
--
Rob Kelk
"Governments have no right to question the loyalty of those who oppose
them. Adversaries remain citizens of the same state, common subjects of
the same sovereign, servants of the same law."

- Michael Ignatieff, addressing Stanford University in 2012

[Werehawk]

Part of the problem I will note is that the tax code has become such a complex morass of special provisions that have been carved into it by politicians in the interest of this or that special interest. It is these that have led to many people who would otherwise pay their taxes to being able to avoid paying them or getting returns. One solution would be to remove at least 90% of the exemptions and provisions that have crept in over the years and then lower the overall rates.

GE has benefited from quite a few such provisions. I will also note the close relations that GE has with political powers that be when incentives for things such as clean energy (a misnomer if anyone asks me) are written. However I will note that the GE tax story has been found to be a bit less than accurate...Story was based on a hoax press release that went viral see: http://www.vpr.net/npr/135376205/
--Werehawk--
My mom's brief take on upcoming Guatemalan Elections "In last throes of preelection activities. Much loudspeaker vote pleading."

[Black Aeronaut]

Personally, I don't care too much about corporate taxes. Business needs a little more freedom to do business. For me, it would be enough that GE does not get a refund - they're even with the house, so let us move on.

Where I would like to aim my guns would be the big earners - I'm talking about corporate officers and high-roller investors - the people that are raking in seven-figure sums. And the only way I would want them to have an out would be if they pulled all their business out of the US and got the hell outta Dodge. If you do business in the US then you owe Uncle Sam a cut of the action - no questions asked. You do have the right to an audit, and if you're a citizen you do have the right to speak your mind on how big of a cut you're giving... but that's about it.

One of the things that pisses me off the most is how things are shaping up. I remember seeing a film in school about the events leading up to the French Revolution and the Storming of the Bastille. One aristocrat notes how there are such a disproportionately large number of commoners to every aristocrat while another puts it off as nonsense for some silly reason or another.

The point is, the same holds true in the USA. There are far more Lower- and Middle-class citizens in the US then there are in the Upper-class. The Upper-class... represents a minority.

[Werehawk]

Practically speaking the U.S. problem right now is an economic regulatory structure that has been gamed in favor of the older established companies. As well as those older rich families which have accumulated wealth. It is these groups that have made it more difficult for new companies to take root and establish themselves. The more complex a regulatory environment is the more opportunities for mischief both fiscal and political arise. Also let me not that both parties are currently very much infected with rich upper class people. The republicans are at least honest about it to a degree. The Democrats on the other hand make a big to do about being concerned about the poor but when the time comes to do stuff more often than not their efforts end up benefiting the same upper class group they belong to. However I will observe that above certain levels tax rates tend to depress the amount of money that comes into government coffers.

Also let me note that neither party is at all that good with budgetary math. Or for the matter at all capable of setting a clear long term economic policy without injecting all sorts of poorly thought out and at times half baked not so brilliant ideas into the mix. Take a look at the corn ethanol based biofuel incentives which have been an example of sheer criminal waste. Or for the matter the entire issue with Freddie Mac and Fannie Mae which was known to be a building crisis as far back as 2003. (One of the reasons I think that a certain Democratic senator whose name starts with F needs to go). If I had my druthers every financial company above a certain size would be broken up into three or more companies to ensure that if one company goes into crisis it doesn't bring the entire financial system down with it.

Note that as consequence of growing up in Latin America I'm much more skeptical about public employee unions than private sector unions.
--Werehawk--
My mom's brief take on upcoming Guatemalan Elections "In last throes of preelection activities. Much loudspeaker vote pleading."

[ECSNorway]

A few figures on what the Bush Tax Cuts actually did:

1) Lowered -all- income tax brackets. The greatest change was not for the rich, but for the lowest tax brackets -- single-filers under $7k/yr and families under $14k/yr saw their total obligation drop by 33%, compared to less than 10% change for the highest bracket.

2) Capital Gains Tax decreased from 10% to 8%. This primarily affects two areas: The cost of expanding a business (and thus creating jobs), and the cost of home ownership. The latter affects all Americans who own their homes. Example: Your house is currently assessed at $80k value. You put work into it to improve it and make it more pleasant for you to live in, say, furnishing the basement. It is re-assessed at $100k. You now owe tax on the difference, because you have gained capital.

3) Increase the limit on pre-tax contributions to retirement plans, affecting all working Americans.

4) Increased the minimum limit of the Estate Tax from $625,000 to $1,000,000, allowing small business and farms to be passed to their owners' heirs without crippling tax burdens but having very minor effects on the significantly wealthy.

Another fact: The poorest 40% of Americans pay zero or negative income tax.
Taxes on corporations are paid by everyone who works for them and buys from them, because the way corporations pay taxes is to decrease expenses (by cutting jobs, most often), and by raising prices.

Over the six quarters immediately previous to the Bush Tax Cuts, the GDP increased by 1.7%.
Over the six quarters immediately following the Bush Tax Cuts, the GDP increased by 4.1%.

In 2000, the wealthiest 20% of Americans paid 81.2% of all income taxes. The poorest 20% of Americans paid -1.6%.
In 2004, the wealthiest 20% of Americans paid 85.3% of all income taxes. The poorest 20% of Americans paid -2.9%.

Who's benefiting from these tax cuts? The people paying more of the burden (the rich), or the people paying less of it (the poor)?
--
Sucrose Octanitrate.
Proof positive that with sufficient motivation, you can make anything explode.

[Werehawk]

In case anybody is interested there is a report from the national taxpayers union about how complex and messy the U.S. tax code has gotten. Well worth reading for the points it makes...

See:http://www.ntu.org/ntu-pp...-tax-complexity-2010.pdf

--G.E. Tax efiling for 2006 if printed would have been over 24,000 pages (G.E.'s accounting dept. gave up on estimating pages after that)
--Werehawk--
My mom's brief take on upcoming Guatemalan Elections "In last throes of preelection activities. Much loudspeaker vote pleading."

[Black Aeronaut]

In 2000, the wealthiest 20% of Americans paid 81.2% of all income taxes. The poorest 20% of Americans paid -1.6%.

In 2004, the wealthiest 20% of Americans paid 85.3% of all income taxes. The poorest 20% of Americans paid -2.9%.

Who's benefiting from these tax cuts? The people paying more of the burden (the rich), or the people paying less of it (the poor)?

And exactly how many of those people actually paid that much in taxes?  As was mentioned before, the tax code is so riddled with loopholes that it's like trying to catch minnows with a drag net meant for tuna.

[Dartz]

Those figures are somewhat meaningless, as they give no real definition as to how wealthy the wealthiest are, or how poor the poorest 20% are. It gives no indication as to how much tax is being paid by either group, or how much tax is being paid overall.

If the poorest 20% keep getting poorer, naturally their contribution as a percentage of 1 whole annual tax take will decrease.

If the richest 20% keep getting richer, and with more people at the bottom dropping out, naturally their percentage contribution to that 1 whole annual tax-take will get higher.

It seems to me that those results could easily be caused by the widening gap between the rich and poor.
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--m(^0^)m-- Wot, no sig?

[CattyNebulart]

As I mentioned before I love the danish tax code though it would never fly in America. What happens it that at the end of the year you get a statement that basicly reads; this is how much we think you owe us, and this is why. (Snip useless numbers) If this is wrong please tell us within two weeks or we'll take it out of your bank account.

If they are right (and they are almost always right) you don't need to deal with any paperwork at all. it's glorious. In comparison my American tax records must have cause the decimation of a small forest.
E: "Did they... did they just endorse the combination of the JSDF and US Army by showing them as two lesbian lolicons moving in together and holding hands and talking about how 'intimate' they were?"
B: "Have you forgotten so soon? They're phasing out Don't Ask, Don't Tell."

[ECSNorway]

In 2000, the wealthiest 20% of Americans paid 81.2% of all income taxes. The poorest 20% of Americans paid -1.6%.

In 2004, the wealthiest 20% of Americans paid 85.3% of all income taxes. The poorest 20% of Americans paid -2.9%.

Who's benefiting from these tax cuts? The people paying more of the burden (the rich), or the people paying less of it (the poor)?

And exactly how many of those people actually paid that much in taxes?  As was mentioned before, the tax code is so riddled with loopholes that it's like trying to catch minnows with a drag net meant for tuna.

Those figures are drawn from the actual government revenues, so that's exactly what was paid by those groups.
Yes, the rich can exploit lots of loopholes. That means they pay a slighty smaller percentage than you'd expect from their bracket (35%, compared to 10% for the lowest paying bracket) of a whole lot more, so their absolute pay-in is significantly higher.
--
Sucrose Octanitrate.
Proof positive that with sufficient motivation, you can make anything explode.

[Dartz]

I think you misunderstand me. Those aren't figures. They are ratios of undefined numbers. The percentages you've presented are ambiguous at best and downright misleading at worst. The include no details of what the actual incomes were. How wealthy the top 20% are compared to the bottom 20%....

Would it make sense to ask, if the poorest 20% kept getting poorer, more of them would fall out of the tax brackets and thus end up contributing even less of a percentage to the overall tax take, along with an increasing welfare burden?
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--m(^0^)m-- Wot, no sig?

[Epsilon]

Nor does it break up the top quintile into the very interesting numbers. Like the fact that CEO pay less taxes (both as a percentage and in absolute numbers) then their secretaries.
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Epsilon

[robkelk]

Er, guys... Basic math and comprehension skills?

"In 2004, the wealthiest 20% of Americans paid 85.3% of all income taxes." How much money did the US government take in through income tax in 2004? (I'm sure the number is on a government website somewhere, but I don't have time to find it right now.) Multiply that number by 85.3% - the result is how much was collected from the wealthiest 20%. The rest - the other 14.7% - was collected from the other four-fifths of the population.

(At least, that's what ECSNorway said. If that wasn't what was meant, then the wrong thing was said...)
--
Rob Kelk
"Governments have no right to question the loyalty of those who oppose
them. Adversaries remain citizens of the same state, common subjects of
the same sovereign, servants of the same law."

- Michael Ignatieff, addressing Stanford University in 2012

[Dartz]

That isn't what we mean at all.

The figures are ambiguous and misleadingbecause they give no picture as to how much income has changed, who's income has changed and in what direction. If the wealthy continue to get wealthier, and the poor poorer, chances are that as a percentage of the whole tax take, the wealthy contribution to taxes will continue to increase, even as the percentage of income actually subject tax, or tax percentages, decreases.

It's a Daily Mail statistic. Sounds like it says a lot while saying nothing at all.... so it can be twisted to say anything
________________________________
--m(^0^)m-- Wot, no sig?

[Wiregeek]

To put that into perspective, I'd rather be beaten with a board than take any sort of advice or statement at face value from the Daily Fail. They are liars and scum, to the point that their infamy is known in Alaska, of all places.
"No can brain today. Want cheezeburger."
From NGE: Nobody Dies, by Gregg Landsman
http://www.fanfiction.net/s/5579457/1/NGE_Nobody_Dies

[ECSNorway]

Statistics for Dartz.

2005.

Top 20% of the population starts at an annual income of $91,705.

Bottom 20% of the population makes $19,178 or less.

2001.

Top 20% of the population starts at an annual income of $83,500.

Bottom 20% of the population makes $17,970 or less.

These are not tax-return figures, these are from the overall population, so they include those who've fallen off the bottom of the tax rolls.

As for the "widening gap", the bottom of the top 20% rose by 10.18% from 2001 to 2005. The top of the bottom 20% rose by 14.88%. In other words, the poor are getting wealthier faster than the rich are.
--
Sucrose Octanitrate.
Proof positive that with sufficient motivation, you can make anything explode.

[ECSNorway]

Nor does it break up the top quintile into the very interesting numbers. Like the fact that CEO pay less taxes (both as a percentage and in absolute numbers) then their secretaries.
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Epsilon

This can probably be attributed to the CEOs being more willing to invest the time and expense to find more deductions than their secretaries, but it's irrelevant to the point I was trying to make.
Which was, to summarize, that the Bush Tax Cuts were not simply "let's give more money to the rich".
They don't give money to anyone, anyway, they just take less of it away.
--
Sucrose Octanitrate.
Proof positive that with sufficient motivation, you can make anything explode.

[Epsilon]

Statistics for Dartz.

2005.

Top 20% of the population starts at an annual income of $91,705.

Bottom 20% of the population makes $19,178 or less.

2001.

Top 20% of the population starts at an annual income of $83,500.

Bottom 20% of the population makes $17,970 or less.

These are not tax-return figures, these are from the overall population, so they include those who've fallen off the bottom of the tax rolls.

As for the "widening gap", the bottom of the top 20% rose by 10.18% from 2001 to 2005. The top of the bottom 20% rose by 14.88%. In other words, the poor are getting wealthier faster than the rich are.

If I go from $1 to $20 I'm experiencing a massive 2000% increase in my wealth! If a rich man goes from $1,000,000 to $1,500,000 he is experinecing a paltry 50% increase in wealth.
Obviously, I am making more money than him!
Go me! Now I can buy a sandwich!
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Epsilon

[Epsilon]

This can probably be attributed to the CEOs being more willing to invest the time and expense to find more deductions than their secretaries, but it's irrelevant to the point I was trying to make.
Which was, to summarize, that the Bush Tax Cuts were not simply "let's give more money to the rich".
They don't give money to anyone, anyway, they just take less of it away.

Trivially true but not substantially correct, like all your other points in this thread. You're grasping the wrong ideas.
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Epsilon

[Glidergun]

Oh wow, ECS, those statistics are in no way less ambiguous or misleading. In some ways, especially combined with the earlier set of statistics, they are worse.
The first pile of statistics was of the percentage of total money collected in taxes, while the second is merely the threshold to be considered part of that group. So the bottom 20% could be a huge pile of people making $0 and a couple of guys making $19,000, while the top 20% could have a similar thing going on. What would be more useful as a comparison would be the mean incomes or total incomes of the two groups.
And as far as "the poor are getting wealthier faster than the rich are"...that is actually the complete opposite of the truth. And if you look at table 6 on that link it will say that the top 20% of the population makes about 60% of the income, which makes the statistic on how much of the taxes they pay seem quite reasonable, especially considering that the distribution of wealth is far more unequal.

[Dartz]

Correct me if I'm wrong, but my Math puts it a little different.

Between 2001 and 2005, the the top of the bottom rose from 17,970 to 19,178. A rise of about 1208 dollars.

As a percentage increase, take: 1208/17,970, * 100. That gives me a 6.72% increase.

Between 2001 and 2005, the bottom of the top rose from 83,500 to 91,705... 8205 collars increase

As a percentage, 8205/83500 *100, or about 9.8% increase.

Where did that 14% figure come from?
________________________________
--m(^0^)m-- Wot, no sig?

[Black Aeronaut]

Statistics for Dartz.

2005.

Top 20% of the population starts at an annual income of $91,705.

Bottom 20% of the population makes $19,178 or less.

2001.

Top 20% of the population starts at an annual income of $83,500.

Bottom 20% of the population makes $17,970 or less.

These are not tax-return figures, these are from the overall population, so they include those who've fallen off the bottom of the tax rolls.

As for the "widening gap", the bottom of the top 20% rose by 10.18% from 2001 to 2005. The top of the bottom 20% rose by 14.88%. In other words, the poor are getting wealthier faster than the rich are.

Got a couple of questions, here.  First, while historical context is nice (hence why I used figures going back as far as 1993), your data says nothing about the last six years, which, IMHO are the most important.  Does your source simply not have that data available?
Second: I would love to know the total gross income of that top 20% and of the bottom 20%.  Averages mean very little when you don't even know how big the pie is in the first place.