Tea Party Crashers

[heironymouspasparagus]

The big effect of cutting from 91% to 70% was that there were fewer deductions, kind of offsetting the effect of the cut a little bit.

Back when the rate went up to 91% it was specifically for one person - John D. Rockefeller.  He was the only one who came even close.

Look at the rate schedules; the highest rate in 1963 was 91% on income over about $200,000.  There were only a few thousand in the whole country who made that kind of dough.  And they got massive deductions, plus the same kind of capital gains treatment, so that anyone who had even a modestly competent accountant got to enjoy very low effective rates.

Sound familiar??  Kind of like today, the richest 0.1% always gets the best rate.  It pays to own Congress.

[heironymouspasparagus]

Red,
Making 100 million when you get to treat it as long term capital gain is vastly different from making 100 million and treating it as regular income.  $25 million difference.  If you were making the choice, which would you choose?  (Quick ethics check)

Would you treat it as what it is - income - or would you go for the long term capital gain??

[Red Arrow]

Red,
Making 100 million when you get to treat it as long term capital gain is vastly different from making 100 million and treating it as regular income.  $25 million difference.  If you were making the choice, which would you choose?  (Quick ethics check)

Would you treat it as what it is - income - or would you go for the long term capital gain??

You missed the point.  At some income level, the government can take a BIG chunk of your money and you still have enough to live comfortably.  Many of these people are setting our tax rates.

[Conan71]

The Reagan tax cuts probably increased revenue. I've seen no peer-reviewed studies that suggested the Bush tax cuts did the same. The pre-Reagan tax rates were much higher than they were when Bush cut taxes, hence the difference in response.

http://www.nytimes.com/2005/07/13/business/13deficit.html?pagewanted=print

"The Congressional Budget Office estimated last week that the deficit for the full fiscal year, which reached $412 billion in 2004, could be "significantly less than $350 billion, perhaps below $325 billion."

The big surprise has been in tax revenue, which is running nearly 15 percent higher than in 2004. Corporate tax revenue has soared about 40 percent, after languishing for four years, and individual tax revenue is up as well.

Most of the increase in individual tax receipts appears to have come from higher stock market gains and the business income of relatively wealthy taxpayers. The biggest jump was not from taxes withheld from salaries but from quarterly payments on investment gains and business earnings, which were up 20 percent this year."

http://www.opinionjournal.com/columnists/pdupont/?id=110010798

"Tax rate reductions increase tax revenues. This truth has been proved at both state and federal levels, including by President Bush's 2003 tax cuts on income, capital gains and dividends. Those reductions have raised federal tax receipts by $785 billion, the largest four-year revenue increase in U.S. history. In fiscal 2007, which ended last month, the government took in 6.7% more tax revenues than in 2006.

These increases in tax revenue have substantially reduced the federal budget deficits. In 2004 the deficit was $413 billion, or 3.5% of gross domestic product. It narrowed to $318 billion in 2005, $248 billion in 2006 and $163 billion in 2007. That last figure is just 1.2% of GDP, which is half of the average of the past 50 years.

Lower tax rates have be so successful in spurring growth that the percentage of federal income taxes paid by the very wealthy has increased. According to the Treasury Department, the top 1% of income tax filers paid just 19% of income taxes in 1980 (when the top tax rate was 70%), and 36% in 2003, the year the Bush tax cuts took effect (when the top rate became 35%). The top 5% of income taxpayers went from 37% of taxes paid to 56%, and the top 10% from 49% to 68% of taxes paid. And the amount of taxes paid by those earning more than $1 million a year rose to $236 billion in 2005 from $132 billion in 2003, a 78% increase."

[Cats Cats Cats]

Might have something to do with the economy Conan.  Considering that after increasing government spending by 38% (2000 vs 2005) Bush was able to increase Tax revenue by 6.3% (2000 vs 2005).  Also the tax cuts were done in 2003?  Also 20% of that cut in the deficit was social security surpluses.  But lets spin the numbers.. Clinton raised taxes and ended up 70% in revenue, that would be unpossible.

[Conan71]

Might have something to do with the economy Conan.  Considering that after increasing government spending by 38% (2000 vs 2005) Bush was able to increase Tax revenue by 6.3% (2000 vs 2005).  Also the tax cuts were done in 2003?  Also 20% of that cut in the deficit was social security surpluses.  But lets spin the numbers.. Clinton raised taxes and ended up 70% in revenue, that would be unpossible.

That's one thing you can count on good liberals for, they will never give Bush credit for anything good. 

[RecycleMichael]

That's one thing you can count on good liberals for, they will never give Bush credit for anything good. 

That is an unfair comment. I think trogdor was showing real numbers and real policy decisions by former President Bush. The way that he fixed the economy was to hire hundreds of thousands of government employees.

I also think of myself as a good liberal and I really appreciated Bush's stance and actions on immigration. He tried to find ways to create jobs and get illegal citiizens paying into the system and become legal.

[Cats Cats Cats]

That's one thing you can count on good liberals for, they will never give Bush credit for anything good.  

You act like the economy has 1 force, taxes.  When Revenue increases it is only because taxes got cut.  It doesn't matter what had happened previously.  They don't account for the fact that in 2003 and 2004 we had the lowest interest rate since forever.  Or that "For instance, from 2003 through the third quarter of 2008, U.S. households extracted $2.3 trillion of equity from their homes in the form of home equity loans and cash-out refinancings."  http://www.international-economy.com/TIE_Su09_BailyLund.pdf   That would have nothing to do with it!  You can tell from the numbers that when it came down to it, we gave back most of the revenue increases that your story was touting.

Year   Revenue   Increase   Inflation
                                     
2000   2025.2         3.38%
2001   1991.1    -1.68%   2.83%
2002   1853.1    -6.93%   1.59%
2003   1782.3    -3.82%   2.27%
2004   1880.1     5.49%   2.68%
2005   2153.6    14.55%   3.39%
2006   2406.9    11.76%   3.24%
2007   2568            6.69%   2.85%
2008   2524           -1.71%   3.85%
2009   2104.6   -16.62%   -0.34%

There are too many variables and the numbers show different things depending on the time frame used and other outside events.
      

[Conan71]

Aaah, fairness.  Another hollow liberal mantra.

Were you guys aware there was an increase in cap gains and corporate tax reciepts?  Apparently not.

Increased gov't payroll would not create such a result.  I don't even know why I bother citing evidence, you guys don't appear to read it.  After this post, I'll just start pulling numbers out of my arse and not cite sources.

http://www.ncpa.org/pub/st307?pg=7

"After the 2003 capital gains tax cut, federal revenues increased in four years by $740 billion.  The budget deficit fell from $401 billion in 2004 to $160 billion in 2007.  Capital gains revenues increased from $55 billion in 2002 to an estimated $110 billion for 2006.  Every indicator shows that the 2003 investment tax cuts helped increase growth, stock market values and federal tax receipts."

[Cats Cats Cats]

Aaah, fairness.  Another hollow liberal mantra.

Were you guys aware there was an increase in cap gains and corporate tax reciepts?  Apparently not.

Increased gov't payroll would not create such a result.  I don't even know why I bother citing evidence, you guys don't appear to read it.  After this post, I'll just start pulling numbers out of my arse and not cite sources.

http://www.ncpa.org/pub/st307?pg=7

"After the 2003 capital gains tax cut, federal revenues increased in four years by $740 billion.  The budget deficit fell from $401 billion in 2004 to $160 billion in 2007.  Capital gains revenues increased from $55 billion in 2002 to an estimated $110 billion for 2006.  Every indicator shows that the 2003 investment tax cuts helped increase growth, stock market values and federal tax receipts."

I think you might be on to something here.  The tax income from capital gains follows the DJIA.  <Golf Clap> 
Of course these tax revenues are below 1997 and 1998 when the tax was 5% higher.  Bbbbbut there was was a stock market bubble.  Which would mean that there are other forces to tax revenue other than the tax percentage.

All my $ sources (on previous post) were from http://www.cbo.gov/ftpdocs/108xx/doc10871/historicaltables.pdf  Got the inflation from some random website

I will concede that lowering the capital gains tax rate to less than half of the highest tax rate will result in more investment in the stock market from the richest in the country.  It will also allow companies to shift income to highly compensated employees over to stock options which will only be taxed at 15% instead of 35%.  Of course that would decrease tax received in other places.  20% less in taxes makes the risk of the stock market worth it.  This would reduce their investment in small businesses that weren't publicly traded (they would have to pay 35% taxes on that).

[Conan71]

You act like the economy has 1 force, taxes.  When Revenue increases it is only because taxes got cut.  It doesn't matter what had happened previously.  They don't account for the fact that in 2003 and 2004 we had the lowest interest rate since forever.  Or that "For instance, from 2003 through the third quarter of 2008, U.S. households extracted $2.3 trillion of equity from their homes in the form of home equity loans and cash-out refinancings."  http://www.international-economy.com/TIE_Su09_BailyLund.pdf   That would have nothing to do with it!  You can tell from the numbers that when it came down to it, we gave back most of the revenue increases that your story was touting.

Year   Revenue   Increase   Inflation
                                     
2000   2025.2         3.38%
2001   1991.1    -1.68%   2.83%
2002   1853.1    -6.93%   1.59%
2003   1782.3    -3.82%   2.27%
2004   1880.1     5.49%   2.68%
2005   2153.6    14.55%   3.39%
2006   2406.9    11.76%   3.24%
2007   2568            6.69%   2.85%
2008   2524           -1.71%   3.85%
2009   2104.6   -16.62%   -0.34%

There are too many variables and the numbers show different things depending on the time frame used and other outside events.
      

False assumption on my beliefs...again.  Of course there's more than one force driving the economy, you simply choosing to ignore one of them because it might be a positive reflection on the Bush administration doesn't mean it didn't happen. 

Many learned economists agree this phenomena exists and there's historical data to prove it has happened in the past with the Kennedy and Reagan cuts as well as data which suggests this happened in the Bush II years. 

But, why did the Obama administration make tax cuts and credits the centerpiece of their economic recovery efforts if they are not effective?  Can you answer that?

Low interest rates can help account for increased corporate revenues via corporate investment in capital equipment and expanding payrolls, increased consumer activity (buying homes, cars, consumer goods) or if invested in capital gain type investments.  There's a lot of documentation existing to show that capital gains tax revenue (a kind of tax revenue typically associated with top income earners) has increased every time cap gains rates have dropped. 

If you are inferring people cashing in on home equity directly influenced tax reciepts, that's incorrect unless you are implying that money was spent on consumption which would have been taxed via corporate income or invested and resulted in gains.  Home equity, in the form of loan proceeds is not taxable income unless you default on the loan.  In fact, no loan proceeds are treated as income unless you fail to repay.  Please feel free to clarify.

Careful though, you are on the verge of actually admitting the economy was good during the Bush II years.  Isn't that the ultimate sin amongst liberals? 

[fotd]

Aaah, fairness.  Another hollow liberal judeo/christian mantra.

Were you guys aware there was an increase in cap gains and corporate tax reciepts?  Apparently not.

Increased gov't payroll would not create such a result.  I don't even know why I bother citing evidence, you guys don't appear to read it.  After this post, I'll just start pulling numbers out of my arse and not cite sources.

http://www.ncpa.org/pub/st307?pg=7

"After the 2003 capital gains tax cut, federal revenues increased in four years by $740 billion.  The budget deficit fell from $401 billion in 2004 to $160 billion in 2007.  Capital gains revenues increased from $55 billion in 2002 to an estimated $110 billion for 2006.  Every indicator shows that the 2003 investment tax cuts growth helped increase growth tax receipts, inflated stock market values and federal tax receipts spending."

Just rearranging the words, Pompous Conanus. Not to disagree about the cut in cap gains rate, but sweet Jesus let's not lose sight of that place and that time. Please, stop pulling things out of your arse...it is Earth Day after all.....

[fotd]

If the economy improved during Bush II daze, it wasn't anything they did in Washington except turn their heads to bankster greed.

[Conan71]

If the economy improved during Bush II daze, it wasn't anything they did in Washington except turn their heads to bankster greed.

Any idea how much smut comes up when you Google the term "turn your head and cough" ?

[Cats Cats Cats]

But, why did the Obama administration make tax cuts and credits the centerpiece of their economic recovery efforts if they are not effective?  Can you answer that?

Tax cut was equal among most of the population.  Instead of 1% getting 95% of the tax cuts.  It is the same thing that Bush did when he sent everybody checks (If giving 95% of the tax cut revenue to 1% the best for the economy why didn't Bush just do the same thing again to stimulate the economy?).

There's a lot of documentation existing to show that capital gains tax revenue (a kind of tax revenue typically associated with top income earners) has increased every time cap gains rates have dropped.

People have the option of selling stock.  So lower tax rates coming up will encourage to sell (large stock gain = large 1 time capital gains tax).  Also, it encourages people in the top income bracket to invest in capital gains (20% off your taxes, its like buying form Kohls).  But then you will have less investment in small businesses (own part of a small business like a moron and you will be paying 35%).   So you invest in the stock market.  The small business would have to make 20% more money to break even after taxes.  When you lower the tax rate you reallocate where tax is being paid and the rate you are paying on it.  It is also based largely on what the Dow does.  It is very difficult to determine that it is not just a shift in how people are paid and how money is invested.  

If you are inferring people cashing in on home equity directly influenced tax reciepts, that's incorrect unless you are implying that money was spent on consumption which would have been taxed via corporate income or invested and resulted in gains.  Home equity, in the form of loan proceeds is not taxable income unless you default on the loan.  In fact, no loan proceeds are treated as income unless you fail to repay.  Please feel free to clarify.

I am saying that people took home equity loans out to 1) pay for new houses (paying builders and realtors) 2) Make improvements on their houses 3) Blow it on worthless crap.  People took the money out for a reason they didn't just take it out for fun.  They took it out to spend it.  If they didn't spend it you would have a huge spike in the amount of savings in the US.

Forgot to add that investment in the stock market was also greatly encouraged due to our wonderful 1% savings interest rates.