Bad Day for Wisconsin

[Specs]

I provided a source that states stimulative multipliers for tax cuts are less than those for a number of government activities such as food stamp provisions, infrastructure spending, et cetera. You can deride these numbers all you want but if they are so incorrect it should be no trouble at all to point me to a source that states otherwise.

To restate, this claims nothing about the “fairness” of the current tax environment or availability of funds to provide stimulus.

It is interesting that the Romers study would be presented as it simply suggests tax cuts are stimulative buts fails to compare their effects to other forms of stimulus. As you can see on the graph I provided, there is no conflict with this information. Id be happy to talk about why this is the case once we move past the “is or isnt” phase of the discussion.

Taxes are a business cost that is calculated into a budget. Have you ever done a budget? I mean in real life, not the classroom.

On avg, raw mat'l composes about 45% of a mfg company's budget. If that company has a 4% margin, what happens if material prices rise 10%?

Taxes are no different. It is a cost figured into the budget. If they go up, you can attempt to pass them on in the price. OR, you can attempt to make it up in some other variable cost... like labor and benefits.

Cute, its like you think I'm in college or something. Anyway, to restate, again, taxes are only paid on profits, not revenue. If a company usually makes $100 and has to spend $70 to do so, they are taxed on $30. If material costs rise $10 they are taxes on $20. If material costs rise $30 they pay no taxes at all. If costs rise $31 they better rethink their business strategy regardless of the tax environment. Tax rates do not effect whether a company can or cannot turn a profit, just how much that profit will be.

You can attempt to pass any change on in price increases or salary deductions or whatever but to do so suggests some inefficiency in the market that isnt already being exploited. Charge too much and get no sales, pay workers too little and they will leave and so forth.


Just for full disclosure I would support a system of no corporate taxes at all with the difference made up through dividends and capital gains rates, but that is a whole different thread.

 

[therealUT]

Anyway, to restate, again, taxes are only paid on profits, not revenue. If a company usually makes $100 and has to spend $70 to do so, they are taxed on $30. If material costs rise $10 they are taxes on $20. If material costs rise $30 they pay no taxes at all. If costs rise $31 they better rethink their business strategy regardless of the tax environment. Tax rates do not effect whether a company can or cannot turn a profit, just how much that profit will be.

You can attempt to pass any change on in price increases or salary deductions or whatever but to do so suggests some inefficiency in the market that isnt already being exploited. Charge too much and get no sales, pay workers too little and they will leave and so forth.

If all sellers have to pay the same tax rates, then they will all raise their prices, passing the buck to the consumers. The only areas that do not see this are borders between cities, counties, and/or states where tax rates are lower and very accessible to consumers who are willing to travel a short distance to purchase the same products.

Just for full disclosure I would support a system of no corporate taxes at all with the difference made up through dividends and capital gains rates, but that is a whole different thread.

Shareholders already pay taxes on their income, prior to purchasing the stocks. By shifting the corporate tax burden solely to the shareholders, to dividends and capital gains, the government effectively ends the practice of paying dividends. This leads to a stock market that is purely speculative and thus more prone to artificial "bubbles" that, when popped, tend to cause disaster for the entire economy.

 

[Specs]

If all sellers have to pay the same tax rates, then they will all raise their prices, passing the buck to the consumers. The only areas that do not see this are borders between cities, counties, and/or states where tax rates are lower and very accessible to consumers who are willing to travel a short distance to purchase the same products.

Why would they do that? If I can undercut the other guy by keeping my prices the same I stand to make a lot more money than if I dont. What you are suggesting sounds like collusion which (despite being illegal) we should work against in any fair market. Remember, this isnt the difference between making money and losing money its just how much money are you going to make.

Shareholders already pay taxes on their income, prior to purchasing the stocks. By shifting the corporate tax burden solely to the shareholders, to dividends and capital gains, the government effectively ends the practice of paying dividends. This leads to a stock market that is purely speculative and thus more prone to artificial "bubbles" that, when popped, tend to cause disaster for the entire economy.

Shareholders pay taxes on income, yes. If they buy shares that dont appreciate they dont pay tax. If they buy shares that do appreciate and choose to liquidate their position they pay taxes on the difference between purchase and sell price. None of this is going to cause dividends to be paid less. In fact, since that money is no longer double taxed corporations can pay more dividends and we can work out rates such that its a net push to shareholders. Government gets the same revenue, and businesses dont have to hire accounting/legal fleets to avoid taxes.

I am glad that we agree speculation leads to needless and destructive bubbles. I would suggest the current market is 99% (at least) speculation anyway but I dont see how the process above would lead to more of it. Perhaps you could elaborate?

 

[therealUT]

Why would they do that? If I can undercut the other guy by keeping my prices the same I stand to make a lot more money than if I dont. What you are suggesting sounds like collusion which (despite being illegal) we should work against in any fair market. Remember, this isnt the difference between making money and losing money its just how much money are you going to make.

It is collusion if the market is not already competitive. Niche markets, therefore, won't be as effected. However, competitive markets (gasoline, milk, bread and butter, etc.) are already pricing at the lowest profit margins possible. Rises in corporate taxes will lead directly to a rise in price. (Or it should, in theory)

Shareholders pay taxes on income, yes. If they buy shares that dont appreciate they dont pay tax. If they buy shares that do appreciate and choose to liquidate their position they pay taxes on the difference between purchase and sell price. None of this is going to cause dividends to be paid less. In fact, since that money is no longer double taxed corporations can pay more dividends and we can work out rates such that its a net push to shareholders. Government gets the same revenue, and businesses dont have to hire accounting/legal fleets to avoid taxes.

It is not mandatory that dividends are paid and many corporations already to not pay dividends because their shareholders would rather that money be directly reinvested, without a tax penalty, than be given to the shareholder -15%. The corporation simply logs it in their arrears and moves forward.

I am glad that we agree speculation leads to needless and destructive bubbles. I would suggest the current market is 99% (at least) speculation anyway but I dont see how the process above would lead to more of it. Perhaps you could elaborate?

The more people invest with an eye towards realizable dividends, the less they invest simply with the outlook of hoping to sell at a peak. The less investors are looking for peaks to sell at and the more they are looking forward to consistent dividends, the less speculation takes place, IMO.

 

[utgibbs]

Why anyone engages in any type of discourse with utgibbs is still beyond me...

I was thinking the same thing. utgibbs is so far gone in his delusions that engaging in debate with him seems fruitless.

Let's be honest, when you are so far left that you clump you and I into a far right spectrum of yourself ... well, yeah you've went way way way to far left.

Then again, I don't even know if it's left. His views almost seem like a new direction.

@therealUT and Vol4Life: If you can't run with the big dogs....

@NEOCON - :hi: it probably is a new direction. To be fair, my views are fairly comprehensive and have almost everything to do with culture vice politics itself. Things like Simple, Transparent, and Progressive taxation is simply a stepping stone, a way to orient the politics back in a direction where changing the culture becomes a possibility. Universal health care I certainly believe is a human right, and it is obvious it cannot be run efficiently under the regime of Capital. However, my "end game" is not simply to have the state run it, although that is certainly the first stepping stone to get there.

Certainly, I want a sustainable culture, one engaged in the historical challenges ever present in the human enterprise (none more challenging than those we face now), one rich in authentic opportunity and authentic human emancipation, one, in short, in which social needs are supreme vice the supremacy (in our own time) of economic rationality. If this is socialism so be it, but it is certainly nothing like Stalinism - which kept economic consideration supreme over people.

I've been thinking of doing a few educational posts where I would just start "breaking the ground" so to speak of my full views, and then only answering legitimate questions afterwards (for instance, ignoring KPT).

If there is interest, I could do this over time.

 

[utgibbs]

He's going in a new direction alright, and everyone's following him right under the troll bridge.

I'm convinced you and IP are just sore because:

1. You are Dyed-in-the-wool Democrats who hate Ralph Nader, or

2. You enjoyed being one of the most clever people on the Politics forum and now you feel threatened. (But, you shouldn't.)

:dunno:

As for trolling, hogwash. I am dismissive towards KPT as he is completely unserious, and I run a little smack in some of my posts (it's not like I don't get plenty in return), but I engage NEOCON, volinbham, and even droski in the right style simply because they aren't trying to be total clowns. I will admit, I do try to clown around a bit in a lot of my posts. But how anyone could get angry at "the real world outside the back door" or other such fun phrases is just either too full of themselves or thinks Kiffin was good for the program and should probably not be walking around without help in civil society. MG has the right tack, as his "real world gorilla" icon shows.

I think the problem is Capitalism is replete with structural antagonisms / inherent contradictions. Anyone who decides to go beyond Capitalism is going to be able to point out these contradictions often and always.

 

[kptvol]

Universal health care I certainly believe is a human right, and it is obvious it cannot be run efficiently under the regime of Capital.

It isn't a human right, it's a privilege, one that many people have no interest in earning.

As a healthcare provider that's worked with both private insurance and a couple of different government managed programs, I can assure you our government does not provide better care.

 

[kptvol]

I'm convinced you and IP are just sore because:

1. You are Dyed-in-the-wool Democrats who hate Ralph Nader, or

2. You enjoyed being one of the most clever people on the Politics forum and now you feel threatened. (But, you shouldn't.)

:dunno:

As for trolling, hogwash. I am dismissive towards KPT as he is completely unserious, and I run a little smack in some of my posts (it's not like I don't get plenty in return), but I engage NEOCON, volinbham, and even droski in the right style simply because they aren't trying to be total clowns. I will admit, I do try to clown around a bit in a lot of my posts. But how anyone could get angry at "the real world outside the back door" or other such fun phrases is just either too full of themselves or thinks Kiffin was good for the program and should probably not be walking around without help in civil society. MG has the right tack, as his "real world gorilla" icon shows.

I think the problem is Capitalism is replete with structural antagonisms / inherent contradictions. Anyone who decides to go beyond Capitalism is going to be able to point out these contradictions often and always.

I am 100% dead serious when I tell you that you are trash that doesn't deserve to breathe the same air as me.

 

[sjt18]

I provided a source that states stimulative multipliers for tax cuts are less than those for a number of government activities such as food stamp provisions, infrastructure spending, et cetera. You can deride these numbers all you want but if they are so incorrect it should be no trouble at all to point me to a source that states otherwise.[

I have. The raw economic stats for economic growth following each.

It is interesting that the Romers study would be presented as it simply suggests tax cuts are stimulative buts fails to compare their effects to other forms of stimulus. As you can see on the graph I provided, there is no conflict with this information. Id be happy to talk about why this is the case once we move past the “is or isnt” phase of the discussion.

The economy accelerates out of recession after tax cuts or with a strong dollar policy. It lags with increased gov't spending. You don't really need all the spin to see that in the raw numbers.

Cute, its like you think I'm in college or something. Anyway, to restate, again, taxes are only paid on profits, not revenue.

ANYWAY TO RESTATE AGAIN, taxes are a budget consideration. If they go up then companies must account for them elsewhere or else go out of business. This is nothing more than math.

If a company usually makes $100 and has to spend $70 to do so, they are taxed on $30. If material costs rise $10 they are taxes on $20. If material costs rise $30 they pay no taxes at all. If costs rise $31 they better rethink their business strategy regardless of the tax environment. Tax rates do not effect whether a company can or cannot turn a profit, just how much that profit will be.

Yes. They do. You cannot run a business long term at 2% profit. Businesses also pay taxes on more than just profit.

Most importantly, taxes take from operating capital even if they are against profit.

If taxes go up then you MUST make it up somewhere else.

You can attempt to pass any change on in price increases or salary deductions or whatever but to do so suggests some inefficiency in the market that isnt already being exploited. Charge too much and get no sales, pay workers too little and they will leave and so forth.

No. Not necessarily. When taxes go up it changes your profit and margin calculations. You simply hope everyone else is feeling it too... but with the cronyism big gov't fosters... you can never be sure.

Just for full disclosure I would support a system of no corporate taxes at all with the difference made up through dividends and capital gains rates, but that is a whole different thread.

I am against any system that taxes investment or production. All taxes should be against consumption. It is the most fair, the most efficient, and the most effective. The Fair Tax IMO is both the most "fair" to people at all income levels and would be the most efficient for raising revenue. It is the ONLY system I have seen that would actually result in the "rich" paying their fair share.

 

[sjt18]

It is collusion if the market is not already competitive. Niche markets, therefore, won't be as effected. However, competitive markets (gasoline, milk, bread and butter, etc.) are already pricing at the lowest profit margins possible. Rises in corporate taxes will lead directly to a rise in price. (Or it should, in theory)

Or... a wage freeze... or demands on vendors... or on benefits changes. None of these things of course are good for the economy or people who work in it.

 

[azVolFan]

The Fair Tax IMO is both the most "fair" to people at all income levels and would be the most efficient for raising revenue. It is the ONLY system I have seen that would actually result in the "rich" paying their fair share.

Have you ever seen a criticism of the FairTax that wasn't completely ignorant?

 

[sjt18]

Have you ever seen a criticism of the FairTax that wasn't completely ignorant?

I haven't seen many "common" people criticize it. Regardless of party or political leanings, most think it is a good idea. The political class however hates it. The genuinely "rich" who are always politically tied in also hate it.

I think many of the elites realize it could be the magic bullet solution for the problem that lefties like gibbs keep harping about- the distribution of wealth and income. Imagine a society where you controlled how far you went simply by your personal productivity and ingenuity... Wait, didn't we used to have one of those before the Progressives convinced earlier generations that economic freedom was bad for them?

 

[R481967]

Having read this entire thread and trying to grasp Comrade Gibbs reasoning, I've concluded that anyone who can take 50 years of socialist/democrat/union bullying in Wisc, bloating themselves on tax money, after losing the election, then trashing the capital, importing union thugs from Comrade Barry... and try to defend it all is beyond redemption.

Give up on him everyone; maybe we could pitch in and buy him a one-way ticket to Cuba.

 

[NEO]

I'm convinced you and IP are just sore because:

1. You are Dyed-in-the-wool Democrats who hate Ralph Nader, or

2. You enjoyed being one of the most clever people on the Politics forum and now you feel threatened. (But, you shouldn't.)

:dunno:

As for trolling, hogwash. I am dismissive towards KPT as he is completely unserious, and I run a little smack in some of my posts (it's not like I don't get plenty in return), but I engage NEOCON, volinbham, and even droski in the right style simply because they aren't trying to be total clowns. I will admit, I do try to clown around a bit in a lot of my posts. But how anyone could get angry at "the real world outside the back door" or other such fun phrases is just either too full of themselves or thinks Kiffin was good for the program and should probably not be walking around without help in civil society. MG has the right tack, as his "real world gorilla" icon shows.

I think the problem is Capitalism is replete with structural antagonisms / inherent contradictions. Anyone who decides to go beyond Capitalism is going to be able to point out these contradictions often and always.

I don't believe UCH is a right. I do believe it would be nice if a working person who does everything they can to support their family while living within their means would have the same health care a US politician has. But I do not view it as a right. I hope no problem standing by and watching someone who is lazy and doesn't want to work starve to death and have no government help in any regard.

I do not though place any faith in the government unlike you appear to. I feel government never ends up working becuase the elected officials still are on corporate payroll at the end of the day (whether anyone wants to admit it or not) and will end up always passing laws that profit their lobbiest and their local voters.

At the end of the day, I believe this country needs to become more relaint on itself and needs to focus more on internal trade and local production.

 

[utgibbs]

At the end of the day, I believe this country needs to become more relaint on itself and needs to focus more on internal trade and local production.

It is amazing when you strip away the political labels, how closely in tune everybody is. These are certainly some of my goals as well.

 

[sjt18]

It is amazing when you strip away the political labels, how closely in tune everybody is. These are certainly some of my goals as well.

When the Progressives pulled their coup about 100 years ago, we did guard our markets and tariffs were a large percentage of Federal revenues. Americans universally thought of themselves as a sovereign nation first and an ally second. There was no UN or globalism.... nor would it have been tolerated. Folks who think like you took control... gave us the income tax, gov't programs, gov't control of markets, bail outs, manipulation throught the tax code, a permanent elite class of rulers, etc.

Again, I think you recognize some of the right problems... but your solutions are usually just more of or a different variety of the things that got us into trouble in the first place.