Trump's Tax Reform

[Androidpk]

To think either one of the parties is fiscally responsible is a fucking riot.

[~Rocktar~]

To think either one of the parties is fiscally responsible is a fucking riot.

One is simply irresponsible in the direction of entitlement programs and pork, the other is irresponsible in the direction of military and pork. Both are buying votes. I believe one ends up with more long term benefits than the other.

[time4fun]

With the exception of Obama's first term (where we had to use government spending to keep our economy from collapsing), Democratic Presidents do better- on the whole- than Republican Presidents when it comes to deficit spending. There's a tendency for people to look at the state of the national debt (which is accumulated from past budgets and grows at an exponential rate due to interest) instead of the annual budget deficit. But deficit spending in the annual budget is the actual measure of how a given administration is doing on this front (well Congress really). Reagan and Bush were particularly bad.

Our deficit became a huge issue once Republicans started slashing taxes. Government spending is actually good for the economy (spoiler alert- so is NOT having 60 million retired or disabled people on the streets because they can't afford to pay their bills and also can't work). Slashing revenue is not. The myth that those tax cuts spur economic growth that "pays for it" is abjectly false. The CBO found no correlation between tax cuts and economic growth in 2012. All they do is drown the country in debt.

Some of our best growth years were actually from Clinton's second term after we raised taxes on the wealthy.

And, just so we are 100% clear- Medicare, Medicaid, and Social Security are not "entitlements". We pay for them.

[Wrathbringer]

You're retarded.

[~Rocktar~]

You're retarded.

This is correct.

With the exception of Obama's first term (where we had to use government spending to keep our economy from collapsing), Democratic Presidents do better- on the whole- than Republican Presidents when it comes to deficit spending. There's a tendency for people to look at the state of the national debt (which is accumulated from past budgets and grows at an exponential rate due to interest) instead of the annual budget deficit. But deficit spending in the annual budget is the actual measure of how a given administration is doing on this front (well Congress really). Reagan and Bush were particularly bad.

Our deficit became a huge issue once Republicans started slashing taxes. Government spending is actually good for the economy (spoiler alert- so is NOT having 60 million retired or disabled people on the streets because they can't afford to pay their bills and also can't work). Slashing revenue is not. The myth that those tax cuts spur economic growth that "pays for it" is abjectly false. The CBO found no correlation between tax cuts and economic growth in 2012. All they do is drown the country in debt.

Which is better for the economy, government spending or private spending? Here is a hint https://www.stlouisfed.org/on-the-ec...mulate-economy

From the referenced article:

The overall takeaway from my research is that government spending does not seem to be a very cost-effective way to stimulate the economy and create jobs.

How long does it take for less taxes to increase economic activity? Let me give you a clue, a lot more slowly than increasing taxes slows the economy.

Also, the Brookings Institute disagrees with the CBO's assessment. https://www.brookings.edu/research/e...onomic-growth/

First, debt-financed tax cuts will tend to boost short-term growth (as in standard Keynesian models and in the literature using the narrative approach), but also tend to reduce long-term growth, if they are financed eventually by higher taxes. Second, revenue-neutral income tax reform can provide a modest boost to economic growth.

Some of our best growth years were actually from Clinton's second term after we raised taxes on the wealthy.

Are you suggesting that tax increases are good for economic activity? HAHAHAHHAHA!

And, just so we are 100% clear- Medicare, Medicaid, and Social Security are not "entitlements". We pay for them.

Wrong. You Social Security is a Ponzi scheme in it's purest form. There is no investment, there is no "trust fund" it is a Ponzi scheme paid for by getting new people to enroll. You get out all you paid in over the first 2.5 to 3 years of getting benefits after that it is simply an entitlement. Here is some older reading with a nice graph to demonstrate the real problem with it, other than the fact people believed that it was either Social or Secure. https://www.mercatus.org/publication...curity-retiree

Keep in mind, the number of workers per recipient is shrinking and one theory as to why Leftists want illegals (other than most South and Central Americans tend fo vote Democrat) is that they pay in without getting anything out of it. It allows them to kick the can down the road and continue to refuse to admit that they have been lying all along.

Now on to Medicare. Again, there is no interest earned and no real return on investment so it is always losing money at the rate of inflation. Here are some facts about Medicare to clearly demonstrate that it is an entitlement. http://www.ncpssm.org/Medicare/MedicareFastFacts

Medicare Part A* (HI) Financing and Tax Rate:

Financing: Primarily finance by payroll taxes* (yay)

Tax rate paid by employee: 1.45%
Tax rate paid by employer: 1.45%
Total tax rate paid by both employer-employee: 2.90%
Total tax rate paid by self-employed: 2.90%
Beginning in 2013, workers pay an additional 0.9 percent of their earnings above $200,000 (for those who file an individual return) or $250,000 (for those who file a joint income tax return)

Medicare Part B

Financing:

About 25% by monthly premiums;
About 75% from general federal revenues*

Medicare Part D

Financing:

• About 14% by monthly premiums;
• About 76% from general federal revenues*
• About 10% from state payments and interest*

* emphasis added

When the vast majority of your funding comes from the general fund, you are an entitlement.

And lastly, here is the fun one since it is hard to nail down the cost since each state has it's own budget so I will take information from here: https://en.wikipedia.org/wiki/Medicaid

Medicaid payments currently assist nearly 60 percent of all nursing home residents and about 37 percent of all childbirths in the United States. The federal government pays on average 57 percent of Medicaid expenses. **

** emphasis added

So, yes, those are entitlements and no, we don't come close to paying in, directly in taxes for them, what they cost to support. They are bloated and crippling social entitlement programs that have grown well beyond what any lying politician could ever admit in public. Here is a breakdown of the 2015 budget: https://www.nationalpriorities.org/b...-101/spending/

Please take note of chart number 4, titled "Total Federal Spending 2015: $3.8 Trillion"

Now, before you want to nitpick and cry about things included in those categories, I concede that the numbers may not be absolutely accurate and do include some other programs like SNAP (which increased enrollees by some 13 million under Obama) and others. The point is painfully obvious for anyone now smoking the Leftist/Socialist crack pipe that spending in those areas is the vast majority of our budget and yet no one ever wants to mess with it. Now I understand why they don't want to mess with it because people are greedy and selfish and it pulls on emotional heartstrings and can't handle the truth so they would vote people out no matter how much the country needs some restraint here. Seriously, claiming those are not entitlements is just amateurish and delusional.

What I find funny is that even taking the stock market crash into account, had the Bush Jr era proposal of letting people invest just 1/2 of their Social Security money into an index fund been put into effect, people retiring today would have somewhere around 50% more retirement income. But hey, who wants to let the people control their own retirement money much less their own life, right?

[time4fun]

First- good job providing sources to support your claims. It's a post worth taking seriously. Having said that- you should be careful with your sources. I'll break this up into the taxation issue and then do another post on Social Security as this is just a wall of text.


Durpor's Work:
First- you are drawing a conclusion from Durpor's work that isn't supported by the work itself. Durpor's research was on Defense spending and on the employment elements of the American Recovery and Reinvestment Act of 2009. Defense spending is just one type of government spending that doesn't represent the aggregated multiplier of all government spending, and Durpor's work is actually in contradiction with Nakamura and Steinsen's research- which- to put it mildly- is a far more cited work. Nakamura and Steinsen actually found that Defense spending had a multiplier of 1.5. [Note that there are some contingencies regarding the current state of the economy during spending in their analysis that are important context]

Durpor's work on the ARRA was also incredibly specific. First- the job creation provisions of the ARRA were just one part of the larger bill. But secondly his research found that the government was paying more to create jobs than the private sector would typically pay, but we were in the middle of a recession. Private employers were paying $0 at that point because they were shedding jobs, not creating new ones.

The CBO estimates that the core provisions of the ARRA had multipliers up to 2.5. Interestingly enough, the provision of the ARRA that had the lowest estimated multiplier (maximum estimate of .4) was the corporate tax provision. In the first year alone, the ARRA was estimated to have increased the GDP by between 1.4-3.8%, which is why the CBO adjusted its GDP projection from a contraction of about 5% to ~3%. (In fact GDP went down 2.9%, vs 5.4% the previous quarter) Overall, I believe the ARRA was estimated by outside groups to have an aggregated multiplier of around 1.5 (This is based on memory, and I cant' find the citation for it, so I don't expect you to take my word for it)

Brookings:

I did a double take when you cited Brookings. They're an extremely prestigious think tank, so their work is highly respected. But they're also a left-leaning think tank that was highly critical of the GOP tax plan. (They're always critical of GOP tax plans) The synopsis of their work that you cited didn't argue that tax cuts were good for the economy- it argued that tax cuts as we had implemented them were actually bad for the economy.

Section IV explores empirical evidence on taxes and growth from studies of major income tax changes in the United States. Consistent with the discussion in Section III, the studies find little evidence that tax cuts or tax reform since 1980 have impacted the long-term growth rate significantly.

Section III provides an empirical starting point. We show that growth rates over long periods of time in the United States have not changed in tandem with the massive changes in the structure and revenue yield of the tax system that have occurred. We also report findings from Piketty, Saez and Stantcheva (2014) that, across advanced countries, even large changes in the top marginal income tax rate over time do not appear to be strongly correlated with rates of growth.

It's summed up beforehand in this sentence:

We find that, while there is no doubt that tax policy can influence economic choices, it is by no means obvious, on an ex ante basis, that tax rate cuts will ultimately lead to a larger economy in the long run

So, unfortunately, Brookings does not disagree with me.

[~Rocktar~]

Yes Brookings did and you ignored it as you always do.

First, debt-financed tax cuts will tend to boost short-term growth (as in standard Keynesian models and in the literature using the narrative approach), but also tend to reduce long-term growth, if they are financed eventually by higher taxes. Second, revenue-neutral income tax reform can provide a modest boost to economic growth.

Your post is a giant excuse as to why you ignore the obvious and don't answer any of my questions. You simply try and cite why you can discount my sources even when I qualify them as I did. Try again, this is a fail.

[cwolff]

Yes Brookings did and you ignored it as you always do.

First, debt-financed tax cuts will tend to boost short-term growth (as in standard Keynesian models and in the literature using the narrative approach), but also tend to reduce long-term growth, if they are financed eventually by higher taxes. Second, revenue-neutral income tax reform can provide a modest boost to economic growth.

Your post is a giant excuse as to why you ignore the obvious and don't answer any of my questions. You simply try and cite why you can discount my sources even when I qualify them as I did. Try again, this is a fail.

Ya, like I said. Dems are better money managers. Trump, Ryan and McConnell recently did debt financed tax cuts and we'll have to raise taxes to pay for them. Bush did the same shit (even started a fucking war with no tax raise) and we should raise taxes to pay for that too.

In the meantime, single payer will save money and Social Security is one of the most responsible things we've done as a nation. It's not a "Ponzi" scheme and the reason you want it privatized is because someone somewhere out there wants to make big ass commission on the collected money. They can't make that commission if Uncle Sam is holding the cash.

[time4fun]

Yes Brookings did and you ignored it as you always do.



Your post is a giant excuse as to why you ignore the obvious and don't answer any of my questions. You simply try and cite why you can discount my sources even when I qualify them as I did. Try again, this is a fail.

Um. Rockstar- what do you think that sentence you just cited means? I'm asking this sincerely.

[time4fun]

Ya, like I said. Dems are better money managers. Trump, Ryan and McConnell recently did debt financed tax cuts and we'll have to raise taxes to pay for them. Bush did the same shit (even started a fucking war with no tax raise) and we should raise taxes to pay for that too.

Yeah, I don't think he realizes that's what the line he quoted is saying.