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Republicans Are Upset About The National Debt Again

Discussion in 'GatorNana's Too Hot for Swamp Gas' started by studegator, Jan 19, 2021.

  1. docspor

    docspor GC Hall of Fame

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    I don't know what you are talking about RE: Reagan. But, it is a myth that he cut taxes. Trump didn't do much to cut taxes either when you net out the tariffs.

    [​IMG]
     
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  2. tampagtr

    tampagtr VIP Member

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    He substantially cut income taxes, especially on the upper marginal brackets. But also presided over compromise which substantially increased FICA taxes to preserve the solvency of the Social Security system.
     
  3. philnotfil

    philnotfil GC Hall of Fame

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    Trump added a big chunk of that new debt before COVID.
     
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  4. docspor

    docspor GC Hall of Fame

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    myth. Even the big cut of 1981 - due to not dealing with bracket creep - didn't cut taxes nearly as much as folks think.


    What is less well-known is that these cuts were then followed by a series of tax increases that, if you add them all together, were almost as big as or even bigger than the 1981 cuts, depending on the measure you use.

    Note: it is easy to cut the tax rate AND raise taxes at the same time!!!

    This article has some good charts (can't cut & paste them b/c they are interactive)

    The Mostly Forgotten Tax Increases of 1982-1993
     
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  5. WESGATORS

    WESGATORS Moderator VIP Member

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    If you break it down to a top 20%, middle 60%, and bottom 20%, you'd be looking at something like this:

    top 20% (77% of wealth): average ~$810,000 per household
    middle 60% (21% of wealth): average ~$75,000 per household
    bottom 20% (2% of wealth): average ~$21,000 per household

    Go GATORS!
    ,WESGATORS
     
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  6. tampagtr

    tampagtr VIP Member

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    Actually we're both right, although you are more right. I had forgotten about some of those those. 20 years ago I used to debate all the stuff because Rush Limbaugh had this stupid line out there about proving the Laffer curve. Back then I remembered the increase of 1982 and forgot it now. Thanks for reminding me.

    But there was also the substantial increase in FICA taxes, the 1983 increase in the article, which is often forgotten in which was a big part of the increase in tax collections, which the idiots try to argue proved up the Laffer curve.

    Thanks for the reminder. I stand corrected. I just always the FICA issue because most people forget that.

    Edited to add: I should've said that he mostly cut upper marginal rates. And as we know, in terms of perceptions, that's really all that matters, even if it's not all that matters in reality
     
  7. Gatorhead

    Gatorhead GC Hall of Fame

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    Thanks but the word "substantially" does not begin to describe the damage........IMO

    The American Citizenry, the 95-99% of us not included in the membership of the "Masters of Capital" have time and time again been asked to take "Hits"
    to support Republican Legislation to aid Corporate Wealth.

    Increased our tax's - Those F'ers don't pay tax - source: Donald Trumps tax bill was $700.00 - supposedly associated with "losses" bahahaha

    Wages have remained FLAT or descending since the 70's.

    No more profit sharing!

    Part time help? See Walmart - they are not employee's they are sales contractors aka "associates" - Like Walmart can't afford to pay people.

    Organized labor - Thatcher / Regan and the gang HATED labor. Did all they could to destroy Unions. Republican deconstruction of labor continues unabated until today.

    Secondary Education: Nope / Pubs are out to take that away as fast as they can. Private/Magnate/Religious - Betsy was a particularly good "Hit Momma"
    crushing dreams for millions of students.

    College Education: Ha ha, he he, ho ho, arughhhhh
    Gone pecan unless you loaded. Nothing like indenturing our young to financial institutions run by the masters of capital.

    Retirement? What F'in retirement - 401 K??? Worthless if you read the fine print, fee's and penalties take your money. Better to invest on your own.

    Health Care: Yeah - Pub health care: Put gun to head, kill self.

    Just goes on and on and on

    We are SUCKERS!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
     
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  8. docspor

    docspor GC Hall of Fame

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    I don't really know how you disprove (or prove) the Laffer curve using real world data. It seems misunderstood to me.
     
  9. tampagtr

    tampagtr VIP Member

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    I think it's been disproven in the real world. At least it any marginal rates that we would ever be talking about. There's some suggestion that would work at very high marginal rates similar to the 50s, marginal rates above 90%. Maybe less than that, maybe 70%. But every so-called real world experiment, to the extent you can look at it ceteris paribis, to use the old economics Latin, though I'm not sure I spelled it correctly, as shown that it is complete bunk. Which only makes sense. It wasn't really an economics theory about the political desire seeking an economic justification
     
  10. docspor

    docspor GC Hall of Fame

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    You do know that the Laffer curve predicts pretty much everything (except at the end pts); that is, it predicts that a tax cut can increase OR decrease tax rev & that a tax rate increase can increase OR decrease tax rev.
     
  11. tampagtr

    tampagtr VIP Member

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    As I am using the term I'm referring to Arthur Laffer's famous thesis that was repeated by everyone on the Right that reducing top marginal rates actually increases gross tax collections above the prior baseline (leaving out inflation and population growth), because it spurs a new burst of economic activity. That has been disproven repeatedly.

    In terms of the broader implications, potentially dynamic scoring or multipliers, which I don't view as part of the Laffer curve, that's not what I was referring to.

    I have long thought that there is at least some part of the argument the could be justified by reference to minimum ROIs that can trigger investment decisions, but I've never seen that analyzed
     
  12. docspor

    docspor GC Hall of Fame

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    that's a (usually intentional) misrepresentation of the theory. The theory simply states that at a tax rate of 0% & a tax rate of 100% tax rev = $0 & that somewhere in between is a rev maximizing tax rate.
     
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  13. philnotfil

    philnotfil GC Hall of Fame

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    Several economists have sought to provide empirical data for the Laffer Curve, most supporters of the Laffer curve ignore the finding because they show that while the Laffer Curve is real, the tax rate that maximizes revenue is much much higher than what they are calling for (depending on the paper, somewhere around 60-70%).
     
  14. tampagtr

    tampagtr VIP Member

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    Said better than I, although I would have put the triggering marginal rate higher than 60%. But I'm not familiar with the scholarship to that level
     
  15. docspor

    docspor GC Hall of Fame

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    I just found an academic paper that experimentally tests the Laffer curve & they find the maximizing tax rate to be in the range of 50% - 65%. Both sides like to cherry pick the economics that supports their views. From what we know of tax & behavior, we should focus on raising the average tax rate & we should have declining marginal rates at some pt!!! As far as my Laffer curve is concerned, I would need to be subsidized to work more (neg tax rate).
     
    Last edited: Jan 20, 2021
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  16. tampagtr

    tampagtr VIP Member

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    I may have phrased it poorly, but you just proved the point I was trying to make. The Laffer Curve as I defined it has never been debated in terms of abstract economic rules that might apply at some marginal rate, but in terms of its impact on proposed tax cuts that were then being debated in Congress.

    And the marginal tax rates the Right would be proposing were at least 20 points below that threshold. Yet they still argued the curve or more often "dynamic scoring" to argue that there would be no negative fiscal impact; in fact it would be positive.

    I probably should've taken the time to look up some of the old debates. But that's what I was referring to.
     
  17. docspor

    docspor GC Hall of Fame

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    I am simply defending the logic of the theory, not idiots. These same idiots think that Keynes was in favor of big gov. I know & know of a LOT of economists & if I was asked who was the smallest gov of all, I'd insta say Keynes. Yes Keynes wanted to smooth the bidness cycle, but even most economists don't seem to know WHY he wanted to smooth it. This video which is pretty good IMO seems to ignore this as well.

     
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  18. tampagtr

    tampagtr VIP Member

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    One last try

    Most economists doubt Trump’s tax cuts will pay for themselves

    Last Thursday, Treasury Secretary Steven Mnuchin suggested that the tax overhaul will essentially pay for itself. The administration “fundamentally believes in dynamic scoring,” Mnuchin said at an event in Washington, DC.


    Dynamic scoring is a type of economic model, popular among Republican lawmakers, that assumes tax cuts will be so good for the economy that they will indirectly generate more money for the government. Dynamic scoring models during the campaign, though, still showed Trump’s plan losing money.


    In order for his campaign plan to pay for itself, the conservative-leaning Tax Foundation calculates, Trump’s cuts would need to add 1.6 percentage points of growth per year, every year, to the current forecast of 1.8 percent annual economic growth in the United States. Such growth “is not possible under any likely policy scenario,” says Alan Cole, a Tax Foundation economist.



    Trump wants a "massive" tax cut. Here’s his best shot at getting it.
     
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  19. tampagtr

    tampagtr VIP Member

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    Me too. I may have shorthanded too much. I did look up a piece. Mnuchin was using it recently about cuts of marginal rates in the 30s
     
  20. docspor

    docspor GC Hall of Fame

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    Both sides are using Laffer logic. When party X says we should raise taxes to increase tax revenues, that sounds like a Laffer curve argument to me.