If you want to see Trickle Down Economics writ large (as opposed to the benefits of lower tax rates in general), go to Alabama, Mississippi, Louisiana, Somalia...
There fixed that for you.
What Is Wrong with "Trickle Down Economics"?
- Thread starter Knight Templar
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There fixed that for you.
Actually no. The states that don't have income taxes (Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming) have seen higher growth rates, higher personal incomes, higher growth in personal incomes, and higher tax revenue growth than states that do have income taxes. The states with the more progressively graduated income tax systems do worse still, and the decline in relative performance is marked by when they adopted their income tax system, or made it steeper.
Alabama and Mississippi have an income tax rate of 5% on everyone, and Louisiana's rate jumps from 4% on everyone over $12,000 to 6% at $50,000 and up (California crosses into 6% rates at half that).
Arthur Laffer still collects lots of real world data on this.
Somalia's taxes are so screwed up that people get shot dead in tax revolts. In fact, the country exactly confirms Ibn Kuldun's warning.
So you were saying, what, exactly?
These are not the only measures of economic success. Try again.
Oh, and Arthur Laffer. Nice. Do you believe in the Easter Bunny and Santa as well? That's called begging the question via an appeal to authority. No logical fallacy goes untouched by you, does it? Try again.
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The report you cite. http://www.itep.org/pdf/junkeconomics.pdf
Is GIGO.
They screwed up the first states I checked, Oregon verus Texas, so horribly that the rest of their conclusions are junk, since they all depend on Oregon.
In figure 2 of their report they say Oregon had a real per capita growth rate of 25.6% from 2001 to 2010, while Texas had a per capita real GSP growth rate of 4.3%.
The inflation adjuster says a 2001 dollar is worth $1.23 2010 dollars.
This little widget http://www.usgovernmentspending.com/compare_state_spending_2001bZ0a
lets you pull up state GSP data for any year, along with population.
Oregon GSP 2001 $112.5 billion, pop 3.5 million
Oregon GSP 2010 $185.2 billion, pop 3.8 million
inflation adjust 2010 to $150.57 2001 dollars
Oregon GSP per capita, 2001, $32,143
Oregon GSP per capita, 2010, $39.623 (in 2001 dollars)
Oregon real GSP per capita growth 23.27%
Fairly close to ITEP's 25.6% (probably from population rounding
Texas GSP 2001 $762.9 billion, pop 21.3 million
Texas GSP 2010 $1,222.9 billion, pop 25.1 million
inflation adjust 2010 to $994.22 billion 2001 dollars.
Texas GSP per capita, 2001, $35,816
Texas GSP per capita, 2010 (in 2001 dollars) , $39,610
Texas real GSP per capita increase of 10.59%
The data shows Oregon growing twice as fast as Texas over this period (actually just catching up).
The ITEP paper claims Oregon grew six times faster than Texas.
That's a serious, serious error.
Also, the article you link talks about median household income instead of average, so as long as there's no change in the middle, you could wipe out vast amounts of wealth and not see it reflected in their numbers.
ITEP also put out another article about Laffer's state-by-state analysis.
http://www.itep.org/pdf/LafferRegression.pdf
There they claim that you can't combine total state and federal tax rates (what people in each state actually pay when comparing the effects of tax rates in different states. I would say that's an absurd argument, because even if all state tax rates were identical, yet state to state income differences existed (and thus federal tax rates), it would let you see the effects in the varying total tax rates across the state data. Nobody actually cares how the tax collector splits up his loot. It's what they pay that affects their behavior.
^Perhaps because the global economy is still not working.
Economic growth in China appears to be slowing
Continued uncertanity about the Eurozone
Banks not lending or not mending as much
etc..
So events halfway around the world can have a direct on your countries economy, events of which you have little to no control over.
Economic growth in China appears to be slowing
Continued uncertanity about the Eurozone
Banks not lending or not mending as much
etc..
So events halfway around the world can have a direct on your countries economy, events of which you have little to no control over.
The way trickle-down is presented is that if you give rich people more money they will create jobs. But time and again this simply doesn't happen.
So if it is so dependent on what's going on half way around the world, then tax rates should be much higher during times when those areas are unstable, since jobs won't be created regardless of tax rate.
Or maybe, the lower tax rate should only apply to individuals and corporations actually creating jobs?
What was the demand for automobiles before there were automobiles? None, there wasn't any demand because nobody knew what an automobile was. What was the demand for IPads in the 1980s? None, there weren't any IPads in the 1980s and there was no way for consumers to demand them. Steve Jobs created jobs by foreseeing a need for IPads in the marketplace, he created those jobs by properly anticipating the demand when his new product came out, it proved useful and people wanted them.
You want an example of trickle down economics, how about my paycheck? Does anyone else work for a rich person or rich investors? How do corporations come about? All I see is Obamanomics not working, unemployment is high, threatening to tax the rich more has suppressed investment and created fewer jobs. The salaries which might otherwise have been paid to middle class and poor people have otherwise gone into government coffers, and instead of being spent on useful things such as IPads are being spend instead on wasteful things such as paper shuffling and new regulations and enforcement of those regulations, further suppressing job creation. Bureocrats cost the private sector their jobs, I know, I am a chauffeur, I moved into Connecticut from New York and I have to wait 6-8 weeks while the Bureocrats get my paperwork done so I can have my passenger endorsement so I can drive people to the airport from Connecticut instead of New York, Now the buerocrat who does my paperwork gets a job making sure I don't have one for 6-8 weeks, is that fair? No, I think it is not!
Do rich people want to get richer? If rich people kept more of their income, what would they do with it? Hmm anyone? anyone?
Why they invest it of course, they invest it to generate more income for themselves, they could put it in a bank, the bank then invests the money in loans to other people, they keep some of the interest and pay some of the interest to the depositor, mean while someone gets a loan that they otherwise wouldn't have because some rich person deposited his extra income.
A rich person could buy stocks, the company that sells the stocks then has the extra income to expand and create more jobs.
A rich person could keep the money in a strongbox where it gather's dust, thereby create no new jobs, so are you saying that most rich people prefer to keep their money in a safe, so it can gather dust? Sounds like the investment strategy for Thirston Howel the Third and his teddy bear.
I'll tell you what Quantitative Easing is, theft. When the government prints money, it is robbing everyone of the money they hold by printing more of it. Inflation is a way of taxing people's wealth by devaluing the money they hold, the government pays for some of its operations by printing money the value being drained from everyone's bank account in proportion to the amount of currency they hold, it is nothing less that a currency tax. When bank accounts are devalued, a rich person is less rich and can hire fewer people because of that fact. More government spending means more buerocrats more regulation and fewer IPads and automobiles being produced as fewer people can afford them and their prices go up due to inflation and salaries aren't keeping up. The Stock market is soaring because of anticipated inflation, the prices of stock have to go up just like the prices of automobiles and a bottle of Coke, which is now about $2 in many places, and I remember when it was under $1 not too long ago. Gas is around $4 a gallon and it has mostly to do with inflation. I don't want anymore Quantitative Easing, what I want is less regulation and lower taxes, not for myself specifically but for my employers so they have the demand for my work.
Supply Side Economics is simply "the rich pissing on the poor"..
At this time, our wealthiest Americans have the lowest tax burden at any time since the income tax was implimented and so I ask you, where are the jobs these "creators" have made?
Overseas, in China and India...
At this time, our wealthiest Americans have the lowest tax burden at any time since the income tax was implimented and so I ask you, where are the jobs these "creators" have made?
Overseas, in China and India...
But the companies that are receiving investment capital aren't turning that capital into jobs and banks aren't lending out capital in a way that has any meaningful impact on the economy.
Lower tax rates have led to a "Dow Jones" recovery, but hasn't had a meaningful impact on jobs.
I have no problems with tax relief for job creators. So if trickle-down really works, let the supporters put their money where their mouths are and target lower tax rates for those who can actually prove they are job creators.
Bingo. This is the lie inherent in the argument that letting the rich keep more of their money means they will invest it and create jobs. Oh, they invest it, all right--but not in the US. They use it to fund firms like Bain Capital, where preserving/creating jobs is not on the agenda, just siphoning profit until nothing is left but a desiccated husk. They put it in overseas tax shelters so they don't have to pay income taxes on their gains. It gets invested pretty much anywhere but in growing US companies and creating jobs.
Ultimately, we can blame Wall Street casino culture, which separates the financial economy from the "real" economy, a business culture that promotes short-term profit over all else, and tax policy and regulatory infrastructure that simply can't cope with all the tricks used to game the system.
To answer the thread question: "What is wrong with "trickle down economics?"
In theory, nothing. In reality, everything. It's that simple.
Thank you.
I have nothing against people in other countries getting work. We're all trying to make it, but Americans are losing jobs that aren't coming back...This is identical to the argument of one car manufacturer that sells a car for $30,000 complaining about another car company selling a comparable car for $25,000 as "stealing their employees jobs." What is a car company to do when another company is stealing their market share by offering a similar product for a lower price?
tick tock tic tock tick tock ding! Times up!
Ah yes, lower the price of the product they sell to match or beat that of their competitors. That is what we must do with our tax rates in order to compete with other countries. There is no amount of threatening we can do to make rich people create jobs in our country, and that is the wrong approach, we must use the carrot of lower tax rates to attract him into investing in our country. If we chase them around too much with big stick policies, threatening them with taxes and penalties, they will just change their citizenship and move to other countries and we'll lose both them and their wealth. Rich people are rich - those that don't steal at least, are rich because they are experts at creating wealth, if we go after that weath with too many taxes or threats of taxes, they'll simply take that wealth elsewhere. Obamanomics simply doesn't work, the past four years have proven that if nothing else.
To answer the thread question: "What is wrong with "trickle down economics?"
In theory, nothing. In reality, everything. It's that simple.
Thank you.
How do we best compete with those countries that are getting "our jobs"? Would threatening rich people with higher taxes make our country more comparative and encourage wealthy millionaires to leave those tax shelter countries so they can come back to the US and pay higher taxes. Tell me of one thing Obama's doing that makes millionaires and billionaires want to leave those other countries and come to the US to create more jobs, can you name a single thing? Democrats think raising taxes on the rich will bring in more jobs, so tell me how does that happen?
Let me give it a try, how about investing in Education?
Ok, suppose we invest in education and we get some results, we have some people who are educated, then some millionare calls them back and says something like this. "Well I have a job for you, and it looks like you have some valuable skills that our company could really use, but the thing is this job is in another country because of the favorable tax climate, so here's what I'll do, I'll purchase tickets for you and your family, cover all moving expenses so you can come to this country and work for me, how does that sound?"
There is no such thing as "Obamanomics," unless you mean "the same fiscal and economic policies we've been using more or less since Reagan."
I'd like an explanation of "Obamanomics" myself. What constitutes that obviously derogatory moniker? That the current Administration took proper emergency steps to save the auto industry? Rescue the major banks? Enacted policies that stopped the hemorrhaging of almost 800,000 jobs per month and reversed the trend so that we've now had thirty straight months of continuous job growth, however small? Made us a net petroleum exporter for the first time in decades? Presided over a recovery that's been encouraging and confidence-building enough for the Dow Jones Industrial Average to soar almost 70 percent since the day Obama took office and for the NASDAQ and S&P to currently sit at levels not witnessed since the early days of the George W. Bush presidency? Overseen policies and steadily improving conditions that have allowed the HDI ranking of the United States to rise from 13th place in the world at the end of the Bush Administration to fourth last year?
What's this "Obamanomics" you're talking about? If it's the above, I'll agree it exists. And it somehow seems to kinda be working.
What's this "Obamanomics" you're talking about? If it's the above, I'll agree it exists. And it somehow seems to kinda be working.
I would truly love to know what economic measures Obama took that his predecessor didn't or wouldn't have.
Stimulus spending? Check.
Corporate welfare? Check.
Bank bailouts? Check.
Tax cuts? Check.
Interest rate cuts? Check.
Stimulus spending? Check.
Corporate welfare? Check.
Bank bailouts? Check.
Tax cuts? Check.
Interest rate cuts? Check.
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