Who to Blame if Obamacare is not passed?

[Wild Cobra]

Are you suggesting Laffer's theory is flawed?

I think I've been there before with the "El - I don't Know-No" before, and am tired of repeating myself. Have so may threads to catch up on, or I would have said something similar. However...

ElNono, please read this piece of Laffer's work if you hadn't:

The Laffer Curve: Past, Present, and Future
by Arthur B. Laffer

and wiki:

Laffer Curve

[ElNono]

How can you fact check such a thing?

It's not really complicated at all, and it involves zero statistics.

Operating below the 'acceptable taxing threshold':
When you increase taxes, tax collection increases.
When you decrease taxes, tax collection decreases.

You don't need the Laffer curve to know that:
If you increase taxes and tax collection decreases, then taxes are too high.
If you decrease taxes and tax collection increases, then you're back below the 'acceptable taxing threshold'.

That 'acceptable taxing threshold' is a constantly moving target, and depends on many economic factors, such as health of the economy in general, job availability and even economic class of the individuals. This is part of the reason we have a tiered tax system.

Laffer didn't invent anything with his curve, and he said as much himself.
It's just a clear way to explain how taxing levels work so the average Joe can understand it.

With this information in hand, we know that:
- The Bush tax cuts were applied while we were still below the 'acceptable taxing threshold', because tax revenues actually went down right after the cuts.
- There's no such thing as a '18%' silver bullet. The peak of the curve is a constant moving target.

[ElNono]

I think I've been there before with the "El - I don't Know-No" before, and am tired of repeating myself. Have so may threads to catch up on, or I would have said something similar. However...

ElNono, please read this piece of Laffer's work if you hadn't:

The Laffer Curve: Past, Present, and Future
by Arthur B. Laffer

and wiki:

Laffer Curve

We discussed this before. You think Laffer's work supports your theory that less taxes = blooming economy in all cases, and it really doesn't.

[Wild Cobra]

We discussed this before. You think Laffer's work supports your theory that less taxes = blooming economy in all cases, and it really doesn't.

Bull . You shouldn't assume what I mean. Ask if you don't know, instead of showing your ignorance.

I say we are at the side of the curve that we need to reduce taxes for optimum revenues. Once they are reduced so much, farther deducing them would reduce tax revenues.

[Wild Cobra]

It's not really complicated at all, and it involves zero statistics.

Operating below the 'acceptable taxing threshold':
When you increase taxes, tax collection increases.
When you decrease taxes, tax collection decreases.

No Sherlock. I say we are above the threshold. Not below it. The Bush Tax cuts proved it. I rather certain we got close to the optimum threshold, but not into the "below" category.

[jacobdrj]

Not concerned as much with people who don't have health care, such as myself. More concerned about people who pay a lot of money for health care and get denied it when they need it most.

Besides, why should the company I work for bear the brunt of the responsibility for my health care? I'd rather them pay us more money and we choose the health care to fit our needs, or to have a blanket tax on corporations (imaginary people) that distributes the burden evenly.

Either way, the current system blows. When you are afraid to purchase insurance as an individual because there is no guarantee that money will be there if you need it, the system is broken.

[ElNono]

Bull . You shouldn't assume what I mean. Ask if you don't know, instead of showing your ignorance.

I say we are at the side of the curve that we need to reduce taxes for optimum revenues. Once they are reduced so much, farther deducing them would reduce tax revenues.

I don't assume anything. If the only flag you wave is the tax cut flag, then there's nothing left to the imagination.

No Sherlock. I say we are above the threshold. Not below it. The Bush Tax cuts proved it. I rather certain we got close to the optimum threshold, but not into the "below" category.

Now you're the one assuming when you don't have to. Go take a look at the tax revenue following the tax cuts: They decreased. Meaning, we were still below the tax threshold when the tax cuts passed. Plus you keep arguing for this 'optimum' threshold, which basically does not exist. I'd like to see what scientific foundation you used to determine what this 'optimum' threshold is. I suspect that it has to do with you 'gut' more than anything else, considering most every economist in the world has been trying to devise a formula for it, and so far has failed miserably at it.

[Wild Cobra]

Besides, why should the company I work for bear the brunt of the responsibility for my health care?

It's become tradition. When companies started offering, with their own free will, it was used as an insentive to get a larger pool of qualified people to select from.

I'd rather them pay us more money and we choose the health care to fit our needs, or to have a blanket tax on corporations (imaginary people) that distributes the burden evenly.

Same here. I would prefer a health saving account, and I would only buy catastrophic insurance coverage. I would love to have an extra $500 to $1000 a month in my pocket, rather than what it costs my employer.

Either way, the current system blows. When you are afraid to purchase insurance as an individual because there is no guarantee that money will be there if you need it, the system is broken.

Also lacks the proper compe ion from excessive regulations. Regulations also drive up real medicals casts. Then of course, there's the cost of insurance the providers must pay!

[Wild Cobra]

Now you're the one assuming when you don't have to. Go take a look at the tax revenue following the tax cuts: They decreased. Meaning, we were still below the tax threshold when the tax cuts passed. Plus you keep arguing for this 'optimum' threshold, which basically does not exist.

Relative to when? What's the source if your information? Factual data, or pundits?

Taxes were too high under Clinton. Too much of the GNP was taxed, leading to disaster when the markets popped. We never achieved the peak revenues by GNP we had after the Bush Tax cuts because there was no Y2K hoax driving purchases, but the tax cuts did reverse the trend. People had more money to spend, and the revenues increased. Sure, it never matched the revenues under the Y2K scare driving the market, but they did increase once implemented.

By GNP:



By dollars:

[ElNono]

Relative to when? What's the source if your information? Factual data, or pundits?

Are the CBO guys pundits? I'm pretty sure they work with raw data.

The Revenue Outlook
Chapter 4, page 93:

Receipts in Recent Years. Receipts from corporate income taxes—like those from individual income taxes— rose relative to the size of the economy in the 1990s, fell sharply between 2000 and 2003, and rebounded strongly in recent years (see Figure4-3 on page 79). The recession in 2001 reduced profits and tax revenues substantially. Business tax incentives enacted in the Job Creation and Worker Assistance Act of 2002 and the Jobs and Growth Tax Relief Reconciliation Act of 2003 further reduced revenues. Those incentives allowed firms to expense (immediately deduct from their taxable income) a portion of any investment made in equipment between September 11, 2001, and December 31, 2004. Prior to 2005, when they expired, those partial expensing provisions both reduced taxable corporate profits and tax payments and increased corporate refunds, thereby reducing net corporate tax receipts. By 2003, corporate receipts as a share of GDP fell to 1.2 percent, their lowest share since 1983. Especially strong profit growth since 2003, combined with expiration of the tax incentives, caused corporate receipts to rise to 2.7 percent of GDP by 2006, their highest share since 1978.

------------------------
(emphasis mine)

And BTW, those graphs you posted do nothing other than support my point. Tax revenues did decrease after the tax cuts. Thanks for the charts.

[Wild Cobra]

Are the CBO guys pundits? I'm pretty sure they work with raw data.

Pundits? Maybe not, but CBO numbers have a history of being way off.

The Revenue Outlook
Chapter 4, page 93:

Business tax incentives enacted in the Job Creation and Worker Assistance Act of 2002 and the Jobs and Growth Tax Relief Reconciliation Act of 2003 further reduced revenues.

That is based on congress' continues believe that tax rates cause a static result rather than having feedbacks. Their statement has no basis in reality.

Those incentives allowed firms to expense (immediately deduct from their taxable income) a portion of any investment made in equipment between September 11, 2001, and December 31, 2004. Prior to 2005, when they expired, those partial expensing provisions both reduced taxable corporate profits and tax payments and increased corporate refunds, thereby reducing net corporate tax receipts.

So they only look at the side that reduces static revenues, while ignoring the increased economy from more money circulating in a dynamic fashion. Cherry picking the facts.

By 2003, corporate receipts as a share of GDP fell to 1.2 percent, their lowest share since 1983. Especially strong profit growth since 2003, combined with expiration of the tax incentives, caused corporate receipts to rise to 2.7 percent of GDP by 2006, their highest share since 1978.

The 2003 tax cuts rectified this! 2006 highest share since 1978, after the larger cuts were in place! Interesting how lower taxes mean higher profit growth, huh?

And BTW, those graphs you posted do nothing other than support my point. Tax revenues did decrease after the tax cuts. Thanks for the charts.

There were more than one set of cuts. I should have specified I was referring to the 2003 cuts. The prior cuts were tiny compared to that, and had almost no effect. Top marginal rates on personal income:

2000 39.6%
2001 39.1%
2002 38.6%
2003 35.0%

Middle Class top marginals:

2000 28% and 31%
2001 27.5% and 30.5%
2002 27% and 30%
2003 25% and 28%

[ElNono]

That is based on congress' continues believe that tax rates cause a static result rather than having feedbacks. Their statement has no basis in reality.
So they only look at the side that reduces static revenues, while ignoring the increased economy from more money circulating in a dynamic fashion. Cherry picking the facts

I'm sorry, I thought we were discussing wether we were above or below the acceptable taxing threshold. Tax revenue decrease = below the acceptable taxing threshold.

The 2003 tax cuts rectified this! 2006 highest share since 1978, after the larger cuts were in place! Interesting how lower taxes mean higher profit growth, huh?

I'm sorry, you must have missed this part: combined with expiration of the tax incentives

Certain tax cuts expire = more taxes collected = larger tax revenue = still below the acceptable taxing threshold.

There were more than one set of cuts. I should have specified I was referring to the 2003 cuts. The prior cuts were tiny compared to that, and had almost no effect. Top marginal rates on personal income:

2000 39.6%
2001 39.1%
2002 38.6%
2003 35.0%

Middle Class top marginals:

2000 28% and 31%
2001 27.5% and 30.5%
2002 27% and 30%
2003 25% and 28%

Do you have the top marginals on corporate income for that period? I mean, if you're not embarrassed to post them. Also, I hope you don't mind if I ask for the source of those numbers?

[Wild Cobra]

I'm sorry, I thought we were discussing wether we were above or below the acceptable taxing threshold. Tax revenue decrease = below the acceptable taxing threshold.

I don't share that opinion. I say we are still above the optimum value.

I'm sorry, you must have missed this part: combined with expiration of the tax incentives

Don't you think the larger tax reduction also helped?

Certain tax cuts expire = more taxes collected = larger tax revenue = still below the acceptable taxing threshold.

Assuming we are on that side of the curve. Again, all evidence shows otherwise. We clearly need farther tax cuts.

Do you have the top marginals on corporate income for that period? I mean, if you're not embarrassed to post them. Also, I hope you don't mind if I ask for the source of those numbers?

First of all, corporate tax revenue is much smaller than the revenues from individual tax returns. I was taking the position of the largest chunk of money. Individual tax returns. I think corporate tax rates stayed 35% all along, but I didn't look. I personally think it's way too high, and our economy would be far better off if we didn't tax businesses so high.

[ElNono]

I don't share that opinion. I say we are still above the optimum value.

I wish it was merely an opinion. But if we go by the precepts explained by the Laffer curve, we're below the optimum value. You can't defend the Laffer curve precepts when they fit your criteria, and dismiss them when they do not.

Don't you think the larger tax reduction also helped?

Sure they did. I also think the expiring tax cuts helped too.

Assuming we are on that side of the curve.

We don't have to assume absolutely anything. Tax cuts = decrease in tax revenue = left side of the peak on the curve. Zero assumptions made. Merely reading the numbers.

Again, all evidence shows otherwise. We clearly need farther tax cuts.

What evidence? Both what you provided and what I provided show that the tax revenue decreased after the cuts.

And now we can dispose of one of the original myths that brought up this discussion: The government doesn't have any more money in their coffers than what it had for the last 40 years as a ratio of the GDP. Meaning, the tax cuts simply did not increase any revenue whatsoever, only decreased it from the median temporarily.

First of all, corporate tax revenue is much smaller than the revenues from individual tax returns. I was taking the position of the largest chunk of money. Individual tax returns. I think corporate tax rates stayed 35% all along, but I didn't look. I personally think it's way too high, and our economy would be far better off if we didn't tax businesses so high.

It's interesting you mention this, because that ascending curve you see from 2004, it's almost exclusively due to corporate tax revenue.

In 2006, according to the CBO, individual income tax revenue was 1,043.9 billion, an increase of 5 percent since 2001. Corporate tax revenue was 353.9 billion in 2006, a 134 percent rise from 2001. That’s a dramatic increase.

The CBO analyzed data to uncover the causes of revenue growth since 2003 in response to a request from Sen. Kent Conrad, chair of the Senate budget committee. In a letter to Conrad, CBO Director Peter R. Orszag says that overall receipts increased by 1.9 percentage points as a share of GDP and that the increase “disproportionately” comes from a rise in corporate income tax revenues.

Orszag attributes two-thirds of the bump in corporate taxes to an increase in corporate profits. The rest he pins to tax policy. For instance, when provisions allowing partial expensing of investment in equipment expired, tax revenue increased. In other words, revenue declined when the provisions were enacted and bumped up again when they expired.

(From the factcheck.org article I linked earlier).

So, are corporate taxes 'marginal' or not? And you still didn't post the numbers. Are you cherry picking just like you claim the CBO is doing?

[Wild Cobra]

I wish it was merely an opinion. But if we go by the precepts explained by the Laffer curve, we're below the optimum value. You can't defend the Laffer curve precepts when they fit your criteria, and dismiss them when they do not.

Are you saying we didn't have growth after 2003?

Sure they did. I also think the expiring tax cuts helped too.

If they helped, why are you saying we are on the low side for taxation?

We don't have to assume absolutely anything. Tax cuts = decrease in tax revenue = left side of the peak on the curve. Zero assumptions made. Merely reading the numbers.

Bull . Revenues increased!

What evidence? Both what you provided and what I provided show that the tax revenue decreased after the cuts.

They increased after the 2003 tax cuts!

It's interesting you mention this, because that ascending curve you see from 2004, it's almost exclusively due to corporate tax revenue.

Bull .

In 2006, according to the CBO, individual income tax revenue was 1,043.9 billion, an increase of 5 percent since 2001. Corporate tax revenue was 353.9 billion in 2006, a 134 percent rise from 2001. That’s a dramatic increase.

OK, there was a larger increase at the corporate tax level, percentage wise. Individual returns are still about 3 times higher in numbers rather than percent.

Remember how many businesses were not making a profit to pay taxes on before the tax cuts? People weren't buying enough goods. With more spendable income, people bought more. Businesses made a profit again that they could be taxed on.

The CBO analyzed data to uncover the causes of revenue growth since 2003 in response to a request from Sen. Kent Conrad, chair of the Senate budget committee. In a letter to Conrad, CBO Director Peter R. Orszag says that overall receipts increased by 1.9 percentage points as a share of GDP and that the increase “disproportionately” comes from a rise in corporate income tax revenues.

Fact without seeing the root cause.

Orszag attributes two-thirds of the bump in corporate taxes to an increase in corporate profits.

Yep, more profits equal more taxable income.

The rest he pins to tax policy. For instance, when provisions allowing partial expensing of investment in equipment expired, tax revenue increased. In other words, revenue declined when the provisions were enacted and bumped up again when they expired.

(From the factcheck.org article I linked earlier).

So, are corporate taxes 'marginal' or not? And you still didn't post the numbers. Are you cherry picking just like you claim the CBO is doing?

I haven't checked. I think corporate taxes have always been 35%. If it's important to you, you look it up. That is not my argument. It's yours. Mine is with individual rates. As people have more money to spend, the economy grows. As the economy grows, more people work and businesses make more money to be taxed on.

[ElNono]

Are you saying we didn't have growth after 2003?
If they helped, why are you saying we are on the low side for taxation?
Bull . Revenues increased!
They increased after the 2003 tax cuts!
Bull .
OK, there was a larger increase at the corporate tax level, percentage wise. Individual returns are still about 3 times higher in numbers rather than percent.

Remember how many businesses were not making a profit to pay taxes on before the tax cuts? People weren't buying enough goods. With more spendable income, people bought more. Businesses made a profit again that they could be taxed on.Fact without seeing the root cause.
Yep, more profits equal more taxable income.

I haven't checked. I think corporate taxes have always been 35%. If it's important to you, you look it up. That is not my argument. It's yours. Mine is with individual rates. As people have more money to spend, the economy grows. As the economy grows, more people work and businesses make more money to be taxed on.

I have to assume you either do not understand or you simply don't want to.
For a person that prides himself of being an engineer and likes to lambast people for not studying a topic before spouting a comment, I'm more inclined to think you're just playing dumb.
So at this point, before I keep on wasting any more time, I would like you to refute that factcheck.org article that flies right in the face of your contention that tax cuts generate tax revenue. And sorry, but I won't take simply "They're wrong, I'm right". That's what you've been doing so far without backing up any single one of your assertions. My intention here is that in order to even attempt to refute the information on that article, you have to read it first. And it does explain better than I ever could what I've been trying to tell you so far, and that has completely eluded you.

[Wild Cobra]

I'm sorry that you have to have Fact Check tell you what to believe. They are sometimes wrong. Please notice they use other peoples facts without a proper analysis.

[Winehole23]

Please notice they use other peoples facts without a proper analysis.

Turn it around, WC.

[Wild Cobra]

Turn it around, WC.

At least I use my mind to determine what is real. I don't blindly use other people's facts. No comparison.

[ChumpDumper]

At least I use my mind to determine what is real. I don't blindly use other people's facts. No comparison.

There is truly no comparison.

[ElNono]

The logical fallacy is staggering. If it's a fact then it's not an opinion. What does it matter who the source is?
Are you arguing that the factcheck report is opinion, and not fact?
Because if that's what you mean, I'm waiting for your rebuttal with hard, cold facts (Yes! You can use any source you want!), not merely your personal opinion, which is all we got right now...

[Holt's Cat]

So Bush's spending outpaced any growth in tax collections. Of course, the assumption is that the increase in tax collections is the result primarily of the tax cuts is a tenuous one, when one considers the role which the asset bubble promulgated by the Fed and Fannie/Freddie had to play in economic growth from 2002-2008.

[DarrinS]

If Obamacare is not passed, I will blame reason and sanity.

[Wild Cobra]

If Obamacare is not passed, I will blame reason and sanity.

I agree here. Only the mentally ill want his health care plan.

[Spursmania]

The health bill keeps getting water downed as it should.
Looks like the senate will not even have a public option. The lobbyists did their job. I was a little disappointed in them at first, but not anymore.
We'll see what transpires...