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Wake up, giving money to rich will not create jobs.

By Nobody follow Nobody   2012 Nov 2, 8:58am 42,183 views   153 comments   watch   nsfw   quote   share    


The jobs are created only when the company needs people to create products, goods and services, not when they have money. I don't understand how you can be fooled into thinking that just because the companies or rich investors have more money from the tax break, they will hire. Do you think they will hire you to just sit around without producing anything, just because they have money to burn? You just wanna free money? Or you want to get paid for your hard work?

So why do you believe that giving money to the rich will create jobs? It seems to decrease the value of your money. The company is not going to hire you based on how much money they have saved or get from the investment but how much labor they need to produce or develop goods or services. So why?

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81   CBOEtrader   ignore (6)   2012 Nov 5, 1:58am     ↓ dislike (0)   quote   flag        

david1 says

I know, correlation is not causation, but what makes you think that deficits cause inflation??? Certainly not the historical record...

I haven't researched this enough to speak as authoritatively as I'd like. However, I'd first use the classic definition of the word inflation as an expansion of the money supply, rather than increasing and decreasing prices.

Then I'd attempt to identify deficits and government spending as a % of GDP rates compared to M1 patterns, then M1 to M2, M2 to M3, M3 to eventual rising prices (probably defined as a basket of historical commodity prices), then all of the above to wealth disparity, minimum wage rates, etc...

My goal would be to analyze moreso like a scientific experiment, while fully acknoweldging my own expectations of what the data would show. Then compare my findings to my expectations. Pretty simple, just a lot of data to look at.

82   david1   ignore (1)   2012 Nov 5, 2:32am     ↓ dislike (0)   quote   flag        

CBOEtrader says

I'd first use the classic definition of the word inflation as an expansion of the money supply

Increasing the money supply not create inflation either...there is some evidence that long term inflation correlates to increases in the money supply, however, there is equal evidence linking inflation to economic or population growth as well. That is, correlation is not causation here either.

Inflation is a measure of price changes.

83   Nobody   ignore (0)   2012 Nov 5, 2:43am     ↓ dislike (0)   quote   flag        

I thought the topic here is whether giving money to the rich as a form of tax break does not create jobs. I understand your point, though. When 1% has this much power, 1% can easily manipulate the system and fool many brain dead folks. Quite frankly I don't see the big difference between socialism and free market. They are both controlled by the 1%.

1. There will be wealth disparity in socialist or free market country. It is probably worse in socialist country like China.
2. The 1% will always have more power and control.
3. There will be so many middle class people who buys into bs of 1%.
4. The majority of politicians are the 1%. And they would like to give more money to themselves. That's just a human nature to want more.
5. It takes more than a few years to cure the economic collapse of this magnitude. It just doesn't happen over night.
6. Most importantly, giving money to the rich would create jobs is a fallacy.
7. The investment can create jobs, but it can not sustain. Only the profit from the demands for goods and services can.

As for my personal preference, I prefer Romney. Cause I know he will make sure that the return from my investment will not be taxed.

I am more curious, if Republicans have their way, we will hit the massive austerity measure or budget cuts in 2013. Our economy will stand still. Yet, Romney thinks he can increase the budget for the military. I wonder where he is going to get the money. Romney's number just does not add up.

84   Nobody   ignore (0)   2012 Nov 5, 2:48am     ↓ dislike (0)   quote   flag        

david1 says

Increasing the money supply not create inflation either...there is some evidence that long term inflation correlates to increases in the money supply, however, there is equal evidence linking inflation to economic or population growth as well.

Actually, if we print so much money, the money becomes worthless. Guess why the gasoline price is so high. Can you honestly say that your cost of living is staying the same in the last few year during the QE?

The earnings from my investment is going up to offset the increase in the cost of living for me. But I feel the cost of living going up definitely. I don't buy into the propaganda created by the 1%. I trust the logic and what makes sense. If you have too much supply, the price tends to come down. Why should it not be the same for cash?

I agree with another factor for inflation is the population growth which creates the demands which will also increase the cost of goods and services. But I don't think the population growth was the cause of current inflation.

85   david1   ignore (1)   2012 Nov 5, 3:40am     ↓ dislike (0)   quote   flag        

Nobody says

Can you honestly say that your cost of living is staying the same in the last few year during the QE?

My totally unscientific analysis.

Yes, we have seen a 40% increase in M2 and a 75% increase in M1 since Jan 08, meanwhile....

Housing - down since Jan 08
Cars - flat to down since Jan 08
Energy - down (oil flat to down, natural gas down)
meats - up, though not close to 40% or 75%
grains - up, though not 40% or 75%
electronics - down

The only things that have come even close to keeping up with the growth in the money supply are education and health care.

Further, the US dollars has gained strength vs. most world currencies in the same time frame as these QE's...

What I am saying is: Where's the beef?

86   Nobody   ignore (0)   2012 Nov 5, 4:11am     ↓ dislike (0)   quote   flag        

david1 says

The only things that have come even close to keeping up with the growth in the money supply are education and health care.

So you do agree with the fact that there are more money. Then without any data, you can see how more supply can decrease the value. OK, now to your data. If you don't actually show the graph, it is hard to see whether you are taking the data at the lowest point or highest point.

OK, now onto the practical view, how do you feel? I have kids. The cost seems to be going higher and higher. The gasoline price seems to have been going up in the last few years, not down. The food price is going up steadily as well. I am spending more on their education, because our pubic school sucks. The school doesn't have any art program or music program. I don't believe 1%'s propaganda that easily without the hard data.

US dollars has not gained strength vs. the currencies which we should care. Sure, if US$ gained strength against Cuban Peso, does that have any impact? You need to care about the currencies that can impact us. The US$ has lost its value against Chinese Yuan and Japanese Yen, despite their effort to devalue their own currency. Manipulating the data to make 1% look better is how 1% controls the rest of us. You are a prime example of how 1% can fool and manipulate. That's why I said "Wake up."

Well, the beef in this case is the imagination and illusions created by 1%.

87   david1   ignore (1)   2012 Nov 5, 4:39am     ↓ dislike (0)   quote   flag        

Nobody says

If you don't actually show the graph, it is hard to see whether you are taking the data at the lowest point or highest point.

That is actually what Republicans do when talking about how gas prices have "doubled" under Obama.

If you want to have a serious conversation, then we will. Ok here goes:

QE1 started November 2008, so lets go 6 months prior to that.

Case Shiller 20 city Housing Index, May 2008: 168.6
Case Shiller 20 city housing index, Current: 145.9
Down 15.5%

Oil, May 1, 2008: 127.35
Oil, Current: 86.23
Down 47.7%

Natural Gas(wellhead), May 2008: 9.96
Natural Gas, Current: 2.86
Down 73%

Live Cattle, May 2008: 92.12
Live Cattle, Current 125.5
Up 36%

Lean Hogs, May 2008: 73.4
Lean Hogs, Current: 78.9
Up 7.5%

Corn, May 2008: 602
Corn, Current: 737
Up 22%

Wheat, May 2008: 796
Wheat, Current: 863
Up 8.4%

British Pound, May 2008: 1.97
British Pound, current: 1.61
Down 18.3%

Japanese Yen, May 2008: 9523
Japanese Yen, current: 12558
up 32%

Euro, May 2008: 1.54
Euro, Current: 1.29
Down 19%

Honda Accord base ex 2008 price 20,532
Honda Accord base ex 2013 price 20,650
up .5%

http://wikiposit.org/w
http://www.standardandpoors.com/indices/sp-case-shiller-home-price-indices/en/us/?indexId=spusa-cashpidff--p-us----

Finally, m1 & m2 growth:

Picture didn't show up but go to the st. louis fed site to see it, it will show up 40% and 75% as I said above...

88   Honest Abe   ignore (10)   2012 Nov 5, 4:42am     ↓ dislike (1)   quote   flag        

Giving money to the poor does not create jobs, but it does create dependency. Thats a great feature for democrats who what to solidify their base of indentured voters.

89   Nobody   ignore (0)   2012 Nov 5, 5:10am     ↓ dislike (0)   quote   flag        

david1 says

Japanese Yen, May 2008: 9523
Japanese Yen, current: 12558
up 32%

What? The number is wrong. How can Japanese yen per dollar is 9523? Stop screwing the number. Currently, it hovering around 80 yen per dollar or 1.24 cents per yen. Chinese Yuan is also increasing its value. You need to care about the currency where we import the most from.

Like I said, without the picture, it can not be determined. And your data is incorrect. You can't manipulate the overall expression this way. This is how people are fooled into thinking one way.

It is true in some instance that price in some area went down, but we also had a recession and economic crisis in Europe. So you can't blindly say that QE has no bearing on the impact on the price of goods. Without QE and the government's effort, we could have had severe deflation.

90   Nobody   ignore (0)   2012 Nov 5, 5:16am     ↓ dislike (0)   quote   flag        

Honest Abe says

Giving money to the poor does not create jobs, but it does create dependency. Thats a great feature for democrats who what to solidify their base of indentured voters.

OK, giving money to the rich only creates hoarding. So what is your point?

Cutting budget for our school and education creates more idiots who will depend on government handouts.

Look, to create jobs, we need to make goods and services that are in high demand. The investment's primary purpose is to increase the output of goods, so the profit can be maximized. Without the profits, any business can not be sustained. Do you think the investment is going to keep coming without profits to go with? Tell me who or what creates goods and services that are in high demand? Investment? Give me a break.

91   david1   ignore (1)   2012 Nov 5, 5:26am     ↓ dislike (0)   quote   flag        

Nobody says

What? The number is wrong. How can Japanese yen per dollar is 9523? Stop screwing the number.

Not screwing the number. This is front month Japanese Yen, quoted from wikiposit.

No idea why it doesn't correlate to the JPY currently. Perhaps their data is bad on that one....

Not intentional.

92   justme   ignore (0)   2012 Nov 5, 5:28am     ↓ dislike (0)   quote   flag        

david1 says

Nobody says

What? The number is wrong. How can Japanese yen per dollar is 9523? Stop screwing the number.

Not screwing the number. This is front month Japanese Yen, quoted from wikiposit.

No idea why it doesn't correlate to the JPY currently. Perhaps their data is bad on that one....

Not intentional.

Just divide by 100 to get the Yen/Dollar figure, I guess.

(why does quoting a quote not work properly? Browser=chrome OS=linux)

93   david1   ignore (1)   2012 Nov 5, 5:33am     ↓ dislike (0)   quote   flag        

ah, found it.

Thanks justme. This is JPY/USD, with the decimal messed up. Either way, the fact that the YEN has gained 32% vs. the USD is the same.

JPY/USD is .01255, so 1/.01255 is 79.68.

So the data aisn't bad, just the decimal.

Dollar used to get ~105 yen in 2008, now worth ~80 yen.

94   CBOEtrader   ignore (6)   2012 Nov 5, 5:38am     ↓ dislike (0)   quote   flag        

david1 says

CBOEtrader says

I'd first use the classic definition of the word inflation as an expansion of the money supply

Increasing the money supply not create inflation either...there is some evidence that long term inflation correlates to increases in the money supply, however, there is equal evidence linking inflation to economic or population growth as well. That is, correlation is not causation here either.

Inflation is a measure of price changes.

OK, since you wont accept my definition of inflation let me try to restate my idea. I would like to evaluate the relationship between m1 and government deficits, then use m1 as an indicator for future m3 growth. The m3 growth i believe most directly benefits the 1%, increasing the wealth disparity. I am almost certain I will find m3 growth directly equates to bubbles, but not sure what part will most directly equate to wealth disparity.

Until I've gone through and looked at everything, I can't say exactly what I'm going to find.

FYI: I am doing this for my own understanding rather than for an academic purpose.

I appreciate your researched opinion, and enjoy the links. Keep posting

95   CBOEtrader   ignore (6)   2012 Nov 5, 5:50am     ↓ dislike (0)   quote   flag        

david1 says

ah, found it.
Thanks justme. This is JPY/USD, with the decimal messed up. Either way, the fact that the YEN has gained 32% vs. the USD is the same.

Yeah, looks like they quoted the JPY in a futures tick method vs a standard currency pair quote. It is the same underlying risk, but futures are a different contract than the currency pair.

96   Nobody   ignore (0)   2012 Nov 5, 7:59am     ↓ dislike (0)   quote   flag        

david1 says

Nobody says

What? The number is wrong. How can Japanese yen per dollar is 9523? Stop screwing the number.

Not screwing the number. This is front month Japanese Yen, quoted from wikiposit.

No idea why it doesn't correlate to the JPY currently. Perhaps their data is bad on that one....

Not intentional.

David1,

One more thing. Here is the link for the gasoline price. Depending on when in 2008, you take the price increase, the outcome is different.

http://gasbuddy.com/gb_retail_price_chart.aspx

If you take the lowest of 2008 to lowest of 2012, then there will be more than 100% increase from 2008 to 2012.

The point is simple. Don't be tricked into believing the single number can tell the whole story. There seems to be a mixed trend. I see the price increase in some area and price decrease in some area. Also, we had a recession, so there was a pressure for deflation, perhaps more severe in Europe. So the cause for the price increase or decrease is a little more convoluted and can't be used for the evidence to conclude that too much cash has no impact on pricing.

But generally, if there is too much supply, its value has tendency to fall. And we need to look at the currency that has more impact on our daily lives like Chinese Yuan. Not Euro. When is the last time you bought a stuff from Euro zone? Sure, I got a car from Italy, but that probably happens only once in a great while. Mostly, I stick to Japanese cars, cause they take me wherever I want to go reliably.

OK, with the actual cost of living going high or staying at where it was at 2008, and the average income going down, can I say that relative cost of living has increased?

97   PeopleUnited   ignore (1)   2012 Nov 5, 8:16am     ↓ dislike (0)   quote   flag        

Nobody says
Tell me who or what creates goods and services that are in high demand? Investment? Give me a break.

Actually yes investment is required in order to create goods and services. And the smartest investors will find a way to maximize return. If taxes and other costs are raised, wise investors will pull their investment and switch it to an industry or country will lower costs and taxes.

98   dublin hillz   ignore (0)   2012 Nov 5, 8:26am     ↓ dislike (0)   quote   flag        

Ultimately, demand occurs when people are paid well at their jobs. Paying people pittance so that they can barely afford rent and utilities does not "stimulate the economy." Unltimately, taxation issues while important pale in comparison to providing well paying jobs to consumer pool.

99   PeopleUnited   ignore (1)   2012 Nov 5, 8:41am     ↓ dislike (0)   quote   flag        

dublin hillz says

Ultimately, demand occurs when people are paid well at their jobs. Paying people pittance so that they can barely afford rent and utilities does not "stimulate the economy." Unltimately, taxation issues while important pale in comparison to providing well paying jobs to consumer pool.

People earning excess income does indeed increase demand. The question is does taxation increase or decrease demand? Careful examination will reveal that taxation reduces demand through several mechanisms. It increases costs for producers and also increases prices for consumers.

100   Nobody   ignore (0)   2012 Nov 5, 8:56am     ↓ dislike (1)   quote   flag        

Vaticanus says

Actually yes investment is required in order to create goods and services. And the smartest investors will find a way to maximize return. If taxes and other costs are raised, wise investors will pull their investment and switch it to an industry or country will lower costs and taxes.

That is the scare tactics used by Republicans. The investment does not make the goods and services. Don't be ridiculous. that is the most naive and ignorant comment I have ever hard. Your ignorance and stupidity rivals that of Wong. People with ideas do. Smart investors invest in a business that they believe that would give them the better return. The tax could be one of the factors for them to consider. But it is always the return.

People with excessive income do not impact the overall demand. You are talking about 1%. You are crazy to think 1% has any impact on demands.

The taxing the rich will not impact the price of goods. How can increasing the tax on 1% impact the price. Who is this moron who did the careful examination. Sorry I forgot; it was you. If you make a wild claim that 1% can impact the price or demand, show the fact. Perhaps, you are brainwashed by the Republicans and Romney.

Now, I see how Republicans and Romney can get to people without a proper education like you and Wong. Speaking of which, making it more and more difficult for the middle class to attend college is a good thing for Republicans. You get more uneducated idiots.

101   Nobody   ignore (0)   2012 Nov 5, 8:57am     ↓ dislike (2)   quote   flag        

Melmakian says

Nobody says

So why do you believe that giving money to the rich will create jobs?

Who is giving money to the 'rich' unless you are talking about the Wall St, GM and Solyndra crony capitalist fundings or 'bailouts' by the government when in control of either party?

If you are referring to taxation, that is not 'giving money' the rich. That is letting them keep more of THEIR money from being confiscated. Big difference.

OK. So does that create jobs?

102   Nobody   ignore (0)   2012 Nov 5, 9:10am     ↓ dislike (1)   quote   flag        

Melmakian says

Yup. Helluva lot more than wasting it on 'stimulus checks' to the Eaters do. The entire history of modern capitalism backs me up on that one.

If you think so, cite the facts.

103   Nobody   ignore (0)   2012 Nov 5, 10:09am     ↓ dislike (2)   quote   flag        

Melmakian says

The New Deal and Hoover's policies before it, the policies of the entire 70s (Two Republican, one Democrat administration) and the first Bush tax cut (remember, those were rebate checks where the government just handed out money w/o it being tied to any change in people's behavior...let alone behavior that leads to more production), and the Obama Stimulus package and what its proponents promised it would deliver.

You basically cited the history of failed economy by giving tax breaks to the rich. And it also tells me any government handout never works. I agree.

Let me ask you this. Do you think the tax breaks have created people like Mark Zuckerberg, Bill Gates, Steve Jobs etc. or companies like Google, Apple, Microsoft and Intel?

104   thomaswong.1986   ignore (5)   2012 Nov 5, 10:18am     ↓ dislike (0)   quote   flag        

Nobody says

Wake up, giving money to rich will not create jobs.

Another Govt backed venture failed California wasts $3,000,000,000 to tax payers.

Five years later, ESCR has failed to deliver and backers of Prop 71 are admitting failure. The California Institute for Regenerative Medicine, the state agency created to, as some have put it, restore science to its rightful place, is diverting funds from ESCR to research that has produced actual therapies and treatments: adult stem cell research. It not only has treated real people with real results; it also does not come with the moral baggage ESCR does.

To us, this is a classic bait-and-switch, an attempt to snatch success from the jaws of failure and take credit for discoveries and advances achieved by research Prop. 71 supporters once cavalierly dismissed. We have noted how over the years that when funding was needed, the phrase "embryonic stem cells" was used. When actual progress was discussed, the word "embryonic" was dropped because ESCR never got out of the lab.

Read More At IBD: http://news.investors.com/ibd-editorials/011210-517870-californias-proposition-71-failure.htm#ixzz2BP9Ys3a8

105   thomaswong.1986   ignore (5)   2012 Nov 5, 10:21am     ↓ dislike (0)   quote   flag        

And now today.. no one can stop the continued waste of tax payers money.

We already know that embryonic stem cell research is a waste of time and money—in fact we knew that when the California voters agreed to spend $6 billion ($3 billion for the bond and $3 billion for the interest on the bond).

Now, we know the most stem cell “research” is obsolete.

“Dr. Victor Dzau, a Duke University professor of medicine and chancellor of health affairs, said it this way: “Right now, there’s no good evidence stem cells can do the job” (of regenerating damaged cells). And RNA reprogramming apparently regenerates tissues without the dangerous side effect of creating tumors as stem cells do.”

How do we stop and end this waste of tax money—we need to close this boondoggle today—California can no longer afford to pay off special interests. What do you think?

http://capoliticalnews.com/2012/05/06/unneeded-gov%E2%80%99t-agency-unable-to-stop-wasting-billions/

106   Nobody   ignore (0)   2012 Nov 5, 10:22am     ↓ dislike (2)   quote   flag        

Melmakian says

If you are referring to taxation, that is not 'giving money' the rich. That is letting them keep more of THEIR money from being confiscated. Big difference.

OK, so let's tax the middle class and let's forget about taxing the rich. Is that what you are saying?

107   Nobody   ignore (0)   2012 Nov 5, 10:31am     ↓ dislike (2)   quote   flag        

thomaswong.1986 says

And now today.. no one can stop the continued waste of tax payers money.

If you are saying this needs to be discouraged. I agree. But that does not relate to the subject of "Giving money to the rich (I should have said as a form of tax break) does not create jobs."

The government invests in many things without the clearly defined return like school. It's merely one's perspective of what is wasteful. I don't see building highway system or FEMA activity a waste of our valuable tax. But why should the government spend money on FEMA, building highway systems and schools? Is that merely wasting our tax money?

108   thomaswong.1986   ignore (5)   2012 Nov 5, 10:36am     ↓ dislike (0)   quote   flag        

Nobody says

I don't see building highway system or FEMA activity a waste of our valuable tax. B

Purchasing goods and services.. are not investments.. they are expenditures without any intention of payback.

109   david1   ignore (1)   2012 Nov 5, 10:44am     ↓ dislike (1)   quote   flag        

Nobody says

f you take the lowest of 2008 to lowest of 2012, then there will be more than 100% increase from 2008 to 2012.

And if you take the highest of 2008 to the highest of 2012, gas is down.

You cite the recession which was deflationary but then cite gas prices that crashed directly as a result of the recession.

Sorry, I picked a date 6 months before the recession and compared prices to today. I picked prices in many difference areas. Foods. Housing. Cars. Energy.

The results were mixed. Some prices were higher. Some were lower.

Under your money supply = inflation theory, we would not see lower prices in so many areas. No price sector with the possible exception of health care has kept up with the growth in money supply.

The money multiplier has simultaneously crashed with the increase in money supply. Look at a graph of the M1 money supply compared to the m1 money multiplier. They move in opposite directions and explain why prices are unaffected.

http://research.stlouisfed.org/fred2/graph/

All that simply means you cannot say "increasing the money supply causes inflation," or by association, increasing government deficit spending causes inflation.

110   thomaswong.1986   ignore (5)   2012 Nov 5, 10:51am     ↓ dislike (0)   quote   flag        

Nobody says

But that does not relate to the subject of "Giving money to the rich (I should have said as a form of tax break) does not create jobs."

Economic Recovery Tax Act of 1981

The Economic Recovery Tax Act of 1981 (Pub.L. 97-34), also known as the ERTA or "Kemp-Roth Tax Cut," was a federal law enacted in the United States in 1981.

It was an act "to amend the Internal Revenue Code of 1954 to encourage economic growth through reductions in individual income tax rates, the expensing of depreciable property, incentives for small businesses, and incentives for savings, and for other purposes".]

Included in the act was an across-the-board decrease in the marginal income tax rates in the U.S. by 23% over three years, with the top rate falling from 70% to 50% and the bottom rate dropping from 14% to 11%.

This act slashed estate taxes and trimmed taxes paid by business corporations by $150 billion over a five-year period. Additionally the tax rates were indexed for inflation, though the indexing was delayed until 1985.

results...

https://www.youtube.com/watch?v=EU-IBF8nwSY

Many economists have stated that Reagan's policies were an important part of bringing about the second longest peacetime economic expansion in U.S. history, and followed by an even longer 1990s expansion that began under George H.W. Bush in 1991.[24][25] This economic expansion continued through the Clinton administration with unemployment rates steadily decreasing throughout his presidency (7.3% at the start of his presidency and 4.2% at the culmination, with the lowest rate reaching 3.9% in 2000).[26] During the Reagan administration, the American economy went from a GDP growth of -0.3% in 1980 to 4.1% in 1988 (in constant 2005 dollars),[27] which reduced the unemployment rate by 1.6%, from 7.1% in 1980 to 5.5% in 1988, but with peaks of around 10.8% in 1983.[26][28] A net job increase of about 21 million also occurred through mid-1990. Reagan's administration is the only one not to have raised the minimum wage.[29] The inflation rate, 13.5% in 1980, fell to 4.1% in 1988, which was achieved by applying high interest rates by the Federal Reserve (peaked at 20% in June 1981).[30] The latter contributed to a relatively brief recession in 1982: unemployment rose to 9.7% and GDP fell by 1.9%.

111   thomaswong.1986   ignore (5)   2012 Nov 5, 10:57am     ↓ dislike (0)   quote   flag        

Nobody says

"Giving money to the rich (I should have said as a form of tax break) does not create jobs."

The Obamatron view

per Obama... "It's going to take more than 4 years to undo 30 years of damage"

go back to higher taxes for social programs ... such as that of the 60s and 70s.

Isnt that what Obama wants ? Undo 30 years of economic expansion.

112   david1   ignore (1)   2012 Nov 5, 11:45am     ↓ dislike (1)   quote   flag        

thomaswong.1986 says

results.

Of course, if we ignore 1982, after this act was passed, when unemployment increased and the GDP (in chained 2005 dollars) fell 2%, then this seems like a slam dunk.

Then of course, there was this in 1982:
http://en.wikipedia.org/wiki/Tax_Equity_and_Fiscal_Responsibility_Act_of_1982

which rescinded many aspects of the Kemp-Roth tax cut. (That means Reagan RAISED taxes if you follow current Republican logic - repealing a tax cut is a tax increase, after all)

After which, GDP grew in 1983 by 4.5% in chained 2005 dollars. Then in 1984, GDP grew by 7.1% in chained 2005 dollars. That is an average annual growth rate of 5.8%.

Then there was this one:

http://en.wikipedia.org/wiki/Deficit_Reduction_Act_of_1984

where Reagan again raised taxes. And in 1985 GDP grew by 4.1%. Then in 1986 GDP grew by 3.4% , in 1987 GDP grew by 3.1%. That is annual aggregate growth of 3.6%. Then we got this one:

http://en.wikipedia.org/wiki/Tax_Reform_Act_of_1986

where tax rates were lowered again, this time it was on rich folks and raised on poor folks. The new tax rates were not fully implemented until 1988. By the way, in 1987 GDP grew by 3.1% and in 1988 it grew by 4.1%. Then fell to 3.5% in 1989, 1.8% in 1990, and finally losing .3% in 1991. Recovered to 3.3% in 1992 and 2.8% in 1993. That is average annual aggregate growth of 2.2% over seven years.

Oh and then there was this one:
http://en.wikipedia.org/wiki/Omnibus_Budget_Reconciliation_Act_of_1993

Which as you know raised taxes on top earners. And we had GDP growth of 4%, 2.5%, 3.7%, 4.4%, 4.4%, 4.8%, & 4.1% in 1994-2000. If you are counting at home, that is seven years with annual aggregate growth of 3.4% after a tax increase.

Phew! What does all that mean? Well, we have a tax reduction in 1981, followed by GDP falling 2% in 1982. Then we have a tax increase in passed in '82 for 1983, followed by two years of average GDP growth of 5.8%. Then we have another tax increase, and we had three years of GDP growth averaging 3.6%. Then we had another tax decrease which after enacted in 1988 led to seven years of average GDP growth of 2.2%. Finally, we have tax increases in 93 under Clinton, followed by seven years of GDP growth averaging 3.4%.

So tax increases have following GDP growth of 5.8%, 3.6%, and 3.4%. Tax decreases have GDP growth of -2%, 2.2% and the coup de grace, Bush's tax cuts in 2001, which lead to annual aggregate GDP growth of 1.4%.

But tell me again, how did tax cuts passed in 1981, largely repealed in 1982 and 1984, lead to jobs and economic growth in the mid to late 1990s???

Especially after another round of tax cuts that were largely repealed by a democrat in the White House?

http://www.bea.gov/national/index.htm#gdp

GDP growth by year in chained 2005 dollars. Use excel and prove the numbers wrong.

Oh and this says nothing of increased government spending during the go-go 80s. Which I am sure had nothing to do with Reagan or economic expansion. That would mean Keynesianism, and demand, might have caused the expansion!

Here is that data if you are interested:

http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=200

Hint: While GDP grew a combined 35% in chained 2005 dollars under Reagan, Federal Government spending grew...wait for it...80% combined under Reagan.

Gosh I don't know...since Government spending is a component of GDP...maybe they are related....

Have a nice night.

113   thomaswong.1986   ignore (5)   2012 Nov 5, 12:16pm     ↓ dislike (0)   quote   flag        

david1 says

which rescinded many aspects of the Kemp-Roth tax cut. (That means Reagan RAISED taxes if you follow current Republican logic - repealing a tax cut is a tax increase, after all)

you mean changed the individual tax rates ... which ones ?

The Office of Tax Analysis of the United States Department of the Treasury summarized the tax changes as follows:

1 repealed scheduled increases in accelerated depreciation deductions
2 tightened safe harbor leasing rules
3 required taxpayers to reduce basis by 50% of investment tax credit
4 instituted 10% withholding on dividends and interest paid to individuals
5 tightened completed contract accounting rules
5 increased FUTA wage base and tax rate

david1 says

Then there was this one:

http://en.wikipedia.org/wiki/Deficit_Reduction_Act_of_1984

Same question... what rates were changed.

he Office of Tax Analysis of the United States Department of the Treasury summarized the tax changes as follows:[3]

1 repealed scheduled 15% net interest exclusion ($900 cap)
2 reduced benefits from income averaging
3 reduced tax benefits for property leased by tax exempt entities
4 temporarily extended telephone excise tax (through 1987)
5 increased depreciation lives for real property from 15 years to 18 years

david1 says

ttp://en.wikipedia.org/wiki/Tax_Reform_Act_of_1986

where tax rates were lowered again, this time it was on rich folks and raised on poor folks. The new tax rates were not fully implemented until 1988.

Income tax rates

The top tax rate was lowered from 50% to 28% while the bottom rate was raised from 11% to 15%.

Many lower level tax brackets were consolidated, and the upper income level of the bottom rate (married filing jointly) was increased from $5,720/year to $29,750/year.

This package ultimately consolidated tax brackets from fifteen levels of income to four levels of income.

---------------

As they say... the DEVIL is in the DETAILS ....

https://www.youtube.com/watch?v=NG_qF2mHOlA

114   david1   ignore (1)   2012 Nov 5, 12:19pm     ↓ dislike (1)   quote   flag        

thomaswong.1986 says

you mean changed the individual tax rates ... which ones ?

Nope. I mean what I said.

115   thomaswong.1986   ignore (5)   2012 Nov 5, 12:27pm     ↓ dislike (0)   quote   flag        

david1 says

Nope. I mean what I said.

LIke Obama said.. Lets undo the past 30 years... NOT GOING TO HAPPEN !

116   david1   ignore (1)   2012 Nov 5, 12:34pm     ↓ dislike (3)   quote   flag        

thomaswong.1986 says

LIke Obama said.. Lets undo the past 30 years...

Nah.. just pointing out how ridiculous citing a 1981 tax law, then citing job and economic growth numbers from the next 10-15 years combined as proof of success really is. I mean, never mind all of the other tax laws passed in the meantime, or other factors that might have played a part in it. Nope. Not to Republicans. There was a law passed once that lowered tax rates and then sometime in the future jobs were created and the economy grew.

It's like saying Obama took a leak in the Atlantic in 1998 and that is what caused Hurricane Sandy this year.

117   thomaswong.1986   ignore (5)   2012 Nov 5, 12:43pm     ↓ dislike (0)   quote   flag        

Lets add some spice..

How about getting rid of the Mortgage Interest Deduction...

there is no use for it since interest rates are at a far lower rate than decades before.
the original tax regulation was a to reduce the interest burden.. that burden is minimal. Today its no more than a subsidy and point of abuse for the Realtors.

How about getting rid of the phase out of the 1997 capital gains on sale of home..

Might as well.. it was a contributing factor to home purchase speculation and the bubble. There is no reason to continue this in our tax laws.
http://en.wikipedia.org/wiki/1997_taxpayer_relief_act

118   APOCALYPSEFUCKisShostikovitch   ignore (43)   2012 Nov 5, 8:26pm     ↓ dislike (1)   quote   flag        

The rich need human sacrifices to be cajoled into providing work for the unwashed.

119   justme   ignore (0)   2012 Dec 8, 1:04am     ↓ dislike (3)   quote   flag        

Melmakian says

I've never gotten a paying job from a poor man/woman in my entire life. Have you?

This is the old If-we-had-no-rich-people-who-would-we-work-for fallacy.

Very handy philosophy if you happen to be the plantation owner.

120   Bellingham Bill   ignore (5)   2012 Dec 8, 1:29am     ↓ dislike (2)   quote   flag        

david1 says

I mean, never mind all of the other tax laws passed in the meantime, or other factors that might have played a part in it.

http://research.stlouisfed.org/fred2/graph/?g=dBo

blue is debt/GDP
red is fed funds rate.

leverage shot up in the 1980s, but conservatives don't want to put that in their thesis. It was the magic of Reaganism they'll say.

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