NationStates Jolt Archive

I need all the republicans to gather 'round the campfire, here.

If you were to see this:

Resolved: That the United States Federal Government should fund Hurricane Katrina relief and rebuilding by ending President Bush’s tax cuts.

What would you do to refute the point? Specifically, why should we keep the tax cuts? Even more specifically, what are economic reasons to keep the tax cuts?

Thank you for your help. As much as I disagree with what you may say, I'll grit my teeth and bear with it because I may end up using it in a speech.

Also, please try to keep this thread as flame-free as possible.

I say no, because I have trouble paying my bills, and rasing my taxes will fuck me over. I also enjoy watching the economy grow. I also don't want to build homes for people in a place that floods.

Strawman - are all Republicans alike?

I happen to follow the ideas of Newt Gingrich.

Sure, we need to spend money on relief, but I wouldn't let Mayor Nagin drive the decision as to how much.

I am against deficit spending. As far as I'm concerned, if we thought the wars in Afghanistan and Iraq had to be funded, I would have stopped the tax cuts along time ago.

Once the wars are over, I can go back and cut some more. And maybe then I could do tax relief. Also, I would not be spending on Katrina relief forever.

The government should minimize on the things that are outside the direct scope of national defense or interstate commerce, and fund items of an indirect scope only for temporary periods (not decades).

Strawman - are all Republicans alike?

I happen to follow the ideas of Newt Gingrich.

Sure, we need to spend money on relief, but I wouldn't let Mayor Nagin drive the decision as to how much.

I am against deficit spending. As far as I'm concerned, if we thought the wars in Afghanistan and Iraq had to be funded, I would have stopped the tax cuts along time ago.

Once the wars are over, I can go back and cut some more. And maybe then I could do tax relief. Also, I would not be spending on Katrina relief forever.

The government should minimize on the things that are outside the direct scope of national defense or interstate commerce, and fund items of an indirect scope only for temporary periods (not decades).

Best response I've seen yet.
Thx.

The tax cuts should stay.
New Orleans should not be rebuilt. It's below sea level for crying out loud. You do not build cities below sea level in hurricane prone areas. Breach the levees and let nature take back the land.

The tax cuts should stay.
New Orleans should not be rebuilt. It's below sea level for crying out loud. You do not build cities below sea level in hurricane prone areas. Breach the levees and let nature take back the land.

Any elaborations as to why the tax cuts should stay besides that NO shouldn't be rebuilt?

Any elaborations as to why the tax cuts should stay besides that NO shouldn't be rebuilt?

He probably doesn't pay his credit card bills, either.

I would support repealing some of the tax cuts, but not many, the truth is the majority of the changes that Bush made really do help people who need help (like me)

I would support repealing some of the tax cuts, but not many, the truth is the majority of the changes that Bush made really do help people who need help (like me)

Which tax cuts would you support repealing, and why?

Which tax cuts wouldn't you support repealing, and why?

Which tax cuts would you support repealing, and why?

I would support changes to the capital gains tax, and changes to the amounts allowed for expensing for schedule C businesses (sole proprietorships)

I would also change some of the phase out limits for deductions on the Schedule A and change how some items are deducted (like home loan interest on a second home wouldn't be deductable.)

I would begin to phase out most of the earned income credit because right now I think the income level to recieve it is too high. (it was over 32,000 last year I believe)

I would also change the rules on the savers credit (form 8880) because right now there is a way to get double deduction for IRA contributions.

Some of the rules on head of household and claiming of nondependent children for earned income credit, I also think are really costing the US a lot of money.

Which tax cuts wouldn't you support repealing, and why?
I wouldn't support the repeal of the increased child tax credit, but would change the phase out limits on the additional child tax credit.

I like the simplified tax brackets the way they are, with the changes that I proposed, most people would pay a little more in taxes, but it wouldn't be too much of a burden on the poor.

Did you know that Americans gave something like 62 billion dollars for relief with Katrina....yet Musharraf only asks for 5 billion to save the lives of thousands and thousands in the areas struck by the earth quake?

Give to the Pakistanis and the Indians please, while you're at it. They really need it.

Strawman - are all Republicans alike?

I happen to follow the ideas of Newt Gingrich.


You know, if he thought all Republicans were alike, he wouldn't have asked for everyone's opinion. He would have just assumed one opinion and moved on.

I'm still registered as a Republican, so I'll feel free to add my $0.02. The tax cuts could only be justified as economic stimulus in a recession. The party has repeatedly told us that we're out of the recession, so it's time to bring the tax rate back up to pay for the nationbuilding that our fearless leader has decided to embark upon.

Did you know that Americans gave something like 62 billion dollars for relief with Katrina....yet Musharraf only asks for 5 billion to save the lives of thousands and thousands in the areas struck by the earth quake?

Give to the Pakistanis and the Indians please, while you're at it. They really need it.

Hmm... last I heard France gave ZERO to Pakistan (source NPR).

And the private giving alone from the US outstripped all of the governmental AND private giving from all of Europe - and outstripped the money from the US government.

We already sent helicopters and other aid to Pakistan - evidently only a few European countries have bothered to help.

Hmm... last I heard France gave ZERO to Pakistan (source NPR).

And the private giving alone from the US outstripped all of the governmental AND private giving from all of Europe - and outstripped the money from the US government.

We already sent helicopters and other aid to Pakistan - evidently only a few European countries have bothered to help.
And?
http://news.bbc.co.uk/1/hi/world/south_asia/4322900.stm
http://europa.eu.int/comm/external_relations/pakistan/intro/ip05_1332.htm
http://www.defensenews.com/story.php?F=1205637&C=landwar
http://www.reliefweb.int/rw/RWB.NSF/db900SID/CHAO-6HP5AK?OpenDocument
http://www.reliefweb.int/rw/RWB.NSF/db900SID/RMOI-6HW4WL?OpenDocument

Apart from you misrepresenting the facts, what does that have to do with it?
Fact of the matter is that the world's response to the quake was found lacking - and I merely reminded people that, as bad as Katrina was, there are much more serious issues out there.

Absolutely not. The economic damage caused by repealing these tax cuts would likely reduce revenue more than they raised. Given the high energy prices and large amounts of consumer debt (a wonderful leftover from the dot-com era now piled on top of the housing bubbles), it would be an economic mistake to do this. New Orleans needs to be rebuilt, but not at the cost of the rest of America's economy.

Absolutely not. The economic damage caused by repealing these tax cuts would likely reduce revenue more than they raised. Given the high energy prices and large amounts of consumer debt (a wonderful leftover from the dot-com era now piled on top of the housing bubbles), it would be an economic mistake to do this. New Orleans needs to be rebuilt, but not at the cost of the rest of America's economy.

Could you please clarify? How would repealing the tax cuts damage the economy?

Btw, 2 pages w00t!

Could you please clarify? How would repealing the tax cuts damage the economy?


They reduce disposable income, which reduces the amount consumers spend on goods and services. Since consumer spending accounts for roughly 70% of the economy, even a modest decline would result in an economic slowdown, if not full recession. Consumers buy less, lowering demand for products, reducing profit for companies, resulting in job cuts and falling stock prices, which further crimp income, and so on.

The situation is especially problematic now because business investment is growing more slowly than it was in the pre tax-cut era (an aftermath of the dot-com bubble), which means consumers have had to take up even greater slack in terms of spending. If investment were to accelerate to those 1990's levels, repealing tax cuts would not have as harsh an impact.

They reduce disposable income, which reduces the amount consumers spend on goods and services. Since consumer spending accounts for roughly 70% of the economy, even a modest decline would result in an economic slowdown, if not full recession. Consumers buy less, lowering demand for products, reducing profit for companies, resulting in job cuts and falling stock prices, which further crimp income, and so on.

The situation is especially problematic now because business investment is growing more slowly than it was in the pre tax-cut era (an aftermath of the dot-com bubble), which means consumers have had to take up even greater slack in terms of spending. If investment were to accelerate to those 1990's levels, repealing tax cuts would not have as harsh an impact.

NICE!

Best argument I've heard as of right now.

NICE!
Best argument I've heard as of right now.

If you have any other questions, feel free to post them.

NICE!

Best argument I've heard as of right now.
You're easily impressed, aren't you? ;)

You're easily impressed, aren't you? ;)

Ach! What is that supposed to mean?:p

You're easily impressed, aren't you? ;)

No, it's just that's the first straight answer I've gotten so far about exactly why repealing the cuts would hurt the economy.

No, it's just that's the first straight answer I've gotten so far about exactly why repealing the cuts would hurt the economy.
Here's another one:

According to the Barro-Ricardian Model of Consumption, consumers are intelligent and rational enough to know that tax cuts they get now have to be paid back at some point in the form of tax raises later.
That means that the spending behaviour from tax cuts is significantly different from normal disposable income.

And it's true, whether Bush starts it now, or his successor will, the deficit will eventually have to be cut (and at least Dean says you need more money to go into Iraq...) and that means higher taxes, now or later.
Bush went overboard with the tax cuts, and sooner or later, consumers will suffer for it.

Here's another one:

According to the Barro-Ricardian Model of Consumption, consumers are intelligent and rational enough to know that tax cuts they get now have to be paid back at some point in the form of tax raises later.
That means that the spending behaviour from tax cuts is significantly different from normal disposable income.

And it's true, whether Bush starts it now, or his successor will, the deficit will eventually have to be cut (and at least Dean says you need more money to go into Iraq...) and that means higher taxes, now or later.
Bush went overboard with the tax cuts, and sooner or later, consumers will suffer for it.

Or you can cut spending.

Or you can cut spending.
You can't on the military...so much is clear.
You have to rebuild Katrinaland, that costs money.
Reducing Corporate Welfare is only a dream - both parties are too deep in their pockets.
Social Security is yet another unpopular and ideological idea (did you know that the tax cuts cost more in one year than the projected blow-out in social security over those next 50 years?), it's impossible politically.

So where? And even if you could...wouldn't the voter know that someone else would eventually raise spending again?

Here's another one:

According to the Barro-Ricardian Model of Consumption, consumers are intelligent and rational enough to know that tax cuts they get now have to be paid back at some point in the form of tax raises later.
That means that the spending behaviour from tax cuts is significantly different from normal disposable income.

And it's true, whether Bush starts it now, or his successor will, the deficit will eventually have to be cut (and at least Dean says you need more money to go into Iraq...) and that means higher taxes, now or later.
Bush went overboard with the tax cuts, and sooner or later, consumers will suffer for it.

Shhhh...the republicans are listening.

The tax cuts help the American economy, period. More specifically, by relieving the tax burden on the Gulf Coast region, the residents there will have more disposable income they can use to rebuild their lives.
My idea is to make small cuts across the board to things like social programs, defense, and social and corporate welfare. The cost may be as little as $50 billion, which is very small in a $2.3 trillion dollar budget, and with such small cuts, no one will feel much pain. More than likely, however, it will be paid for by loans. As this puts more money into circulation, there is always the risk of inflation to worry about, and it may be counterproductive.

The tax cuts help the American economy, period. More specifically, by relieving the tax burden on the Gulf Coast region, the residents there will have more disposable income they can use to rebuild their lives.
The biggest cuts are to the high brackets, as you know. You can't tell me that the majority, or even a high number, of people in Katrinaland are going to do better because of some multi-millionaire not having to pay that exta 100k in taxes.
Those people probably left already.

The biggest cuts are to the high brackets, as you know. You can't tell me that the majority, or even a high number, of people in Katrinaland are going to do better because of some multi-millionaire not having to pay that exta 100k in taxes.
Those people probably left already.
Can you provide me proof of these "cuts for the rich" that you speak of? As a tax professional, I really haven't seen them around.

The fact is that everyone got cuts, even the rich, and while thier percentage is the same, the actual $ amount is more. It doesn't really matter anyway, they pay more of the tax then anyone else does, in fact due to these new tax cuts, less of the lower middle class are paying taxes at all.

Can you provide me proof of these "cuts for the rich" that you speak of? As a tax professional, I really haven't seen them around.
http://www.wsws.org/articles/2001/mar2001/tax-m13.shtml
Could it be that poor people can't afford tax professionals...:p
http://www.whitehouse.gov/news/reports/taxplan.html
Replacing the current tax rates of 15, 28, 31, 36, and 39.6 percent with a simplified rate structure of 10, 15, 25, and 33 percent (see Appendix for rate schedule);
But you're right, if you only consider the income tax rates, then poor and middle class people come away okay. Which of course completely ignores the realities actually connected with disposable income, where you'd have to go with absolute figures, and consider savings rates among the different strata.
And the timing is an issue there too.
http://www.ctj.org/html/gwb0602.htm

And finally, Paul Krugman explains the agenda behind it all.
http://www.pkarchive.org/economy/TaxCutCon.html

http://www.wsws.org/articles/2001/mar2001/tax-m13.shtml

The most basic distortion is that Bush will cut taxes “across the board.” The White House plan actually ignores those taxes that place the greatest burden on the working class, such as the payroll tax and excise taxes. Bush's plan targets those taxes, including the estate tax and the federal income tax, where the wealthy pay the largest share. This selectivity insures that the tax cut automatically favors the richest taxpayers.
okay so you guys are mad about the ss tax and the medicare tax?
yeah, I would push the threshold up a bit on those right now if you make over 84,000 and some odd change you don't have to pay on the amount above that. That has been like that for years though, it isn't a Bush thing, he didn't 'cut" in that area, he left it alone (even though the # increases every year for inflation)

Could it be that poor people can't afford tax professionals...:p
There are many ways for the poor to get thier taxes prepared by a professional for free or little cost, in fact I am volunteering some time to an organization this year. Most of the people I do taxes for wouldn't really qualify as rich anyway, I did 280 tax returns last season and only 79 of them were people who made more than $100,000 and only 4 of those made over 1 million.

But you're right, if you only consider the income tax rates, then poor and middle class people come away okay. I don't only take into count the tax rates, I figure in the tax credits and deductions available, and also the fact that many of the phase out levels were raised to include more people.


Which of course completely ignores the realities actually connected with disposable income, where you'd have to go with absolute figures, and consider savings rates among the different strata.
so the government is responsible for how people spend their money now?

oh and I didn't ask for the "tax cuts for the weathly" propaganda either, I have seen enough of that. I am asking you to point out specific tax cuts that benifit the top 2% only.

don't look too hard, there aren't any.;)

oh and I didn't ask for the "tax cuts for the weathly" propaganda either, I have seen enough of that. I am asking you to point out specific tax cuts that benifit the top 2% only.
As you said, there aren't any.

But if you look at the scheme behind it, it is obvious that it has the greatest effect with the rich people. It was their money that was considered vital for economic performance, and they were targeted.
Poor people too got some, but as you could read in the various links, in the grand scheme if things it was peanuts, justified or not. If you want my opinion, that was a political scheme, while (at least in some parts) the top bracket cuts had some economic rationale behind them.

"Fair" tax cuts in my opinion would first and foremost raise the threshold on which people have to pay any tax at all. People with half a million bucks salary can afford to pay taxes without having to cut back on anything serious. The very bottom bracket however would really benefit from not having to pay even the 15% or so that they pay currently.

The tax cuts should stay.
New Orleans should not be rebuilt. It's below sea level for crying out loud. You do not build cities below sea level in hurricane prone areas. Breach the levees and let nature take back the land.

Many citys in the US are almost at Sea level, If Katrina went through New York the storm surge would flood the city. Why don't they tear New York down since it's so close to the water? Washington D.C. was built on a swamp was that a stupid idea? Charleston is located almost exactly at sea level. They should tear it down also right? Los Angeles is in an earthquake Zone, tear it down too. There are risks everywhere you live.

The Tax cuts are mostly for the rich, I don't see the rich doing anything for us, so screw the high income group and remove their tax cuts. They got plenty of money to pay for it, they'll just have to wait a few years for that third Cruise Ship.

As you said, there aren't any.

But if you look at the scheme behind it, it is obvious that it has the greatest effect with the rich people. It was their money that was considered vital for economic performance, and they were targeted.
Poor people too got some, but as you could read in the various links, in the grand scheme if things it was peanuts, justified or not. If you want my opinion, that was a political scheme, while (at least in some parts) the top bracket cuts had some economic rationale behind them.
they got the most money, because it is a percentage and they have more to come from.

If you have 10 cents and I take 10% that is a penny, if you have 10 dollars and I take 10% then that is a dollar.

"Fair" tax cuts in my opinion would first and foremost raise the threshold on which people have to pay any tax at all. People with half a million bucks salary can afford to pay taxes without having to cut back on anything serious. The very bottom bracket however would really benefit from not having to pay even the 15% or so that they pay currently.
most of the tax payers I prepared for didn't end up paying tax at all. In fact I had people up into $60,000 that didn't have a tax liability.

and almost nobody actually pays their marginal tax rate.

for example you have a married couple with 2 kids that makes $45,000.

$45,000
- $10,000 (standard deduction)
- $12,800 (exemptions)
= $22,200
* 10% (their marginal tax rate)
= 2220 (their tax)
- 2000 (child tax credits 1000 each for 2 kids)
= 220

That means that although their marginal tax rate was 10%, their effective tax rate was only .04%
my example assumes that they don't have any other credits (like the credit you get for retirement savings, or education credits, ect.) It wouldn't take much more to wipe out their tax bill entirely.

The Tax cuts are mostly for the rich, I don't see the rich doing anything for us, so screw the high income group and remove their tax cuts. They got plenty of money to pay for it, they'll just have to wait a few years for that third Cruise Ship.
The tax cuts are for everyone, and the top 5% pay the majority of the taxes so they are doing something for you. :rolleyes: They are paying taxes.

It wouldn't take much more to wipe out their tax bill entirely.
Sorry to say it to someone who earns her living with it...but that is ridiculous.

I assume then that no one in the US pays their taxes?

Sorry to say it to someone who earns her living with it...but that is ridiculous.

I assume then that no one in the US pays their taxes?
sure, the rich people do, if you start to make more than $60,000 you get hit with AMT and phase outs, by $200,000 most of the tax credits and deductions are either reduced or completely unavailble to you.

Small business owners pay taxes, and corporations pay a lot too.

It isn't as crazy as the people I get in who make $21,000 don't pay in estimates, claim non-dependents, and get a fully legal $4000 refund. That is what upsets me.

sure, the rich people do, if you start to make more than $60,000 you get hit with AMT and phase outs, by $200,000 most of the tax credits and deductions are either reduced or completely unavailble to you.

Small business owners pay taxes, and corporations pay a lot too.

It isn't as crazy as the people I get in who make $21,000 don't pay in estimates, claim non-dependents, and get a fully legal $4000 refund. That is what upsets me.
So what is your stand on it?
Poor people get some tax cuts, but in absolute terms they are smaller, in percentage terms they are roughly the same, and in relative terms they are smaller too (ie $200,000 taxes from a million are less compared to $200 out of $1000). $200,000 less means no new sports car, but $200 less means no visit to the doctor, or living in LA South Central rather than a nicer area.

The economic rationale is obvious: It's not about percentages, it's about absolute numbers. Targetting the richest people obviously means more dollars injected into the economy through disposable income. It's the most effective area for tax cuts.

They are not designed to lift the burden on poor people...especially considering your point that apparently poor people don't pay taxes anyways because of their accountants and tax professionals.

And to top it all off, they rip a huge whole into the budget that will have to be fixed...and rest assured that the same economic reasons mean that raising the taxes for the rich will hurt the economy the most...

So what is your stand on it?
Poor people get some tax cuts, but in absolute terms they are smaller, in percentage terms they are roughly the same, and in relative terms they are smaller too (ie $200,000 taxes from a million are less compared to $200 out of $1000). $200,000 less means no new sports car, but $200 less means no visit to the doctor, or living in LA South Central rather than a nicer area.
yep.

The economic rationale is obvious: It's not about percentages, it's about absolute numbers. Targetting the richest people obviously means more dollars injected into the economy through disposable income. It's the most effective area for tax cuts.
yep.

They are not designed to lift the burden on poor people...especially considering your point that apparently poor people don't pay taxes anyways because of their accountants and tax professionals.
yep, except for the tax credits I was talking about, you don't really need a tax pro to do for you anyway, if you have 2 kids then you get 2000 dollars, it's easy.

And to top it all off, they rip a huge whole into the budget that will have to be fixed...and rest assured that the same economic reasons mean that raising the taxes for the rich will hurt the economy the most...
I wouldn't "raise" the taxes, I would make changes to the idiotic tax code we have now, most of the people that would be affected by my changes would be the 'rich' anyway.

I wouldn't "raise" the taxes, I would make changes to the idiotic tax code we have now, most of the people that would be affected by my changes would be the 'rich' anyway.
Well, if you're going to have to increase tax revenue, someone will pay more than they did before, or more people have to pay.
Whether you do that through tax rate changes, or auxilliary regulations really doesn't matter.
It'll hurt someone, and hurting the rich will probably hurt the economy and thus the government more than hurting the poor, especially in America, where you have a curious relationship to poverty.
That being said, it is unlikely that all the poor in America put together could actually pay to fix the budget gap right now...

Well, if you're going to have to increase tax revenue, someone will pay more than they did before, or more people have to pay.
Whether you do that through tax rate changes, or auxilliary regulations really doesn't matter.
It'll hurt someone, and hurting the rich will probably hurt the economy and thus the government more than hurting the poor, especially in America, where you have a curious relationship to poverty.
That being said, it is unlikely that all the poor in America put together could actually pay to fix the budget gap right now...
true, but it will only hurt a little. ;)

true, but it will only hurt a little. ;)
Don't count on it...not all is well with the US economy and its outlook for the next 20 years.

Don't count on it...not all is well with the US economy and its outlook for the next 20 years.
yeah, it isn't as bad as it is made out to be, but I see hard times coming in the future. Luckily, I am prepared for that.