Unemployment rates are in for November!

Discussion in 'Politics & Current Events' started by saosebastiao, Dec 25, 2008.

  1. superdave

    superdave Member+

    Jul 14, 1999
    VB, VA
    Club:
    DC United
    Nat'l Team:
    United States
    WTF? We tried that. It failed. In fact, Reagan cut taxes and had a recession. Then he raised taxes and we had significant growth. Clinton had a fantastic economic record, and he raised taxes on high incomes. Bush did the opposite and has the worst economic record since Hoover.

    I mean, "it would be easy to say"? What the hell does that mean? It would be easy to say that Hitler was a good person. See, I just did it. It doesn't make it true!!!!
     
  2. steve-o

    steve-o New Member

    Nov 14, 2007
    Didn't G. W. Bush come into office in the midst of a recession?

    This is from the Gov't so who know's if it's true:
    http://www.house.gov/jec/growth/taxpol/taxpol.htm
     
  3. Chris M.

    Chris M. Member+

    Jan 18, 2002
    Chicago
    Well, right now, putting cash in the pockets of consumers or of companies isn't doing much for spending. That is why the government needs to step in with some massive spending over the next two years. You will see tax cuts quickly for the middle class and you likely won't see any increase. At best, the bush cuts to the wealthy will be allowed to expire. If the economy is still in the tank in two years, I suspect you will see an extension of those cuts.

    Obama has made it pretty clear that he understands the negative impact of a tax increase in a recession.
     
  4. saosebastiao

    saosebastiao New Member

    May 22, 2005
    Many Keynesian economists accept Laffer's explanations without qualification. Its simple to do when you understand what his theories really say.

    Its not hard to understand, the laffer curve has nothing to do with a refutation of Keynesian economics. The only real refutations are Austrian school and Monetarist or Chicago school. The Laffer curve deals with tax rates and revenues.
     
  5. saosebastiao

    saosebastiao New Member

    May 22, 2005
    Stop. You aren't helping.
     
  6. superdave

    superdave Member+

    Jul 14, 1999
    VB, VA
    Club:
    DC United
    Nat'l Team:
    United States
    Sure he is. :D
     
  7. steve-o

    steve-o New Member

    Nov 14, 2007
    Helping what?

    Tax breaks for big corporations will help in time like this, only for companies, not individuals. They will put more $$$ in the companies pockets which allows them to extend their payroll, something they otherwise couldn't have done because of the credit/lending freeze. This thinking doesn't help those that have lost a job, if you have my prayers go out to you, but it does help to stem future job losses.
     
  8. superdave

    superdave Member+

    Jul 14, 1999
    VB, VA
    Club:
    DC United
    Nat'l Team:
    United States
    We just sent a shitload of money to financial institutions. What did THEY do with it?

    If that pop culture definition of insanity is accurate (doing the same thing over and over again and expecting different results) is accurate, then you're LITERALLY insane.
     
  9. Matt in the Hat

    Matt in the Hat Moderator
    Staff Member

    Sep 21, 2002
    Brooklyn
    Club:
    New York Red Bulls
    Nat'l Team:
    United States
    So do you considered the self employed a business or an individual? What about LLC's or S-Corps with flow thru tax structures and no corporate income tax?
     
  10. steve-o

    steve-o New Member

    Nov 14, 2007
    What does LLC stand for? What about the "corp" in S-Corps? If you're self employed and haven't set up and LLC, or a Corporation, or a Company you're losing $$$ every year you file for taxes. I'm simply talking about individuals whose take home pay is over the 250K mark that Obama wants to raise. With that in mind, if he, Obama, is correct, a majority of self-employed people are under that tax line. So they wouldn't have to worry about it. You can raise the taxes on the rich with out raising it on the corporations/businesses.
     
  11. steve-o

    steve-o New Member

    Nov 14, 2007
    They remained solvent for the time being. Yes, some of them used it to pay out their bonuses to their execs, which is ludicrous. But others, such as the most recent auto bailout, used the money to pay off loans, to keep from defaulting. To keep from having to cut another million jobs. To keep the economy from turning to complete shit.
     
  12. saosebastiao

    saosebastiao New Member

    May 22, 2005
    The problem with that logic is that business extend payroll when they need to extend payroll. They don't do it when they have extra cash laying around. Don't get me wrong, I am all for a corporate tax cut...I have even advocated a complete revocation of the corporate tax. But your logic is off, and your reasoning is poor.
     
  13. saosebastiao

    saosebastiao New Member

    May 22, 2005
    Wrong again. Being in a LLC or S-corp does not save you taxes if you are self employed. In fact, you are taxed exactly the same as a partnership or sole proprietor. They are simply liability structures.

    This is what I mean...just stop. You aren't helping your cause.
     
  14. Michael Russ

    Michael Russ Member

    Jun 11, 2002
    Buffalo, NY

    Says who?

    http://www.bls.gov/cps/faq.htm#Ques5

    It's a survey, as long as the respondent says he/she is available for work and actively looking, then they are counted as unemployed.

    How else exactly should we determine if a person is unemployed, or if they just decided to stop working other than to ask them?
     
  15. steve-o

    steve-o New Member

    Nov 14, 2007
    THEY CAN'T EXTEND PAYROLL IF THEIR CREDIT SOURCE IS DRIED UP. Realize that much. How can you pay someone if you have no cash, with credit? I'm not talking that these cuts should take place for all of eternity, only for the time of this current crisis. Lowering the rates, or simply not raising them will/could reallocate cash in certain companies. Which would afford an employer the opportunity to keep more workers on hand.
     
  16. steve-o

    steve-o New Member

    Nov 14, 2007
    Really, you can't write off expenses? Being allowed to write off those expenses puts more cash in the self-employed's pocket. If I take a client to dinner and charge it with my small business credit card, is that not a deduction? Not necessarily a tax cut, but it's a tax break.
     
  17. saosebastiao

    saosebastiao New Member

    May 22, 2005
    You can write off your expenses no matter what form of business you own.
     
  18. saosebastiao

    saosebastiao New Member

    May 22, 2005
    If companies are paying income taxes, they are making a profit. That doesn't stop them from having cash flow problems, but neither do income taxes. If a company is having cash flow problems, then giving them a tax break will do little to no help.

    Look...it has been documented very well that increases in the corporate income tax have corresponded with decreases in workers compensation. In fact, a 1% increase in the CIT corresponds with a 0.7% decrease in wages. This phenomenon has been found internationally as well as in the US, so its pretty well supported.

    This however, does not mean that a 1% decrease in corporate income taxes will correspond with a 0.7% increase in wages. It would completely depend on the wage competitiveness in the industry. Management and shareholders are more likely to have first dibs. There is no doubt going to be increases in employment and investment, but the amount is likely to be quite a bit smaller than the .7%. The argument is still valid, but its far less effective in real life than your rhetoric would like it to be.

    If you want some better arguments for what you are talking about, I can help you. First, move away from personal income tax arguments. The economic effects of personal income taxes are correlated with GDP growth, but in a relatively minor way. The benefits of lowering taxes right now would not be greater than the drawbacks of having drastically lower revenues.

    With corporate taxes, the story is much different. Corporate tax revenue is tiny in comparison with personal income tax revenue. It is a very small part of our tax revenue in total. It is also subject to the most complexity and biggest lobbying in congress. It creates an entire industry for tax reduction. Because of the complexity, rates can be very selective...with certain industries effectively paying below 20% and others paying max rates. The corporate tax rate has been proven to be an effective means of competing internationally for investment: Nations with lower rates have higher investment nationwide. Simple tax compliance can be a drain on the economy, redirecting resources from better uses.

    And last of all there is the double taxation argument. If you own a corporation, or even shares of a corporation, you are taxed twice. If the company makes money, it is taxed before it is distributed to you, after which you will pay taxes as well. Even if they don't pay a dividend, shareholders still pay double taxes because retained earnings and share prices will be held back.

    So lets catalog this:

    Benefits of lowering the corporate income tax:
    More competitive climate for investment
    Workers will share a percentage of the increase in income
    Employment may increase
    Drawbacks of lowering the corporate income tax:
    Slightly less total government revenue

    Benefits of total elimination of the corporate income tax:
    Drastically more competitive climate for investment
    Workers share a percentage of the increase in income
    Employment may increase
    Double taxation eliminated
    More cross-industry fairness
    Elimination of corporate lobbying for tax breaks and loopholes
    Elimination of the need for a corporate tax reduction industry
    Complete elimination of dead-weight loss from tax compliance costs
    Drawbacks of total elimination of the corporate income tax:
    A little bit less total government revenue.



    There you go. Run with it.
     
  19. steve-o

    steve-o New Member

    Nov 14, 2007
    Thanks for the help. Notice, I did stay away from personal income; in my original post I wasn't entirely clear about who should receive the tax cut/break. My apologies. However, you will also notice I chose my wording carefully on some points, "will/could." I did this b/c I knew that while my theory should work, it may not.

    As you pointed out, workers share a percentage of the retained income from tax cuts; the cuts may also lead to increased employment. In this economy, that possible increase in employment can be substituted for lengthening current employment. It could stop the bleeding of jobs. That was my whole argument.

    Again, thanks for further enlightenment on CIT.
     

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