- Joined
- Jan 2, 2006
- Messages
- 28,174
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- Boca
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- Political Leaning
- Independent
There have been multiple threads on this concept. Some have argued for no taxes, some have argued for heavily taxing high earners, and some have even argued for taxes based on government spending they believe necessary.
The state of the national debt is startling; we are approaching WWII levels of government debt as a % of GDP. The deficit, given the recent recession, has eclipsed 10% of GDP. State and local municipalities have been teetering in the red.
The recent midterm win by the GOP has rendered the possibility of another stimulus to highly unlikely. Even though i firmly believe a greater fiscal stimulus, one that was composed entirely of infrastructure spending, would be the most effective way in dealing with high unemployment, it's indefinitely off the table.
So let's talk tax cuts. Not the tax cuts popularized by Bush 42 (which yielded little if any positive economic results), but tax cuts that have the greatest potential to effect jobs in a positive fashion.
When a small business owner wants to give someone a job, they do so under the premise that a new employee will increase production in some facet of their operations. A small business would only be inclined to "increase production" if they are experiencing production shortages given their current workforce and physical capital alignment. Small business owners do not hire additional employees based on the taxation of their personal income. To believe anything in this regard is similar to believing in Santa Claus, The Tooth Fairy, etc....
The recent recession was caused by a demand shock that persists to this day. This demand shock did not magically appear when Obama was elected, enacted stimulus, or enacted his health care reform. Insufficient demand has a direct relationship on labor markets. Therefore, it would seem obvious that in order to decrease unemployment, we have to increase demand.
Does continuing a lower tax policy increase demand? I don't see how you can assume such a notion. Would lowering income taxes spur demand? Maybe, but only for those who are currently at zero to negative savings rates.
What will spur demand is a sudden 0% tax holiday on corporate income taxes (from January 2011 -January 2012 minimum). Such a fiscal policy severely diminish the need for corporations to "Dutch Sandwich" their overseas profits into Caribbean banking institutions, and bring that money home. These profits would then be used to increase capital, pay dividends to shareholders, or invest in US assets. Such a tax holiday would cost the federal government between $65 and $75 billion in tax revenue.
Comments?
The state of the national debt is startling; we are approaching WWII levels of government debt as a % of GDP. The deficit, given the recent recession, has eclipsed 10% of GDP. State and local municipalities have been teetering in the red.
The recent midterm win by the GOP has rendered the possibility of another stimulus to highly unlikely. Even though i firmly believe a greater fiscal stimulus, one that was composed entirely of infrastructure spending, would be the most effective way in dealing with high unemployment, it's indefinitely off the table.
So let's talk tax cuts. Not the tax cuts popularized by Bush 42 (which yielded little if any positive economic results), but tax cuts that have the greatest potential to effect jobs in a positive fashion.
When a small business owner wants to give someone a job, they do so under the premise that a new employee will increase production in some facet of their operations. A small business would only be inclined to "increase production" if they are experiencing production shortages given their current workforce and physical capital alignment. Small business owners do not hire additional employees based on the taxation of their personal income. To believe anything in this regard is similar to believing in Santa Claus, The Tooth Fairy, etc....
The recent recession was caused by a demand shock that persists to this day. This demand shock did not magically appear when Obama was elected, enacted stimulus, or enacted his health care reform. Insufficient demand has a direct relationship on labor markets. Therefore, it would seem obvious that in order to decrease unemployment, we have to increase demand.
Does continuing a lower tax policy increase demand? I don't see how you can assume such a notion. Would lowering income taxes spur demand? Maybe, but only for those who are currently at zero to negative savings rates.
What will spur demand is a sudden 0% tax holiday on corporate income taxes (from January 2011 -January 2012 minimum). Such a fiscal policy severely diminish the need for corporations to "Dutch Sandwich" their overseas profits into Caribbean banking institutions, and bring that money home. These profits would then be used to increase capital, pay dividends to shareholders, or invest in US assets. Such a tax holiday would cost the federal government between $65 and $75 billion in tax revenue.
Comments?