• This is a political forum that is non-biased/non-partisan and treats every person's position on topics equally. This debate forum is not aligned to any political party. In today's politics, many ideas are split between and even within all the political parties. Often we find ourselves agreeing on one platform but some topics break our mold. We are here to discuss them in a civil political debate. If this is your first visit to our political forums, be sure to check out the RULES. Registering for debate politics is necessary before posting. Register today to participate - it's free!

TED Ed: Do tax cuts stimulate the economy?

Dans La Lune

Zionism is Antisemitism
DP Veteran
Joined
Aug 30, 2019
Messages
9,382
Reaction score
5,873
Location
Oceania, 1984
Gender
Male
Political Leaning
Socialist
Examining whether tax cuts for the rich and corporations stimulate the economy and/or improve the quality of lives for the general population and health of the government.

 
Examining whether tax cuts for the rich and corporations stimulate the economy and/or improve the quality of lives for the general population and health of the government.



The video doesn't come close to proving the implied assertion that Reagan's tax cuts failed, or tax cuts in general fail, to stimulate the economy. In fact, if you take a look at federal treasury receipts since 1980, what you'll find is a year on year growth rate of almost 6% in constant dollars. There isn't a Fortune 500 CEO on the planet who wouldn't be thrilled with revenue performance like that. To put that in individual terms, if you were making $40,000 a year in 1980 and received 6% raises from your employer every year, for doing the same job you'd today be making over $460k/yr.

Our friends in Washington haven't been suffering from a lack of our money for a very long time.
 
You don't have to be an economist to know that trickle down theory hasn't worked the past decades and was a ridiculous idea to begin with.

The video doesn't come close to proving the implied assertion that Reagan's tax cuts failed, or tax cuts in general fail, to stimulate the economy. In fact, if you take a look at federal treasury receipts since 1980, what you'll find is a year on year growth rate of almost 6% in constant dollars. There isn't a Fortune 500 CEO on the planet who wouldn't be thrilled with revenue performance like that. To put that in individual terms, if you were making $40,000 a year in 1980 and received 6% raises from your employer every year, for doing the same job you'd today be making over $460k/yr.

Our friends in Washington haven't been suffering from a lack of our money for a very long time.
Yet the median American wage vs. just about any cost real humans have has gone down. (vs. housing costs, food prices, educational prices, childcare costs, and any other metric.) Which shows that the wealth absolutely hasn't "trickled down" to normal Americans.

The metric you chose, and you likely did this intentionally, has no correlation to the wealth and well being of middle and lower class Americans. No one will argue with you the rich have gotten richer the past 4 decades, but the argument for trickle down economics is that by showering the rich with more money, it'll magically makes its way down to the rest of us, which it hasn't. The wealthy hoard their wealth, send it overseas or spend it on luxury goods that benefit other rich people.

Trump and the Republicans gave away massive amounts of free money to the ultra rich and business owners, and we haven't seen that money either. Their tax cuts were permanent, while the tax cuts that were supposed to help the middle class had an expiration date. This was a sleezy tactic to make middle class Americans think they were getting a substantial share of the tax cuts when they weren't.

Further, the last couple of republican presidents have left office with massive deficits, and it's always left to the democrats to be the adults and get the budget back in order.
 
You don't have to be an economist to know that trickle down theory hasn't worked the past decades and was a ridiculous idea to begin with.


Yet the median American wage vs. just about any cost real humans have has gone down. (vs. housing costs, food prices, educational prices, childcare costs, and any other metric.) Which shows that the wealth absolutely hasn't "trickled down" to normal Americans.

The metric you chose, and you likely did this intentionally, has no correlation to the wealth and well being of middle and lower class Americans. No one will argue with you the rich have gotten richer the past 4 decades, but the argument for trickle down economics is that by showering the rich with more money, it'll magically makes its way down to the rest of us, which it hasn't. The wealthy hoard their wealth, send it overseas or spend it on luxury goods that benefit other rich people.

Trump and the Republicans gave away massive amounts of free money to the ultra rich and business owners, and we haven't seen that money either. Their tax cuts were permanent, while the tax cuts that were supposed to help the middle class had an expiration date. This was a sleezy tactic to make middle class Americans think they were getting a substantial share of the tax cuts when they weren't.

Further, the last couple of republican presidents have left office with massive deficits, and it's always left to the democrats to be the adults and get the budget back in order.
1669639092906.png
 
Nobody is supporting trickle down in 2022, are they?
 
I support allowing businesses and individuals to keep more of what they earn.
I agree. Toss in reducing the debt, and you have my vote.
 
The video doesn't come close to proving the implied assertion that Reagan's tax cuts failed, or tax cuts in general fail, to stimulate the economy. In fact, if you take a look at federal treasury receipts since 1980, what you'll find is a year on year growth rate of almost 6% in constant dollars. There isn't a Fortune 500 CEO on the planet who wouldn't be thrilled with revenue performance like that. To put that in individual terms, if you were making $40,000 a year in 1980 and received 6% raises from your employer every year, for doing the same job you'd today be making over $460k/yr.

Our friends in Washington haven't been suffering from a lack of our money for a very long time.

Hmmm

"After the Economic Recovery Tax Act of 1981 revenues fell by 6% in real terms. This promoted a tax increase that passed the House in late 1981 and the Senate in mid-1982 called the Tax Equity and Fiscal Responsibility Act of 1982. This act was an agreement between Reagan and the Congress that raised revenues for the following years. Following that increase, there were 3 other tax increases from 1983-1987 for other various reasons. In total, the US lost over $200 billion in 2012 chained dollars due to the original tax cut in the first four years and around $1 billion for the second tax cut. The four tax increases from 1982-1987 added a total of $137 billion in revenue which adds up to roughly $64 billion in net revenue lost because of the cuts.[13]"

Link
 
Hmmm

"After the Economic Recovery Tax Act of 1981 revenues fell by 6% in real terms. This promoted a tax increase that passed the House in late 1981 and the Senate in mid-1982 called the Tax Equity and Fiscal Responsibility Act of 1982. This act was an agreement between Reagan and the Congress that raised revenues for the following years. Following that increase, there were 3 other tax increases from 1983-1987 for other various reasons. In total, the US lost over $200 billion in 2012 chained dollars due to the original tax cut in the first four years and around $1 billion for the second tax cut. The four tax increases from 1982-1987 added a total of $137 billion in revenue which adds up to roughly $64 billion in net revenue lost because of the cuts.[13]"

Link
Total up Treasury receipts during the time period I described and see what you get.
 
Examining whether tax cuts for the rich and corporations stimulate the economy and/or improve the quality of lives for the general population and health of the government.


YOu don't need to watch a video to know that Reagan's trickle down theory of economics failed miserabley.
 
How much more?
Considerably more. I’d opt for a single, flat income tax rate for all sources of income. No deductions, loopholes, or credits, applied to all income earned above the poverty level. The rate would be somewhere around 20%, but I’m open to debate on the exact number.
 
I support allowing businesses and individuals to keep more of what they earn.

That sounds good in theory, but when the top 10% has about 70-80% of the wealth, then the other 90% are disproportionately influenced by what those with the wealth do with their money. They mostly invest it. They invest it before creating new jobs, which is the rationale that right wing economists posit as a justification for keeping more of what they earn.
 
Considerably more. I’d opt for a single, flat income tax rate for all sources of income. No deductions, loopholes, or credits, applied to all income earned above the poverty level. The rate would be somewhere around 20%, but I’m open to debate on the exact number.

A flat tax is a terrible idea. To someone who's making $25,000 a year, a 17% tax is much more significant than it is for someone who's earning $250,000. I would love a flat tax - would lower my tax burden considerably. But I'm not even about to pretend that this is fair to someone earning a fraction of what I do.
 
A flat tax is a terrible idea. To someone who's making $25,000 a year, a 17% tax is much more significant than it is for someone who's earning $250,000. I would love a flat tax - would lower my tax burden considerably. But I'm not even about to pretend that this is fair to someone earning a fraction of what I do.
$25k is below the poverty line. That person who pay no income tax.
 
$25k is below the poverty line. That person who pay no income tax.

Understood, but if we're talking about a truly flat tax with no exceptions, loopholes, or whatever, I think the point still stands. Even if you propose an exemption for the first 30-35,000 taxed, taxation has to take disposable income into account.
 
Understood, but if we're talking about a truly flat tax with no exceptions, loopholes, or whatever, I think the point still stands. Even if you propose an exemption for the first 30-35,000 taxed, taxation has to take disposable income into account.
Flat tax rate. Someone making just above the poverty line would still pay relatively little tax.

Using round numbers to keep the math simple, suppose the rate is 20% on income above $50k. Someone making $60k pays $2k. Someone making $600k pays $110k.
 
Flat tax rate. Someone making just above the poverty line would still pay relatively little tax.

Using round numbers to keep the math simple, suppose the rate is 20% on income above $50k. Someone making $60k pays $2k. Someone making $600k pays $110k.

Well, flat tax means different things to different people. If you exempt the first X number, maybe it could be more palatable, but a progressive tax system is the fairest -- if we ditch the loopholes and tax things like cap gains.
 
Well, flat tax means different things to different people. If you exempt the first X number, maybe it could be more palatable, but a progressive tax system is the fairest -- if we ditch the loopholes and tax things like cap gains.
I have never seen a serious flat tax proposal that didn’t have an exception for income earned below (or close to) the poverty line. It’s been true here in my state for as long as I’ve been paying taxes. For decades, and up until very recently, MA had a single 5% rate for all income.
 
I have never seen a serious flat tax proposal that didn’t have an exception for income earned below (or close to) the poverty line. It’s been true here in my state for as long as I’ve been paying taxes. For decades, and up until very recently, MA had a single 5% rate for all income.

A "flat tax" that includes an exemption is just a progressive tax. Just not nearly as progressive.

Admitting that we need an exemption in a flat tax regime is basically admitting that we need progressive taxation.
 
A "flat tax" that includes an exemption is just a progressive tax. Just not nearly as progressive.

Admitting that we need an exemption in a flat tax regime is basically admitting that we need progressive taxation.
If calling it "less progressive" gets you on board, I'm good with that.
 
The video doesn't come close to proving the implied assertion that Reagan's tax cuts failed, or tax cuts in general fail, to stimulate the economy. In fact, if you take a look at federal treasury receipts since 1980, what you'll find is a year on year growth rate of almost 6% in constant dollars. There isn't a Fortune 500 CEO on the planet who wouldn't be thrilled with revenue performance like that. To put that in individual terms, if you were making $40,000 a year in 1980 and received 6% raises from your employer every year, for doing the same job you'd today be making over $460k/yr.

Our friends in Washington haven't been suffering from a lack of our money for a very long time.


Now look at the federal deficits during those years and one could easily infer that the economic growth was due to government funded economic stimulation rather than organic growth
 
A flat tax is a terrible idea. To someone who's making $25,000 a year, a 17% tax is much more significant than it is for someone who's earning $250,000. I would love a flat tax - would lower my tax burden considerably. But I'm not even about to pretend that this is fair to someone earning a fraction of what I do.
Imo, we could set a base income of the Federal Poverty level as where the flat tax begins, but I think you need a floor of @$100k.
 
Back
Top Bottom