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We have a Spending Problem, NOT a tax revenue problem

That's my point. The Clinton and Bush administrations were propped up by bubbles not tax cuts.


OK, lets take your “point” in context to the post of mine that you responded to. If you go back and read my post, hopefully you will see that it was focused on Clinton's first term. Now tell me how the dotcom bubble had any effect on his first term.
 
Here is just one, which actually points out faults with both the government and the derivatives market.

Alan Greenspan Says the Federal Reserve Didn't Cause the Housing Bubble - WSJ.com

Do your do deligence and you will see the government did not jump start the housing boom, unless you believe they forced banks to take no money down mortgages and traders to trade those derivatives as low risk.

force? no. simply manipulated the market to make it profitable to do so, and did from time to time punish banks who weren't "diverse" enough in their lending practices.
 
force? no. simply manipulated the market to make it profitable to do so, and did from time to time punish banks who weren't "diverse" enough in their lending practices.

Can you explain how they (the government) did this?
 
Instead of providing any real evidence, you will probably go on about how the CRA forced banks to loan to bad recipients. Not allowing them to merge into conglomerate financial companies is certainly not punishment.
 
:shrug: if you wish to say so, that is fine. the fact remains his post left that as a fully legitimate reply.

you know how we always talk about how pols have lost control when they start complaining about the questions they receive, when the narrative becomes the story-about-the-story? yeah, here.



their income has indeed gone up at a faster rate than others - which is the trend as societies advance. however, this has occurred even as we have altered our tax code to lift the burden from the middle class and place more of it on our higher earners. the "their income has advanced" argument would imply a 1-to-1 growth result. For example: "The top 10% used to make 25% of the income and pay 25% of the tax burden, now they make 45% of the income and pay 45% of the tax burden. As their income grows, so does their portion of the tax bill." But that is not what has happened. Their share of the national tax burden has accelerated much faster than their share of the national income. The top 1% of Americans now pay more in taxes than the bottom 95%:

blog20090729-chart1.jpg

As you can see, the top 1% are paying 40.5% of the tax burden... but they are only doing it on around 22.5% of the national income.

ergo, it is not a one-to-one growth ratio that we would see were the only factor that of increasing top incomes. the fact that we have deliberately shifted much of our tax burden off of our middle class and onto the wealthy accelerates that trend and is responsible for the disparity in comparative rates of growth.

So, in the context of the discussion of our "shortfall" (ref: OP), our problem is not that we don't tax the rich - it's that we seek to avoid taxing the (voting) middle class, while still giving them lots of goodies.

now, in a discussion of revenue; we have some historical constants. Observe what happens to tax revenue as tax rates jump around wildly:

hauser.gif


Tax Revenue seems to come in relatively independent of tax rates - usually at around an average of 19% of GDP. We saw a slight increase in collections after multiple tax cuts:

Federal-Personal-Income-Tax-Collections.JPG


...but not enough to really push us too far out of bounds of that historical average of around 19%.

what DID finally push us out of that historical average was a massive increase in the size of Government. Government does not tax itself quite as enthusiastically as it taxes labor, investment, and production - and so as Government rises as a percent of GDP, tax revenues fall as a percentage of GDP. So, in the last couple of years, we have seen Government increase from about 20 to about 24.5% of GDP , and we have seen Revenue fall from about 19 to about 15.5% of GDP.



SO, when discussing the need to get revenues to match expenditures, it becomes evident that:

1. Rates do not powerfully directly effect revenue - GDP and the relative size of Government do.
2. If you want to increase revenues, therefore, you have to increase GDP
3. If you want to increase revenues as a percent of GDP, you have to reduce the size of government relative to GDP.
4. Rates do not seem to have a powerful direct effect on revenue - but they do on growth. Raising rates is thus more likely to reduce growth, thereby reducing revenue off of what you would have otherwise collected.


If you want to get revenues to match expenditures, therefore, you have to grow GDP and reduce government relative to it. Raising tax rates is more likely to be counterproductive than it is neutral, and is exceedingly unlikely to move those two lines closer together.

You speak about the top 1% as though they are same tax payers both before and after the tax cut, but they are not all the same people after the cut as they were before. Bush's tax cuts eliminated millions of low income tax payers from the tax rolls. So if you take any percentage slice from the top, they will represent more concentration of wealth. This is true whether or not their tax rates are changed. But we do know their individual tax rates have been lowered, therefore their individual tax bills are lowered as well. You shouldn't believe the snake-oil the Tax Foundation is selling you.
 
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Instead of providing any real evidence, you will probably go on about how the CRA forced banks to loan to bad recipients. Not allowing them to merge into conglomerate financial companies is certainly not punishment.

Carrot and stick.
Banks with negative CRA ratings could not complete aquisitions, mergers or compete for federal loan money at prime fed rates for capital investment to expand.

Banks that DID comply and had positive ratings were eleigible for Fed funds more readily.

Go look up CRA and find a .gov link that tells what CRA regulation actually did and what powers regulators had.
 
Carrot and stick.
Banks with negative CRA ratings could not complete aquisitions, mergers or compete for federal loan money at prime fed rates for capital investment to expand.

Banks that DID comply and had positive ratings were eleigible for Fed funds more readily.

Go look up CRA and find a .gov link that tells what CRA regulation actually did and what powers regulators had.

Banks do not give a damn about "federal funds" when they can borrow form other banks (the actual federal funds market), the discount window, or even from European/Japanese/Chinese banks paying LIBOR-esqe rates of interest using corporate bonds/paper.

FAIL
 
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