[CRASH HARDDRIVE]

Originally Posted by besson3c 

This is not always true.

For a while, social security worked. Medicaid can help reduce the costs across the board by reducing strain on our emergency care from people that can't afford private health insurance. Of course, there is also public education and other public services that generally work pretty well.

Your argument paints things as though I'm saying there'd be no money for government programs, and that people for responsible and fair taxation (not wealth-redistribution schemes) are for NO taxation. Not at all. In fact, as the debate question pointed out, there are times when lesser taxation even leads to more revenue- which anyone who runs a business knows is simply the effect of a lower price leading to more activity, as a greater number of smaller transactions can easily produce more revenue than a smaller number of larger transactions.

I'm not one of these "let's abolish the IRS" types- I'm simply a person who believes that the government has plenty of money to achieve the things it's actually charged with doing, without excessive taxes. Government waste, mismanagement, fraud, overspending, over-borrowing, etc. are far greater problems than lack of revenue and taxpayers "not paying enough" and too many people have been sold a bill of goods otherwise.

Government and politicians have no business what-so-ever engaging in wealth redistribution, or using regressive taxation to manipulate behavior or social policy.

It is also worth keeping in mind that if you starve a public service of its resources, it becomes useless or at least less useful. Look at FEMAs reaction to Hurricane Katrina, or of other public services that people love to bitch about (e.g. the BMV, post office, etc.). So, there is a careful balance in funding the services you wish to make public.

Moreover, looking at the housing crisis, the collapse of Enron, etc. we see the effects of what can happen in the private sector when greed runs amuck and unregulated loopholes are exploited.

Again, no one said there needs to be no regulation.

The irony of everything you said above, is that Obama's policy of not giving a squat if raising capital gains would actually lead to LESS economic activity that produces capital gains, and therefore LESS revenue collected from capital gains, because somehow that's "fair" would more likey starve some government program due to lesser revenue, than encouraging more economic activity and producing greater revenues via LOWER CG taxes would.

He's basically saying he doesn't care- he's more concerned with the fact that it would mean 'the rich' aren't having something taken away from them, he can't go to the poor and say "see? I took something from a rich guy! Now don't you feel better?" Lesser revenue? More borrowing and spending to compensate? Who cares. Soaking the 'rich' is more important.

[Chongo]

How about no income taxes at all(i.e. the Fair Tax), like it was before the XVI amendment was passed?

[CRASH HARDDRIVE]

Originally Posted by BRussell 

I want to add two points:

1) Liberals believe that it's empirically false what Gibson claimed, that cutting taxes (capital gains or other types) causes an increase in revenues.

Prove it. Gibson was absolutely correct. Cutting capital gains from 28% to 20% increased revenues. By the way, it was Clinton who did so. Even he realized it.

[Chongo]

Originally Posted by CRASH HARDDRIVE 

Prove it. Gibson was absolutely correct. Cutting capital gains from 28% to 20% increased revenues. By the way, it was Clinton who did so. Even he realized it.

Clinton signed it, the (R)s passed it.

[besson3c]

Originally Posted by CRASH HARDDRIVE 

Your argument paints things as though I'm saying there'd be no money for government programs, and that people for responsible and fair taxation (not wealth-redistribution schemes) are for NO taxation. Not at all. In fact, as the debate question pointed out, there are times when lesser taxation even leads to more revenue- which anyone who runs a business knows is simply the effect of a lower price leading to more activity, as a greater number of smaller transactions can easily produce more revenue than a smaller number of larger transactions.

Marketing 101 will tell you that that isn't always true. It's a big fat "it depends" that is contingent upon the balance of supply vs. demand, as well as many other factors (e.g. perception).

I'm not one of these "let's abolish the IRS" types- I'm simply a person who believes that the government has plenty of money to achieve the things it's actually charged with doing, without excessive taxes. Government waste, mismanagement, fraud, overspending, over-borrowing, etc. are far greater problems than lack of revenue and taxpayers "not paying enough" and too many people have been sold a bill of goods otherwise.

I do agree that a lot of money is being mismanaged, all of the earmarks in our budget come to mind (which were passed by this president). However, before any proposals to gut everything, it seems like it would be far more prudent to prevent mismanagement of what we have. This is a more fundamental problem that will exist regardless of how much money the government has to mismanage.

He's basically saying he doesn't care- he's more concerned with the fact that it would mean 'the rich' aren't having something taken away from them, he can't go to the poor and say "see? I took something from a rich guy! Now don't you feel better?" Lesser revenue? More borrowing and spending to compensate? Who cares. Soaking the 'rich' is more important.

These are just your emotionally driven assumptions which may or may not be true. I can't argue your feelings, I can only argue against your actual arguments.

[BRussell]

Originally Posted by CRASH HARDDRIVE 

Prove it. Gibson was absolutely correct. Cutting capital gains from 28% to 20% increased revenues. By the way, it was Clinton who did so. Even he realized it.

I've cited the evidence over and over and over again. I've cited the conservative (not to mention liberal) economists who say it's snake-oil to claim it. I've cited how the government's economists - both administration and CBO - score tax cuts as revenues losses, not gains. Here is one good source. I'd like to see an actual economist - not a news anchor or politician or think-tanker - make the claim that a capital gains tax cut causes and increase in revenues, because I've never seen it.

Capital gains revenue collections are almost completely determined by the state of the stock market. Capital gains revenues went up and up and up throughout the 1990s as the stock market went up - including when the rate was cut - and then fell through the floor from 2000-2003. There's no evidence of a bump in the trend when the tax was cut in the 1990s, although it didn't go down either. But since 2003, the stock market has been increasing slowly again, and cap gains revenues have been creeping back up again.

[CRASH HARDDRIVE]

Please show me where raising the rate has led to any significant increase in revenue, and where lowering it has led to any significant decrease.

Look at 1970- the rate increased from 25% to 29.5 then up to 35%. Revenues that had been raising decreased and didn't recover to 1968 levels until 1977.

When the rate was lowered in 1979 to 28% revenues stayed consistent, and even climbed slightly. The reduction to 20% in 1982 continued the upward trend, until the hikes of to 33% and 28% starting in 1988 stagnated rates again.

Once more, the reduction to 20% in 1997 under Clinton sent rates back upward. Rates began to fall in 2001, not after the reduction to 15% in 2003 which if anything, has done the opposite as we're climbing back to 1998 levels.

Mathews was totally correct- there's no evidence to support that raising that rates again to 28% (the maximum Obama wants to raise it) will increase revenues- nor does he seem really interested in doing so.

[BRussell]

crash: That's a good table. But I want to reiterate what I said in my previous post, because your post suggests to me that you didn't get me: Cap gains revenues are determined almost solely by the stock market, and decreases in the rate haven't caused an increase or a decrease in revenues. The cycle just keeps chugging right along, past increases and decreases in the rate. The revenue trend did not change one bit after the 1997 rate cut. It was going up before it, and it continued to go up after it - but no faster than it had been. There's no evidence that cap gains revenues decrease after rate cuts, but there's also no evidence that they cause an increase, which was the point that Gibson made, and you claimed was absolutely correct.

[CRASH HARDDRIVE]

Originally Posted by BRussell 

crash: That's a good table. But I want to reiterate what I said in my previous post, because your post suggests to me that you didn't get me: Cap gains revenues are determined almost solely by the stock market, and decreases in the rate haven't caused an increase or a decrease in revenues.

If you think for one minute that investors aren't influenced by a difference of say 15% and 28% (the max amount Obama wants to raise it to because for some inexplicable reason he thinks that's 'fair', I've got a bridge to sell you. That'd be almost twice the tax rate, and would kill a LOT of investment activity. But somehow that's "fair" because in the world of leftists, middle class people don't invest, only the 'rich' do, and somehow the poor benefit from people investing less.

The revenue trend did not change one bit after the 1997 rate cut. It was going up before it, and it continued to go up after it - but no faster than it had been.

I think you're willfully blind, much like Obama himself. Pre-1997, the revenues were fluctuating from a lows in the 30's and 40s, to above 50bil. After 1997, the rate for the first time ever cracked 100 billion- basically doubling from the 1993-94 era. That's not anywhere near the same fluctuating increases and decreases that were occurring before.

By the way, if you look at the mid-80's nearly the same thing occurred- the reduction to 20% from 28% led to a huge increase (nearly 100 billion in 1988) and the following increase to 33% and 28% kicked it back down again.

Rather than try and thumb your nose to the fact that decreasing the rate HAS led to higher revenues, maybe you'd do better to try and actually answer the question Obama had to try and skirt around- what exactly do you think is to be gained from raising rates, and what's your real motivation for doing so?

Where can you point to where raising CG taxes has really led to any significant increase? How then can you, with a straight face, spout on about what you'd do with "more revenues" after a CG tax hike, when history proves that's not been the trend, but the opposite has? What's your real reason? Some crazy view of what's "fair" because you're taking something from the rich? If so, why not just admit that, rather than just try and bamboozle people?

Mathews was right on for actually asking Obama a tough, substantive question like that, and expecting a FACTUAL and substantive answer. Which of course, he didn't get- unless you count "because it's fair" as at least an honest admission of the true motivation, and things like revenues be damned.

The only truly reliable predictor of the future is the past. And here the evidence is fairly straightforward. Over the past 30 years a consistent pattern has emerged: every time the capital gains tax has been cut, capital gains tax revenues have risen. Every time the capital gains tax has been raised, capital gains tax revenues have fallen. Here are some prominent examples:


* In 1968, real capital gains tax receipts were $34 billion at a 25 percent tax rate. Over the next eight years the tax rate was raised four times, to a high of 35 percent. Yet with the tax rate almost 10 percentage points higher in 1972 than in 1968, real capital gains tax revenues were only $27 billion — 21 percent below the 1968 level.

* In 1978, when the top marginal tax rate was 35 percent, $28 billion in capital gains taxes were collected. By 1984, after the tax had been cut to 20 percent, revenues from the lower tax rate were $41 billion — 46 percent above the 1978 level.

* In 1986, the tax rate increased by 40 percent, from 20 to 28 percent. Did tax revenues climb by 40 percent? Just the opposite occurred. In 1990, the federal government took in 13 percent less revenue at the 28 percent rate than it did in 1985 at the 20 percent rate. In 1991 (and again in 1992), the government collected more than 15 percent less revenue than it did in 1985.

* In 1996, the year before the capital gains tax rate was cut from 28 to 20 percent, net capital gains on assets sold were roughly $335 billion. A year later, capital gains had leapt to $459 billion. (The tax cut was retroactive to May 1997.) In 1996 the Treasury collected roughly $85 billion in capital gains revenues. In 1997 those tax payments soared to $100 billion. As Table V shows, capital gains revenues for the period from 1997 to 2000 were nearly double what they were during the preceding period.

* After the 2003 capital gains tax cut, federal revenues increased in four years by $740 billion. The budget deficit fell from $401 billion in 2004 to $160 billion in 2007. Capital gains revenues increased from $55 billion in 2002 to an estimated $110 billion for 2006. Every indicator shows that the 2003 investment tax cuts helped increase growth, stock market values and federal tax receipts.

NCPA | Study #307, The Bush Capital Gains Tax Cut after Four Years: More Growth, More Investment, More Revenues


I know, I know- the above flies in the face of "get even with the 'rich' at all costs!" liberalism, but there it is.

[Big Mac]

Warren Buffet and Bill Gates benefit from lower capital gains taxes. But so does your hard working average neighbor who has his capital gains taxed at a low rate, too. The way to achieve fairness certainly isn't to raise the rate on everyone, unless you think hosing regular people who have stock portfolios is a good thing for the economy (it's not). I would support a progressive capital gains tax rate as an alternative - something like the current low tier for gains up to $1M and a 30% rate for gains >$1M.

Of course, it would be infinitely better to switch to a flat tax or, better yet, to repeal the 16th amendment altogether and adopt a national sales tax as the replacement. The founders thought direct taxation to be so onerous that the prohibition against it was included in the Constitution itself. If it had been included with the Bill of Rights instead there never would have been an income tax foisted upon this great country.

[BRussell]

Originally Posted by CRASH HARDDRIVE 

If you think for one minute that investors aren't influenced by a difference of say 15% and 28% (the max amount Obama wants to raise it to because for some inexplicable reason he thinks that's 'fair', I've got a bridge to sell you. That'd be almost twice the tax rate, and would kill a LOT of investment activity. But somehow that's "fair" because in the world of leftists, middle class people don't invest, only the 'rich' do, and somehow the poor benefit from people investing less.

Right, "leftists" believe that middle class people don't invest. That's exactly what Obama has said, and I have said - exactly. You're simply incapable of making factual arguments, crash. You can't resist the emotionalism, can you?

Of course people are influenced by tax rates - mainly by shifting investment income from one year to another with a lower tax rate. But the facts show that people don't stop investing when the rate is higher and then all of a sudden start investing when it goes lower. The facts show that revenues stay on the same trends regardless of what government does. You may think people wait around for the government to cut their taxes before they do anything, but the facts don't show that.

I think you're willfully blind, much like Obama himself. Pre-1997, the revenues were fluctuating from a lows in the 30's and 40s, to above 50bil. After 1997, the rate for the first time ever cracked 100 billion- basically doubling from the 1993-94 era. That's not anywhere near the same fluctuating increases and decreases that were occurring before.

This is factually incorrect. The rates varied along with the stock market and recession before the rate cut, and caried with the stock market and recession after the rate cut. There was no increase in revenue growth after the rate cut. In fact the highest growth (46%) came right before the rate cut, and the average growth rate after the rate cut was lower than the average growth rate before the rate cut.

year...cap gains revenue growth rate
1990...-14%
1991...13%
1992 ...21%
1993...-2%...recession
1994...19%
1995...19%
1996...46%
1997...17%...rate reduction
1998...11%
1999...23%
2000...10%
2001...-50%...stock market crash
2002...-26%

By the way, if you look at the mid-80's nearly the same thing occurred- the reduction to 20% from 28% led to a huge increase (nearly 100 billion in 1988) and the following increase to 33% and 28% kicked it back down again.

Again, what you're say in the first part is simply demonstrably factually false. Just look at the average revenue growth rates. The second half of what you're saying is true, but the rates were changing rapidly up and down during that time and the revenues were too. I don't think there's any long-term relationship, especially when you look at other, more clear instances of rate changes and you don't see the pattern you're looking for. At some point it's just like reading tea leaves or tarot cards.

Rather than try and thumb your nose to the fact that decreasing the rate HAS led to higher revenues, maybe you'd do better to try and actually answer the question Obama had to try and skirt around- what exactly do you think is to be gained from raising rates, and what's your real motivation for doing so?

I'm not raising any rates, and I have no motivation to raise them or do anything to them. But what Obama basically said is that investment shouldn't be treated as superior to work. They should be taxed at roughly the same rate as a matter of fairness and simplicity.

Where can you point to where raising CG taxes has really led to any significant increase? How then can you, with a straight face, spout on about what you'd do with "more revenues" after a CG tax hike, when history proves that's not been the trend, but the opposite has? What's your real reason? Some crazy view of what's "fair" because you're taking something from the rich? If so, why not just admit that, rather than just try and bamboozle people?

I can't point to where raising cap gains taxes has led to dramatic increases in revenues. But you'll note that, despite what you claim, I have never spouted off about what I would do with more revenues after a cap gains tax hike. No bamboozling whatsoever.

Mathews was right on for actually asking Obama a tough, substantive question like that, and expecting a FACTUAL and substantive answer. Which of course, he didn't get- unless you count "because it's fair" as at least an honest admission of the true motivation, and things like revenues be damned.

I'm not sure why you keep talking about Matthews. Gibson you mean? And I did think it was a fair question, unlike most of the other questions they asked, which were inane.

NCPA | Study #307, The Bush Capital Gains Tax Cut after Four Years: More Growth, More Investment, More Revenues

I know, I know- the above flies in the face of "get even with the 'rich' at all costs!" liberalism, but there it is.

You seem to think that people were just waiting around for George and the Government to give them the go-ahead, and then they started working and investing. I've got news for you crash, and it may crush you, so get ready: People are making the economy work without the government enacting some magic policy. The stock market burst in 2001, and has been slowly getting back on track since then. It wasn't Congress or George that made the money start to flow again.

[CRASH HARDDRIVE]

Originally Posted by BRussell 

Right, "leftists" believe that middle class people don't invest. That's exactly what Obama has said, and I have said - exactly. You're simply incapable of making factual arguments, crash. You can't resist the emotionalism, can you?

Oh please, look who's talking. You simply can't stand the fact that your obsession with raising taxes doesn't actually correspond with raising revenues, and that your real motivations for it are something other than any real desire to deal with budget deficits or revenue. You've got no facts at all to show that raising revenues on CG taxes raises revenues, so rather than explain why you're so gung ho to raise rates anyway, you simply try and snipe at the facts that show the opposite. And that's not emotionalism? Give me a break.

Of course people are influenced by tax rates - mainly by shifting investment income from one year to another with a lower tax rate. But the facts show that people don't stop investing when the rate is higher and then all of a sudden start investing when it goes lower.

Investors invest to make money. When you create a situation where there's less money to be had from an investment (whether its by raising the tax rate or whatever else) then people will find ways around it, and you'll see less revenue on that tax rate.

You may think people wait around for the government to cut their taxes before they do anything, but the facts don't show that.

This is a funny bit of your typical smoke-screening, because you're the one who's entire life clearly revolves around a desire for the government to be doing something for you, usually in the form of taxing someone else. You're fine with Obama rasing the CG rate, despite the fact that it's clear (and you've certainly failed to prove otherwise) that there's NO revenue increase to be gained from it. You expect some magical 'fairness' to happen simply because you've hiked up a tax rate to stick it to someone. How else do you explain it?

Meanwhile, I don't think I've said once I'm waiting around for the government to do jack diddly- just leave the friggen 15% rate alone. It's clearly working fine, hasn't led to any decrease of revenue -in fact, the opposite- and the lower rate is good for investors- middle class, rich, or otherwise.

You're the one arguing for the government to change something- and yet you've cited no factual reason behind it, and have no numbers to support it.

This is factually incorrect. The rates varied along with the stock market and recession before the rate cut, and caried with the stock market and recession after the rate cut. There was no increase in revenue growth after the rate cut. In fact the highest growth (46%) came right before the rate cut, and the average growth rate after the rate cut was lower than the average growth rate before the rate cut.

I've never said the stock market as a whole didn't have anything to do with the numbers- just that the fact remains:

"Over the past 30 years a consistent pattern has emerged: every time the capital gains tax has been cut, capital gains tax revenues have risen. Every time the capital gains tax has been raised, capital gains tax revenues have fallen."

That statement doesn't say, "...and no other market factor has anything to do with rates." Which is now what you're trying to backtrack into, rather than address the issue. You claimed that what Gibson said was wrong- yet you've completely failed to prove it wrong.

When has raising the CG tax rate led to a significant increase in revenue? How can Obama claim to spend 'increased revenues' from his desire to raise the rate, when there's no historical evidence to support that this would happen- in fact, the opposite. Talk about emotionalism- you're simply incapable of admitting that he's playing to the voters who think any time you "stick it to someone who has a buck more than you do" that it's a good thing. Just saying "I'm going to raise a tax!" sounds good to people like you, and you're incapable of making a real, substantive case for it.

Again, what you're say in the first part is simply demonstrably factually false. Just look at the average revenue growth rates.

Spin it all you like, but the rate decrease led to a revenue increase. Just because it doesn't match the same rate of increase as another factor of the market, doesn't make that fact not true. You're simply trying to say that "well, since revenue fluctuations can occur with other market factors, we must discount the fact that my entire premise of tax cuts= baaaad, tax increases= gooood is completely false. Nice try, but no sale. The tax rate cut of 1997 was followed by increased revenues- double that of just a few years earlier.

The second half of what you're saying is true,

Nice wax over, but that would be the part that destroys Obama's desire to raise rates- where the raising of rates killed an upward trend in revenue. The question then remains: why raise rates?

I don't think there's any long-term relationship, especially when you look at other, more clear instances of rate changes and you don't see the pattern you're looking for. At some point it's just like reading tea leaves or tarot cards.

I think you want it to be completely random, like reading tarot cards and tea leaves, but that's a really weak argument in favor of raising rates, when even the reading of the tea leaves doesn't show it to produce any real results.

I'm not raising any rates, and I have no motivation to raise them or do anything to them. But what Obama basically said is that investment shouldn't be treated as superior to work. They should be taxed at roughly the same rate as a matter of fairness and simplicity.

That's a contradiction: you say you've got no motivation to raise rates, yet you think they should be taxed at a higher rate as a matter of 'fairness'. What is that, but emotional goobledygook? This goes back to the point of taxes not being silly, illogical, emotion-based social policies, but sound fiscal policies. It really doesn't matter if you think an investment, by not being taxed to the point of less profitability, is being "treated as superior to work". As if people that invest, don't also work and have already paid their taxes on the amounts they invest.. So basically, Obama is willing (like most tax and spend liberals) to use the tax code as a bludgeon to enact misguided social policy and pass judgments, and actual revenues and fiscal responsibility be damned.

I can't point to where raising cap gains taxes has led to dramatic increases in revenues.

Again, prove it.

But you'll note that, despite what you claim, I have never spouted off about what I would do with more revenues after a cap gains tax hike.

You haven't proven a CG tax hike would produce more revenues, so I don't see how you can argue something that hasn't happened.

I'm not sure why you keep talking about Matthews. Gibson you mean? And I did think it was a fair question, unlike most of the other questions they asked, which were inane.

Opps, sorry- yes Gibson.

You seem to think that people were just waiting around for George and the Government to give them the go-ahead, and then they started working and investing.

Too funny. This from the guy who thinks everyone is waiting around for Obama to make things "more fair" by "not treating investments as superior to work, so let's nearly double the rate, revenues and sound fiscal policy be damed".

I've got news for you crash, and it may crush you, so get ready: People are making the economy work without the government enacting some magic policy. The stock market burst in 2001, and has been slowly getting back on track since then. It wasn't Congress or George that made the money start to flow again.

Wow... really? Holy cow! Y-you mean people can actually do for SELF, and don't need the government enacting policy to make the world go around? WOW! So no more waiting around for government to give everyone healthcare, welfare, and wealth too?

Money actually flows from the private sector, and not from government, or any of the dipshits sitting around in Washington?! Holy cow Brussel, that's radical thinking! Next thing we may even hear radical concepts like "Bush doesn't get all the blame for bad economic news, and Clinton (or whatever Dem) doesn't get all the credit for the good. I'd love to see more of this radical thinking from you in future debates! It sounds... dare I say it, almost conservative!

[Captain Obvious]

Originally Posted by besson3c 

I do agree that a lot of money is being mismanaged, all of the earmarks in our budget come to mind (which were passed by this president).

And inserted into that budget by a majority Democratic Congress who refused a moratorium on those earmarks proposed by Republican senators Coburn and DeMint.

[Chongo]

Anyone that has a 401(k) invests.

Why is anyone surprised George Steponallofus went after Obama? He worked for the Clintons. He should not have even been allowed in the same city during the debate. Do you think Tony Snow will be a moderator in the fall debates? Not gonna happen.