The Clinton Surplus Myth...

Perhaps you should learn the difference between and on-budget and total surplus.

 

Math today is identical to math from 50 years ago sans your slide rule. It always has been and always will be; income minus expenses equals deficit/surplus.

It is foolishness to assume the social and economic metrics today are the same as they were 50 years ago. Everything today is different! It's not even apples and oranges; it's apples and bricks! Taking actions of 50 years ago in today's environment might give you 180 degree different outcomes.

One of these days you will understand all of this tax talk is 100% political BS. The wealthy will gladly pay some more taxes...5-10% more with limited downside...and you know what...it won't hurt them at all. Pundits who tell the truth fully know that taxes must be raised on ALL Americans! However because of political BS, most Americans believe the wealthy can bail out everyone and this is not possible. So unless your government greatly reduces it's spending, then your lower and middle classes need to pay more taxes...and this will hurt!

You CANNOT balance the US budgets without pain and suffering from the lower and middle classes!

Lastly, you are talking about taking another $1.3 trillion from the private sector to give to the government. This cannot be done without causing economic issues for people and business. Then you wish to give this taxpayer cash to the government when the government has zero spending constraints!

Any idiot can do the math to understand why there are deficits and mounting debt. But it will require and idiot+1IQ to understand the cause and effects of micro-managed tax hikes...

 

Yet it is amazing how many conservatives seem to not understand that basic concept, and seem to think that deficit = spending.

Who assumed that? It would also be foolish not to learn from the past.

LOL ... haven't you read the posts in this forum? Most conservatives are unwilling to raise taxes one cent.

The wealthy absolutely could "bail out" the deficit.

Eliminate the Bush tax cuts and cut military spending to relative 2000 levels.

Balanced budget with modest or now pain to the lower/middle classes.

Who says? In 2000 we were taking relatively $800 billion more from the private sector and the economy was doing just fine. Why would another 2-3% of the economy make that much difference?

Exactly. And any idiot who can do math realizes that when you slash your tax revenues with tax cuts and more than double your spending on the military and wars, you get big deficits.

But it's amazing how many idiots just won't acknowledge this basic arithmetic.

 

demonstrate that revenue goes up when tax rates go up.
What is the functional relationship between the two?

 

Be my guest. I've explained it to you on at least one prior ocassion.

 

A surplus is simply coming under budget. Well, what if the budget set is ridiculous to begin with?

 

No, that is not what a surplus is. It was defined earlier in this thread.

Macroeconomics should be a mandatory HS course. It's amazing (appalling?) how so many don't have a clue about it.

 

Excuse me, that is assuming the budget is equal or less than tax revenues. And your right, it makes our current budgets even more ridiculous because they are about a trillion dollars more than tax receipts. The question for progressives is, will a 4% increase on the 1% greatly increase tax revenues. Well, that remains to be seen how it affects production in the long term.

 

I assume no such thing. A surplus is simply a function of the difference between revenues and expenses, where revenues are greater.

The question for conservatives is, if we collected the same proportion of GDP today in tax revenues as we did in 2000 before the Bush tax cuts, would tax revenues be greatly increased?

Modest increases in taxes never seemed to hurt the economy before.

 

Maybe or maybe not. Either way, it is not going to solve our problems. As the former US comptroller general david walker has said many times, we have tens of trillions of dollars in current debt and future entitlement debt. You could take all of the 1% money and it would not even make a dent in the problem. We should be focusing more on major reforms to SS, Medicare, and Defense spending, before we worry about 4% points on 3 million people in this country who are already paying 35% of the countries fed income collected tax revenues.

 

You didn't answer my question. Give up?

This is regurgitate right wing propaganda I've seen scores of times.

Total gross personal income is $13.3 trillion, and just the 1% alone take about 20% of that, or $2.7 trillion. Not saying we should, but we could balance the budget just by taxing the top 1% alone.

 

Raising the taxes on the 1% from 35% to 39% is not going to balance the budget. You have a growing entitlement base. You have 16 trillion dollars in current debt. Remember, that expiring debt interest gets very expensive. You have tens of trillions of more debt in promised entitlements.

My grandma was a house wife, did not contribute to SS, she collected it every month from age 65 to 103 years old. There a lot of people who never contributed to the program who are on it, it isn't sustainable, and taxing the rich more, is not going to save it.

 

You keep dodging my question.

Eliminate the Bush tax cuts and we'd go a long way.

If you answered my question above, you'd now how close we could come.

It's very sustainable. Just remove the income cap of $110k, and make it applicable to investment income, and it will have a surplus for eternity. Then you could probably lower the rate.

The problem is now, the richests who dominate most the income and wealth don't effectively pay it either at all or as a percentage of their income.

 

I am not dodging your question, I addressed it several posts earlier. Would it raise revenues, yes, but not enough when we are running a trillion dollar deficit every year. And, if those taxes lead to a slip in production, then your revenues may dip. Remember in the 90s when clinton had us on 39%, he was fortunate to have the tech explosion and the growth that came along with it. We cannot assume we will have such a market revolution during the next wave of tax increases.

Repeal bush cuts? You may not want to take all of them away, it will tax the middle class more as well.

You need to show me data that that cap and more revenues off investment income would lead to higher revenues. And that data needs to factor how higher capital gains could affect more private investment. I really doubt that most of the elderly people collecting SS or using medicare are still working and making more than 110k a year and I doubt many of them have significant investment income either.

 

I missed your answer, but to the contrary. In 2000, before the Bush tax cuts, the Govt collected 20.4% of GDP in tax revenues.

In 2011, it collected 2,302.0 billion, which was only 15.3% of a GDP of 15,094.0 billion.

Had the Govt collected 20.4% of GDP last year, revenues collected would have been $3,079.1 billion.

That additional $777 billion in revenues would have knocked out far more than half the deficit.

So yes, that alone would pretty much be all we needed to do. But if you want to go to the spending side, if in 2011 we spent proportionately the same on the military as we did in 2000, we would have saved about $250 billion which combined with the extra revenues would have knocked the deficit down by more than a trillion.

I remember numerous conservatives saying the Clinton tax increase would not help the deficits, would wreck the economy and kill jobs. Could they have been more wrong then?

I remember numerous conservatives saying the Bush tax cuts would not cause deficits, and would spur the economy and create more jobs. Could they have been more wrong then?

Sorry if I don't have a lot of faith your right now.

I'd be good with making them more progressive. But with the deficit we have, we need the revenue as a higher priority.

Cap gains vary based on the stock market. You need to show me that increasing capital gains would have a long term negtive effect on the stock market.

We don't have a problem with private investment. We have trillions of dollars sitting around doing nothing. We need more spending to create demand for products and services.

 

How is raising the taxes on the rich from 35% to 39% going to take you from collecting 15% GDP to 20% GDP? Again, Clinton had the fortune of his tenure being during the tech boom, it was a pretty big deal, read about it. Bush tax cuts would not cause deficits if Bush wasn't such a huge spender. Taxes are never the problem, spending will always be the problem. Have you looked at the US budget over the last 50 years? The budgets over the last 10 are far too high. We need to make painful cuts to get closer to a 2 trillion dollar budget. Cap gains are far more involved than the stock market. Higher cap gain rates mean less profits for investors. Less profits for investors mean less money for the those investors to reinvest.

Regardless, this will always come down to a simple argument of do we want more money with the people, or more money with the government. I believe individuals should have the freedom to manage their wealth, you believe the government should redistribute money through social programs. And that is where this debate can go no further.

 

let me pay 15% on my income, and I will invest more too.

 

explain it here so all can hear it.
Or, ...... are you backing down on your claim that tax increases increase revenues ?

 

Will you? Most people would probably just go buy a new car, house, digital devices, gamble, drugs, you name it, anything but invest it, I don't care it's anyones choice. Anyways, I don't know how much you make or what tax bracket you are in, but after you pay your ordinary income %, you are welcome to take your post-tax money and invest it and pay 15% on the capital gains just like anyone else. Cheers.

 

are you giving a greater good argument ?

is that what the rich do, use their post tax income to invest ?
Is your claim that the rich have very large w-2 income then invest the post tax money for large gains taxed at 15% ?

 

No, I don't care what anyone does with their money. I don't care that most Americans cannot properly manage their finances. That they rather get their $5 starbucks every morning than pay for a good private healthcare plan. The problem arises when they start thinking that other people should pay for it.

Yes, people do invest their post-tax income. I see it done on a daily basis through my company. That is often how they become rich. Of course there are your artists and athletes who are lavish spenders and the folks who inherit fortunes, but many rich people lived modest lifestyles while young and saved and then wisely invested.

 

Yes, you did, and yes you do. You just defended the practice with the argument that the money was reinvested into the economy.
Are there any other greater good arguments that are justified, or just yours ?

So the wealthy don't really make a large portion of their primary, pre-tax income as "capital gains", they earn primarily wages ? Most of their income is taxed at the top income tax rate of 35%, and subject to AMT as well ?
Their capital gains income exists primarily from the investments earned on the post tax left overs ?

It's OK to lie, but do keep them somewhat believable.

Income is income. Don't tax the poor shcmuck making $250K at 35%, while taxing another, who makes a heck of a lot more, and a huge percent of his income as gains, at the 15% rate.
You know that the majority of their income is made as gains, while relatively little is made as ordinary, w-2 income.


Further, don't defend it with some wimpish greater good argument, unless you are prepared to accept all of the other greater good arguments as valid.
Your argument is no better that that of the progressives justifying the welfare state for the greater good.

 

Same way it did in the 1990s.

But you may be right. We may need to increase the top rate to 50% like Reagan had it during his recovery.

I did.

Contrary to conservative claims that Clinton tax increases would wreck the economy and destroy jobs, he had the best job growth and longest sustained boom since WWII.

Could the conservatives have been more wrong?

Why would anyone trust them on taxes when they've been so wrong so many times?

More right wing propaganda. You've got it down well.


Year - Revenues
2000 2,025.2
2001 1,991.2 <- Bush tax cuts
2002 1,853.2
2003 1,782.3
2004 1,880.1

That unprecented 4 year drop in revenues caused deficits.

Taxes are a problem if they are two low for spending.

I have looked at the budgets. Have you?

If you had, you'd know that over the past three years, revenues proportionately are the lowest they've been in 6 decades.

The Govt gives its money to the people.

The simple question we have is whether we want to continue the "trickle down" policies pandering the to 1% that have redistributed most of the growth of wealth and income to the richest and leaving the middle classes tapped out and without the resources to power the economy, or do we want to reverse "trickle down" policies and rebuild the middle class?

 

Sure. Why is it only important that the richest who are already rich to have more to invest?