Question # 2: in the last 60+ years, in what decade did we see the highest job growth rate and real income the bottom 80% of taxpayers

Question #3: In the last 60+ years, in what decade did we see the highest marginal tax rate?

Question # 4: In the last 60+ years, in what decade did we see the lowest job rate growth and real income decline in bottom 80% of tax payers?

Now,if you are able to answer all four questions, correctly; please explain trickle down economices to me on more time.

Phoebus Rising

Yes, tax cuts are stimulative, but they do not pay for themselves.

Tax cuts are a form of stimulus. If the tax cuts didn’t have anything to do with the recovery following the Dotcom bust then Obama had no business continuing them following the mortgage meltdown and adding an additional trillion dollars in stimulus spending on top of that. But by your logic that fact that Obama wants to keep the Bush tax cuts in place for 98% for American means that his economic policies are no better than Bush’s.

But back in reality the Bush tax cuts didn’t fully go into effect until 2005 — right when revenues started to shoot up. If you look at 2007 we were on a projected path to surplus. The CBO even released a report at the time that at current growth rates in spending and revenue we’d achieve a surplus by 2016. And I’ll also point out that you are in fact not making an apples to apples comparison from ’97 to ’05. A lot of the revenues pulled in from ’97 were from the creation of a new digital marketplace called ‘The Internet’. And it looks like your making the common mistake of confusing the percentage of tax RATES versus GDP and actual tax revenues in terms of dollars and cents. In 1997 total revenues were 1.86 trillion dollars and in 2005 2.1 trillion dollars. And by 2007 when the economic policies of Bush had time to take their effect on the economy as a whole the revenues peaked to 2.4 trillion.

The mortgage meltdown hit and revenues understandingly dropped off following a recession just like they did in 2003. But by this point at the end of Obama’s first term we should see revenues returning back to 2007 levels and GDP and revenues growing at traditional post recessionary rates. But the economy is stagnating because of the high degree of uncertainty the Obama regime has injected into the marketplace. It keeps printing money but then pays the banks to sit on the cash to keep inflation under control which also has the effect of limiting capital investment since no one is lending. It fails to pass a budget and let spending spiral out of control. It grows the size of the federal government to the point where the D.C. area saw a 40% increase in median income while the rest of the nation saw a drop in median income to 1967 levels. It introduced a massive overhaul of the healthcare industry that burdens businesses with enormous costs just to hire someone full time. Its created an entitlement culture where it pays single mothers making less than 29,000 a year 59,000 in entitlement benefits. He’s done all these things AND kept the Bush tax rates in place which again by your logic is bad bad bad.

This graph shows revenues relative to the strength of the economy. You can see a noticeable drop in revenues in both 2001 and 2003. You can also see the gap closing after the 1997 tax cuts.

http://research.stlouisfed.org/fredgraph.png?g=dv8

http://research.stlouisfed.org/fredgraph.png?g=du2

Always has been. See Hauser’s Law.

It will be an expensive lesson but probably worthwhile in the long run. The Republicans will cave eventually, might as well teach an important lesson on the way.

In any case, this is easy-peasy for Obama. He lets the Bush tax cuts expire, then pushes for tax cuts on everyone except his “rich” Americans. At that point, what are the Repubilcans going to do. . .refuse tax breaks for the middle class and everyone else?

If they were smart, they would do exactly that, but they won’t.

Its not that long, but its more than the preview provides.

No Deal = tax rate increase across the board, military cuts, entitlement cuts
… followed by immediate legislation to put taxes back at the current (or even slightly higher) rate for the bottom 50/75/90/whatever percent (yea! Obama is cutting the taxes those evil Republicans raised!) and increases to the entitlements back to the current (or more likely higher) level (yea! Obama is saving the poor from the Social Security/Medicare/whatever cuts the evil Republicans caused!)

Net Result of No Deal =
1) Tax increases on the rich
2) Defense cuts (without even needing a potentially embarrassing vote)
3) Increases in entitlements
4) Obama gets credit for cutting taxes on the middle class
5) Obama gets credit for “saving” Social Security
6) Republicans get blamed for trying to increase taxes on the middle class
7) Republicans get blamed for trying to kill poor people
8) Reduced revenue (via Laffer curve) leads to calls for higher taxes and more stimulus

So… I wonder how hard Obama is going to work to reach a deal???

Who remembers this exchange from the April 2008 debate?

GIBSON: All right. You have, however, said you would favor an increase in the capital gains tax. As a matter of fact, you said on CNBC, and I quote, “I certainly would not go above what existed under Bill Clinton,” which was 28 percent. It’s now 15 percent. That’s almost a doubling, if you went to 28 percent.

But actually, Bill Clinton, in 1997, signed legislation that dropped the capital gains tax to 20 percent.

OBAMA: Right.

GIBSON: And George Bush has taken it down to 15 percent.

OBAMA: Right.

GIBSON: And in each instance, when the rate dropped, revenues from the tax increased; the government took in more money. And in the 1980s, when the tax was increased to 28 percent, the revenues went down.

So why raise it at all, especially given the fact that 100 million people in this country own stock and would be affected?

OBAMA: Well, Charlie, what I’ve said is that I would look at raising the capital gains tax for purposes of fairness.

We saw an article today which showed that the top 50 hedge fund managers made $29 billion last year — $29 billion for 50 individuals. And part of what has happened is that those who are able to work the stock market and amass huge fortunes on capital gains are paying a lower tax rate than their secretaries. That’s not fair.

And what I want is not oppressive taxation. I want businesses to thrive, and I want people to be rewarded for their success. But what I also want to make sure is that our tax system is fair and that we are able to finance health care for Americans who currently don’t have it and that we’re able to invest in our infrastructure and invest in our schools.

And you can’t do that for free.

That thought has not entered his mind. His objective is simply to recapture money that the wealthy stole from the workers. He doesn’t really even care where he spends it; simply confiscating that money is its own reward.