[Falconoffury]

I've been arguing politics with someone lately, and I was wondering how I could learn more about the topic. The specific argument is that Republicans tend to give tax breaks for the wealthy, which in turn allow the wealthy to create more jobs, creating more overall tax money and prosperity. Democrats tax more, but they put more money into social programs to help the people who are struggling financially. I tend to be more on the latter side of this argument, but I was wondering what you all think. Are there any articles I can read to learn more about these specific theories? Which is the healthier way for the government and society to function?

[mainster]

Essentially both England and the USA are one party states. Oligarchies/Plutocracies, buying the parties and candidates of both sides. The policies will always be for the sponsors, not for the people.
Democrats of Republicans, two sides of the same coin. Who cares?
On all the major issues the policies are the same - "business as usual", screw the people! The minor differences and the elections are just for show, a big sham! The media also wholly controlled by the plutocrats.
As has always been the case throughout history, the top 1% controls the bottom 99% today just using more covert means and media brainwashing... history repeats itself. Those stupid enslaved sheep...

"The most hopelessly enslaved are those who don't realize they are enslaved"

Seems it is all part of human nature.

"How could it be otherwise" (J.Hanson)

[Leanan]

So-called "trickle-down" economics has been pretty much discredited. The talk about tax breaks for the wealthy creating jobs for the middle class is just an excuse to grab the goodies. Remember, Dubya wanted tax cuts even before there was a recesssion. (Supposedly because of the surplus built up during the Clinton years.)

It used to be that Democrats taxed more to create social programs, but that's not true now. The deficit fell under Clinton, and leaped under Bush. Clinton did raise taxes, but not to fund social programs. Just to try and balance the budget. Weirdly, the Democrats have become the party of fiscal responsibility. And despite Republican predictions of doom, the economy boomed after Clinton raised taxes. (Not because of higher taxes, of course, but because it lowered the deficit.)

IMO, that's the best use of taxes - paying down the debt. That helps the economy more than tax breaks for the rich, and it's a long-term investment, not a sugar high that we'll pay for later (as is the case with both tax cuts and spending on social programs).

Supply-side economics never worked for Reagan. It resulted in high deficits. And it doesn't lead to more jobs. We live in a global economy now, and that money gets invested overseas, giving Chinese or Indians jobs, not Americans.

Most economists, even conservative ones, admit that the Bush tax cuts were a poor stimulus for a recession. The money would be better off going to people who would spend it. Extended unemployment benefits, say, or a cut in the payroll taxes. Perhaps even better would be the FDR solution: invest in infrastructure. Build and repair roads and bridges, and other public works. That will give people jobs now, and also help the business sector when the economy recovers, since they're the ones using roads, etc. the most.

Of course, if you think peak oil is looming, the whole equation changes. Maybe the money would be better spent on nuclear power plants than roads. Or maybe we should just pay down the debt, so our economy is better able to withstand the maelstrom ahead.

In any case, the record deficit Dubya has run up is truly alarming. Even if oil isn't a problem anytime soon, the deficit will be. Reagan ran up his record deficits in the early '80s, when there were decades before the baby boomers hit retirement age. Now, the oldest of them are almost there. We won't have much time to recover before we have to start paying back the money we stole from Al Gore's lockbox.

[pip]

I don't have the numbers on hand, but the richest 15% pay 80% of the taxes. The richest 50% pay 98% of the taxes. If you give a tax break it will go obviously benefit the rich the most on a dollar basis even if the less wealthy get a larger % tax cut. Just gives the democrats a chance to say Republicans only care about the wealthy.

[Falconoffury]

The more I learn about the national debt and where the money goes, the more I realize that it goes towards the unsustainable consumption of the US. I can imagine the US being in better economic shape if we kept the trend of a debt reduction. Bush wants to spend like there is no tomorrow, and use his currency control of oil to support the debt. This can be defined as a form of imperialism. It's like during the Revolutionary War when Britian wanted to tax the Americans to increase the riches of the homeland. Now the US is doing sort of the same thing to the rest of the world. We are taking valuable resources and leaving some of the countries in shambles. After reading about what the oil industry is doing to Nigeria, it saddens me. The gap between the rich and the poor in some oil exporting countries is staggering.

The US sure isn't the same boston tea party bunch that I have learned about in the history books. Our lifestyle has made us too complacent of our government.

[small_steps]

Bush wants to spend like there is no tomorrow

I'm thinking that either:
(a) he is totally clueless

(b) can't see past tomorrow

(c) has had an apocalyptic vision of the world (will be no tomorrow)



Would think that the founding fathers are shown to be more than they really were, but what they were was some of the bravest that humans have seen, and their vision for the future has not since been matched.

[Leanan]

The richest 50% pay 98% of the taxes.

It's more like 96%. And I suspect that applies only to federal income tax. So it doesn't count payroll taxes. (Social security and Medicare.)

And if the richest 50% own 99% of the wealth, then they are still underpaying.

If you give a tax break it will go obviously benefit the rich the most on a dollar basis even if the less wealthy get a larger % tax cut.

But if the purpose of a tax cut is to stimulate the economy, then it should go to people who will spend it. Otherwise, it's no stimulus. And the people who will spend it are the poor and middle class, not the wealthy. That's why many economists suggested that payroll taxes should be cut, not income taxes. That would help working folk, and businesses as well, since the employers and employees each pay half.

Is that fair? Maybe not. But we've always had a progressive tax system. That is, taxes are based on your ability to pay. If we're going to throw that by the wayside, fine, but then we should also get rid of deductions for dependents. Why should a single person pay more than a family? Families use government services more, they should pay more. "Fair" would be a poll tax. You pay a fixed amount for each person in the household.

And speaking of businesses...in the 1950s, corporate income taxes accounted for something like a third of all revenue. Now, corporate taxes are only 7%. I remember one year, people were outraged because General Electric's state tax bill in NY was $275. GE is a huge company, with several large plants in the state. The toxic waste they've spewed from various sites have polluted the Hudson River, where New Yorkers' drinking water comes from, and many other places. But they paid less in taxes than many individuals.

Our tax system was set up in the 1930s. It is no longer adequate for our global economy. Companies make use of the taxpayer provided amenities, like roads and bridges and water and education, but they incorporate overseas and duck U.S. taxes. The tax burden has increasingly shifted from the wealthy to the poor, and from the corporations to individuals.

If you want to know more, check out this book:

http://makeashorterlink.com/?C19321A09

It's called Perfectly Legal: The Covert Campaign to Rig Our Tax System to Benefit the Super Rich - and Cheat Everybody Else, by David Cay Johnston.

Think he's a bleeding-heart liberal? Wrong. He's a tax expert, and a registered Republican.

[Leanan]

Coincidentally, this article appeared today:

http://www.msnbc.msn.com/id/5689001/

According to the non-partisan Congressional Budget Office, the tax burden has shifted from the wealthy to the middle class under President Bush.

The CBO study, due to be released today, found that the wealthiest 20 percent, whose incomes averaged $182,700 in 2001, saw their share of federal taxes drop from 64.4 percent of total tax payments in 2001 to 63.5 percent this year. The top 1 percent, earning $1.1 million, saw their share fall to 20.1 percent of the total, from 22.2 percent.

Over that same period, taxpayers with incomes from around $51,500 to around $75,600 saw their share of federal tax payments increase. Households earning around $75,600 saw their tax burden jump the most, from 18.7 percent of all taxes to 19.5 percent.