Bush / McCain Tax fallacy

Uh oh, there you go, getting all "nuanced" on us.

Sorry I was all hopped up on O'Dells 90 Shilling last night.

Here is a paragraph from the article Dirt Diablo linked to:
"Had the dollars required to finance the president's tax cuts been used in other ways, they would have made a real difference. Larger tax cuts for middle- and low-income families, for example, would have stimulated immediate new spending because the savings rates for most of these families are low. And their additional spending would have been largely for products made by domestic businesses - which would have led, in turn, to increased employment."

What is interesting to note is, during the 2001 debate of the Bush tax cuts, McCain said, "I cannot in good conscience support a tax cut in which so many of the benefits go to the most fortunate among us, at the expense of middle class Americans who most need tax relief." McCain reiterated this position in an April 11, 2004, interview on NBC's Meet the Press, saying: "I would have -- I voted against the tax cuts because of the disproportionate amount that went to the wealthy Americans."

Mitt Romney slammed McCain for voting against the Bush tax cuts during the Republican debates. Now, of course, McCain has seemingly lost his "good conscience" and has expressed his support for the Bush tax cuts.

His good conscience has changed because the state of the economy has changed since 2001. You don't raise taxes in the middle of an economic downturn, unless you're criminally insane.

Hey Julius! Guess what? The US was experiencing a recession in 2001-2002, at the same time McCain opposed the Bush tax cuts( based on the quotes from McCain I provided earlier). In fact, McCain was still defending his vote against the Bush tax cuts as late as 2004, if not later. Please, provide some evidence (i.e. quotes) where McCain has stated the reason he has reversed his stance on the Bush tax cuts is due to the 2008 economic downturn.

Is this a flip-flop. If you look at unemployment rates since 2000 several trends emerge.

a) The Bush admin inherited an economy with low un employment
b) By 2002 the UE rate jumped and continued to increase
c) Small correction 2005-06 by slight decrease in UE rate
d) UE rates have risen consistently ever since

Only insane people keep doing the same and expect different outcomes. Tax cuts for the wealthy do not create jobs or improve the economy. The employment and UE rates are the facts I base this on coupled with trade deficits, the weak dollar, bailing out of financial institutions.

What tax cuts for the wealthy do is make them wealthier.

Please show me facts otherwise to this claim.

If I may try my turn at nuance - he opposed the depth of the cut as being too generous to the wealthy. In principle, he believed then, and does not, that it's ludicrous to raise taxes in the middle of a down turn. He did not propose raising them in 2001-02; rather was against the cut. He is a fiscal conservative (McCain), and knew that the war was going to cost a helluva lot, and he felt the cut went too deep. Eventually, you can cut taxes too deeply. There is a negative return, eventually. Today, eliminating the Bush cuts, plus increasing the cap on FICA, would amount to the greatest single heist by a government on its people in the history of government. He is opposed to such thievery.

You are completely ignoring the spending that has taken place since 2001. JFK and RWR both knew, as does GWB etc...that higher taxes (at some point) reduce government receipts. It's a fact. There are literally a million resources on the net to show this. Look it up. The issue that caused the problems you mention was spending. Friggin outta control spending. The war cost a helluva lot, and in order to pay for it, Bush gave in to every spending bill he saw. McCain will veto every earmark. Will Obama?

I have no idea where Obama thinks he's going to get $$ to pay for his spending proposals. He certainly isn't going to get it by increasing our taxes.

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There is a distinct pattern throughout American history: When tax rates are reduced, the economy?s growth rate improves and living standards increase. Good tax policy has a number of interesting side effects. For instance, history tells us that tax revenues grow and ?rich? taxpayers pay more tax when marginal tax rates are slashed. This means lower income citizens bear a lower share of the tax burden ? a consequence that should lead class-warfare politicians to support lower tax rates.

Conversely, periods of higher tax rates are associated with sub par economic performance and stagnant tax revenues. In other words, when politicians attempt to ?soak the rich,? the rest of us take a bath. Examining the three major United States episodes of tax rate reductions can prove useful lessons.

1) Lower tax rates do not mean less tax revenue.

The tax cuts of the 1920s
Tax rates were slashed dramatically during the 1920s, dropping from over 70 percent to less than 25 percent. What happened? Personal income tax revenues increased substantially during the 1920s, despite the reduction in rates. Revenues rose from $719 million in 1921 to $1164 million in 1928, an increase of more than 61 percent.

According to then-Treasury Secretary Andrew Mellon:

The history of taxation shows that taxes which are inherently excessive are not paid. The high rates inevitably put pressure upon the taxpayer to withdraw his capital from productive business and invest it in tax-exempt securities or to find other lawful methods of avoiding the realization of taxable income. The result is that the sources of taxation are drying up; wealth is failing to carry its share of the tax burden; and capital is being diverted into channels which yield neither revenue to the Government nor profit to the people.

The Kennedy tax cuts
President Hoover dramatically increased tax rates in the 1930s and President Roosevelt compounded the damage by pushing marginal tax rates to more than 90 percent. Recognizing that high tax rates were hindering the economy, President Kennedy proposed across-the-board tax rate reductions that reduced the top tax rate from more than 90 percent down to 70 percent. What happened? Tax revenues climbed from $94 billion in 1961 to $153 billion in 1968, an increase of 62 percent (33 percent after adjusting for inflation).

According to President John F. Kennedy:

Our true choice is not between tax reduction, on the one hand, and the avoidance of large Federal deficits on the other. It is increasingly clear that no matter what party is in power, so long as our national security needs keep rising, an economy hampered by restrictive tax rates will never produce enough revenues to balance our budget just as it will never produce enough jobs or enough profits? In short, it is a paradoxical truth that tax rates are too high today and tax revenues are too low and the soundest way to raise the revenues in the long run is to cut the rates now.

The Reagan tax cuts
Thanks to ?bracket creep,? the inflation of the 1970s pushed millions of taxpayers into higher tax brackets even though their inflation-adjusted incomes were not rising. To help offset this tax increase and also to improve incentives to work, save, and invest, President Reagan proposed sweeping tax rate reductions during the 1980s. What happened? Total tax revenues climbed by 99.4 percent during the 1980s, and the results are even more impressive when looking at what happened to personal income tax revenues. Once the economy received an unambiguous tax cut in January 1983, income tax revenues climbed dramatically, increasing by more than 54 percent by 1989 (28 percent after adjusting for inflation).

According to then-U.S. Representative Jack Kemp (R-NY), one of the chief architects of the Reagan tax cuts:

At some point, additional taxes so discourage the activity being taxed, such as working or investing, that they yield less revenue rather than more. There are, after all, two rates that yield the same amount of revenue: high tax rates on low production, or low rates on high production.

2) The rich pay more when incentives to hide income are reduced.

The tax cuts of the 1920s
The share of the tax burden paid by the rich rose dramatically as tax rates were reduced. The share of the tax burden borne by the rich (those making $50,000 and up in those days) climbed from 44.2 percent in 1921 to 78.4 percent in 1928.

The Kennedy tax cuts
Just as happened in the 1920s, the share of the income tax burden borne by the rich increased following the tax cuts. Tax collections from those making over $50,000 per year climbed by 57 percent between 1963 and 1966, while tax collections from those earning below $50,000 rose 11 percent. As a result, the rich saw their portion of the income tax burden climb from 11.6 percent to 15.1 percent.

The Reagan tax cuts
The share of income taxes paid by the top 10 percent of earners jumped significantly, climbing from 48.0 percent in 1981 to 57.2 percent in 1988. The top 1 percent saw their share of the income tax bill climb even more dramatically, from 17.6 percent in 1981 to 27.5 percent in 1988.

Harmful Spending & Complexity
Lower tax rates are important, but they are not the only critical issue. Both the level of government spending and where that money goes are very important. And even when looking only at tax policy, tax rates are just one piece of the puzzle. If certain types of income are subject to multiple layers of tax, as occurs in the current system, that problem cannot be solved by low rates. Similarly, a tax system with needless levels of complexity will impose heavy costs on the productive sector of the economy.

So why have you not taken your boy to task for spending us into a mess?

Tax cuts have not done what you claim they do which is create economic growth. So it is good to see you get off that train.

Agreed that uncontrolled spending is a culprit but that is a result of weak leadership. This is also contradicts your assertion that GWB is a strong leader.

Earmark elimination will not get us to pay down the deficiet spending on the war. Remember your hero said that the war would pay for itself with the oil from Iraq.

McCain central plank (nat'l security = war = many fronts = many years)contradicts with his fiscal conservative plank. Seems any presence is going to cost more than he can cut elsewhere. Our quality of life will suffer to pay for the war on terrorism.

Let's face it someone with balls will need to raise taxes and it probably will begin at the state level because all our Nat'l leaders are too worried about their bank accounts and holding onto power than making the true hard choices.

I am not convinced that McBush or Obama have the balls.

McCain never said the Bush tax cut package was too "deep." Never. If he has, surely the proof exists. Provide the proof. When asked at that time, McCain clearly stated he could not in "good conscience" support the Bush tax cuts because the tax cuts were "disproportionate" and would come at the "expense of the middle class." Those are HIS words, not mine. This is fact. He has never made any such comments about the Bush tax cuts being too deep under the economic circumstances of that time.

Using a simple analogy, I think most objective observers would agree that saying the tax cuts are "disproportionate" is like saying someone (the wealthy) is getting too big a "piece" of the tax cut pie, while someone else (the middle class) is getting too small a piece. That is not the same as saying the pie itself is too big.

Oh I have. You guys think that I love "my boy" and all that he does? You're higher than Marion Barry in a Motel 6.

Unfortunately, your argument doesn't hold water. If you knew anything about our budget, you'd see that it's entitlements that are taking up a greater portion of the budget every year. We are no longer able to afford ourselves. There's a reason they'll only be 78 cents for every dollar promised in social security by 2041. We pay out the ass for everyone. The Great Society, long before GWB was doing lines at Yale, created a slice of America that is completely, wholly, and entirely attached to the government tit. And the President, no matter who he is, is powerless to change that fact. Hell, when Newt tried to reduce the size of medicare's growth, he was lambasted as being an evil guy who wants to cut your granny's checks. Until you start taking care of your own granny ("you" is figurative) and stop relying on the tit to feed her, we're fucked.

McCain never said the Bush tax cut package was too "deep." Never. If he has, surely the proof exists. Provide the proof. When asked at that time, McCain clearly stated he could not in "good conscience" support the Bush tax cuts because the tax cuts were "disproportionate" and would come at the "expense of the middle class." Those are HIS words, not mine. This is fact. He has never made any such comments about the Bush tax cuts being too deep under the economic circumstances of that time.

Using a simple analogy, I think most objective observers would agree that saying the tax cuts are "disproportionate" is like saying someone (the wealthy) is getting too big a "piece" of the tax cut pie, while someone else (the middle class) is getting too small a piece. That is not the same as saying the pie itself is too big.
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Well then he's an idiot. Because the tax cuts turned our economy around in '02 after 9/11. The spending since have done it no good - added to the fact that lenders were giving houses to anyone with a credit score about 62.

Earmark elimination will not get us to pay down the deficiet spending on the war. Remember your hero said that the war would pay for itself with the oil from Iraq.

McCain central plank (nat'l security = war = many fronts = many years)contradicts with his fiscal conservative plank. Seems any presence is going to cost more than he can cut elsewhere. Our quality of life will suffer to pay for the war on terrorism.

Let's face it someone with balls will need to raise taxes and it probably will begin at the state level because all our Nat'l leaders are too worried about their bank accounts and holding onto power than making the true hard choices.

I am not convinced that McBush or Obama have the balls. [/quote]

States are poor. So goes the fed budget, so go the states'. Obama will gladly raise your taxes. You might as well flush it down the toilet tonight. It's going to do you, and the economy, about the same. It doesn't take balls to raise taxes. It takes balls to cut spending.

I can't believe we're having this conversation actually - about a guy who has a history, a history, of standing up against special interests and earmarks, and a guy who has no history, no history at all, other than "community organizing". I really can't believe how easily you guys are willing to hand the reins of this country to someone who has the experience of a middle manager at Rite Aid.

Don't forget he's about CHANGE

Apparently GWB came in with sooooo much experience that all he has touched turned to gold.

What we are willing to do is take the reins into our collective hands and out of people who have no interest in this country other than pilfer it for their and their cronies gain.

Marion could afford a Motel 6 during those years?

I wholly agree entitlements are out of control.

So farm subsidies should go, any bail out of any industry should go (serves them right for offering a mortgage to a low income person), Medicare (because we have a poor HC system stop prolonging life via new technology and pharms), unemployment, welfare, tax cuts for any industry (oil companies included), GI bill benefits, kill everyone on death row (or repeal the death penalty). I probably missed a few so please feel free to add to the list.

Any politician who says he is going to cut taxes or give a tax refund is trying to buy votes. Especially in an election year.

We need a better way to talk about this.

Rather than say we will give tax break to business hoping they will empoyee more people, can we say AFTER you have employeed more people for a year we will give you a tax break.

I don't know, stiull needs work.
Guess I can't run this year.

BHO has 300 foreign policy advisors. Every one a crony.

Nancy dearly wanted BHO over HRC. Why? He'd be easy to push around. No experience in Washington - he'd be a slam dunk. She'd run the country. The way the Super Dupers went for him, even when the polls were showing how much more electable HRC would be against McCAin, was for the same reason.

Cronyism is going nowhere.

GI Bill benefits should not be on your list. Among everything you listed, the GIs are the only one doing anything to earn their keep. That is, doing a public service, for spare change.

And obvioulsy, I forgot, repeal the death penalty.