The Dirty Little Truth About the Minimum Wage

[healthmyths]

No they didn't increase revenues by 40%. That is straight up nonsense and blatant counter factual not a single economist would ever argue, no matter how crazy of a rightwing nutter you'll manage to find.

When you tax at lower rate the general rule is that you collect less, especially around current low rates. It's really not that complicated...unless you are a rightwinger politico of course and have desperate need to reconcile claims to fiscal concern and your unyielding tax-cut religion.

Let me put it another way to you:

If what you say were true, nobody would ever object to tax-cutting - I pay less tax and government collects MORE? Yes please, I'll take two! But the reason why it sounds too good to be true is because IT IS.

View attachment 101132

Is there an argument against mine somewhere in there?

There isn't. Correlation is not proof of causation.

Reagan II, Bush and Clinton all raised income taxes at the end of 80s and into 90's from there until tax cuts in 2001 we broke all records on revenues with respect to GDP.

This is a chart of percentage of GDP, not actual dollars.

But using your chart, look what happened when GW cut taxes. It began to increase right up to the beginning of the housing problems.

?? No.

After Bush tax cuts revenues dropped like a brick (from peak 10% to 7%). Then there was of course some buoyancy from the real estate bubble (7%-8%) followed by recession and a record low of 6%. Revenues since the passage of tax-cuts in 2000s are a disaster compared to the 90s.

It is OF COURSE tied to state of economy, but that's the point, there is no proof in this correlation and it's not directly possible to see impact of relatively small tax-cut volume on entirety of revenues.

Economists Left, Right and Center agree that tax cuts are not self financing. The only disagreement is on the extent of revenue loss.

Belief in downside free tax-cutting is reserved solely for rightwingers, that is what it takes to believe these magical stories.

Then why does my chart tell a different story? We were experiencing a recession when 911 hit, and of course, revenues went down. After GW's cut, look at the chart. Revenues increased once again. And before you criticize my chart, look at your GDP chart as well.

To support your point!

In spite of these gigantic cataclysmic events Bush had:
a) 400,000 jobs lost due to Hurricanes Katrina/Rita ,
b) 2,800,000 jobs lost in alone due to 9/11,
c) 300,000 jobs lost due to dot.com busts... In spite of nearly $8 trillion in lost businesses, market values, destroyed property..
IN SPITE of that:
2002 $157.8 billion deficit.. also 9/11 occurred and tax revenues lowered for years later due to dot.com/9-11 losses against revenue.
2003 $377.6 billion deficit.. BRAND new cabinet Homeland Security, plus loans made to businesses.. again tax revenues down..affect of 9/11
2004 $412.7 billion deficit.. Revenues up by 5.5% spending increased and economy getting back.
2005 $318.3 billion deficit.. revenues up by 14.5% deficit decreasing at rate of 22%
2006 $248.2 billion deficit.. revenues up by 11.7% deficit decrease 22%
2007 $160.7 billion deficit.. revenues up by 6.7% deficit decrease 35%
2008 $458.6 billion deficit.. revenues down and deficit INCREASED TARP loan mostly...
http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=20

AFTER the tax cuts Federal Tax REVENUES Increased an average of 9.78% per year!!!
http://www.whitehouse.gov/omb/budget/Historical

Also O'Bumbler... he profited from TARP with this $693 billion PAID back including a profit of $70 billion...
GWB paid it out... Obama profited with the TARP payback and WE STILL had deficits at a larger rate then any Bush had save 2008!

US Federal Deficit by Year - plus charts and analysis

 

[hadit]

No they didn't increase revenues by 40%. That is straight up nonsense and blatant counter factual not a single economist would ever argue, no matter how crazy of a rightwing nutter you'll manage to find.

It's not an argument. It's a documented public record of fact. You can look it up at the Treasury Dept. website. In 1980, total tax revenue was $517.1 bil. In 1988, when Reagan left office, total revenue was $909.2 bil... that's 75.8% more. The "nonsense" is trying to argue that was the result of population growth and technology. Regardless of that argument and how utterly ridiculous it is, the CBO prediction was still very wrong. Whether they didn't factor in the results of lowering taxes or they didn't factor in population growth and technology... their predictions were totally wrong.

When you tax at lower rate the general rule is that you collect less, especially around current low rates. It's really not that complicated...

Problem is, that's just not so. When you lower top marginal tax rates it generates more investment capital which creates many jobs for people who pay taxes and revenues increase. It happened when Reagan lowered taxes, it happened when Clinton lowered taxes and it happened when Bush lowered taxes. It also happened back in 1960 when Kennedy lowered taxes.

If what you say were true, nobody would ever object to tax-cutting - I pay less tax and government collects MORE? Yes please, I'll take two!

Well, what I am saying IS true, you can go to the Treasury Dept. website and confirm it. Now, there is the Laffer Curve... you CAN cut taxes so much that it does result in less revenue. And, as Bush proved, you can cut tax rates across the board and it doesn't produce as good of results as Reagan's and Kennedy's cutting the top marginal rates and expanding the base. This is because the middle class don't generally create many jobs with their tax cuts.

Likewise, whenever Trump decreases the corporate tax rates, we will see a tremendous increase in expansion and growth which will generate more tax revenue. People object to tax cuts because they are simple minded and don't understand the dynamics... they live in a vacuum like the CBO and don't factor in the results of cutting taxes.

Let me try and explain this with an analogy that even a dummy like you can follow... Imagine you have a lemonade stand. You charge $1 a cup for lemonade. Today you sold 20 cups and your revenue was $20. Someone comes along and suggests you sell lemonade for 50 cents a cup. Now, in YOUR way of looking at it... you believe that is ridiculous because you'd only make $10 tomorrow. But in reality, the lower price generates many more customers and you sell 50 cups instead. Your revenue is now $25.

IOW, there really is a sweet spot where the tax rate maximizes revenue to the Treasury while minimizes the negative impact to business. Our problem is that sweet spot does not match what the politics of envy demand.

 

[AntonToo]

It's not an argument. It's a documented public record of fact. You can look it up at the Treasury Dept. website. In 1980, total tax revenue was $517.1 bil. In 1988, when Reagan left office, total revenue was $909.2 bil... that's 75.8% more.

CORRELATION YOU CLAIM IS FACT. CAUSATION YOU CLAIM IS BULLSHIT.

Can you understand that?

If I say less cake eating causes more revenues and point to the FACT of increasing revenues at the time of less cake eating, I still have made a completely bullshit claim.

Conservative economists, who love their tax cuts, tell you straight up that only cranks and charlatans actually believe that tax-cutting at current rates causes revenue growth, and yet you still think your crackpot nonsense to be real.

AMAZING.

You are smart people. You know that the tax cuts have not fueled record revenues. You know that the first order effect of cutting taxes is to lower tax revenues. We all agree that the ultimate reduction in tax revenues can be less than this first order effect, because lower tax rates encourage greater economic activity and thus expand the tax base. No thoughtful person believes that this possible offset more than compensated for the first effect for these tax cuts. Not a single one.

- Andrew Samwick, Chair of Economic Advisors to President Bush.


The second unhappy change in the American economy has been the extraordinary growth of our public debt. In 1970 it was just 40 percent of gross domestic product, or about $425 billion. When it reaches $18 trillion, it will be 40 times greater than in 1970. This debt explosion has resulted not from big spending by the Democrats, but instead the Republican Party’s embrace, about three decades ago, of the insidious doctrine that deficits don’t matter if they result from tax cuts.

-David Stockman, Reagan's Director of Management and Budget Office.

 

[AntonToo]

Now, there is the Laffer Curve... you CAN cut taxes so much that it does result in less revenue. And, as Bush proved, you can cut tax rates across the board and it doesn't produce as good of results as Reagan's and Kennedy's cutting the top marginal rates and expanding the base. This is because the middle class don't generally create many jobs with their tax cuts.

Kennedy has cut top marginal tax rate from 91% to 65%, OBVIOUSLY 91% is excessive. OBVIOUSLY very few would actually pay it. It is a REASONABLE assumption that at those rates people will indeed pay more taxes after tax-cut. Not because they are more productive with their tax-cut than middle class, but because THEY HARDLY EVER PAID IT ANYWAY.

What we are talking about now is 39% top braket rate, which is 26% tax-cut FROM Kennedy's tax-cut, and what economists agree on is at this point we are well on the left side of the Laffer Curve and cutting tax rates from here will substantially decrease revenues.

 

[Boss]

IOW, there really is a sweet spot where the tax rate maximizes revenue to the Treasury while minimizes the negative impact to business. Our problem is that sweet spot does not match what the politics of envy demand.

That's not how I would put it. The Laffer Curve demonstrates there is a point at which tax cuts will not produce more tax revenues. Obviously, if you were to cut the tax rate to 0% there is no tax revenue. But historically, every time we have reduced the top marginal tax rates in modern history, it has resulted in greater tax revenue.

I personally think that somewhere around 15-20% on top marginal incomes is about the lowest you can go and still see an increase in revenue. Below that rate, I don't think it would make much difference in stimulating investment and that is what generates increased revenue.

Now, you may wonder how I came up with 15-20%... it's because an investor, if they are smart, can usually find a way to get 10-15% return on investments without risks. They need an incentive to make investments with risks and a lower tax rate serves as that incentive.

Also... cutting middle income tax rates doesn't generate much revenue, it actually decreases it. Middle income persons aren't expanding businesses and hiring people. They have a little more money in their pockets to spend and that does help stimulate the economy in the short term but it doesn't work to produce more tax revenues. It's cutting the top marginal rates that generates the revenue.

You see this with the results of the Bush tax cuts in particular as opposed to Reagan's cuts. Bush cut taxes across the board for all taxpayers, and that was fine but it didn't serve to increase revenues like the Reagan tax cuts because what Reagan did was to cut the top marginal rates while expanding the base. In other words, more people became taxpayers instantly at the same time, investors were given an incentive to invest. This resulted in huge revenue gains.... 78.5% over 8 years, as a matter of fact.

 

[AntonToo]

I personally think that somewhere around 15-20% on top marginal incomes is about the lowest you can go and still see an increase in revenue.

Is your personal opinion supported by any economist? ONE. just one.

This is what economists, surveyed by IMG Chicago think about tax-cut effect on GDP and revenues:

Laffer Curve | IGM Forum

There is NOT A SINGLE ONE, that thinks that tax-cuts at current rates will raise revenues. NOT ONE. You should read their comments on that question and ask yourself - what do I know that they don't?

 

[Boss]

Kennedy has cut top marginal tax rate from 91% to 65%, OBVIOUSLY 91% is excessive. OBVIOUSLY very few would actually pay it. It is a REASONABLE assumption that at those rates people will indeed pay more taxes after tax-cut. Not because they are less productive with their tax-cut than middle class, but because THEY HARDLY EVER PAID IT ANYWAY.

EXACTLY! They didn't pay it! That's the part Liberals don't understand when they start yammering about the old tax rates on the so-called "wealthy." Those rates were seldom ever paid because of all the deductions and credits. You can tax someone 100%... doesn't matter if they're not going to pay it.

What we want is a tax rate so low they don't mind paying it. If they can invest and make a profit without having it all confiscated in taxes, they will do that. If not, they will find ways to invest in securities and tax-free municipals... or offshore investment where they aren't subject to US taxes.

What we are talking about now is 39% top braket rate, which is 26% tax-cut FROM Kennedy's tax-cut, and what economists agree on is at this point we are well on the left side of the Laffer Curve and cutting tax rates from here will substantially decrease revenues.

Economists DO NOT agree on this... that's bullshit. 39% is better than 91% for sure... but again, NO ONE was paying the 91% tax rate. Why would I want to risk my money making 10-15% profit only to pay 39% tax on it? That's stupid... I can invest in securities and tax-free municipals and have no risk and no taxes. I may not gain as much profit but ANY profit is better than losing money while risking my capital.

I challenge you again to go look at the Treasury Dept. website and find ANY year where we lowered the top marginal tax rates... see for yourself, it ALWAYS resulted in an increase in tax revenue. It may not happen the first year as investment takes time to happen, but always within a couple of years, we are gaining more revenue at the lower rates. Reagan increased the revenues by 78% over 8 years while the CBO predicted an average of $100 billion loss over 10 years.

This whole argument originated as you crowing about CBO estimates which I maintained are meaningless because they are almost never accurate. The CBO simply cannot calculate the results of the policy itself. They can only tabulate based on the static information at hand.

 

[AntonToo]

Economists DO NOT agree on this... that's bullshit. 39% is better than 91% for sure... but again, NO ONE was paying the 91% tax rate. Why would I want to risk my money making 10-15% profit only to pay 39% tax on it? That's stupid... I can invest in securities and tax-free municipals and have no risk and no taxes. I may not gain as much profit but ANY profit is better than losing money while risking my capital.

What the fuck?

Taxes are on PROFIT. Never on loss. And long term capital gains taxes top out at 20%.

You seriously need to stop, you are obviously too clueless to hold a respectable opinion on any of this.

 

[Boss]

I personally think that somewhere around 15-20% on top marginal incomes is about the lowest you can go and still see an increase in revenue.

Is your personal opinion supported by any economist? ONE. just one.

This is what economists, surveyed by IMG Chicago think about tax-cut effect on GDP and revenues:

Laffer Curve | IGM Forum

There is NOT A SINGLE ONE, that thinks that tax-cuts at current rates will raise revenues. NOT ONE. You should read their comments on that question and ask yourself - what do I know that they don't?

Look... goofy... if ALL you are going to do is drink from the Liberal koolaid fountain, there isn't much I can do to help you. The IGM is a group of 51 partisan democrat-leaning economists gathered together by the very liberal University of Chicago and they promote almost exclusive Democrat policy like increasing the minimum wage. They are not some objective bipartisan source.

Now... it doesn't really matter what they THINK... the actual numbers are available at the Treasury Dept. website for anyone to look up! Every time, in modern history, where we lowered the top marginal income tax rates, we experienced an INCREASE in tax revenues. That's a fact... it's not a matter of what people think.

 

[AntonToo]

I personally think that somewhere around 15-20% on top marginal incomes is about the lowest you can go and still see an increase in revenue.

Is your personal opinion supported by any economist? ONE. just one.

This is what economists, surveyed by IMG Chicago think about tax-cut effect on GDP and revenues:

Laffer Curve | IGM Forum

There is NOT A SINGLE ONE, that thinks that tax-cuts at current rates will raise revenues. NOT ONE. You should read their comments on that question and ask yourself - what do I know that they don't?

Look... goofy... if ALL you are going to do is drink from the Liberal koolaid fountain, there isn't much I can do to help you. The IGM is a group of 51 partisan democrat-leaning economists gathered together by the very liberal University of Chicago and they promote almost exclusive Democrat policy like increasing the minimum wage. They are not some objective bipartisan source.

Now... it doesn't really matter what they THINK... the actual numbers are available at the Treasury Dept. website for anyone to look up! Every time, in modern history, where we lowered the top marginal income tax rates, we experienced an INCREASE in tax revenues. That's a fact... it's not a matter of what people think.

New definition of liberal cool-aid: Citing opinions of conservative economists.

How fucking hopped up on rightwing bullshit can you get?

I asked you for one economist that agrees with you, JUST ONE. You think there is perhaps a simple reason why you can't produce?

 

[Boss]

What the fuck?

Taxes are on PROFIT. Never on loss. And long term capital gains taxes top out at 20%.

You seriously need to stop, you are obviously too clueless to hold a respectable opinion on any of this.

Right... so if I am going to gain 20% profit but pay 39% tax, why would I do that?

We're not talking about long-term capital gains. Like I said... if risk capital investments are going to be taxed at 39% then I am going to keep my money in long-term instruments and avoid risks. It's just smarter.

 

[Boss]

Chicago is liberal? HAHAHAHA

It's probably one of the most liberal cities in America... it's the birthplace of Hillary and home state of Obama! It's deep dark blue and has been for years.

 

[AntonToo]

What the fuck?

Taxes are on PROFIT. Never on loss. And long term capital gains taxes top out at 20%.

You seriously need to stop, you are obviously too clueless to hold a respectable opinion on any of this.

Right... so if I am going to gain 20% profit but pay 39% tax, why would I do that?

We're not talking about long-term capital gains. Like I said... if risk capital investments are going to be taxed at 39% then I am going to keep my money in long-term instruments and avoid risks. It's just smarter.

Dumbass if you make 100 dollar profit and pay under 100% tax you still have made a profit. If there is at any point in your life some profit that you do not want, please let me help you alleviate you of it.

Long term is simply more than 1 year, surely there some way that can be found to deffer it.

Can you say something that doesn't offend the intellect?

 

[AntonToo]

Chicago is liberal? HAHAHAHA

It's probably one of the most liberal cities in America... it's the birthplace of Hillary and home state of Obama! It's deep dark blue and has been for years.

You fucking ignoramus, read up:

Chicago school of economics - Wikipedia

Milton Friedman is from that economic school.

Chicago macroeconomic theory rejected Keynesianism in favor of monetarism until the mid-1970s, when it turned to new classical macroeconomics heavily based on the concept of rational expectations.

 

[Boss]

I asked you for one economist that agrees with you, JUST ONE.

Milton Friedman.

 

[AntonToo]

I asked you for one economist that agrees with you, JUST ONE.

Milton Friedman.

You mean Milton Friedman from CHICAGO ECONOMIC SCHOOL? THAT Friedman?

 

[Boss]

What the fuck?

Taxes are on PROFIT. Never on loss. And long term capital gains taxes top out at 20%.

You seriously need to stop, you are obviously too clueless to hold a respectable opinion on any of this.

Right... so if I am going to gain 20% profit but pay 39% tax, why would I do that?

We're not talking about long-term capital gains. Like I said... if risk capital investments are going to be taxed at 39% then I am going to keep my money in long-term instruments and avoid risks. It's just smarter.

Dumbass if you make 100 dollar profit and pay under 100% tax you still have made a profit. If there is at any point in your life some profit that you do not want, please let me help you alleviate you of it.

Long term is simply more than 1 year, surely there some way that can be found to deffer it.

Can you say something that doesn't offend the intellect?

No... If I take my money out of a tax-free security to use it as an investment, it is taxed as a capital gain. Any profit I make with the remaining money is taxed as income. Now... if you want to completely eliminate capital gains taxes and only tax income (profit) at 39%... I'll go for that.

 

[AntonToo]

Milton Friedman on the Bush tax cuts: "I am in favor of cutting taxes under any circumstances and for any excuse, for any reason, whenever it's possible. The reason I am is because I believe the big problem is not taxes, the big problem is spending. The question is, "How do you hold down government spending?" Government spending now amounts to close to 40% of national income not counting indirect spending through regulation and the like. If you include that, you get up to roughly half. The real danger we face is that number will creep up and up and up. The only effective way I think to hold it down, is to hold down the amount of income the government has. The way to do that is to cut taxes. "

Remembering Milton Friedman


He just told you that tax-cuts reduce revenues.

 

[Boss]

Milton Friedman on the Bush tax cuts: "I am in favor of cutting taxes under any circumstances and for any excuse, for any reason, whenever it's possible. The reason I am is because I believe the big problem is not taxes, the big problem is spending. The question is, "How do you hold down government spending?" Government spending now amounts to close to 40% of national income not counting indirect spending through regulation and the like. If you include that, you get up to roughly half. The real danger we face is that number will creep up and up and up. The only effective way I think to hold it down, is to hold down the amount of income the government has. The way to do that is to cut taxes. "

Remembering Milton Friedman


He just told you that tax-cuts reduce revenues.

Yep, and I already said you CAN cut taxes enough to reduce revenues. Specifically, if those tax cuts target middle incomes. That doesn't negate the proven fact that whenever we have lowered the top marginal tax rates it increases revenues.

 

[AntonToo]

Milton Friedman on the Bush tax cuts: "I am in favor of cutting taxes under any circumstances and for any excuse, for any reason, whenever it's possible. The reason I am is because I believe the big problem is not taxes, the big problem is spending. The question is, "How do you hold down government spending?" Government spending now amounts to close to 40% of national income not counting indirect spending through regulation and the like. If you include that, you get up to roughly half. The real danger we face is that number will creep up and up and up. The only effective way I think to hold it down, is to hold down the amount of income the government has. The way to do that is to cut taxes. "

Remembering Milton Friedman


He just told you that tax-cuts reduce revenues.

Yep, and I already said you CAN cut taxes enough to reduce revenues. Specifically, if those tax cuts target middle incomes. That doesn't negate the proven fact that whenever we have lowered the top marginal tax rates it increases revenues.

You are stating falsehoods stemming from ignorance of what drives revenues and how they are comparatively measured (standard measure is %GDP, which adjusts for inflation and economy size). Revenues dropped after Bush's tax cuts and when Obama let top bracket tax-cut expire in 2012 revenues have gone up.

Correlation on it's own is not proof of anything as I time and time explain, but there is not even consistent correlation to point to except that revenues in nominal dollars always grow through the business cycles along with economy expansion - cut or raise.

This is why you can't find a single economist to support your view that we are on right side of Laffer curve. Facts do not support your free lunch theory.