Tax cuts for rich do not spur job growth

Slick Willy says that no taxes should be raised at a time like this.

Bill Clinton on CBS' "Late Show" with Letterman: "There's two different issues. Should you raise taxes on anybody right today -- rich or poor or middle class? No, because there's no growth in the economy.

Is Clinton right about this- or is Obama with his incessant quest to fleece the most productive earners in our society? Obama has started this class warfare- pitting the poor against the most successful- a group of people he should be thanking instead of attacking.

The top 5% pay more than 70% of all the income taxes- without them Obama and the poor would be royally screwed. No wonder rich people wont contribute to the Obama election fund this year- they are under attack.

65-year non-partisan studies found that "cutting taxes for the rich does not increase saving, investment, or productivity growth."

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I don't care what Bill Clinton says.

I don't care what Bill Clinton says.

I'm engraving that into stone.

BearMtnHIB wrote:

I don't care what Bill Clinton says.

I'm engraving that into stone.

Be my guest...Since I agree with him on 99.99999% of everything else he says, it won't mean much...

Secondly, the article(s) I quoted shows that: "cutting taxes for the rich does not increase saving, investment, or productivity growth."

Which is not the same as your constant insistence that INCREASING Taxes (i.e., letting the Bush tax-cuts EXPIRE), will hurt them... As I recall, the topic of this thread is NOT whether letting tax-cuts expire will keep job-creators from creating jobs; but about "Tax cuts for the rich do NOT spur job-growth."

You need some new material.

pineinthegrass wrote: First off, I'm not advocating reducing tax rates for the wealthy. But I do have a couple of questions about that study.

First, it looks at historic tax rates (tax brackets). Tax rates do not accurately reflect what a person actually pays in taxes for a number of reasons. First off it doesn't reflect the deductions, credits, or "loopholes" a person may get. Second, if a 90% top bracket didn't begin until say $1,000,000, it's not accurate to compare it to another year where the top bracket may of been 50% but applied to all money over $250K.

It seems to me they should of looked at effective tax rates instead. That is what a person actually pays after all the deductions and tax brackets are taken in effect. Here are historic fed income tax rates since 1979...

http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=456

While the effective rates for the top 1% (top 0.1 and .01% not listed) are down a bit, they've only varied from about 19% to 24%. This is a time period when the top bracket, which the report looks at, varied from 70% to 35%. Big difference.

Also, we often talk about the top 1% or 10%, but this report looks at the top 0.1% and 0.01%. Why so selective and why look at such a small group? The group that did the report may be nonpartisian, but we know they often just look at the parameters that the person in Congress who asked for the report requests them to use. I wonder if that's what happened here? I see no reason to use tax brackets in the report when effective tax rate is much more accurate.

I agree with most of PITG points about the study and conclusions.

First, the title of the thread "Tax cuts for rich do not spur job growth" should have read " Top Tax rate cuts do not spur GDP growth" if you read the OP link. They are talking about top marginal rate effect on GDP, not jobs, and as Pine says, they don't allow for what income bracket the rate applies to, or the effect of deductions.

Second, trying to look at GDP growth over a time period and isolating a singe variable's effect is pretty hard to do I think. There are natural business cycles, effects from Fed policy, productivity, energy costs, world wide demand for exports, inflation, etc. etc. These all affect the GDP number too.

Third, as for income and wealth distribution, that has a lot more to do with capital gains rate, not top income tax rate. IMO

But the topic of taxes is always interesting to me. I favor lower marginal rates and few or no deductions/credits. I'd like to see all rates converge toward 20-25% instead of making the system more progressive, with more favored rates and deductions that distort the economy.

I found this article which attempts to answer Dogs question. FYI

http://www.theatlantic.com/business/arc ... er/262489/

How Do Taxes Affect Growth? It's a Very, Very Hard Question to Answer
(1) It depends on why Congress is changing taxes in the first place.
(2) It depends on what the Federal Reserve does.
(3) It depends on what's going on in the rest of the world.

... and ....."The short-run macroeconomic consequences of tax changes depend on how the Federal Reserve changes monetary policy in response to the tax change," Harvard economist Martin Feldstein wrote in a 2008 review of taxes and behavior. Even if some tax changes have longer-term effects on businesses and overall industries, the short-term is awfully noisy.

Something the Dog Said wrote: Analysis by Citizens for Tax Justice claims that the Bush era tax cuts resulted in $1,918.9 billion in lower revenue from FY2001 through FY2009, and that the total cost if implementing the cuts (including interest payments on debt) was $2,141 billion.

And to arrive at that figure they have presumed that everything would have been the same as it was except for the tax structure in place. They presume that the tax rate changes didn't shorten the duration of the recession that was inherited by Bush and intensified by the events of 9/11/2001. They presume that the recovery from the recession would have been as large and as fast regardless of the tax structure and policy. That is a presumption that is impossible to sustain. One must take a leap of faith that the presumption is accurate, there is no means available to prove that it is an accurate presumption. It also presumes that the recession would not have been any deeper with the Clinton tax structure than it was with the Bush tax structure, another impossible presumption to sustain.

The original premise must be a valid one for any conclusions reached under that premise to have any validity Dog. But you already know that. Given that there is no ability to sustain the original premise, there is no ability to validate the conclusions reached resulting from it either. It doesn't stop you or the Citizens for Tax Justice from trying to convince others that the results are valid, it simply removes any possibility that they have any chance of being valid.

PrintSmith wrote:

Something the Dog Said wrote: Analysis by Citizens for Tax Justice claims that the Bush era tax cuts resulted in $1,918.9 billion in lower revenue from FY2001 through FY2009, and that the total cost if implementing the cuts (including interest payments on debt) was $2,141 billion.

And to arrive at that figure they have presumed that everything would have been the same as it was except for the tax structure in place. They presume that the tax rate changes didn't shorten the duration of the recession that was inherited by Bush and intensified by the events of 9/11/2001. They presume that the recovery from the recession would have been as large and as fast regardless of the tax structure and policy. That is a presumption that is impossible to sustain. One must take a leap of faith that the presumption is accurate, there is no means available to prove that it is an accurate presumption. It also presumes that the recession would not have been any deeper with the Clinton tax structure than it was with the Bush tax structure, another impossible presumption to sustain.

The original premise must be a valid one for any conclusions reached under that premise to have any validity Dog. But you already know that. Given that there is no ability to sustain the original premise, there is no ability to validate the conclusions reached resulting from it either. It doesn't stop you or the Citizens for Tax Justice from trying to convince others that the results are valid, it simply removes any possibility that they have any chance of being valid.

Revisionist history yet again. Bush did not inherit a recession, he created one. Remember that sizeable surplus that Bush inherited and promptly blew through. And the wisdom of those unfunded tax cuts at the same time as entering into wars. The facts are true and valid. Merely because they contradict your revisionist dreams does not render them moot. Most if not all economists agree that the unfunded tax cuts were a major factor in the record Bush deficits.