Are we headed for a double dip recession?

AspenValley wrote:

The Viking wrote: The top 3% employ 70% of the country. So if you raise their taxes they can't hire and will have to lay off. I don't see the logic in that.

Once more, reallllllllll slow.

How is continuing the tax cuts (that have been in effect now for almost ten years and didn't do squat to prevent economic collapse nor rebound us out of it) supposed to do what it has so far failed to do?

(I am not even going to bother going into a long explanation of why raising PERSONAL income tax rates has almost no effect on employment since most employees are employed by CORPORATIONS not INDIVIDUALS, because it is plain that that the "Lower taxes on rich people means the working class will benefit" meme is obviously surgically embedded in your head.)

Once more realllllllll slow to you......

They did work and still are!!!!. If we had not had those tax cuts in place now and this deregulation housing recession hit, we would be in a full blown depression with absolutely no one having any money or spending it right now. Much much worse than we are right now. So you want to take money out of the emlpoyers (the only people hiring) pockets to hope that they will spend more and hire more? The only reason they are hiring at all and spending and keeping this economy from a full blown depression is because fo the Bush Tax cuts. What the hell kind of economics class did you take? Obamanomics? (or whatever the word is that they use)

Nothing was going to stop this recession from hitting us. The day Clinton signed that deregulation, he started the ball rolling for the inevitable. The only thing that could have stopped it is if Bush would have reversed it and I wish he would have but if he would have tried to take away the right for people with practically no job or income to buy a house for 0% down by just 'stating' that you made enough, after Clinton gave them that right, there would have been mutiny!

The Bush Tax cuts are all that kept this from being a total disator and a depression for many many years to come. Like I said, Bush's tax cuts helped 'save or create' millions of jobs. We just didn't use that term back then. Now obama is thinking of reversing the only thing that is helping? He is a total moron!!

Viking, you are either not listening or you don't understand what I am asking you. I am asking you how you think just keeping taxes low on personal incomes over $250,000 is going to reverse an economic collapse of a magnitude not seen (at least) since the Great Depression. You have not responded to that question and you have not offered any other solutions. I have been listening with disgust for the last ten years as people of your mindset just keep acting as though tax cuts are the cure for every ill.

Tax cuts didn't even prevent the "ill" in this case and you have shown absolutely no sign that you can explain how continuing them would reverse it. I am asking you to consider, just for sixty seconds or so, whether you and others like you might be mistaken in believing the economic world is really as simplistic as "lower taxes and all will be well"?

We have a huge deficit that has been growing for 10 years and we no way to pay for it. We have a military budget that eats up about 65 cents of every tax dollar and even if we completely stopped ALL current military spending, the interest on past wars and on entitlements for veterans would STILL claim about 30 cents of every tax dollar. So even if we gutted every single social program out there including social security, we would STILL have a gigantic tax burden and deficit. Cutting taxes for the past ten years is responsible for about 45% of the deficit that accumulated before the economy tanked. You can sit there and try to blame the Obama stimulus for all of it but it won't fly - we were deep into reckless deficit spending under Bush and that is simply undeniable. Do you understand what happens to an economy that continues to use deficit financing to subsidize tax cuts? We will be very, very lucky if we don't end up in hyperinflation even if we doubled taxes.

No, I am not dying to pay higher taxes! I am a small business owner and there is a good chance I will be effected by the higher rates. But I also recognize that you can't just demand lower taxes and also keep the country out of bankruptcy in times like these.

I know I am probably wasting my breath with you. I don't think you have the slightest clue about what is going on in this country, what has caused it, or what might fix it. And the fact that you can't suggest anything other than a continuation of what hasn't worked proves that.

AV can I ask what business you are in? You don't have to tell me exactly what you do - but give me an example of how you produce profit - and I will give you examples that you may understand better.

Here's an example of how raising my taxes affects a waitress in Evergreen. The government willy nilly thinks it can steal more of my money without any affects - but then I cut back on goiing out to dinner. Maybe I cut back 2 meals out per week. Not that I would tip any less %, but since I cut back on the two meals - my waitress now misses out on that tip money.

I hear several waitresses complain to me that they are only making 30 or 40 dollars in 6 hours of work - my example is why. People have cut back for whatever reason - lost jobs - less work - hours cut. My waitress dosn't understand - she just knows that all she has in her pocket after 6 hours work is 30 bucks.

I understand why. Less money in the pockets of earners and producers means less money in the pockets of a waitress. It's really that simple. Yes the economy is more complicated but the bottom line is really pretty simple.

So simple - you'd think even an Obama voter could understand!
But I could be wrong.

http://money.cnn.com/2010/08/25/news/economy/tax_breaks_extensions/index.htm?section=money_latest

Saw this today
http://www.benzinga.com/market-update/1 ... -dip-reces

One thing we noticed in our biz, is that those making over 250k are actually getting more deductions and are carefully making sure that everything they spend is run through the biz as deductable.
So most of the tax hikes seem nill as long as you have a good CPA.

My business involves compiling and analyzing financial data. Although I don't see how that matters to you.

And of course I understand that taxes effect more than how many are employed directly. However, since the higher taxes don't kick in until my personal family income after deductions tops $250,000, AND only applies to that percentage that is over $250,000. Right now I don't think my income is going to be in the affected bracket so I don't think I'm going to be paying more taxes next year, but my business is growing. It could happen. But I guarantee you I won't be stiffing waitresses over it or even cutting back on going out to eat if I do. I'm pretty sure that most people that will be affected by the return to higher tax rates won't be, either.

To be quite honest with you I would probably just fiddle around with my corporate structure and how I take earnings from the business and end up paying no more taxes at all. And I bet that will apply to an awful lot of people who are in the upper brackets. You may pay a higher rate when you earn more but there are also usually more ways to shield your income. Why do you think CEOs take so much of their earnings in stock options?

I recall that LJ posted the increases for the various tax brackets - and they all increased...

But you seem to be failing to understand that everything matters - the lost jobs, the cut hours, the higher taxes. What happens to my condition affects a waitress. What affects the waitress affects the babysitter - and on and on it goes.

I would expect someone who is compiling and analyzing financial data to understand this better than most. Many new taxes will affect business owners next year. They will be passing on those taxes in the form of higher prices (or reduced services) to all who consume their product or service. This means fewer dollars in the hands of those consumers. It means fewer dollars in the pockets of a waitress.

Maybe the higher costs force some of your clients to shop for a better price for compiling and analyzing financial data. Maybe they shop around to save money (or to use your term -they "just fiddle around with their corporate structure" - and find some new startup company in India that will do what you do - for half the price.

Before you discount that possibility- a friend of mine who is a financial analyst has had this happen to her in the last 6 months. She's been out of work and willing to work for less now, so if you send me your client list I will pass it on to her.

Higher taxes for anyone get passed along into the general economy - in the form of reduced economic activity. That in turn hurts everyone. The cumulative effects add up.

And today we can see the results.

BearMtnHIB wrote: But you seem to be failing to understand that everything matters - the lost jobs, the cut hours, the higher taxes. What happens to my condition affects a waitress. What affects the waitress affects the babysitter - and on and on it goes.

I would expect someone who is compiling and analyzing financial data to understand this better than most. Many new taxes will affect business owners next year. They will be passing on those taxes in the form of higher prices (or reduced services) to all who consume their product or service. This means fewer dollars in the hands of those consumers. It means fewer dollars in the pockets of a waitress.

Maybe the higher costs force some of your clients to shop for a better price for compiling and analyzing financial data. Maybe they shop around to save money (or to use your term -they "just fiddle around with their corporate structure" - and find some new startup company in India that will do what you do - for half the price.

Before you discount that possibility- a friend of mine who is a financial analyst has had this happen to her in the last 6 months. She's been out of work and willing to work for less now, so if you send me your client list I will pass it on to her.

Higher taxes for anyone get passed along into the general economy - in the form of reduced economic activity. That in turn hurts everyone. The cumulative effects add up.

And today we can see the results.

I don't argue that higher taxes can have negative impacts but lowering taxes when we have gigantic deficits will have worse effects. I think we need to keep taxes as low as possible to still have a functioning government because it is damned hard to do business WITHOUT a functioning government, but to act like all you have to do to solve all the problems of the economy is to lower taxes for the wealthy is laughable. If you were going to lower them it would make more sense to lower them for the midrange earners because they are much more likely to go out and spend the extra money in ways that will stimulate the economy than are those earning higher amounts - because they are stashing the cash, not spending.

And please, you needn't shed crocodile tears over my business possibly being outsourced to India. I'm not stupid. My business model niche depends on direct knowledge of local conditions. My business could crash if the entire economy does, though, which is why I'm worried about the hyperinflation we could soon be flirting with. And making the deficit still worse by lowering taxes right now might very well cause that.

BearMtnHIB wrote: Higher taxes for anyone get passed along into the general economy - in the form of reduced economic activity. That in turn hurts everyone. The cumulative effects add up.

And today we can see the results.

I split this out to respond to because it represents a common fallacy that I am sick of seeing repeated as "truth". The fact is, even if we allow the tax cuts on the highest earners to expire, the rates will STILL be lower than during say, the Reagan era. And for the past 10 years or so they have been just about the lowest they have been since before WWII.

So if all these "cumulative effects" have been adding up, the "results" we are seeing is of the "cumulative effect" of some of the LOWEST income tax rates in the past 70 years.

And anyway, I can't believe anyone in their right mind would seriously argue that the cause of the economic meltdown was high taxes - especially since they are at historic lows.