BTW, the S&P 500 fell by 6.66% today!

[Lagboltz]

Here are two.

http://www.taxfoundation.org/publications/show/151.html

http://www.ritholtz.com/blog/2011/07/tax-rates-deviations-from-average/

Both of them show maximum marginal income tax rates quite different from your lies.

Now, PLEASE, do your homework.

Please.

(Did some squawker mention "never getting through" to him?)

Acorn the second source you cite is EXACTLY what I posted. The data in that graph goes from 1913 on up. The data in my graph goes from 1965 on up. Compare those two regions and you will find they are identical.
Can you read graphs? Look at the little numbers that indicate years at the bottoms of my graph and the one you cite. Follow each respective year up the vertical axis to see what the tax rate is. But you must compare the same years on each graph.

The astounding thing about your post is that you say my graph is lies and do the homework etc. Your post is by far one of the most inane ones I have ever seen you do. I just can't fathom the bankruptcy of your mental capacity.

 

[GenSeneca]

As I said in post #35 my "major point" is trickle-down has not been proven.

So long as you are not suggesting that increasing taxes will increase GDP growth rates.

I copied the data from a gov website and put it in a spreadsheet, but since the GDP was so erratic, I did a moving average to smooth it out so you could see the longterm GDP trend more clearly.

By 'smoothing out' your numbers, it seems some data contradictory to your conclusion disappeared from the graph:

In 1982 the GDP growth rate had fallen to -2% and the top marginal rate was lowered from 69.13% to 50%.
By 1983 the GDP growth rate had risen to 4.5%
By 1984 the GDP growth rate had risen to 7.2%

Taxes were lowered and GDP grew rapidly. Those are the facts... but those facts are misleading.

Juxtaposing tax rates and GDP growth is terribly misleading in general. Using the empirical data available, I can cherry pick between GDP and top marginal rates to make just about any claim.. I can use it to claim that raising taxes increases GDP, that lowering taxes increases GDP, and even claim that leaving taxes unchanged increases GDP. The inverse is also true, I can claim that lowering taxes reduces GDP, that raising taxes reduces GDP, and that leaving tax rates unchanged reduces GDP.

Point being... There simply is not a strong enough correlation between tax rates and GDP to make any accurate and honest claims regarding either trickle down or trickle up theories. I have found that rather than tax rates, the Fed rate has historically shown a much stronger correlation with GDP, until recently that is.

Historically, when the fed rates went up, GDP went down, when the rates went down, GDP went up. Politicians have known this to be true for decades and have used the Fed rate to influence GDP during that time. Yet they have allowed the argument over GDP and tax rates to continue, most likely as a means of distracting voters.

After the dotcom bubble and housing bubbles of recent history, the correlation between the Fed rate and GDP growth seems to have stopped. Despite efforts from the last administration, and the current administration, to lower Fed rates in hopes of spurring economic growth, GDP simply hasn't responded. The fed rate is nearly 0% so the economy should be booming but it's not. Politicians on both sides have no idea how to fix the problem this time around, so they're just pointing fingers at each other to hide their own incompetence.

 

[GenSeneca]

I disagree. I don't think lagboltz is implying that there is a causal effect, but that there is a correlation. . .and that is easy enough to see.

It's misleading. I can create a graph using stats about global temperatures and Al Gore's weight to suggest a correlation between his weight gain and an increase in global temperatures, as he got fatter the world got hotter. That doesn't mean the two things actually correlate.

But, if anything, it seems clear that the period of high taxes showed a rise in GDP, and the periods of low taxes showed a deep in GDP, rather than the reverse. . .as the GOP is trying so hard to pass as a "fact!"

There are simply so many other factors, with stronger correlations, that are being excluded from the equation that it wouldn't be accurate to make such a claim. The Fed rate is only one factor, market bubbles are another huge factor that are simply left out of these types of overly-simplistic evaluations.

For example, Clinton had higher tax rates and the economy was doing well, so people on the Left like to claim that higher taxes are good for everyone and that Bush lowering taxes caused the GDP to crash. They are ignoring the fact that there was a HUGE market bubble under Clinton that burst just in time for Bush to walk into office and fulfill his promise of lowering taxes.

If you have factual data that show the reverse trend, I'll be happy to look at it and read the analysis.

I could but it would be dishonest for me to do so, since the correlation is simply not strong enough between tax rates and GDP.

 

[Openmind]

It's misleading. I can create a graph using stats about global temperatures and Al Gore's weight to suggest a correlation between his weight gain and an increase in global temperatures, as he got fatter the world got hotter. That doesn't mean the two things actually correlate.


There are simply so many other factors, with stronger correlations, that are being excluded from the equation that it wouldn't be accurate to make such a claim. The Fed rate is only one factor, market bubbles are another huge factor that are simply left out of these types of overly-simplistic evaluations.

For example, Clinton had higher tax rates and the economy was doing well, so people on the Left like to claim that higher taxes are good for everyone and that Bush lowering taxes caused the GDP to crash. They are ignoring the fact that there was a HUGE market bubble under Clinton that burst just in time for Bush to walk into office and fulfill his promise of lowering taxes.


I could but it would be dishonest for me to do so, since the correlation is simply not strong enough between tax rates and GDP.

MAYBE if it was ONE graph. . from ONE source. As I said before, why don't you present a graph that shows the opposite trend?

Also, if that trend showed only ONCE or TWICE over close to 100 years, it could be a fluke. But it repeats itself over and over again.

In the other hand, I haven't seen ANY graph from any sources that showed a reverse trend.

I also find it humorous that you talk about the "HUGE market bubble" under Clinton that burst just in time for Bush's presidency (seemingly blaming Clinton for the SHORT recession in 2001), but you still insist that Obama is the casue of all our economic problems!!!

This is beneath you, really. I wouldn't be surprise with such hypocrisy coming from . . .another poster in this forum, but I think you're much smarter than that.

But will you at least recognize that, if there is not enough data to show that higher taxes and higher GDP seem to happen simultenously, that the "idea" that lower tax provides an increase in GDP is at the least no more factual, and that we just don't know with certainty?

 

[Lagboltz]

So long as you are not suggesting that increasing taxes will increase GDP growth rates.

Correct.

By 'smoothing out' your numbers, it seems some data contradictory to your conclusion disappeared from the graph:

In 1982 the GDP growth rate had fallen to -2% and the top marginal rate was lowered from 69.13% to 50%.
By 1983 the GDP growth rate had risen to 4.5%
By 1984 the GDP growth rate had risen to 7.2%

Taxes were lowered and GDP grew rapidly. Those are the facts... but those facts are misleading.

The site Openmind quoted, http://www.slate.com/id/2245781/
uses a rather short moving average. I used a large one as done in stock prices that span decades, because I wanted to show the long term effects.

Juxtaposing tax rates and GDP growth is terribly misleading in general. Using the empirical data available, I can cherry pick between GDP and top marginal rates to make just about any claim.. I can use it to claim that raising taxes increases GDP, that lowering taxes increases GDP, and even claim that leaving taxes unchanged increases GDP. The inverse is also true, I can claim that lowering taxes reduces GDP, that raising taxes reduces GDP, and that leaving tax rates unchanged reduces GDP.

Yes, again that's why I used a wide moving average -- to try to avoid cherry picking in the short term, although I don't have any real cogent argument for that being particularly realistic.

Point being... There simply is not a strong enough correlation between tax rates and GDP to make any accurate and honest claims regarding either trickle down or trickle up theories.

That was my point too -- at least for trickle down. I wasn't claiming anything about trickle up, although I agree with you.

I have found that rather than tax rates, the Fed rate has historically shown a much stronger correlation with GDP, until recently that is.

Historically, when the fed rates went up, GDP went down, when the rates went down, GDP went up. Politicians have known this to be true for decades and have used the Fed rate to influence GDP during that time. Yet they have allowed the argument over GDP and tax rates to continue, most likely as a means of distracting voters.

I must be missing something because the Fed rate is strongly peaked at 1980 and doesn't seem to follow GDP or the tax rate in any reasonable way. Or as LittleAcorn might say, Lies; all Lies.

After the dotcom bubble and housing bubbles of recent history, the correlation between the Fed rate and GDP growth seems to have stopped. Despite efforts from the last administration, and the current administration, to lower Fed rates in hopes of spurring economic growth, GDP simply hasn't responded. The fed rate is nearly 0% so the economy should be booming but it's not. Politicians on both sides have no idea how to fix the problem this time around, so they're just pointing fingers at each other to hide their own incompetence.

I don't think anything will correlate with anything anymore because the economic world is in such a large state of flux. My gut feel is that we have gone too far past the peak of the Laffer curve in lowering taxes and should start backtracking.

 

[GenSeneca]

...you still insist that Obama is the casue of all our economic problems!!!

Where have I said that?

It's true I'm not fond of Obama, I think his policies are destructive and his deficit spending will lead us to ruin, but I felt the same way about Bush. If you feel it's constructive to lay blame, then I find that each one of them, and each of their respective parties, should have an equal share of the blame... There's plenty to go around.

 

[GenSeneca]

I must be missing something because the Fed rate is strongly peaked at 1980 and doesn't seem to follow GDP or the tax rate in any reasonable way. Or as LittleAcorn might say, Lies; all Lies.

As I said, I didn't find a causal link but I found the correlations stronger between the Fed rate and GDP than with Tax rates and GDP. It probably was a mistake that I didn't point out the correlation grew weaker over time, instead I only pointed to where the link seemed to end.

I don't think anything will correlate with anything anymore because the economic world is in such a large state of flux. My gut feel is that we have gone too far past the peak of the Laffer curve in lowering taxes and should start backtracking.

Why should we begin raising taxes?

 

[Lagboltz]

As I said, I didn't find a causal link but I found the correlations stronger between the Fed rate and GDP than with Tax rates and GDP. It probably was a mistake that I didn't point out the correlation grew weaker over time, instead I only pointed to where the link seemed to end.

Why should we begin raising taxes?

For a few reasons:
I'm a sort of liberal democrat.
It's something new to try that hasn't been done for a long time.
It goes a long way toward paying down the deficit no matter what else is done in the way of reduced spending.
Conservative thinking is based on trickle-down, which is disputed by the pundits that I cherry pick.

 

[GenSeneca]

It goes a long way toward paying down the deficit no matter what else is done in the way of reduced spending.

Didn't you admit earlier that raising taxes does not increase revenue?

...I said the higher the taxes, the higher the GDP, not the higher the revenue.​

 

[Lagboltz]

Didn't you admit earlier that raising taxes does not increase revenue?

...I said the higher the taxes, the higher the GDP, not the higher the revenue.​

It may look that way when the statement is out of context. Pandora thought I was talking about higher revenue in the graph. My statement above merely says no, I was talking about higher GDP.

Here is the full context of post #30 where I continue on to deny that trickle-down has been substantiated.

You missed the major point, I said the higher the taxes, the higher the GDP, not the higher the revenue. Why do you want to counter my post. I'm including both parties in the long span of the graphs. I am not laying blame on any party. I'm just trying to show that trickle down theory has not been substantiated.

I would gladly vote for lower taxes if I thought it would bring more revenue but it doesn't always work that way. You can see that the GDP is rather wavy, so the graph proves nothing in the short term. But long term shows the trend.

 

[GenSeneca]

It may look that way when the statement is out of context.

Oh yeah... We're only supposed to take Glenn Beck's statements out of context to make it sound like he said something he didn't actually say, sorry for the confusion.

Anyway... If you really do wish to claim that raising the top marginal rate of our Progressive income tax causes increased revenue, then I'd love to hear your case.

 

[Lagboltz]

Oh yeah... We're only supposed to take Glenn Beck's statements out of context to make it sound like he said something he didn't actually say, sorry for the confusion.

Another random editorial .

Anyway... If you really do wish to claim that raising the top marginal rate of our Progressive income tax causes increased revenue, then I'd love to hear your case.

I think we were better off before Bush's tax cuts. Yes, I know there are a lot of other factors that affect the economy, but it's worth trying that again. Nobody is wise enough to see the optimum solution in an economy of chaos. That is my case in it's entirety. No reasoned-out macroeconomics.

If you think decreasing taxes is the answer, I have heard all the arguments already. Stealing from the rich. Poor people don't hire people. Trickle down works. If you have anything further to add, I would love to hear your case.

 

[GenSeneca]

Another random editorial

Just entertaining myself.

I think we were better off before Bush's tax cuts. Yes, I know there are a lot of other factors that affect the economy, but it's worth trying that again.

I can accept "just because" as a reason, I don't consider it a rational reason, but it's still a reason.

I too think we were better off during the Clinton era. I'd have no problem with going back to the Clinton era tax rates but only on the condition that we also go back to the Clinton era budgets.... That would mean going from our current budget of 3.8 Trillion back to a budget of 1.6 Trillion, a cut of more than 50% to the federal budget.

Nobody is wise enough to see the optimum solution in an economy of chaos.

I have a solution... Stability. In a climate of total chaos, people are looking for order, and that requires stability. Americans would be eager to commit themselves to greater investments if they weren't so frightened about what the next president, or the next congress, is going to do.

For example, while Bush was in office, he heavily supported fuel cell vehicles with taxpayer dollars. Investors jumped on the bandwagon believing that with government backing, fuel cells would be the next big breakthrough. When Obama was elected, he abandoned fuel cell research and instead put the weight of the government behind electric and hybrid vehicles. The market cannot be expected to remain stable in a climate where politicians can simply pick an industries winners and losers.

If you think decreasing taxes is the answer, I have heard all the arguments already. Stealing from the rich. Poor people don't hire people. Trickle down works. If you have anything further to add, I would love to hear your case.

Ultimately, I'd favor a flat tax, say 15%, everybody pays, no loopholes, no exemptions, no deductions, no way at all to avoid or reduce your tax liability. The "rich" would still pay far more than the "poor" but everyone would have "skin in the game" and tax revenues would skyrocket. However, that's about as likely as Congress balancing the budget - without cooking the books.

So... If we're going to keep the Progressive Income Tax system, then set the rates at whatever, I don't really care, but set them at that rate for at least a decade so that everyone knows what the rate will be next year, and the year after that, and five years from now, etc. That kind of stability would go a long way to bringing order to the chaos.

Also stop letting government pick the winners and losers in business and industry, being able to "reward friends and punish foes" only creates more chaos.

 

[Lagboltz]

Just entertaining myself.

I can accept "just because" as a reason, I don't consider it a rational reason, but it's still a reason.

I too think we were better off during the Clinton era. I'd have no problem with going back to the Clinton era tax rates but only on the condition that we also go back to the Clinton era budgets.... That would mean going from our current budget of 3.8 Trillion back to a budget of 1.6 Trillion, a cut of more than 50% to the federal budget.

I don't mind using the Clinton taxes. The spending more than doubled, some of it due to the war. I am curious and would like to see a chart comparing Clinton's and Obama's budget in the various categories to see how Clinton did it.

I have a solution... Stability. In a climate of total chaos, people are looking for order, and that requires stability. Americans would be eager to commit themselves to greater investments if they weren't so frightened about what the next president, or the next congress, is going to do.

Yeah, both sides are frightened for different reasons.

For example, while Bush was in office, he heavily supported fuel cell vehicles with taxpayer dollars. Investors jumped on the bandwagon believing that with government backing, fuel cells would be the next big breakthrough. When Obama was elected, he abandoned fuel cell research and instead put the weight of the government behind electric and hybrid vehicles. The market cannot be expected to remain stable in a climate where politicians can simply pick an industries winners and losers.

Fuel cells are long term. Hybrids are short term. We need both, but government sponsored research is the sort of thing conservatives want to cut because the research should be done by industry.

Ultimately, I'd favor a flat tax, say 15%, everybody pays, no loopholes, no exemptions, no deductions, no way at all to avoid or reduce your tax liability. The "rich" would still pay far more than the "poor" but everyone would have "skin in the game" and tax revenues would skyrocket. However, that's about as likely as Congress balancing the budget - without cooking the books.

We have to disagree on flat taxes. 50% of people now pay no taxes. 20% of the people make less than $20,000 but would have to pay $3,000 under your plan. That wipes out any discretionary income for purchases to expand the economy. 12.3% are below poverty level. The lower classes will go even lower while the upper classes gain even more wealth.

So... If we're going to keep the Progressive Income Tax system, then set the rates at whatever, I don't really care, but set them at that rate for at least a decade so that everyone knows what the rate will be next year, and the year after that, and five years from now, etc. That kind of stability would go a long way to bringing order to the chaos.

I agree with that. I think we should keep progressive taxes, but simplify the tax laws considerably. The IRS has a 67,024+ page tax code.

Also stop letting government pick the winners and losers in business and industry, being able to "reward friends and punish foes" only creates more chaos.

To be fair, we should get rid of all subsidies.

 

[GenSeneca]

Both parties would scream bloody murder if we cut the budget by 52% and returned to Clinton's spending levels. They already consider increases in spending that aren't in the double digits to be "draconian cuts" in spending, that tells me these people are completely disconnected from reality.

50% of people now pay no taxes. - Lag
Everyone who earns an income should have to pay income taxes.

20% of the people make less than $20,000 but would have to pay $3,000 under your plan. - Lag
Everyone should pay their "fair" share. Chances are someone earning $20k/yr qualifies for many government assistance programs... Just one example is food stamps where the average annual benefit is over $1500 but there are many other programs. So the "poor" would continue to collect more in benefits than they pay into the system but they'd finally have "skin in the game".
To be fair, we should get rid of all subsidies. - Lag
I don't support government intervention into the economy in any form, subsidies included.