Question for economic/financial gurus.....

[Phins4life 271]

Could someone with a non-biased viewpoint tell me whether or not taxing the wealthy a little more would actually hurt the economy? Further, is this proposed additional revenue even the thing that's holding up the debt ceiling negotiations at this point? Is it Medicare, SS, education? Or is there a simpler explanation, such as ego or political posturing and finger pointing to avoid having to make a tough decision that might cause people to lose ground in their 2012 campaigns?

 

I'm genuinely interested to hear some logical opinions on this issue, mostly because I will be directly impacted if this thing doesn't get resolved by the deadline, or at least that's what I have come to believe based on the information I hear on the news and the C-Span debates. I'm tired of hearing the same recycled arguments by party biased members of congress. I mean, it really makes no sense to me how grown men and women can justify their blame games without offering real solutions in the face of this deadline looming over us. The Democrats are pissed that Republicans don't want tax hikes, the Republicans are laying the overspending issue at the feet of the Democrats (even though Bush actually started the overspending). I honestly never watched a single minute of C-Span until 3 days ago, and now I wish I hadn't started. The unwillingness of either party to budge on the final key issues, even a little bit, baffles me.

[Favre4Ever+ 4,476]

Could someone with a non-biased viewpoint tell me whether or not taxing the wealthy a little more would actually hurt the economy? Further, is this proposed additional revenue even the thing that's holding up the debt ceiling negotiations at this point? Is it Medicare, SS, education? Or is there a simpler explanation, such as ego or political posturing and finger pointing to avoid having to make a tough decision that might cause people to lose ground in their 2012 campaigns?

 

I'm genuinely interested to hear some logical opinions on this issue, mostly because I will be directly impacted if this thing doesn't get resolved by the deadline, or at least that's what I have come to believe based on the information I hear on the news and the C-Span debates. I'm tired of hearing the same recycled arguments by party biased members of congress. I mean, it really makes no sense to me how grown men and women can justify their blame games without offering real solutions in the face of this deadline looming over us. The Democrats are pissed that Republicans don't want tax hikes, the Republicans are laying the overspending issue at the feet of the Democrats (even though Bush actually started the overspending). I honestly never watched a single minute of C-Span until 3 days ago, and now I wish I hadn't started. The unwillingness of either party to budge on the final key issues, even a little bit, baffles me.

 

Well... Firstly, I think everyone is going to be at least a little biased.

 

The two basic arguments regarding taxes are as follows..

 

Conservatives say that tax hikes take money out of the hands of citizens, thus less money is going back into the economy to help stimulate it.

 

On the other side... Liberals believe that even with low taxes, all the money that is going back to the people ISNT actually being put back into the economy. Instead, people decide to save or invest that money which doesn't help the economy at all.

 

You can make a valid argument for either side, IMO. But I am NEVER for taking hard earned money from people. Whether they be filthy rich or horribly poor. And while I agree that not EVERY single penny of that extra money would be going back into the economy (as the pro-tax folk claim), it's pretty common knowledge that if you give the people more money, they will spend more.

 

And as far as the last paragraph... Bush definitely didn't start the overspending. lol. Obviously , he didn't help.. But the deficit has been piling up since before Bush was born.

[RazorStar 4,025]

The government can spend in an economy too though... I do think the rich absolutely need to be taxed more than the poor though, America is pretty fucked up in that regard.

[Phins4life 271]

Well... Firstly, I think everyone is going to be at least a little biased.

 

The two basic arguments regarding taxes are as follows..

 

Conservatives say that tax hikes take money out of the hands of citizens, thus less money is going back into the economy to help stimulate it.

 

On the other side... Liberals believe that even with low taxes, all the money that is going back to the people ISNT actually being put back into the economy. Instead, people decide to save or invest that money which doesn't help the economy at all.

 

You can make a valid argument for either side, IMO. But I am NEVER for taking hard earned money from people. Whether they be filthy rich or horribly poor. And while I agree that not EVERY single penny of that extra money would be going back into the economy (as the pro-tax folk claim), it's pretty common knowledge that if you give the people more money, they will spend more.

 

And as far as the last paragraph... Bush definitely didn't start the overspending. lol. Obviously , he didn't help.. But the deficit has been piling up since before Bush was born.

 

I worded that poorly. I meant to say that he started the period of significantly increased spending we are still experiencing today. During the Clinton era the total national debt rose by around 1 trillion. By comparison, Bush's administration bumped it from roughly 5 to 10 trillion by the time Obama was elected, in the same amount of time. To be fair to Bush, I don't know if the margin would be as high if inflation is considered, but it is still a significant amount of debt increase. Once he took office, the lengthy period of economic growth we experienced during Clinton's years came to an end. Obama took over and certainly hasn't done any better, but it was a mess he partially inherited that he subsequently made worse. My original point was that the Republicans are perfectly willing to lay the overspending problem at Obama's feet, when it was a Republican administration that uncharacteristically started throwing the money around at a faster rate than usual.

[Favre4Ever+ 4,476]

The government can spend in an economy too though... I do think the rich absolutely need to be taxed more than the poor though, America is pretty fucked up in that regard.

 

The way the US Government jump starts the economy is through war.

[RazorStar 4,025]

Somebody should tell American economists and congress about the broken window fallacy.

[Favre4Ever+ 4,476]

The broken window fallacy is kind of a fallacy in itself. Bastiat was kinda retarded. lol

 

Buying a new window isn't really buying new goods and is instead counted as "maintenance" costs? Just because you are replacing something that is broken, doesn't mean you aren't buying new goods.

 

Your shoes wear out and you get new one to replace it. Is that maintenance?

Your car breaks down and you buy a new one to replace it. Is that maintenance?

 

No... You are still buying brand new goods, even if it is meant to replace something you already had. Bastiat never grasped the idea of goods having a lifetime. He thought after you buy something, you will always have it. Which is a major hole in his argument.

 

Yes, buying a new window means you aren't spending that money on shoes or a clothes or jewelry... But the point is that the money IS being spent on new good and IS being put back into the economy. It doesn't matter if it's going to windows, shows, cars, whatever. Money entering local and national economies is money regardless of where it is spent.

 

Regardless.... That fits more as a domestic issue. Country building is a bit different than a broken window.

Edited July 29, 2011 by Favre4Ever

[RazorStar 4,025]

Destruction in general really doesn't generate profit, America was in and out in 4 years in World War 2, if you aren't at war for a long time, it gives a nice little boost, but constant war is just a drain on everything.

[WindyCitySports 407]

Very controversial issue here. F4E hit the nail on the head yet again when it comes to politics.

 

I see where people are coming from when they say that it is important to take care of the poor in order to achieve a healthy economy. Let me address two issues with the way the liberals go about doing this.

 

First of all, a healthy economy can not be achieved when money is taken from the rich. Like I said, there is no doubt that it is important to take care of the poor. Yet, who gives you your paycheck every month? The rich guy who owns your company does (or at least mine does). If you start taxing the hell out of that guy, he won't be able to come up with the money to give you your paycheck, therefore having to layoff workers as well as inflate prices, both hurting members of the lower class.

 

Second of all, in regards to taking care of the poor, the government can not do this nearly as well as private charities can. I am a huge proponent of the government cutting back on programs like welfare and allowing private charities to step in. This way, no one is forced to give money to the charities like they are in welfare (through taxes), but the charities can guarentee that the majority of the money will go directly to the lower class and/or aid for the lower class. The government, rather cannot guarentee this, as our tax money is used for many different things. Trust me when I say that people will be very generous when giving to a charity that can guarentee where the money is going.

 

In regards to the problem with taxing the elderly. Like F4E said, taking away money from people who earned it is never a good thing. Of course, with the debt we have piled up, the government needs money, so I can see why that statement wouldn't hold people back from supporting higher taxes on the elderly. However, aren't the elderly often big spenders? Many have been saving up their entire lives, not wanting to rely on Social Security, and many elderly persons go on big vacations and buy things for themselves and others every day. This goes back to the simple philosophy that if you take away people's spending money, you are taking away money that will potentially be injected back into the economy.

 

And trust me, you aren't the only one sick of both parties' unwillingness to do anything to fix the problem.

Edited August 3, 2011 by WindyCitySports