Okay, I’m going to make this one nice ‘n’ simple. The Washington Post popped out a study about who benefits from the tax plans of Obama and McCain, complete with handy-dandy graphic:
Now, I want you to notice something VERY important there. Actually, three things.
- No one, NO ONE, has a tax increase under Obama until they hit over $603,000 in household income, whereas everyone gets a cut under McCain.
- Obama’s cuts are bigger for all income levels under ~$111,000, and up to about $160,000 they’re not that far off.
- McCain’s cuts increase with income, Obama’s go in reverse. McCain gives greater proportional cuts to the rich, not just more money.
The first question that anyone looking at these figures should have is “what proportion of the population falls into these categories?” I’ve done this before, but we’ll do it again with the new numbers. According to the ol’ US Census Bureau (PDF), 85% of the population is under $100,000. According to the Wikipedia article I sneetched that link from, once you hit $154,000 you’re in the 95th percentile. Imagine just how small of a percentage represents the over-$600,000 crowd.
This is fairly significant since the tax cut percentage doubles when you go from the $66k-111k bracket up to the $680k-2mil bracket. John McCain can only claim he is a better candidate for, at best around 85-90%, and that Obama’s plan is only bad for the top less-than-one percent. Meanwhile, Obama has tax cuts for at least 99% of the country, the majority of whom will see greater cuts under him.
So the next time you hear the line that Democrats just want to take your money and Republicans are looking out for the regular old blue-collar Joes, hopefully you’ll be of the mind to smack ‘em upside the head.
Say a person makes over $600,000. Are we expecting his consumption to be affected by Obama’s tax increase? Will he drive his boat any less? Will he put off any new car or real estate purchases as a result of the tax? Will he eat any less caviar or smoke any fewer cigars as a result of the tax hike?
That’s the interesting thing. When it comes down to it, the people hurt by Obama’s plan will be annoyed but likely won’t make any palpable changes in their lifestyle. The lower end most certainly will.
A person making $600,000 that loses an extra 7 grand in taxes will piss and moan but can still buy the same things. The guy making $20,000? Well that extra $700 will make a big difference to him.
You didn’t actually answer the question: will the rich guy consume any less? Will he make a single purchasing decision, in terms of personal luxury or necessity items, that comes out differently as a result of the tax hike?
Are you literally asking me if a rich man, taxed extra under Obama, will decide to put back that carton of Haagen Daaz ice cream and pick up the store brand? Because I think I answered it more than adequately: the rich will not alter their lifestyles in any meaningful way, whereas the middle/lower class will.
So far, so good.
Now, since we’ve established that the rich guy will not be eating any less Haagen Dazs (and I fully agree), then I have a question:
Presuming that some poor guy can’t afford to eat ice cream at all today, and that after Obama’s tax hike on rich people who don’t change their consumption at all he will be able to eat ice cream, then where, exactly will the new ice cream come from?
Since we know the rich guy isn’t eating any less, then either somebody else is eating less ice cream, or somebody else is producing more ice cream. Who is this person? How does it work?
Please show me the paper trail by which the rich guy’s money turns into poor-people’s ice cream, or at least identify who goes with less when you raise the taxes of people who can afford tax hikes with no cut in their own lifestyles.
Take your time.
You see, my friend, the new ice cream is bought by the poor man, who uses his new money to pump it back into the economy.
The increased flux of business generated by the poor guy helps increase productivity, making sure that there is more ice cream. Supply and demand, my friend.
We have acknowledged that the tax level of the rich guy makes little difference. He’s not going to buy less if he’s taxed extra, ergo he also won’t buy more under less taxes, so all that extra money the rich guy gets offers no benefits beyond his bank account.
So when all the poor people get their extra $700, they USE it. This increases demand, boosts business, ups productivity, improves the economy as well as the lives of those who formerly could not afford ice cream.
The rich guy’s money doesn’t turn into anything, nor does anyone go with less. It’s simply supply and demand. Demand won’t change when the rich get greater cuts, it’ll just turn into more inheritance. It will when you give it to the poor.
Ask yourself who spent their tax refunds faster: the people who weren’t hurting for grocery money, or the people who were.
We have acknowledged that the tax level of the rich guy makes little difference.
Not exactly. What we’ve agreed on is that the money forfeited by the rich guy does not come out of his consumption. We’ll surely come back to the question of where it did come from.
Now, if somebody is going to have ice cream they didn’t have before, then either somebody beside the rich man will have to go without their ice cream, or the labor and resources that were going to produce something else will now go to producing additional ice cream so that the poor guy can have some too.
Which is it? Or do you propose that the new ice cream comes from somewhere else?
OR, the tax cuts will add revenue stream that goes for paying for the production of more ice cream.
I fear you’re not exactly sure what you’re talking about. Largely because I’m defending a tax cut, and you’re basically trying to say that giving middle/lower class people a tax cut is a bad idea. Reaganomics failed, there is no “trickle down” system.
OR, the tax cuts will add revenue stream that goes for paying for the production of more ice cream.
Ice cream doesn’t come from “revenue.” It comes from farmland, cattle, feed, dairy equipment, and labor. From where will the newly diverted rich man’s money divert the resources needed to create the ice cream? Obviously you don’t think a bunch of previously unmilked cows are all going to suddenly start giving milk in response to the arrival of poor people, holding rich people’s money, at the supermarket — do you?
If you picture a new economic landscape that produces so much ice cream that even the poorest can have some, then I’m just asking where you will get the resources to produce additional ice cream.
I know things are harder for you libs when the money is factored out, but the problem isn’t that poor people don’t have enough money — it’s that there isn’t enough ice cream for everyone to have some. And what I’m asking you to do is to identify the mechanism by which more ice cream comes into the hands of poor people as a result of giving them rich people’s money. We both agree that by taking the money from the rich guy, he is not the one consuming less. So who is?
We could also try this with gasoline, the supply of which doesn’t really vary with demand.
Say there are ten guys and a hundred gallons of gas. The richest guy makes so much money that he will consume 15 gallons of gas no matter what you do to his taxes. The remaining nine guys buy 10 gallons each, except for the very last one, who can only afford 5. The rich guy takes 15, and the other nine split the remaining 85 as described.
Now, say we tax the rich guy enough that the tenth guy can afford 10 gallons of gas. We’ve already agreed that the rich guy isn’t giving up anything — he can still afford his 15 gallons. So where does the poor guy’s extra 5 gallons come from?
This is a simpler example because we don’t have to tinker with the prospect of creating more gas like we did with ice cream. But if you want to maintain that the ice cream problem is fundamentally different from the gas problem (it isn’t), then we can go back to that harder problem after we solve this one. Where does the poor guy’s new 5 gallons of gas come from?
Are you done here already?
It really would be nice if you’d answer this. There’s either reason in your position that can be accounted for in these examples, or there’s accounting in these examples that could change your reasoning. Why not proceed and see what happens? Who knows — with a sufficiently convincing defense of your position, maybe you’ll make a liberal out of me!
That’s because your examples don’t actually work. They assume finite amounts of material and giving one guy more means giving another guy less.
“This is a simpler example because we don’t have to tinker with the prospect of creating more gas like we did with ice cream.”
Yes. Yes we do. Thanks to these nifty things called “reserves”, oil companies would watch as demand increased, which would be coupled with more money coming in, and would do what they can to increase production. Now this is oil, so as a liberal I’ve got lots of inherent issues there, but the principle remains.
“Ice cream doesn’t come from “revenue.” It comes from farmland, cattle, feed, dairy equipment, and labor. From where will the newly diverted rich man’s money divert the resources needed to create the ice cream?”
Again, yes. Yes it does. You seem to be running under the assumption that the world is producing everything at maximum capacity and production cannot increase no matter how much extra demand there is.
By that logic, we should all still be sitting at the same production levels of 50, 100, or 150 years ago. Yet, somehow, the amount of gasoline Americans use until recently went up annually. How is that possible if, by your example, someone else has to use less gas if another guy wants more?
I’m starting to lose my patience with this. I have no problem with debate, but when you’re simply being contrary even when you have no actual point or justification behind it, I get more than a little tired.
That’s because your examples don’t actually work. They assume finite amounts of material and giving one guy more means giving another guy less.
In case you haven’t heard, there really is only a finite amount of petroleum, as witnessed by libs all over the internet who think we should consume less so that our children can have more. In this case, it appears that you’d rather give it to our poor now, instead of waiting for our kids. Fair enough, but there is a very real zero-sum-game in petroleum.
The gas example works like that specifically because they don’t produce significantly more when we demand more — instead, the price just goes up. We have far more demand than the supply system can keep up with as it is. The point is that enabling poor people to voice more demand will not create more gas if the current demand does not do so already: it will just raise the price higher. Now since we’ve established that the rich guy will not buy less gas as a result of the policy, just who do you think will have to split their share with the poor? And the answer is “people who cannot afford to absorb the price increase” — namely, the middle class.
The ice cream example doesn’t work like that because in the case of ice cream we will produce more
Thanks to these nifty things called “reserves”, oil companies would watch as demand increased, which would be coupled with more money coming in, and would do what they can to increase production.
Do you not think oil companies, with record prices and profit, already have both the means and the necessary incentives to increase production?
“Ice cream doesn’t come from “revenue.” It comes from farmland, cattle, feed, dairy equipment, and labor. From where will the newly diverted rich man’s money divert the resources needed to create the ice cream?”
You seem to be running under the assumption that the world is producing everything at maximum capacity and production cannot increase no matter how much extra demand there is.
No. I am of the opinion that everything operates at maximum employment. Every drop of milk produced by our dairy system is currently put to use. None of it is poured down the drain, and no stockpiles are accumulating. This is pretty basic economics, lib.
Now you enter the picture, and you’d like to give a lot of people some additional ice cream. So we’ve got to put together a few more cows and ice cream plants, but until those arrive, how will the new demand affect the situation? Now, remember, the rich guy will not be eating any less ice cream, so the result is that everyone who cannot afford the price increase will have to share a little with the poor guy — again, the middle class.
Taking money from the rich and giving it to the poor has exactly the same effect on the middle class as if the rich adopted the poor into their homes and started buying them things: the rich man’s money is used for more consumption, and the people in the middle suddenly have more competition for the things they’d like to buy. Their standard of living goes down.
Now, there’s the question about how industry will respond to the new demand; the matter of expanding the dairy industry or drilling for more oil. And this is a great time to see where the rich guy did cut back when you took his “excess” money.
Libs love to remind us how some 1% own 99% of the wealth. I know that’s not the exact number, but I neither know nor care what the exact number is since the entire exercise is complete bullshit anyway. “Wealth” sounds like Ferraris, Yachts, filet mignon and Haagen Dazs, but what it really means is things like stock, basically the corporate infrastructure that employs us all and which eagerly solves every problem it can see a profit in solving. Apparently some lib thought it would be helpful in the class war to tally up the value of all that boring crap that your typical poor person couldn’t be persuaded to own, and then show what a percentage of “the pie” those holdings represent in the hands of the minority of people with the self discipline desire to actually save.
It is that wealth which is supposed to come into play when demand for ice cream or gas goes up, but, lo and behold, it is also the source of that wealth which got gutted when you started diverting it to the poor. So what you’ve done, in a nutshell, is dismantle ice cream factories and feed them to people who want ice cream but who can’t be bothered to buy stock in ice cream factories.
Now, you’re free to look at this however you want to. And in my experience, liberals can rationalize some pretty interesting ways of looking at things. But the entire point here is that before your tax policy goes into effect everybody in the population is pretty much working, even though some people are apparently not consuming enough for your tastes. After your policy there won’t be any more people working, but there will be more people consuming — congratulations. But let’s try to remember that the ones who we taxed will not be consuming any less or working any harder, which means the burden of carrying the new consumption will necessarily fall on the middle class, who will do so through a combination of working harder and consuming less — also known as being poorer.
You should read that last part a few times, because quite frankly I’m sick of hearing about how the middle class carries all the weight when it’s liberal policies that put it on them. That became inevitable the moment you agreed that the rich guy’s lifestyle would not be affected by the new code. Well, that stuff’s all got to come from somewhere, and anytime the poor get anything they didn’t actually work for — regardless of how they got it — it will be provided at the expense of the middle class whose consumption is affected by rising prices.
I’m starting to lose my patience with this.
You should be. It’s no doubt annoying to stare into a mirror and see a threat to liberty and prosperity.
I apologize for this typo:
The ice cream example doesn’t work like that because in the case of ice cream we will produce more
It doesn’t belong there. Sorry for the editing.
I’d like to remind you, Rick, that your entire argument is rooted in your desire to prove that giving tax cuts to the middle and lower class is a bad idea. Whatever happened to the right being the champions of the blue-collar?
I guess that means you were against the stimulus package, right? I mean, how in the WORLD could all that extra money have been put to use when all materials are being used?
I’ve never argued this hard with someone who said tax cuts for the middle class is bad. I’m just befuddled.
Hanlon, he refuses to waver from his conviction, whether he’s proven wrong or not.
Ya gotta hand it to the guy, he is blissfully unencumbered by the thought process. And he resorts to name-calling, you notice? When he gets really upset, we’re all labeled “libs”, as if that’s a bad thing.
I’d like to remind you, Rick, that your entire argument is rooted in your desire to prove that giving tax cuts to the middle and lower class is a bad idea.
Really? Where did I say that? That’s not my desire at all.
I’m just saying that you libs have no idea what you’re taxing when you tax the part of rich people’s money that they weren’t going to consume anyway. That much is painfully obvious.
And I’m saying that anything the poor consume that they didn’t actually produce is like a tax on the middle class.
You libs are stupid that way. You get fixated on the money, when the problem is really about how much and how hard people must work to provide for themselves.
All I see you doing is mandating that people must share more with those who don’t provide for themselves. And you yourself established, right here, that the sacrifices necessary to do that will not be made by the rich.
When I oppose your ridiculous Marxist policies, it’s never the rich I’m worrying about.
And yes, I opposed the “stimulus” package as nothing more than a vote-buying scam. What did you think it was?
Let me ask you a question, Hanlon. Let’s forget for a second our disagreement on these tax matters, and explore your line of reasoning.
If you believed that raising taxes on the rich caused the middle class to live more poorly while causing the truly poor to live better:
Would you do it?
Would you admit it?
Would you want voters to know?
It doesn’t matter whether you really believe it, it’s just a matter of what you would do if you did believe it. Think of it as an honesty test.
Paul:
whether he’s proven wrong or not.
Bring on the proof, sport. They’re only convictions because I’ve been convinced. You’re obviously a superior liberal — why don’t you just convince me otherwise?
As an inferior conservative, I should be mere childsplay for someone of your intellect.
Simply because you refuse to be convinced otherwise. Your mind is made up and won’t be confused by contrary evidence.
Someone of my intellect realizes when he’s trying to teach a pig to sing.
Ok, now see the top of the Tax table is mostly companies and if you give them a Tax brake they will lower there price for products, if you raise taxes they will higher there price for products b/c they dont want to pay the extra taxes, they simply pass the cost on to you. Why do you think things at Walmart are cheaper then any where eles? It is all about money if you lower it things become cheaper in the long run.
Willie, the “trickle down economics” idea didn’t really go well.
The reason Wal-Mart sells its products cheaper is because they outsource and cut costs wherever possible in order to undercut their competitors. It has nothing to do with generosity thanks to running an efficient operation.
It’s been evidenced time and time again that when you give the wealthy massive tax breaks, they use their extra revenue to boost their own portfolios.
If you give Exxon an enormous tax break (and they get plenty), they aren’t going to pass the savings onto us because it isn’t going to increase their profits to do so. They’ll simply pocket the extra cash.
It’s been evidenced time and time again that when you give the wealthy massive tax breaks, they use their extra revenue to boost their own portfolios.
Which is exactly what they’re supposed to do with it. And they do that because, as you yourself have said, these changes in revenue do not affect their personal lifestyles — they affect only their saving (investing) habits. Your problem is that as a liberal all you see is the dollar value of the portfolio change, and not the actual capital that is bought with it. Do you think America saves too little? Well, a tax cut for the rich is all but guaranteed to be saved. What do you think the poor would do with the same money, Einstein?
You need to understand what “boosting a portfolio” is. What this really means is that they will invest the money in some sort of capital venture. There is more to this than just giving the money to the business; there’s also what the business itself then does with the money. And the answer is that it buys more labor or goods with which to expand its capacity.
If the business buys labor, then that puts people to work. If the business buys goods, then the companies that sell it the goods will have to add to their capacity to provide them — which means that they will put people to work.
The tax breaks for the rich do not give them more convertibles or larger mansions — we’ve proven here – you’ve proven here – that they will have their luxuries with or without the cuts. Their portfolios are the capital that employs all the rest of us, and tax cuts for the rich mean economic growth.
This is how supply side is supposed to work. This is how supply side economics does work. This is what supply side economics does. So, if you say “the “trickle down economics” idea didn’t really go well,” then you’re going to have to explain what you expected it to do. Because it does what it’s supposed to.
It amazes me how little is known about economics on the political left. Most of what you believe is economic absurdity. And even liberal economists like Paul Krugman regularly say things that make real economists wince. If you had even a clue to what your policies look like through the lens of basic economics you’d be embarrassed.
Perhaps I am conservative/libertarian precisely because I learned economics before I acquired an ideology instead of just picking an ideology that sounded like it meant well.