tax cuts for the rich

[Enforcer Talen]

are they a bad thing?

[Darth Yoshi]

Well the rich can afford to be taxed, so unless the poor are getting cuts of equal or greater magnitude, giving the rich a tax cut is a stupid thing.

[darthdavid]

darth yoshi = 200% right

[Alyrium Denryle]

I agree.

You give tax cuts to the wealthy...what will they do with it? Sure they will invest some of it, but what about the rest? Bu a yacht, a mansion something one time and extravagant..or just hording it

Give a tax cut to the middle class, they will invest a small amount for retirement, the rest goes to a nw house, a car a new toaster, a TV dog food, human food, cable tv, internet, phone bills, paying off credit card debt....

[Alex Moon]

I agree.

You give tax cuts to the wealthy...what will they do with it? Sure they will invest some of it, but what about the rest? Bu a yacht, a mansion something one time and extravagant..or just hording it

Give a tax cut to the middle class, they will invest a small amount for retirement, the rest goes to a nw house, a car a new toaster, a TV dog food, human food, cable tv, internet, phone bills, paying off credit card debt....

The rich don't just horde their money. They're likely to invest it in order to make more money, or to spend it. In either case the money goes back into the economy.

[Alex Moon]

Well the rich can afford to be taxed, so unless the poor are getting cuts of equal or greater magnitude, giving the rich a tax cut is a stupid thing.

The rich pay the majority of income taxes as it is. Economically, a 1% reduction in the top tax rate is going to have a greater effect than a 1% reduction in taxes for people in the bottom 25% of incomes.

[Alyrium Denryle]

But will the effect be the same? Will that mony "trickle down" to the rest of the people, and improve their quality of life in a noticable way?

[darthdavid]

O lord not reganomics

[Joe]

are they a bad thing?

Hell no. You can't cut taxes effectively without giving the people absorbing the brunt of them a bigger break (unless you want to take people off the tax rolls altogether, which isn't a good thing).

[Joe]

But will the effect be the same? Will that mony "trickle down" to the rest of the people, and improve their quality of life in a noticable way?

On some level, yes, eventually. Anytime you take resources from the market and use them to fund government activity, you're imposing a deadweight loss on the economy and destroying wealth. That's not to say there should be no taxes, but they should only be in place when the benefit to society exceeds the cost of the tax.

[Asst. Asst. Lt. Cmdr. Smi]

Well, if the upper tax bracket gets their taxes cut, then they might use it to expand their business, and hire employees. It may sound greedy and unfair, but if that's how the spend the money, then a tax cut for the upper class might work.

[Sea Skimmer]

The rich are just as entitled to there money as anyone else. And since in the US at least they pay a higher percentage of there income in taxes I'd say there more entitled to cuts.

[The Duchess of Zeon]

are they a bad thing?

No.

[Yogi]

Problem with Reganomics is overseas investments. Sure people will benefit, just not in America.

[Enforcer Talen]

why?

[Joe]

Problem with Reganomics is overseas investments. Sure people will benefit, just not in America.

Surely much of the money will stay in America. Furthermore, foreign investment offsets American overseas investment to a reasonable degree.

[Alyrium Denryle]

I would tend to give tax cuts to the people that...you know...need it.

[Vercingetorix]

Even if we grant that the rich will increase investment in American industry, it's still not clear to me that that's a positive thing. Many economists have speculated that the root cause of the continuing malaise is structural overinvestment. For several decades after WWII, we had great numbers of people moving into the middle class and buying all manner of new consumer products. This upward trend in consumer spending was sustained right through the 90's, however some have speculated that we have reached a saturation point where consumer spending is leveling off. Because spending has stopped expanding, production is geared to a much higher level than is needed, and as a result, corporate competition has become increasingly cutthroat and profit margin have shrunk. On this view, it is not increased investment, but a realignment of productive capacity, invovling corporate restructuring and perhaps some bankruptcies, that will get the economy back on it's feet.

[Joe]

It's true about the overinvestment, it reached absolutely ridiculous degrees with the dotcom hype (thanks in no small part to the loose-money Fed).

[SyntaxVorlon]

The biggest problem with trickle down is that it hasn't ever really worked. The best way to help the economy is to reduce the amount of money in the deficit. The US economy is getting pulled apart.

In the past few months it's become clear that after spending $100 billion on the war and $350 billion on a tax cut(bush wanted $700 billion), going mostly to people who already have LOTS of money, while the Public School System is sorely in need of $100 billion. Though of course Bush won't spend $100 billion on the schools because he wants the situation to become bad enough to impliment a voucher program.

The tax cut will not help, if a family has a high enough income then they will be getting a great deal back, but if they have enough already to do what ever they want, then they will just have a lot more cash. Please enlighten me, how often did Jack Welch use his personal capital to help out GE?

If anything the lower income brackets should be getting a huge amount of money, the trickle down would happen almost immediately as people who have many necessities and near zero liquid capital are able to invest in the economy by buying everything they need. And if enough of them are smart they'll try and get their kids into college, which would create a far larger number of skilled workers.

But I digress. My point is that the wealthy aren't really going to contribute all of that money back into the system, they're going to save it as long as they can in offshore accounts so that they can manuever around inheritance taxes.

[TrailerParkJawa]

Right now, the economy is in a doldrums because companies are not spending money. Even companies that have money are curtailing spending. So reducing taxes so the rich have extra money to invest, rings a bit hollow. They have money to invest now, and are not doing it.

Consumers have been holding up the economy for a while now, but many are reaching the point where they are going to seriously curtail spending, since it does not seem like any end to the current economic malaise soon.

Id rather see the govt raise the personal exception from 4500 per person to something like 6500. This would leave extra money for those at the bottom and still give money back to the top. If you want to spur spending from the upper class, get rid of the silly "luxury" tax. I always found that to be kind of stupid. I dont understand why you should pay extra tax above and beyond normal sales tax just because an item is expensive.

[Stormbringer]

are they a bad thing?

No. Any proportional tax break will inevitably give much more to the wealthy because they pay more.

A lot of the opposition to taxes breaks is rooted in the notion that any one with money must be a crook and swindle the poor. In short, it's pre-supposing that the wealthy must have no right to their money. It's rooted in a sad version of class warfare that's been perpetuated mostly by the liberal side.

Whether tax cuts that affect the wealthy will stimulate economy is another question. In theory it should but in practice it often depends on a lot of other things.

[Vercingetorix]

^^^You seem to seperate the question of whether the rich deserve tax cuts and the question of whether such tax cuts would benefit the economy into two seperate issues. Assuming for the moment that tax cuts to the rich do not stimulate the economy, explain to me why we would want to cut their taxes.

[NapoleonGH]

If i were to support any form of tax change, i would say tax the rich more, and reduce the taxation of the middle class. It is the middle and upper middle class who are the largest and most constant consumers in our markets for the majority of products, by giving them more capital, they will be able to buy more, giving companies more money, thus giving the rich enough money to afford increased taxes. I call this the "trickle up" effect.

[Wicked Pilot]

cut government spending, tax cuts to all!