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Two Reasons raising taxes will destroy the economy

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posted on Oct, 30 2012 @ 01:29 PM
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Raising taxes at this point will hurt the economy even more. I know people love the mantra "tax the rich" or "pay your fair share" whatever that means, but raising taxes on anyone will hurt not help. There's 2 main reasons why.

1. 16 trillion in debt. People often say we can raise taxes and they point to past economies when taxes were high and the economy was good. The one thing that wasn't present is 16 trillion dollars in debt. The reason you keep having things like QE1 or QE2 is because the Fed has to print money to buy our debt. We're sinking in debt and a slow growth economy.

This huge debt causes everything to dry up. This is because as the debt goes up consumption goes down. Other Countries will hold our debt as long as we consume their goods. This is why we need to concentrate on trade deals more. We have to rely more on consumption until we find industries that will replace the jobs that we lost to cheap labor. Which brings me to my second point.

2. We're in a global economy with cheap labor. In this Global Economy people have more options. This is why you hear Obama making these silly claims about "paying your fair share" and "Economic Patriotism." America is based on the individual pursuit of happiness and living by the dictates of your own conscious. Not a collective controlled by a small group of people who will take that "fair share" and use it to enrich donors and friends. This occurs with both Republicans and Democrats.

We don't need "Collective Salvation" from Government. People will offset the increase in taxes by moving their money overseas in an emerging market with lower capital gains rates. People have more options in a global economy. Raising taxes will feed the Behemoth for a few days and they will be right back out looking for more money to waste and spend.

We need more growth and smaller Government. We can't afford the Behemoth in Washington. Our children and grandchildren can't afford the Behemoth in Washington.




posted on Oct, 30 2012 @ 01:42 PM
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reply to post by neoholographic
 


Nafta screwed the nation, many forget that was the root of all this outsourcing and destroying of americas manufacture base.

That being said some of the Highest taxes ever where during times when America was the most prosperous, but who knows now that our manufacturing base is gone.

Sold out by the politicians and the corporations... Something needs to change.



posted on Oct, 30 2012 @ 01:57 PM
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I am going to guess the OP has not bothered to look at our economic growth and the comparative tax rates that went along with it over the last 60 years. As much as I do not like paying them history shows the exact opposite effect of higher tax rates in the US. Of course no politician wants to say that because it would cost votes.



posted on Oct, 30 2012 @ 02:14 PM
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Maybe not but with $16 trillion in national debt and over $1 trillion deficit we sure cant continue to operate like we are. We cant just keep adding $1 trillion to our deficit every year. Something has got to give. Also printing money to buy debt is just wrong on so many levels. If I'm not allowed to do it why is the government allowed to do it?

I think taxes need to be raised across the board and then we need to scale back massively on the military budget and then finally start putting our surplus to the debt. All these things need to be done in order for us to truly recover economically. Anything else is a bandaid or will worsen the problem (like qe infinity)



posted on Oct, 30 2012 @ 02:16 PM
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No offense OP...I have a degree in economics and always get a little excited to read informed arguments on either side of the fence....this OP is not one of them. I am unclear how raising taxes, specifically on the highest incomes that derive the bulk of thier wealth from "un-earned income" will destroy the economy?



posted on Oct, 30 2012 @ 02:54 PM
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Again, you can't play the history game. We have a 16 trillion dollar debt and we're in a global economy with cheap labor.

The fact is we're a Country where people look out for self and that's how it should be. We pursue happiness by the dictates of our own conscious. People will give according to their own conscious not "economic patriotism" whatever that means.

People will move money overseas and invest in emerging markets before feeding greedy politicians who have us 16 trillion in the hole.

Look at liberal actors and singers who love Obama. Most of them have "production companies" that don't produce anything. They just use it to avoid paying taxes upfront. This is why so many of them get in trouble for not paying taxes.

Let's see if these liberal actors and singers will be economic patriots and when they earn 5 million for a movie they pay taxes off the top like it's earned income instead of running it through their "production company."

At the end of the day, pro growth policies and smaller Government is what's needed, not more taxes when we're 16 trillion in debt and we live in a global economy with cheap labor.



posted on Oct, 30 2012 @ 03:04 PM
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reply to post by Indigo5
 

Dear Indigo5,

Hi! I haven't seen you for a while. Hope you're well.

I am unclear how raising taxes, specifically on the highest incomes that derive the bulk of thier wealth from "un-earned income" will destroy the economy?
I wonder if the question of incentives come into play. France, under it's new leader, Hollande, has instituted a new and rather drastic tax policy. The Frebch taxman will take 75% of everything when your income hits a million Euros. One early result? Bernard Arnault, France's richest man, has applied for Beligian citizenship. Many others have decided to move to England.

Some comments from the press:

Pierre-Antoine Gailly, president of the Paris Chamber of Commerce and Industry, says it sends the wrong message to just the kind of people that France needs.

"It is not a good decision because it pinpoints a few people, a couple of thousand who are very talented entrepreneurs and which the country needs to sustain economic development," he says.

For tax lawyer Mr Tripet, the revolution is not really the point. He is not worried about a few billionaires leaving France.

(At the G20 summit in June, the UK Prime Minister David Cameron promised to "roll out the red carpet" to any French business people fleeing the country to avoid high taxes.)

But he worries that future generations of France's brightest and best will decide to make their fortunes elsewhere.

"I asked many of my clients who have children between 25 and 35, and nine-tenths of them are studying or working abroad," he says.

"Certainly, France has got used to the ambitious and well qualified moving abroad in their 20s to make money and see the world.

"It has always consoled itself with the thought that when they settle down and start a family, the excellent tax breaks for families, the education system and generous benefits will bring them home again.

"The danger is that very high tax rates make it less likely they will return."
www.bbc.co.uk...
Eventually, the question will be asked, "What do you plan on doing with the money raised?" We haven't yet found a way to make the economy blossom with federal spending. Put more people on food stamps? We're at record levels now. Extend unemployment benefits? That will help? Will it help more than dropping bales of money over poor areas?

Let me ask the same question reversed. How does raising taxes on high incomes help the economy? Are you so sure we're on the left side of the Laffer curve?

With respect,
Charles1952



posted on Oct, 30 2012 @ 03:13 PM
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Originally posted by neoholographic

The fact is we're a Country where people look out for self and that's how it should be.

We pursue happiness by the dictates of our own conscious.

People will give according to their own conscious not "economic patriotism" whatever that means.

Look at liberal actors and singers who love Obama.

Let's see if these liberal actors and singers will be economic patriots and when...


Excerpted a few bits from your post to highlight the obvious...you are making an idealogical/emotional argument laden with labels, generalizations, gross assumptions and frankly gross inaccuracies...you are not making any kind of economic argument or even a logical one...just rhetoric...


Originally posted by neoholographic
At the end of the day, pro growth policies and smaller Government is what's needed, not more taxes when we're 16 trillion in debt and we live in a global economy with cheap labor.


I don't think anyone is claiming that pro-growth policies aren't needed???? Do you believe that one half the country is "anti-growth"?? Can we talk like grown-ups for a change? The debate is centered on how that growth is created and generated.

Smaller government? YES...Government no larger than it absolutely needs to be...Democrats and Republicans both would like a less expensive government. No one cheers debt. Again the debate is about where we cut and where we subsidize...and loop holes and tax breaks given disproportionately to the wealthy is a subsidy.



posted on Oct, 30 2012 @ 03:23 PM
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Originally posted by charles1952

Eventually, the question will be asked, "What do you plan on doing with the money raised?" We haven't yet found a way to make the economy blossom with federal spending. Put more people on food stamps? We're at record levels now. Extend unemployment benefits? That will help? Will it help more than dropping bales of money over poor areas?

Let me ask the same question reversed. How does raising taxes on high incomes help the economy? Are you so sure we're on the left side of the Laffer curve?

With respect,
Charles1952



What to do with the money raised??? No not Unemployment...not more food stamps...Spin and Rhetoric.

Higher taxes on the wealthy...who have benefited from historically low tax rates, loop holes and bailouts for the past decade and created LESS...FAR LESS jobs as the unemployment rate has shown, plus near economic collapse.

Take that money and preserve tax breaks for the middle class, cut government where it is not needed and balance the budget.

The consumer class is the engine of economic growth in this country...not the investor class. They do not invest unless there is actual demand...consumption...the middle class. So we continue on a path of coddling the rich at the expense of everyone else and the investor class will in fact leave the USA for better populations to plunder....but if we revive the middle class, everyone benefits.

We have given the wealthy every tax break and benefit and bailout that we can afford...and jobs have nose-dived, the middle class is near bankrupt and has no money to buy things...and the investor class sits on thier money cuz no one is buying anything.

Middle class tax breaks...raise the rates for the wealthy...repair our failing infrastructure...cut and reform wherever we can....balance the budget...and the American consumer/middle class will drive the economy upwards the way it always has.



posted on Oct, 30 2012 @ 03:36 PM
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reply to post by Indigo5
 


Not an ideological argument just a fact. It has nothing to do with "economic patriotism" whatever that means.

Also, you have to be naive if you think both Republicans and Democrats want to see a less expensive Government. Their power lies in the more money they control even if it's deficit spending.

Bush and now Obama spend like crazy. Obama will do nothing about the debt and Government spending because he thinks Government spending can spur growth in a global economy with cheap labor.

I'm supporting Romney because of his record.

When he was in business, his co-workers called him conservative and careful with other peoples money. A foreign concept in Washington. He turned debt into surplus in Mass. and the Olympics.

Will he be better, I hope but I know Obama like Bush will do nothing about Government spending and Debt.



posted on Oct, 30 2012 @ 03:55 PM
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Originally posted by Indigo5

Originally posted by charles1952

Eventually, the question will be asked, "What do you plan on doing with the money raised?" We haven't yet found a way to make the economy blossom with federal spending. Put more people on food stamps? We're at record levels now. Extend unemployment benefits? That will help? Will it help more than dropping bales of money over poor areas?

Let me ask the same question reversed. How does raising taxes on high incomes help the economy? Are you so sure we're on the left side of the Laffer curve?

With respect,
Charles1952



What to do with the money raised??? No not Unemployment...not more food stamps...Spin and Rhetoric.

Higher taxes on the wealthy...who have benefited from historically low tax rates, loop holes and bailouts for the past decade and created LESS...FAR LESS jobs as the unemployment rate has shown, plus near economic collapse.

Take that money and preserve tax breaks for the middle class, cut government where it is not needed and balance the budget.

The consumer class is the engine of economic growth in this country...not the investor class. They do not invest unless there is actual demand...consumption...the middle class. So we continue on a path of coddling the rich at the expense of everyone else and the investor class will in fact leave the USA for better populations to plunder....but if we revive the middle class, everyone benefits.

We have given the wealthy every tax break and benefit and bailout that we can afford...and jobs have nose-dived, the middle class is near bankrupt and has no money to buy things...and the investor class sits on thier money cuz no one is buying anything.

Middle class tax breaks...raise the rates for the wealthy...repair our failing infrastructure...cut and reform wherever we can....balance the budget...and the American consumer/middle class will drive the economy upwards the way it always has.


This post shows you don't understand the economy we're in. These are just every politicians talking points that will never get done.

The fact is the investor class is very important because the more they make the more they consume. You had real estate investors making and spending millions.

Consumption is the key especially in a global economy with cheap labor. The 16 trillion dollars in debt hurts the middle class because many of them live off of credit. At this point, they have to until we start finding jobs that were lost to cheap labor.

Other countries love holding our debt as we consume their goods. So the American people can borrow and consume. The problem occurs when the Government borrows and spends like crazy (Bush,Obama).

This causes a credit crunch because the middle class is paying for the debt. So instead of going out to eat on family night, The mother and father decide to start eating in to save money.

So, the Government debt and spending is the problem. So more taxes and Government spending are not the solution in a global economy with cheap labor while we're sinking in 16 trillion dollars in debt.



posted on Oct, 30 2012 @ 04:15 PM
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reply to post by neoholographic
 


Ben Stein doesn't think so and warns against serious catastrophe if we don't. He is non-partisan, in fact leans toward Republican, but has amazing credentials and is a brilliant mind when it comes to economics. His Father was an economist, Herbert Stein economic advisor and contributor to the Wall Street Journal. Ben lays out the argument for raising taxes on the wealthy (and maybe they should be raised at least back to where they were before Reaganomics re-distributed the tax burden from the rich to the poor) Not too many people disagree that the Bush tax cuts for the rich need to expire but you are right. The middle class cannot take another beating in the form of another tax hike to give the richest 10% a break. Screw them!


Economist Ben Stein tells CNN's Brooke Baldwin that raising taxes on millionaires is fair and necessary to avoid default.







edit on 30-10-2012 by newcovenant because: (no reason given)



posted on Oct, 30 2012 @ 04:25 PM
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reply to post by neoholographic
 





We need more growth and smaller Government. We can't afford the Behemoth in Washington. Our children and grandchildren can't afford the Behemoth in Washington.



Behemouth?
Is that what you call the only thing standing between you and a corporate takeover of the country?

The government should be working on behalf of it's citizens. The government should not simply step aside and leave America and the American people to fend for themselves. It should turn the reigns over to big business and trust them to grow America and do right by their workers. When has that EVER happened? We'd still have slavery if we could get away with it. You know we would but not for a bunch of disgruntled people who didn't think it was right. No - I certainly do not trust people left to their own devices.

Government absolutely should NOT turn a blind eye and hand the population on a silver platter to the CEO's running private enterprise. I don't care how much they want it and what they promise to do with the country when they get it.

It is just wrong. It is against the Constitution, in place to protect the people and our government against being taken over by outside interests. Why not stop the corporate takeover of America? Why not strengthen the government so that it can't be run roughshod over by corporate interests and industry polluters?

Another Gulf Oil spill, poisoned wells and exploited protected lands is not helping future generations no matter how you look at it.
edit on 30-10-2012 by newcovenant because: (no reason given)



posted on Oct, 30 2012 @ 04:38 PM
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reply to post by neoholographic
 


Raising taxes on the wealthy elite is not going to destroy our economy, that's just a load of fear-mongering B.S.

Our economy has done it's best when the top marginal rates were much higher than they are today and that's a fact, not a prediction.

I agree with your premiss that when wealthy people have more money they seem to consume more. The problem with your argument is that the same holds true for the middle and lower classes of our population and seeing how these economic classes are much larger than the wealthy class, the demand created by their consumption will dwarf that of the wealthy elite. Knowing that it's demand for products, (not wealthy people) that is the driving force behind job creation, it would only make sense to have our tax policy designed to favor those who would create the largest demand.

On top of everything else, here's two very good reasons why raising taxes won't destroy our economy. Are you ready for it? Here it is;

1. It never has before and
2. It never has before.



posted on Oct, 30 2012 @ 04:57 PM
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Originally posted by neoholographic

Originally posted by Indigo5

Originally posted by charles1952

Eventually, the question will be asked, "What do you plan on doing with the money raised?" We haven't yet found a way to make the economy blossom with federal spending. Put more people on food stamps? We're at record levels now. Extend unemployment benefits? That will help? Will it help more than dropping bales of money over poor areas?

Let me ask the same question reversed. How does raising taxes on high incomes help the economy? Are you so sure we're on the left side of the Laffer curve?

With respect,
Charles1952



What to do with the money raised??? No not Unemployment...not more food stamps...Spin and Rhetoric.

Higher taxes on the wealthy...who have benefited from historically low tax rates, loop holes and bailouts for the past decade and created LESS...FAR LESS jobs as the unemployment rate has shown, plus near economic collapse.

Take that money and preserve tax breaks for the middle class, cut government where it is not needed and balance the budget.

The consumer class is the engine of economic growth in this country...not the investor class. They do not invest unless there is actual demand...consumption...the middle class. So we continue on a path of coddling the rich at the expense of everyone else and the investor class will in fact leave the USA for better populations to plunder....but if we revive the middle class, everyone benefits.

We have given the wealthy every tax break and benefit and bailout that we can afford...and jobs have nose-dived, the middle class is near bankrupt and has no money to buy things...and the investor class sits on thier money cuz no one is buying anything.

Middle class tax breaks...raise the rates for the wealthy...repair our failing infrastructure...cut and reform wherever we can....balance the budget...and the American consumer/middle class will drive the economy upwards the way it always has.


This post shows you don't understand the economy we're in. These are just every politicians talking points that will never get done.

The fact is the investor class is very important because the more they make the more they consume. You had real estate investors making and spending millions.



No they don't. That's one of the reason they got rich in the first place.




Consumption is the key especially in a global economy with cheap labor. The 16 trillion dollars in debt hurts the middle class because many of them live off of credit. At this point, they have to until we start finding jobs that were lost to cheap labor.



How does Government debt affect household debt? There is absolutely no connection between the two.





Other countries love holding our debt as we consume their goods. So the American people can borrow and consume. The problem occurs when the Government borrows and spends like crazy (Bush,Obama).


If I am a chinese and i buy american debt, i first use my yuan to buy $, then buy a T-Bill for the promise to get back more $ a few years down the road. There is no connection between debt and foreign trade balance.



This causes a credit crunch because the middle class is paying for the debt. So instead of going out to eat on family night, The mother and father decide to start eating in to save money.



A credit crunch is basically an increase in standards demanded by the lender. This is another complete non-sequitur in your argument.





So, the Government debt and spending is the problem. So more taxes and Government spending are not the solution in a global economy with cheap labor while we're sinking in 16 trillion dollars in debt.


edit on 30-10-2012 by narwahl because: (no reason given)



posted on Oct, 30 2012 @ 05:07 PM
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It's funny how all of these posts are based on an economy from the past.

WE'RE 16 TRILLION IN DEBT IN A GLOBAL ECONOMY WITH CHEAP LABOR!

Even Ben Stein talks about past economies that succeeded with high tax rates. People are so in love with class warfare, all they can say is tax the rich.

Nobody needs to be taxed more. The problem is Government borrowing and spending. You can't fix this problem by raising taxes.

For instance, Government spending worked better 40 to 50 years ago because the Government could spend a billion dollars and 85-90% of that money stayed in the local U.S. Economy. Today, if the Government spends a billion dollars 40-50% can be spread out overseas. So, Government spends and the American people don't see the benefit. There's not enough jobs or the kind of jobs to keep feeding the Government in Washington.

So say you're going to spend 50 billion dollars. You don't do it through a new government program where politicians will give contracts to friends and donors. You give that money directly to Credit Unions and Community Banks with the stipulation that 90-95% goes to people in the Community for Mortgages, Business and personal loans.

You Work on a slew of trade agreements. Set up free trade zones like Romney talked about. Reduce the scope and size of Govt.

There's no need to raise taxes on ANYBODY!!

The problem is Government Spending and Debt.



posted on Oct, 30 2012 @ 05:10 PM
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Originally posted by neoholographic

I'm supporting Romney because of his record.

When he was in business, his co-workers called him conservative and careful with other peoples money. A foreign concept in Washington. He turned debt into surplus in Mass. and the Olympics.



Politics aside...that is some mis-informed crazy right there...

When he was in business...he was careful with his money and often his investors money...but not with the company which he aquired, those he plundered...to offer return to himself and his investors. Management fees, debt, bankruptcey was his profit model. He is good with money the way Tony Soprano is good with money.

Mass.?



That being said, it’s true that the long-term debt went from $16 billion (see A-22) on Jan. 1, 2003, just before Romney took office, to $18.7 billion (see A-22) on Oct. 1, 2006, three months before he left. That’s an increase of $2.7 billion.

According to Moody’s State Debt Medians, in 2007 — the year Romney left office — Massachusetts had the highest debt per capita of any state in the country, $4,153. Connecticut ranked second, with $3,713, and Hawaii third, with $3,630.

www.factcheck.org...

He did manage a balanced budget (he was constitutionally required to like every Mass. Govenor), by shifting the tax burden to property taxes...middle class while at the same time cutting state aid and education.

Olympics? You mean he made that a success?? AFTER asking and getting 1 Billion from the federal gov?



posted on Oct, 30 2012 @ 05:23 PM
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reply to post by Indigo5
 


You don't understand how Private Equity works. Of course they have to leverage the position of their investors when dealing with troubled companies. These investors include Firefighter and Teachers pension funds.

The biggest investor in Bain today is the California State Pension Fund with $600 million.

So they can't just go to a troubled company and say, here's 100 million dollars, if you turn things around give us a call. They have to put their investors in the best position. I wish Washington thought this way when it comes to tax payer money.

I tell Republicans who complain about Clinton and try to say he didn't give us a surplus, that they're wrong and Clinton did a good job. It's just like kool aid drinking democrats who don't want to accept the fact that Romney turned things around in Mass and the Olympics.



posted on Oct, 30 2012 @ 06:22 PM
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Originally posted by neoholographic
reply to post by Indigo5
 


You don't understand how Private Equity works. Of course they have to leverage the position of their investors when dealing with troubled companies. These investors include Firefighter and Teachers pension funds.

The biggest investor in Bain today is the California State Pension Fund with $600 million.

So they can't just go to a troubled company and say, here's 100 million dollars, if you turn things around give us a call. They have to put their investors in the best position. I wish Washington thought this way when it comes to tax payer money.


You are confused in a fundemtal way. Government is not a business. A governmetns goal is goal is not profit. If it was that would mean raising revenues and cutting costs. Raising taxes and cutting services. If government was a business, it would be the omnipotent monopoly where competing with them would get you arrested. Government has no competitors, they write the laws. Crazy thinking.

The circular logic of "I wish Washington thought this way with taxpayer money"...Taxpayer money isn't an investment to profit from...whom would government collect "profit" from? who are thier customers?...TAXPAYERS!...see the problem? Government is a vehicle to do those things we can not do as individuals...regulation of industry, miltary defense etc. etc. NOT a profit entity, profit requires winners and losers...and taxpayers would be both, only differentiated by tax breaks and government choosing which way the money flows...plutocrasey...oligarchy...monopoly...government has literally no competitors, no restraint and can only "profit" by choosing with literal omnipotence in a playing field that they design and utterly rule, winners and losers...,.government as a business is terrifying.



posted on Oct, 30 2012 @ 06:24 PM
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Originally posted by neoholographic
reply to post by Indigo5
 


You don't understand how Private Equity works. Of course they have to leverage the position of their investors when dealing with troubled companies.



BTW m- utterly wrong. You have no idea what I do and have done for a living. I understand private equity VERY well...but I don't think you understand the difference between vulture capitalism and government.




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