GOP May Block Payroll Tax Cut Extension That Obama Claims Could Save Up To 1 Million Jobs

TBI ^ | 8-22-2011 | Zeke Miller

[Eagle of Liberty]

That’ correct. I used the years I did because the argument at hand was “Do tax cuts decrease revenue?” and the answer is, “Of course they do at first but the economy expands the revenues recover”.

The major portion of the tax cuts were enacted in 2003. After that tax cut, revenues increased, almost immediately. Those increases were due to less money being taken from basically everyone, corporations, dividends and personal income. This, coupled with a stable future business outlook, allowed businesses to invest and expand. Those expansions employed more workers and those workers paid taxes. Those new taxpayers increased revenue some more.

You have to look at tax cuts/hikes and spending as two different monsters. In the short term, tax hikes can bring in more revenue but that is only until those that do not wish to suffer the tax increases move elsewhere. When they move, the US loses not only that corporation's tax revenue but also all of the people that that company employs. For a longer term solution, any method of loosening the reins on businesses contributes to more business investment, more employment and a more steady stream on income.

Now you have the spending side. Spending should always be viewed in relation to the revenue. Less revenue, less spending. Unfortunately for decades, the powers that be have written automatic spending budget increases into legislation. They have shied away from any sane budget policy. No BBA, no limit of spending as a percentage of GDP and because of these idiots sitting in Washington, our debt is now, by law, going to be higher than 100% of our GDP. 1995 was the only time when Congress acted responsibly and this was only for a few years until they noticed all of the additional revenue that was at hand and what new programs could be enacted.

IMO, until Obama is GONE, businesses are not going to re-invest even with tax cuts out of fear of Obama. We have economic uncertainty and businesses exist to survive. Remove the uncertainty, i.e. remove Obama and his Regulation hungry Czars, and businesses will once again invest and hire. Keep the uncertainty, i.e. Obama is re-elected, and tax cuts may ease the burden but businesses will still hoard their money out of fear of what this insane Administration will do next.

The REAL problem revolves around the fact that we have had basically two economic policies for far too long:

Democrats - Tax and Spend
Republicans - Cut Taxes and Spend

Neither Party has had the integrity to control spending and that is sad.

[MontaniSemperLiberi]

“The major portion of the tax cuts were enacted in 2003.”

That’s not true. EGTRRA was passed in 2001 and was made retroactive to the 2001 fiscal year (normally congress works on the next fiscal year). EGTRRA was what most people think of when they refer to the “Bush Tax Cuts” because it contained the income tax changes as well as a few other, smaller, changes.

The graph I posted was for income taxes and not taxes as a whole for that reason.

JGTRRA was passed in 2003 which accelerated the reductions set forth in EGTRRA. Corporations and individuals with a high amount of investment income had their accountants move numbers around on their spreadsheets to declare more income to take advantage of the better rates. It didn’t hurt that the stock market had a good run too.

SS tax revenue increased steadily through out.

“Now you have the spending side. Spending should always be viewed in relation to the revenue. Less revenue, less spending. Unfortunately for decades, the powers that be have written automatic spending budget increases into legislation.”

I’ve been doing a lot of poking around in the budget numbers and I think it may actually be worse than that. The CBO typically assumes that the economy will immediately recover from any recession and then grow at 2.5% indefinitely with a 1.5% inflation rate. This has not happened in the past ten years (or so). So, congress is always budgeting for the best case scenario. They assume over the long term that they can grow government 4% a year from wherever they are now and it will stay the same as a percentage of the economy.

All deficits are temporary in perpetuity, according to congress.

Paul Ryan’s plan was even worse than that. He took the Heritage foundation’s recommendation on tax cuts projected their effect out twenty five years and claimed that his plan would balance the budget sometime around 2036. The Heritage foundation was grudging to admit but finally had to admit that Ryan’s projections of 1% unemployment in 2036 were not correct.

“The REAL problem revolves around the fact that we have had basically two economic policies for far too long:

Democrats - Tax and Spend
Republicans - Cut Taxes and Spend”

We agree on that 110% FRiend. That is why I fear my country is doomed. For too long we’ve been out of balance from the natural order due to wishful thinking and a lack of faith in God. I’m coming to the point where I think we would be better off without the Federal Government despite all the problems that would cause.

[Eagle of Liberty]

That’s not true. EGTRRA was passed in 2001 and was made retroactive to the 2001 fiscal year (normally congress works on the next fiscal year). EGTRRA was what most people think of when they refer to the “Bush Tax Cuts” because it contained the income tax changes as well as a few other, smaller, changes.

EGTRRA was passed in 2001 but major parts were not scheduled to take effect until later years. JGTRRA, passed in May 2003 moved up some of the tax rate drops to Jan 2003. The brackets and percentages changed slightly in 2001 and 2002 but the big changes did not take place until Jan 2003.

http://www.moneychimp.com/features/tax_brackets.htm

The graph I posted was for income taxes and not taxes as a whole for that reason.

The graph that I posted was just Income Taxes as well.

I’m coming to the point where I think we would be better off without the Federal Government despite all the problems that would cause.

Getting to that point as well, comrade.