Category Archives: Taxes

Low Taxes verses Economy

Taxes and the Economy

Congressional Research Service Report

We heard it over and over last year how low lower taxes stimulate the economy. Not so it turns out. Interesting research here called Taxes and the Economy: An Economic Analysis of the Top Tax Rates Since 1945. It doesn’t matter if we look at the marginal rates or long-term capital gains rate the hard data just doesn’t add up to creating anything good.Most interesting and controversial is that this Nonpartisan Tax Report Withdrawn After G.O.P. Protest, released not far ahead of November’s election by the Congressional Research Service was pulled following GOP pressure. Yes, it was unfortunately just before the election, and yes the verbiage is a bit off so go ahead and ignore the verbal summary, ignore the timing, in fact ignore anything at all that could by either party be considered partisan. Just take a look at the data from 1945 until now and you see a some compelling realities:

  • Lowering marginal tax rates does NOT increase economic activity nor impact the GDP.
  • Lowering capital gains rates does NOT increase economic activity nor impact the GDP.
  • Lowering marginal tax rates and/or capital gains tax rates does NOT increase saving and investment.
  • Lowering marginal tax rates and/or capital gains tax rates does NOT increase U.S productivity.
  • Lastly, lowering capital gains and/or marginal tax rates DOES make the wealthy wealthier and add to the significant and growing U.S income inequality.

In hindsight it is pretty clear to economists why there was party pressure to hide this report. Nearing the end of a hard fought, expensive campaign the facts here don’t just challenge but completely destroy the central tenant of conservative economic theory being put in front of voters, that reduced tax rates increase economic growth, increase saving and investment, and boost productivity (increase the economic pie).

Look at the data, in the end, lowering taxes on the wealthy just makes them wealthier, the rest of us see no impact. Surprise!

Paul Ryan – Integrity

We know he’s the GOP running mate, heard lots of hype on everything from the tea

Paul Ryan

party, Medicare, music, to how he works out.  I DON”T CARE and here’s why; integrity…lack of integrity.

Ryan is both proclaimed, and self proclaimed as a deficit hawk and this is a lie. In my first blog [1] I wrote about the 19 Senators who voted for the $850 Billion (bank) Bailout bill but who also claim they want a balanced budget.  That activity was not limited to the Senate. Mr. Ryan it would seems voted right with the 19. Remember, all of the $850 Billion was deficit spending. Integrity.

But like the infomercial, that’s not all. Mr. Ryan also voted for the auto industry bailout, and voted to retain federal subsidies for big oil corporations. His “budget” would also retain the oil subsidies while cutting EPA enforcement, alternative energy and conservation funding. For that he is at least consistent, but what it means is he is not a deficit hawk as he proclaims. His budget world would retain subsidies and tax breaks for already wildly successful oil corporations and make it up by cutting things like food stamps, welfare, women’s health, and education. Even the U.S Conference of Catholic Bishops critiqued Ryan’s (himself a Catholic) proposal “for cutting food stamps and other assistance programs for the poor after Ryan said his Catholic faith helped shape the policies in the document” [2] He is far less interested in balancing the budget than he is in furthering his ideologist agenda…Integrity.

I’m with Jim Cramer on this. Ryan’s selection won’t make a bit of difference except getting some attention which the campaign desperately needed after a month of gaffes, but being otherwise ignored. “What rich person who wants his taxes lower thinks Ryan will make that much of a difference? For people voting on their tax rates, haven’t they already settled on the idea of voting for Romney? Other than rich people, are any Americans willing to sacrifice Medicare when the program pays for endless best-in-the-world health care? Is there anyone other than the rich — who can afford it anyway — who would change his mind?” [3] A non-impact on the voters unless we actually start to care about voting records and…integrity.

What we have in the end is just another politician. One who hasn’t made a real living doing anything else but being on your and my payroll in Washington.  And one who’s voting record and proposed budget supports his intent to support already successful corporations at the expense of a legitimate safety net. One who says one thing, and does another. Integrity, where can we find some for these guys?

 [1] http://americanmoneylies.com/?p=23

[2] Romney selects Paul Ryan as VP, By Jonathan Easley and Emily Goodin – 08/11/12 07:10 AM ET

[3] http://www.topix.com/forum/com/bmy/TCKJB0FTPA2SU6A9K