pas'ion Wrote:
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> President George W. Bush had pushed through two
> big tax cuts - one in 2001 because the government
> was supposedly taking in too much money, the
> second in 2003 to stimulate investment. But the
> economy tanked anyway. The latest tax-cut screed,
> the Republican Party's Pledge to America, has no
> meaningful numbers, proposes no changes in
> programs like Social Security, Medicare and
> defense, and asks no sacrifices of anyone, yet it
> says it can balance the budget. Good luck with
> that.
>
>
>
http://www.washingtonpost.com/wp-dyn/content/artic
> le/2010/10/17/AR2010101700019_3.html?nav=hcmodulet
> mv
>
>
> One proposed solution is to jump-start the economy
> with deep and permanent tax cuts. That's more than
> a little problematic, given that the Great
> Recession began in 2007, when tax rates,
> especially on investment income, were about the
> lowest in modern times and there were no "Obama
> tax increases" on the horizon.
Yes, the article is very interesting if you read past your short but meaningless highlight:
...What about having the Treasury engage in a massive stimulus program to put money in people's pockets and have them spend it, ginning up economic activity and restoring confidence? But stimulus money has to come from somewhere - and it doesn't seem possible for the Treasury to raise a few trillion more stimulus bucks without dire consequences to interest rates and the dollar's value.
It doesn't help that the administration wrongly predicted that its stimulus package would hold unemployment to 8 percent; the rate soared to 10 percent and still hangs stubbornly in the mid-nines.
Other institutions, such as the Fed and the Social Security Administration, both nonpartisan, also underestimated our economic problems. But the administration's mistake, which seems to have been an honest one, has undermined its credibility.
The fact that stimulus programs seemed designed to favor unionized workers, a core Democratic constituency, didn't help. Nor did the fact that Cash for Clunkers and the $8,000 credit for first-time home buyers caused one-time spikes in new-car and house sales that fell off sharply after the programs expired. ...
Yeah, but that has nothing to do with the point of his topic either. The point basically is this - the money is there, and it isn't going to come back to the US under current conditions. If they threaten to pass legislation to somehow tax it, then they will just spend the money elsewhere. Best bet, offer incentives to get them to invest the money back here in the US. And um - very few people are really embracing the 'deep cuts' mentality - other than for a short term stimulus. Many folks would like to make portions of the Bush tax cuts permanent, and the majority of Americans would probably agree on increasing taxes (a bit) on folks making over $500K a year. Our taxes here in the US though are much different than overseas - we have income taxes at Federal and State levels, we require businesses to pay not only employment taxes on their workers, but then also taxes on their earnings. Additionally we then tax 'passive' earnings such as the earnings on savings which could hardly be argued as real 'income' - but whatever.
But yeah, being stubborn always works - especially with other people's money.
If you can’t model the past, where you know the answer pretty well, how can you model the future? - William Happer Cyrus Fogg Brackett Professor of Physics Princeton University