The Benefits of the Fair Tax
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17-02-2014, 09:20 AM (This post was last modified: 17-02-2014 09:27 AM by frankksj.)
RE: The Benefits of the Fair Tax
(17-02-2014 08:19 AM)wazzel Wrote:  
(15-02-2014 10:19 PM)frankksj Wrote:  You want real numbers? Attached is a study using real numbers. It concludes every 1% increase in tax rates lowers gdp by 2%-3%.
Historical data does not back that up. Tax revenue regardless of rate is around 19% of GPD, fairly consistently. GPD growth has happend in time of both low and high top marginal rates. While there may be some relation it is not the only cause.

The link I gave you includes historical data. It links to studies, which link to more studies, all of which ultimately link to oecd data. You can't just dismiss it.

It's even easier to seen how income tax rates effect investors' behavior since they can instantly alter how much they work as tax rates change. Go to taxpolicy.org, and download the US historic ltcg income tax rate, vs. the amount of tax revenue collected, and put them into an Excel chart. I attached it for you. For 40 years, the pattern is unbroken. As the tax rate goes down (red) the amount of tax revenue goes up (blue) and vice-versa. Except for the one spike during the dot com boom from 1997-2000, the two are perfect mirror opposites. For you to conclude "While there may be some relation it is not the only cause", there is a perfect relation over 40 years tied precisely to changes in the tax rates.

When the tax rate got down to 15%, investors worked so much harder the tax revenue collected shot up past $800 billion. When the tax rate was 40%, tax revenue was only $50 billion as people simply stopped working.

You're just living in denial to ignore all the data.


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17-02-2014, 10:04 AM
RE: The Benefits of the Fair Tax
(17-02-2014 08:19 AM)wazzel Wrote:  Historical data does not back that up. Tax revenue regardless of rate is around 19% of GPD, fairly consistently. GPD growth has happend in time of both low and high top marginal rates. While there may be some relation it is not the only cause.

Sure, but the argument is not really about marginal rates, that was used as a demonstration of principle that income taxes are a disincentive to productivity. At 100% taxation productivity will drop to zero. At 0% it's maximized, all other factors equal.

There was a metastudy completed recently, reported in the latest issue of Reason, showing a direct correlation between state income tax levels and state economies. The correlation coefficient is very strong - states with high state income taxes lag, and those with low or none, lead, other factors being equal. I don't think I can link it, as it's a paid source. But outside this thread, it's not really a controversial claim anyway.

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17-02-2014, 10:04 AM (This post was last modified: 17-02-2014 10:19 AM by GirlyMan.)
RE: The Benefits of the Fair Tax
(17-02-2014 09:20 AM)frankksj Wrote:  When the tax rate got down to 15%, investors worked so much harder ...

The fuck that even mean, Frank? That ain't working. Get your money for nothin', get your chicks for free.




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17-02-2014, 10:05 AM
RE: The Benefits of the Fair Tax
(17-02-2014 09:20 AM)frankksj Wrote:  
(17-02-2014 08:19 AM)wazzel Wrote:  Historical data does not back that up. Tax revenue regardless of rate is around 19% of GPD, fairly consistently. GPD growth has happend in time of both low and high top marginal rates. While there may be some relation it is not the only cause.

The link I gave you includes historical data. It links to studies, which link to more studies, all of which ultimately link to oecd data. You can't just dismiss it.

It's even easier to seen how income tax rates effect investors' behavior since they can instantly alter how much they work as tax rates change. Go to taxpolicy.org, and download the US historic ltcg income tax rate, vs. the amount of tax revenue collected, and put them into an Excel chart. I attached it for you. For 40 years, the pattern is unbroken. As the tax rate goes down (red) the amount of tax revenue goes up (blue) and vice-versa. Except for the one spike during the dot com boom from 1997-2000, the two are perfect mirror opposites. For you to conclude "While there may be some relation it is not the only cause", there is a perfect relation over 40 years tied precisely to changes in the tax rates.

When the tax rate got down to 15%, investors worked so much harder the tax revenue collected shot up past $800 billion. When the tax rate was 40%, tax revenue was only $50 billion as people simply stopped working.

You're just living in denial to ignore all the data.

Hmmmmm...wonder why in 2000-2005, the gain fell while the rate remained the same....

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17-02-2014, 10:10 AM (This post was last modified: 17-02-2014 10:26 AM by GirlyMan.)
RE: The Benefits of the Fair Tax
(17-02-2014 10:04 AM)toadaly Wrote:  The correlation coefficient is very strong - states with high state income taxes lag, and those with low or none, lead, other factors being equal.

The Peoples Republic of Maryland with the highest median income per capita as well as some of the highest taxes in the US would beg to differ. The Free State don't lag behind, we fucking lead. Tongue

As it was in the beginning is now and ever shall be, world without end. Amen.
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Or your shadow at evening rising to meet you;
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17-02-2014, 10:24 AM
RE: The Benefits of the Fair Tax
(17-02-2014 10:04 AM)GirlyMan Wrote:  
(17-02-2014 09:20 AM)frankksj Wrote:  When the tax rate got down to 15%, investors worked so much harder ...

The fuck that even mean, Frank? That ain't working. Get your money for nothin', get your chicks for free.

Girly, do you like it when people assume government employees like you don't work? Or do you think they should walk a mile in your shoes before judging?

Yes, investors work. No, Warren Buffet didn't get to be who is by sitting at home and watching TV all day. If so, we'd all be doing that. Read his bio. The man is a workaholic, putting in very long days researching companies to invest in, reviewing business plans, assembling management teams, attending board meetings, analyzing strategy, etc. Who are you to judge and say "he doesn't work"?

It OBVIOUSLY is work because you can see that as soon as you raise the income tax rates, they simply stop investing. If it wasn't work, if it was all money for nothin', then why do they change their behavior as tax rates change?
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17-02-2014, 10:29 AM (This post was last modified: 17-02-2014 10:34 AM by frankksj.)
RE: The Benefits of the Fair Tax
(17-02-2014 10:05 AM)Cathym112 Wrote:  Hmmmmm...wonder why in 2000-2005, the gain fell while the rate remained the same....

Jeez, you're a "professional economist" and you don't know this???? It's because during the 90's Alan Greenspan fueled a huge dot com bubble, which burst. As I said, you'll see from the chart, there's a perfect opposite correlation between tax rates and tax revenue EXCEPT during the dot com bubble, when the revenues shot up, and then during the bust when they plummeted. If you average out the bubble and bust, you'll see the correlation remains perfect for 40 years. Every notch you raise the tax rate people reduce their work effort accordingly.

So, when people call for a return to a 40% ltcg rate, which means tax revenue would plummet again from $850b to $40b, it's undeniable this is going to wipe out government's tax revenue and make the economy even worse, but they call for it anyway because it satisfies an emotional need to see rich people get punished.
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17-02-2014, 10:33 AM
RE: The Benefits of the Fair Tax
(17-02-2014 10:10 AM)GirlyMan Wrote:  
(17-02-2014 10:04 AM)toadaly Wrote:  The correlation coefficient is very strong - states with high state income taxes lag, and those with low or none, lead, other factors being equal.

The Peoples Republic of Maryland with the highest median income per capita as well as some of the highest taxes in the US would beg to differ. The Free State don't lag behind, we fucking lead. Tongue

Girly, we went over this already. It's because you're next to Washington DC, and the Federal Government pays salaries that are much higher than the private sector. So, of course, Virginia and Maryland, the two states where all the federal employees live, are going to report extremely high incomes.

But we're talking about a formula that can apply to all 50 states. This solution of "just move your state next to Washington DC" isn't going to help the people of Nevada. The state is kind of fixed where it's at, and cutting it out from the land mass and transporting the state to be adjacent to DC is not a reasonable plan to boost Nevada income.
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17-02-2014, 10:38 AM (This post was last modified: 17-02-2014 11:04 AM by GirlyMan.)
RE: The Benefits of the Fair Tax
(17-02-2014 10:24 AM)frankksj Wrote:  
(17-02-2014 10:04 AM)GirlyMan Wrote:  The fuck that even mean, Frank? That ain't working. Get your money for nothin', get your chicks for free.

Girly, do you like it when people assume government employees like you don't work? Or do you think they should walk a mile in your shoes before judging?

I sit on my ass all day writing computer programs, Frank. That ain't working. Won't get a blister on my little finger, won't get a blister on my thumb, but I might get Carpal Tunnel. And I don't get chicks for free. Not sure what I'd do with them even if I did. .., Consider ... Hand 'em over to Manly to take care of I guess.

(17-02-2014 10:24 AM)frankksj Wrote:  Yes, investors work. No, Warren Buffet didn't get to be who is by sitting at home and watching TV all day. If so, we'd all be doing that.
...
It OBVIOUSLY is work because you can see that as soon as you raise the income tax rates, they simply stop investing. If it wasn't work, if it was all money for nothin', then why do they change their behavior as tax rates change?

The Prophet Buffet may not be the best example to make your case, Frank, seeing as he's already on the record as saying, "So let’s forget about the rich and ultrarich going on strike and stuffing their ample funds under their mattresses if — gasp — capital gains rates and ordinary income rates are increased. The ultrarich, including me, will forever pursue investment opportunities." Tongue

As it was in the beginning is now and ever shall be, world without end. Amen.
And I will show you something different from either
Your shadow at morning striding behind you
Or your shadow at evening rising to meet you;
I will show you fear in a handful of dust.
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17-02-2014, 10:58 AM (This post was last modified: 17-02-2014 02:09 PM by GirlyMan.)
RE: The Benefits of the Fair Tax
(17-02-2014 10:33 AM)frankksj Wrote:  Girly, we went over this already. It's because you're next to Washington DC, and the Federal Government pays salaries that are much higher than the private sector.

That's bullshit Frank. I could make 3x my salary if I went to work as a Beltway Bandit. I work with ex-colleague Beltway Bandits who prove it. I don't because 1) I despise fucking Beltway Bandits trying to rip off the taxpayers and I'm kinda like the last line of defense and 2) the fuck I'm gonna do with 3x my salary? It's like offering another round of lobster to a fucker who's already full. And 3) Dude, I live a 1/2 mile from my work in the house my wife grew up in. Goddam coincidences. ... Number 3 is probably more like #1. I ain't moving. Big Grin

As it was in the beginning is now and ever shall be, world without end. Amen.
And I will show you something different from either
Your shadow at morning striding behind you
Or your shadow at evening rising to meet you;
I will show you fear in a handful of dust.
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