Why don't I hear this said every day? Supply side economics is a load of crap

[NCcoast]

Mainstream Media Spokesmodel/GOP talking head: We can't raise taxes on the wealthy while we're in a recession. It will stifle the economy and slow job growth.

Any progressive smart enough to tie his shoes: The conditions that supply side economics suggest will stimulate the economy, more wealth in the hands of the wealthy, have existed for a decade. And here we are, the worst economy since the Great Depression. Supply side economics is a load of crap. Let's tax the wealthy, start rebuilding our infrastructure and paying down the national dept. See, you actually can tax your way to prosperity, because economies are stimulated from the bottom up, not the top down.

I'm a simple guy, OK. Have I got this wrong? Isn't it just that simple? Why aren't I hearing this said every day?

[provis99]

1. yes, it's crap.

Any person who deals in reality will know it is crap. But what matters in today's world is not reality, but power. And the assholes who push this supply-side crap have the power.

[ejpoeta]

3. and the media. it helps to control the media and therefore be able to repeat your

message ad nausea until it sounds true.

[dkf]

2. Oh for goodness sakes, you would have to tax them a lot just to get to even.

You think you can close a 1.5 trillion deficit yearly and tax them more to pay for infrastructure? That sounds like blood from a stone territory.

For 2008 the total AGI of the top 1% was $1.7 trillion. So you would have to tax their entire pay and leave them with no income whatsoever. That would mean everyone who made more than $380,000 would get nothing.

Of course 2008 was a bad year for the stock market so these numbers are impacted by that. But still, how realistic is it to make this group pay for everything?

http://www.taxfoundation.org/news/show/250.html

[mmonk]

5. I don't give a rat's ass about revenge or their income.

The whole meme of the corporate state is if they are taxed a dime more than the poor, it's class warfare. It's about economics. I wrote my thesis or final paper for macro economics against the supply side economics of Jack Kemp which became "Reaganomics". I wrote it would bankrupt state and local governments as it was an attack on our federalism setup. It took 30 years. I didn't know how long it would take. But it took long enough for them to grab the propaganda mantle and blame it on liberalism. We are in the final stages of their victory unless this can be turned around. However, the "fair tax" flat tax dogma has taken hold to the point where as Warren Buffet said, his secretary pays more of a percentage of her income in taxes than he does.

[dkf]

7. I'm not arguing that supply side works, just that the Numbers dont work if we assume the top 1% can

Pay the entire deficit and shoulder all the increasing spending that entitlements and demographics are bringing.

[reformist2]

9. The national wealth is $60 trillion, but we can't tax $3 trillion of it?!

[dkf]

12. No you can't because we don't do asset based taxes, it's income based.

Unless you are going to wait til everyone dies but the really rich have figured out foundations are a nice way to keep control of their $ and escape the estate tax.

[reformist2]

17. True, but we can tie income tax rates to net worth.

The 16th Amendment is very open ended on how we tax income.

If someone's net worth is $1 billion or more, I see nothing wrong with setting their income tax rate at 80%.

[dkf]

21. Geez people barely know what their net worth is.

I can't imagine appraising assets every year. That would make owning an expensive house a true burden and that is the equivalent of doing an estate tax return every year. I am shuddering at the thought.

[mmonk]

10. I heard a different summation on Thom Hartmann.

He was making a case that if we returned to pre GW Bush tax rates, we would be seeing a decline in the rate of deficits and if we returned to tax rates when Reagan took office, we might see elimination of it. Keep in mind its not just about the income tax rate, but what is taxed (such as how dividends and interest are taxed and other things). When they talk about flattening taxes, it involves more than marginal rates, but how various parts of income (including corporate) can be taxed. It seems to me we can be creative enough to produce enough revenue to keep what we have had in infrastructure and the public square as well as a safety net. What do you think?

[dkf]

13. I doubt pre Reagan tax rates will only affect the top 1 or 2%

My point is if the middle class thinks we can increase spending as will be needed to keep entitlements as is, and that they will escape paying more taxes for it they are very very deluded.

All benefits and increased spending should be supported with the idea that ones own taxes will be affected by it. It is easy to support free benefits, not so easy if you have to pay for them and even harder to support paying taxes for other people's benefit in a time when we will all be insecure.

And the reason we will all be insecure is because the nations balance sheet looks iffy enough that it can't be counted on to fulfill all it's promises. That is what makes paying into the system seem like you are taking a chance you will never receive a benefit.

[mmonk]

20. The imbalance was created by rich and powerful forces.

The collapse of the system to deregulation created a situation whereby less are paying into the system and as incomes fall (by design) less taxable income as well. Tax rate increases and stimulus spending are the only solution as further gutting of the public system creates even less economic activity to sustain anything.

[dkf]

25. Well we are where we are.

My friend had a husband with a gambling problem. Unbeknownst to her he raided all their retirement plans and even forged her signature. Yeah they got a divorce but what could she do? We are stuck with the consequences of stupidity and recklessness. But it's still our collective burden.

[Hassin Bin Sober]

8. Don't forget about corporate taxes and tariffs. Yes?

[dkf]

16. Then they will all pull a Caterpillar on us.

Corporations can move anywhere in the world now, especially if their International arms start bringing in a larger chunk of revenue.

Caterpillar sent a letter to the Illinois Governor telling him of all the other states that are wooing them to move. I guess for some it is worth playing chicken and seeing if they will stay or not, but our laws don't give them disincentives from leaving. Like states, I am sure other countries will offer great deals to move.

China is playing on their monopoly of rare earths to move production there. If they build there, corporations dont have to pay tariffs on the rare earths. So lower tariffs and cheap labor make that a hard deal to pass up.

[Hassin Bin Sober]

32. "our laws don't give them disincentives from leaving"

Then change the laws.

Let the fuckers move. IF they can make it without access to our markets then show them the door.

For every company that CAN leave the US, there are 100 that can't leave or survive without access to one of the LARGEST MARKETS IN THE WORLD.

It's time to put our foot down and say if you want access to our markets or access to our government contracts or access to our military protection, you have to pay your fair share of taxes and tariffs.

Do you think Chase or BofA or Walmart or GE are going to pack up and leave?... Or, in the case of GE, forgo government contracts? Or companies like Haliburton, who pretty much owe their existence to US government contracts, will cease to take government contracts if we don't accept their Dubai scam or start making them pay their fair share?

[NCcoast]

33. Agreed

[hfojvt]

29. it isn't realistic to ask the top 1% to pay for everything

The AGI of the top 10% was $3.856 trillion and the AGI of the top 50% was $7.35 trillion. The AGI of the bottom 50% was $1.07 trillion.

Using $1.5 trillion as the benchmark is not realistic because these years have been the worst for the deficit. There's no need to erase it in two or three years, even if that was feasible.

The thing is, it is just ridiculous for Republicans to jump up and down and have a tantrum about $170 billion in budget cuts because the deficit and debt is gonna kill us all at the same time as they just got done giving $150 billion in tax breaks to the top 1%.

IF the deficit and debt really are serious problems then obviously tax increases on the top 10% or top 25% are at least as necessary as $500 million in cuts to WIC.

But, oh to hear even DUers howl if it is suggested that people making $70,000 a year NOT get a tax cut, or worse yet, pay another $400 in taxes. An extra $8 a week in taxes would just KILL those poor, poor middle-classers.

[somone]

4. Because voodoo economics is great stuff

http://www3.pictures.gi.zimbio.com/Obama+Signs+Ronald+Reagan+Centennial+Commission+F-40yL3kgCil.jpg

[reformist2]

6. One problem is that taxing income isn't the same as taxing wealth.

There are lots of retired multi-millionaires out there who could probably care less if you made the income tax 100%.

[IndyPragmatist]

11. By no means is it a load of crap....

However, it isn't used as it should be. "Trickle down economics" is a sound theory, however, Reagan didn't use it properly, and instead just used it as a tax break. Used properly, "Trickle down economics" means that the owners of capital are given more space to grow, thus employing more workers and benefiting more people. But again, Reagan used this as a tax break for the rich with little incentive for growth.

Supply side economics is not a load of crap, it's just bastardized by politicians into a way to give more money to the wealthy with little incentive to put that money back into the business. I would like to see it used properly in the United States, but I dont think that will ever happen.

We need to raise taxes on those who are not putting anything into growth. If Steve Jobs wants to put money back into Apple to help it grow, we should make it as easy as possible for him to do so. But if Steve Jobs just wants to increase the stock price and put that money into his own pockets, we absolutely should raise taxes on him.

[verges]

14. As I see it...

It turns traditional Supply and Demand upside down. It seems to work on the assumption that if you build it, they will come. Provide the supply and there will be a demand. But it doesn't really work that way. Someone stated above, economies are bottom based, and the wealth flows up. Not top based with the wealth trickling down.

[Cresent City Kid]

15. Welcome to DU where you will hear it everyday

If Obama talks about raising the top rate tonight as expected, the subject will come up more, and hopefully voices of reason will be heard over the din.

Raising the top rate won't cover the entire deficit, but it's a good start. And it has to be paid, so loopholes need to be closed. If it was up to me, I'd audit the Forbes 400 every year.

Phrases you're likley to hear are "job creators", "productive members of society", and "small business owners", all code words for the rich. In this difficult time, they will be asked to shoulder the burden of extra cash.

[reformist2]

19. So true. The way the rich call themselves "producers" makes me howl.

Many of them even fancy themselves as the heroes of an Ayn Rand novel. So delusional.

[Cresent City Kid]

26. If we give them any tax break at all

they should have to document actual job creation.

[Romulox]

37. A man who cut taxes for the rich then launched a THIRD war has little credibility

when he subsequently claims to be a deficit hawk. :shrug:

[Cresent City Kid]

38. He's without credibility like you say

And he's talking about ending the Bush tax cuts for the rich way too late, but he's thrown it out there and I'm hoping the discussion leads to something. Trickle down is like a vampire, allergic to sunlight. I'm pessimistic, but I'd at least like to have the fight.

[Davis_X_Machina]

18. Everyone amenable to persuasion knows it as of years ago....

...and everyone else isn't amenable to persuasion. To them, it's an article of faith, and you can't refute a theology.

[90-percent]

22. A conservate frame of the same debate

Of total tax revenues received, I've heard:

The top ONE TENTH pay 12%
The top ONE Percent pay 41%
The top FIVE percent pay 51%

Makes me feel like I'm taking food out of the mouths of billionaires if I even mention raising taxes on the already wealthy!

No wonder last years tax bill actually raised taxes on the poor. They aren't giving their fair share!

-90 Jimmy

:sarcasm:

[RUMMYisFROSTED]

30. Those numbers are probably pretty close but...

The top ONE TENTH own more than 12% of the wealth.
The top ONE Percent own more than 41% of the wealth.
The top FIVE percent own more than 51% of the wealth.

The thing they always "forget" to mention.

[Poboy]

23. We have tried this (supply side/bush tax cuts) for the past 10 years! FAILURE!!!!

[melm00se]

24. because demand side economics

as the sole view of the economy is equally false.

An economic system is dynamic and interdependent.

supply with no demand is just as useless as demand with no supply.

[themadstork]

35. What does that even mean

Gaming the system so all the wealth goes to the proletariat while the ruling class starves? The poorer classes with plenty of loose cash that they're itching to spend, but those at the top left without the capital (either their own or investors') to create the stuff the proles will buy? *Somehow* I don't think we need to worry about that happening any time soon. And even if it did, I think some enterprising turd would see all the people outside his store itching to buy, go out and obtain a loan at even the most risky and sleaziest interest rates, and then sit back and watch as his product gets gobbled up by the masses. As the esteemed economist Alec Baldwin would say: "You got the prospects comin' in; you think they came in to get out of the rain? Guy doesn't walk on the lot unless he wants to buy. Sitting out there waiting to give you their money! Are you gonna take it? Are you man enough to take it?"

[lib2DaBone]

27. Supply side economics is nothing more than a false equation...

..conveniently trotted out by the right-wing Plutocrats in order to steal from the working poor in America.

And it has worked very well. Corporate profits sky high.. wages down.. jobs gone to China.. no healthcare... people living in tents.

Now about that pesky Social Security...

[bullwinkle428]

28. My Democratic congressman was totally buying into the supply-side meme

at a freaking fundraiser I was attending on his behalf! So utterly disheartening. He did win re-election, but I want to see how he handles all of this budget shit, before I decide if he receives my support the next time around.

[Brewman_Jax]

31. Supply-side economics had been discredited back in the '70's

but dress it up and paint it, it became Reaganomics, etc.

Its stupidity was proven beyond doubt when Bush* called for tax cuts during wartime. :crazy:

[themadstork]

34. We should call it by its original name

Horse-Sparrow Economics. Some of what's fed to the horse winds up on the street for the sparrows.

[Romulox]

36. Neo-liberalism/globalism is the new version of Supply Side economics.

Unfortunately, the above theories are almost like religious precepts to both parties. You'll not find more than a handful of "mainstream" politicians who don't push for free trade coupled with vigorous military intervention to guarantee profits. If such a course of action is meant to benefit the average American at all, it is in an indirect "trickle down" manner. :shrug: