Need rebuttal to neocon tax cut argument

[upi402]

From a GD thread:

''let them have back more bush tax cuts for the top 1% that don't do shit for the economy''.
{REPLY}
They ARE the economy. Check the tax receipts data. That 1% pays the vast majority of taxes and most of the investment capital. You have several other good arguments for tax increases that are available to you that will win. Use one.

Every conservative I debate uses this line as reasoning to cut taxes on firms and the wealthy. I need to have a concise copy&paste reply to this argument for frequent use. Anyone have a good one? I'm no expert by any means so please tell me if this is irrefutable.

[Make7]

1. Well, taxes were increased at the beginning of the Clinton Administration.

The economy seemed to do fairly well during his administration.

Taxes were cut at the beginning of the Bush Administration. The economy during his time in office - not so great.

Have them explain why their theory does not conform to reality when actually put into practice.
 

[permabear1]

16. Revenues have to come from everywhere

With the U.S. running $1.3 trillion budget deficits, spending will have to be chopped, including entitlements and the military, and taxes will have to be increased. Not only on the rich, but on everyone. The only way to make up such a massive shortfall is to attack the problem from all sides. On the revenue side, a VAT tax is needed along with an increase in marginal income taxes on all brackets. Following the Great Depression and WWII the top income tax rate was 90 percent. It was gradually reduced over the decades to 70 percent by Kennedy and then to 28 percent by Reagan. Reagan's massive tax cuts started the entire budget deficit spiral. When Reagan was elected the national debt was $900 billion. By the end of Reagan's second term, it had ballooned to $3 trillion. As others have shown above, tax cuts are not a prerequisite to economic growth as Clinton raised taxes which led to the greatest decade of growth in American history along with budget surpluses. Conservatives often claim that tax cuts lead to more revenue. This is a blatant fallacy. Tax cuts may contribute to economic growth (as spending increases also do), but in the end you end up with less revenue when you take in less taxes.

[BlueJazz]

2. Look...WE.make the rules. WE enable the rich to get rich. WE buy..

...the stuff they make (if they make anything)...which a lot of times, the rich don't do shit for their money.
WE should set the tax rates on the rich.
If they don't like it...make a lot less or pay their employees more or move to another Country.

I don't want to hear the rich whine because they can't have 4 houses instead of 3.

I've been around "The Rich" a lot in my life and believe me... (to them) common folks like most of us are just Workers that "Take My Money."

[DJ13]

3. That argument isnt restricted to neocons

I've had a fellow DU'er just post much the same thing to me in a reply to a post of mine.

Oh its not stated in such stark terms, its couched in "if you tax the wealthy they will move somewhere else" kind of language........but the sentiment is the same as the Republicans, which I found kind of shocking here.

[Salviati]

4. Why would they invest in our economy given its dismal state

The best arguement I've got for them is by using the invisible hand against them. The idea is that the economy is a big cycle,

=> increased demand => increased production => increased investment => increased employment =>

That by increasing any one part of the cycle will eventually lead to increases in other parts of the cycle... so increasing investment, by putting more money in the hands of those who are likely to invest it, will increase the amount of capital avalible to increase production, but in a supply driven scheme, the allocation of that capital may not be as effeciant as possible. That investment capital may not be put to the best use once the economy gets going, in that investors are likely to invest in what will get them the best return right now, not what people will be demanding once the economy rebounds, and even if they are foresighted enough to think beyond the next quarter, choosing exactly what to invest in is a guessing game at best. If however, you increase the amount of money in the hands of those likely to spend it, then the free market will decide where the additional investment capital is needed. The demand for certain goods and services will rise, and it is to those that investment capital should flow. So if people truely believe in the free market, then I don't see how they can belive in supply side economics, which seems much more of a planned economy way of looking at things.

[DJ13]

6. You could increase corp tax rates & give incentives

to encourage them to invest in increasing manufacturing within the US.

That would kick start the cycle you talked about.

You could do the same with individuals in the top 10%, increase tax rates (including capital gains) with tax incentives to redirect their investments so they also increase the likely hood of a renewed business cycle.

The current GOP kind of broad tax cuts does nothing to encourage the wealthy to reinvest in our country.

[Justitia]

5. Yeah, I laughed at that one.

There is such a lack of understanding re: basic economics & tax, it's probably pointless.

You could go through all the trouble of explaining tax receipts, the progressive federal income tax structure, complete w/marginal effective rates, total taxes vs. income taxes, income vs. wealth, etc., etc. (that's just the tax side, not even getting to economics yet), but then you'd be teaching a college level course via DU.

I just don't know how to boil all that down to a bumper sticker for the bobble heads. :shrug:

[upi402]

8. "bumper sticker for the bobble heads" = my Holy Grail

Is there an inoculation then?

I saved different arguments on my old laptop, but I always kept adding support. It got muddy and lengthy real fast.

[Justitia]

10. Pearls before swine, my friend. Spend your effort on those w/legitimate questions.

Blow off the talking point parrots, they don't have a clue what THEY are talking about, they will certainly never understand what YOU are talking about.

And it's not likely they will either be in the 1% or legislating on the issue, so their high dudgeon is absurdist comedy material.

[jtuck004]

7. Not even close. And just because they "say" it don't make it so.

Sure, ask them to post the tax reciept data they say they are quoting. It's fiction. Make them put some references on the line that proves it. It's all just opinion, smoke and mirrors. They won't, and can't, because the majority of that goes to corporate profits, which is why we are where we are today.

Check out job creation under those tax cuts in this liberal newspaper called the Wall Street Journal:
http://blogs.wsj.com/economics/2009/01/09/bush-on-jobs-the-worst-track-record-on-record/tab/article/

Where's the investment?

There is plenty out there to indicate that a small number of people own the vast majority of wealth in this country, very much like we started with in the 1700's, and that the investment that does exist is paltry in its effect on American business. I wish I had the link here, but in most communities the real investment comes from the money loaned out by the banks, money that comes from people's savings and business accounts. But it is not happening today, which is why the government is having to step in to try to stop the job loss - but it's not enough, and won't be until business decides it is more patriotic to have a strong economy than to defeat a president they don't like. Big businesses are buying up and closing their competitors, monopolizing the assets, and milking them for all they are worth. Investments my foot.

Check this link out - http://www.youtube.com/watch?v=tOxZb2H8c0I from another post at http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=114x75766#75776

[upi402]

12. I winnowed this out from your WSJ link

Job creation per year, by President:

Bill Clinton---------(D) 2,900,000
Jimmy Carter------(D) 2,600,000
Lyndon Johnson----(D) 2,300,000
Ronald Reagan-----(R) 2,000,000
Richard Nixon------(D) 1,700,000
John F. Kennedy---(D) 1,200,000
Harry Truman------(D) 1,100,000
Gerald Ford--------(R) 745,000
George H.W. Bush--(R) 625,000
Dwight Eisenhower-(R) 438,000
George W. Bush----(R) 375,000

The Wall Street Journal

...and Reagan paid for his "recovery" by jacking up the credit card. We went from the biggest lender nation, to the biggest debtor nation.

http://blogs.wsj.com/economics/2009/01/09/bush-on-jobs-the-worst-track-record-on-record/tab/article/

It's too big for a bumper sticker, but I'll spam back it to some ditto-heads that have me on their propaganda list.

[Bitwit1234]

9. I bet any thing if you could get the tax records of those rich

you would find that 99% of those 1% don't pay any taxes at all.

[econoclast]

11. Here is the root of the problem

Earlier post suggested ...

=> increased demand => increased production => increased investment => increased employment =>


But in a global economy it is important to footnote WHERE each piece of this cycle occurs. We have been following this logic for years. What has occurred is the following ...

Putting more money into the hands of people with a high marginal propensity to spend those funds =>
=> increased demand for Japanese cars, Chinese made clothes, flat screen TVs from Korea and Japan, iPods and iPhones manufactured in China, computer games programed in India( you get the picture)=>
=>increased production in China and Korea and Hong Kong and India etc=>
=>increased investment in China and Korea and India etc =>
=>increased employment guess where?=>
=>increased demand in China and India etc for what .... For better housing. For more food. For savings because those economies have no saftey net.
=>. =>. =>. Eventually there will be demand forAmerican stuff
But I wouldn't want to hold my breath waiting for eventually.

Basically, lots of the money pumped into increasing demand in America makes one stop at Walmart or the Hyundai dealer and it is off to China or Korea or India. And I see mo reason to assume that the next slug of money will be different than the previous ones. Example. Those good high paying green jobs? There were recently about 1800 wind turbines installed in the US. 80% of the turbines came from overseas! You can look it up.

We need to stop thinking about boosting demand and start thinking about creating conditions that make it profitable for people to do business HERE instead of THERE.

[upi402]

13. The country that makes stuff and sells it to other countries -WINS!

That is, in fact, my kinda bumper sticker!

Rising tide floats all boats
'Trickle down' is 'pissed-on'

"Eventually there will be demand for American stuff"
So true. In the long run, we're all dead. -John Maynard Keynes

[stevebreeze]

14. The top 1% of income has grown far far faster then it's tax share.

They in fact pay just slightly more then the meddle class as a % of income if you count, as is rational to do ALL taxes. Not just federal income taxes but also payroll taxes state and local taxes and fees. We in fact have a relatively flat overall tax structure now.
It is also worth noting that taxes paid by corporations used to account for 33% of federal tax revenue, and now are less then 10%. The wealthy who own 90% of corporations pay this tax too.
In fact according to the tax foundation, a conservative anti tax group, last year their "tax freedom day" was earlier then in any year since 1967. don't look for that figure on the Tax Foundation's web site. They like people to think taxes are at record highs.
My favorite short explanation... the Republicans have been lowering our taxes for 30 years. This is the economy we got out of that.

[austin78704]

15. Grocery store

Say 100 low-to-middle-income families go to the grocery store and buy enough groceries for one month. That will add up to thousands of dollars, which will pay the people staffing the store, the truckers supplying the store, the staff at the distribution centers supplying the trucks, the workers at the processing plants supplying the distribution centers, and the farmers supplying the food in the first place.

Now, instead of those 100 families, send in ONE family with same income as those 100 other families combined to buy groceries for one month. No matter how fat and wasteful they are, they will not spend as much as the 100 families.

The point of the above is that while the wealthy may have the economic power of many lower and middle class people combined, they cannot apply it effectively.