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Help Me with this Republican Tax-cut Conundrum

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maxrandb Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-12-05 06:54 PM
Original message
Help Me with this Republican Tax-cut Conundrum
I've had a question that really bugs me. The Repukes are always selling their tax-cuts by saying that it "increases" tax revenue to the government. Now that's out of one side of their mouths. Out of the other side of their mouths, they say that government is too big and we need limited government.

One of these things cannot be true, can it? If cutting taxes brings in more revenue for the government, aren't they making government bigger? How could you support giving even more money to a government that you want to make smaller.

Methinks that somewhere in there, these people are lying their asses off.
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cornermouse Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-12-05 07:07 PM
Response to Original message
1. Government makes tax cuts for rich people.
Other than a few expensive baubles, rich people already have anything they want.

Rich people put money in the bank instead of spending it.

Government runs out of money.

Government says they must cut size and expenses.

Government cuts size and expenses by closing facilities, programs, and firing or laying off a lot of employees.

Fired or laid off employees stop spending because they have no money.

Less money being spent results in weak economy.

Rich people have no reason to add employees due to anemic economy. No one is buying their stuff so their tax cuts remain in the bank.

Government gets less tax money so government states they must cut size and expenses.

Government cuts size and expenses by closing more facilities, more programs, and firing or laying off a lot more employees.

Fired or laid off employees stop spending because they have no money.

Less money being spent results in weak economy.

Rich people have no reason to add employees due to anemic economy. No one is buying their stuff so their tax cuts remain in the bank.

Government gets less tax money so government states they must cut size and expenses.

Government cuts size and expenses by closing more facilities, more programs, and firing or laying off a lot more employees.

Fired or laid off employees stop spending because they have no money.

Less money being spent results in weak economy.

Rich people have no reason to add employees due to anemic economy. No one is buying their stuff so their tax cuts remain in the bank.

Etc., etc., etc.
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maxrandb Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-12-05 07:16 PM
Response to Reply #1
3. You forgot the part where the poor eat the rich
Napolean said it best; "Religion is what keeps the poor from killing the rich"
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beyurslf Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-12-05 07:10 PM
Response to Original message
2. Cutting taxes does not increase revenue.
They like to site the Reagan years after the tax cut in the 80's. Tax receipts went down until they raised the social security tax and then tax receipts went up. You can google the info, I don't have it right here with me though.
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cornermouse Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-12-05 07:26 PM
Response to Reply #2
4. Reagan years were when a lot of women had to start working
Edited on Sat Nov-12-05 07:29 PM by cornermouse
outside their home because the one income was so severely stressed.

It was also a time when it became difficult to get loans. As I remember, at the time, the tv commmentators said it was because the government was borrowing so much money.

That was also the period of time when they began talking about how many products had oil additives or oil based packaging. ...Sort of like the report on the radio I heard the other day. Oil is in shampoo, plastic, just all sorts of things that you would never suspect. During Reagan, right after they began to talk about it, we had the recession. :think: ...Hmmm...
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jmowreader Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-12-05 08:22 PM
Response to Original message
5. This is how it's SUPPOSED to work
A Repuke tax cut is supposed to increase government revenues like this:

1) The government cuts taxes on the rich
2) The rich take the proceeds from the tax cut and build new factories, hire workers and make products
3) The employees hired in step 2 pay income tax on the money they earn. They also pay all manner of other taxes.
4) The products made in step 2 are sold in taxed transactions
5) The rich person's factory's revenues are taxable income, which causes money to flow to the government

That's all well and good...but! If you're pulling down a million a year and your tax rate goes down by four percent, is that enough money to allow you to open a factory? If you're pulling down 10 million a year, is a four percent tax cut going to allow you to start a new business? Well...no. It's not. The reality is that unless we ELIMINATE taxes on the rich, all of these wonderful things that tax cuts are supposed to do...won't happen.

A rich person who just received a tax cut could take out a massive loan to start another business or expand the one he already had--but he could do that without the tax cut, too.

Here's how the shit really works:
1) Rich person receives tax cut
2) Rich person does one of three things: buys more stock with it, trades in his Mercedes for a bigger one, or trades in his yacht.
3) The ONLY way a stock purchase is going to help a company is if you're buying into an IPO. Buying "used" stock is like buying a used car in that none of the money from the sale is going back to the company whose name is on the certificate. The person who sold the stock to the broker gets some of what you paid; the brokerage gets the rest.
4) Buying the new Mercedes should help the economy...of Stuttgart, where they made it. Also benefitting are the company that owns the cargo ship, the company that unloads the car from the ship and imports it into the country, the company that drives the car from Bayonne to your local dealer, and the local Mercedes garage. Same deal with yachts, but your smaller--under 120 feet--yachts are made in the US so that's a different story. Actual Americans get to eat good when you buy a new yacht. Everything they eat tastes like acetone, but that's beside the point. Really massive yachts are made in European shipyards.
5) After the yachts, cars and stocks are purchased, all fifty freepers sit around going on and on about how wonderful the tax cut was for them. "Why, I just got a job polishing Mr. Warbucks' new Rolls-Royce. I wouldn't have this job if Dear Leader's tax cut didn't let Mr. Warbucks buy a new car."
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Orangepeel Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-12-05 08:27 PM
Response to Original message
6. to a repub, "big government" doesn't mean tax revenues
it means the number of federal employees and the amount of spending to help the poor.

Tax dollars spent to provide give-aways to corporations or develop nonworking weapons programs are okay.
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