I'm usually good at defeating talking points, but admittely have no simple answer for these:

"You cannot tax your way to prosperity!"
"Tax the corporations and it affects all of us. They'll raise their prices to cover their costs!"
"The GAO is never going to go for Obama's tax plan and he'll end up welching on his promise!"

I'm hearing these come up an awful lot lately, particularly from taxophobe right wingers who seriously think that lowering taxes and keeping tax cuts permanent will create jobs and put more money in the hands of the citizenry (despite the fact that 28 years of instituting such methods has resulted in the exact opposite happening).

It was touched on a bit in this thread when a freeper named rustee invaded our sacred space briefly and spouted the nonsense that when you tax the wealthy and corporations, they pass the losses on to you in the form of higher prices. The rebuttal given was that when corporate tax rates are high, businesses saw the need to expand rather than lose that money to taxation. When the rates are low, they feel no great need to hire, thus creating large profits but a "jobless recovery" in the process.

Yet, the rule in debate is "you assert, you prove", and I need to know WHY businesses in the past would have lost that money to taxation; WHY giving more money to corporations doesn't necessarily lead to prosperity (other than past performance). Google is not helping me in this regard; all I'm coming up with are idiotic freeper threads on sayanything from this subject.

Maybe it's a little late and I admittedly am not that strong in this area of corporate economics, but I need to blast this whenever it's brought up and I don't speak factoid very well.

Raising taxes does not make the law of supply and demand disappear. They will still have to compete in the marketplace if they wish to make a profit. Taxes are mostly irrelevant.

However, monopolies can and do charge what the public is unwilling to pay, but what the public has no choice about

Which is why certain levels of regulation and anti-trust laws are necessary.

I guess the rule only applies to us.

Look to history for your answers. The economy was good under Clinton, and crashed when Bush lowered the top brackets. Reagan lowered taxes on the rich & a recession resulted.

Seems to me that taxing his way to prosperity is EXACTLY what FDR did.

We were doing pretty well in the '60's, with the top bracket as high as 90% (later lowered to 70%).

is because he put Americans to work with that money! In fact, taxing the rich is the ONLY way to prosperity because they won't part with a dime (except for the yacht, jewelry and FOREIGN built cars)unless you rich it from their cold, stinking hands. Reagan eventually became successful at so called prosperity because he raise taxes 6 times creating the largest tax increases in history! A little fact Repugs would rather you not know.

. . . whereas all a freeper has to do is yell "bullshit" as loud as he pleases and his point is made and everyone agrees.

So I think point one on the "assert, so prove" is for them to name a point in history when taxation was low (that would be anytime in the past 28 years, under mostly Republican rule) and economic ruin DIDN'T happen. They'll of course point to the high stock market numbers durng King George the Second's term (which subsequently plunged back to or below 2001 levels this year) and then I can point out the "Jobless Recovery" during those high levels and enormous profits.

I would just like a factoid answer on the "They'll pass the higher tax rates down to the consumer in the form of higher prices" talking point.

Unless you don't feel like you should pay for what you get. Rich folks should be happy to pay quite a bit more, both in amount of dollars and percentage for a system that has made them wealthy and that protects that wealth. Quite a lot of those individual fortunes were made because the United States (at least used to) have a good public education system, a good interstate highway system, a good interlocking system of transportation and commerce. How many blocks of sewer line are laid by Wall Street on a given day? Worker productivity has gone steadily up in the last 50 years, and people are working better, more efficiently and longer hours. Yet wages are stagnant. Where is the wealth created by that labor going? We used to tax corporations and wealthy persons at 90% in the 1950s and 1960s, and a greater percentage of Americans belonged to unions in those days. Nowadays, households have to work a minimum of two jobs, and when President Bush met a woman scraping by working three jobs, he smirked that this was the quintessential American Dream story: Working one's ass off and falling a little farther behind each and every day.

Taxes lay the foundation for the structure of our system, and the idea that taxes are a drain has been propagated by the very same persons who brought us the Great Depression of the 1930s, the savings and loan ruination of the 1980s, the junk bond disaster of the 1980s and 1990s, and the recent meltdown of the housing market.

you cannot sell anything to anyone. We'd still be living in homes without any electric or A/C. Henry Ford realized that the people working on the facory line needed to make enough to buy the product... So, if no jobs, no wealth, no company anyway.. AND because they make more of the money, you need to have it spread back into the population to provide things like roads and bridges to get to work and schools that produce "workers" who are able to compete in the market and law/ justice in order to keep society safe... These are what we get with taxes.. Now, there's pork and assholes that people elect who do horrible things to our budget and make deals with the devil.. This is why its important to be vigilant of our democracy. Joe's right, taxes are patriotic and people don't mind paying as long as they are still able to pay for milk and gas and have some savings... which hasn't happened, duh, under Bushie.

I was a young buyer in a factory manufacturing machine tools (industrial drill presses, surface grinders, gear hobbing machinery). I bought lots of stuff: steel, bearings, castings, controls. One of the big purchases was motors. A very big company (coincidentally one that employed Ronald Reagan in 60's) started moving their leadtimes from 2-4 weeks out to 16-18 weeks. When I started asking questions, I found out that they moved production to Mexico. Why? To save money and give them an economic advantage over their competitors.

I remember thinking then 'OK, that makes sense, I guess...but if everyone does it, how will they eventually sell their products in this country?' Turns out, they really don't care...there's a really big market in the world and they have no allegience to a political entity with borders. What they have absolute respect for are profits and shareholder value. Everything else is secondary.

We should have been going after them then. But remember who was running the show in the early 80's...a guy who was a spokesman for the company that was outsourcing jobs. A guy, sainted by the Republicans, because he was a deregulator.

The problem, IMHO, is that a corporation will always do what makes sense for them to get a leg up on their competition. Competitors will quickly move to negate that advantage, by doing the same thing. That's why you need government oversight, working first and foremost for the people's interests - to make sure the game is played fairly and to penalize the corporations when they break the rules. Assign a competitive disadvantage to the corporations that try to cheat. A fair game makes the system work. When people are elected that promote a corporation's interests over the people's, the game eventually comes to an end.

"You cannot tax your way to prosperity!"

Taxes are what we pay to keep society running, and it only makes sense that the wealthiest people should give back the most--which is still a pittance to them--to the system that's made them wealthy. The truth is that you can't tax-cut your way to prosperity either. The Republicans have been giving their handouts to corporations and the ultra-wealthy for eight years now, and the economy has done nothing but go downhill.

"Tax the corporations and it affects all of us. They'll raise their prices to cover their costs!"

They didn't lower their prices when Bush basically gave them a free pass on taxes, so clearly the small amount of tax they pay has no bearing on the actual price of their products.

"The GAO is never going to go for Obama's tax plan and he'll end up welching on his promise!"

The GAO has no say over US tax policy. They're an accounting arm of the US government, and don't have the right to approve or deny changes that go through the legislative system, as any alteration of the tax code does. Anyone who thinks that the GAO runs the government simply shows that they don't understand the issue.

:thumbsup:

Or in a nutshell, ask them how life was in the 90's.

"You cannot tax your way to prosperity!"
Taxes were never a stand alone vehicle to prosperity. It's ridiculous on it's face. But without any money to run the government, it would cease to exist. So, taxes are necessary, and should be at the proper rate to be the most efficient, not harming the economy, yet still allowing for function. That's where the argument should be, what's the proper rate; what we have now, this debt and deficit, could cause hyper-inflation with high unemployment.

TheWraith said the rest perfectly. He or she has you covered.

"You cannot tax your way to prosperity!"
- No you can't, but without taxes, bridges don't get rebuilt, highways continue to deteriorate, levy's and damns fall by the wayside


"Tax the corporations and it affects all of us. They'll raise their prices to cover their costs!"
- If Corporations can afford to pay their CEO's billions of dollars for failing, then they can afford to pay their taxes. Perhaps they should reduce their CEO pay and then they can cover their own costs.

- Most Corporations have money off shore so they don't have to pay their taxes, and yet they expect the public to give them breaks on lands and other property.

"The GAO is never going to go for Obama's tax plan and he'll end up welching on his promise!"

- Since * decided to give the President more power, Obama can and will apply his tax plan. The GAO will be run by Obama's hand selected personel. They will do what is expected of them.

That's all for now.

and the really wealthy just made them more greedy, a few years ago CEO's pay was up 60% It's kinda like the more you get, the more you want.

It happened after WWII, and it happened in the 1990s.

NOBODY needs to make $10 million, $100 million a year. NOBODY. That money can be used to fix our infrastructure, create new energy sources, rebuild our schools, and fix the environment. All creating new jobs, btw.

In other words, before it pays a penny of tax, a corporation subtracts ALL its business expenses, everything from executive salaries to paper clips. A company can actually lower its taxes by opening new plants or hiring new people.

Some economists believe that Japan's high corporate tax rate was an incentive for companies to pour money into R&D, which is also subtracted from taxable income.

Between the low corporate tax rates of recent years, and the pernicious principle taught in business schools that said that the only purpose of a company was to maximize returns for the shareholders, managers became focused on short-term quarterly profits.

. . . well, guess what the irresponsible greedbags did. You know, rather than create a middle class HERE.

Hmmmmm, wonder who was responsible for the widespread teaching of CEO/wealthy-first-and-wealthy ONLY economics? According to The Great Risk Shift, none other than Harvard guy Martin Feldstein, now a MCCAIN economic adviser.

Corporate income tax is levied against PROFITS ... i.e revenues (sales, etc.) LESS expenses (wages, salaries, etc.).

The BEST way for a corporation to avoid income taxes is to hire more employees until their expenses match their revenues... i.e. no profits to tax.

:evilgrin:

I'm only being somewhat sardonic, though. When corporate tax rates were higher, that's EXACTLY what corporations did - they HIRED and expanded production. It turns out that it was better to go after marginal markets than pay income tax. 'Owners' saw unrealized capital gains (i.e. their stock holdings increased in value) and were happy as pigs in shit. Employees were happy since they were paid better. The community was happy because there were MORE goods at lower prices.

Lowering corporate taxes has motivated the arbitrage types and bean counters to slash labor AND raise prices to take advantage of (historically) LOW tax rates on corporate profits.

For the more detail-oriented, an examination of a corporation's Accounts Payable would give a HUGE insight into how money is 'laundered' and the fat cats are being fed.

and never done accounting for a business. They therefore imagine (and the Republicanites don't enlighten them) that businesses are taxed just like individuals, i.e. on all their earnings minus a few deductions.

"You cannot tax your way to prosperity!"

The numbers put the lie to this. The upper 5% of wealth did no worse than they do now back when the top income tax rate was 90%. The robust economy driven by a blooming middle class is the tide that raises all boats.

"Tax the corporations and it affects all of us. They'll raise their prices to cover their costs!"

It's not that we want to tax the corporations, it's that the corporate behavior can be steered by taxation. If a corporation is US based, provides living wage jobs here, and builds national community, then they should get the breaks. What we've had under the corporation owned wings of both parties over the past, is tax breaks for reducing labor costs and offshoring jobs. That behavior should be punished severely.

"The GAO is never going to go for Obama's tax plan and he'll end up welching on his promise!"

WTF? The GAO has zero input over tax policy. Now the GOP in congress is a different issue altogether.

I suspect Biden will be a big asset in the Senate.

-Hoot

I kind of figured that had nothing to do with anything, I just had to check.

He's one of those "THEY'RE ALL CROOKS!" types. I told him not to vote and stop watching the Angry White Guy Network.

just point to the prosperity of the Clinton administration.

www.wearableartnow.com

Economics and the GNP would take over here. Your freeper rustee should exit the basement and go back to Micro/Macro and learn something.

political discussions with him are futile, he makes rush limbaugh look liberal

ennywhoo - he went into the talking points or variations thereof

my response was: yeah, you're right, deregulation, more corporate taxcuts and more wealthy-fare have worked out sooo well for us, we should continue falling off a cliff