PDA

View Full Version : Trickle-Down Economics



pghin08
10-26-2011, 12:05 PM
http://www.cbo.gov/doc.cfm?index=12485

This is a link to a recent study done by the Congressional Budget Office on income disparity in the US. If you don't feel like reading it (particularly the full summary), here is the gist:

"CBO finds that, between 1979 and 2007, income grew by:

275 percent for the top 1 percent of households,
65 percent for the next 19 percent,
Just under 40 percent for the next 60 percent, and
18 percent for the bottom 20 percent."

Note that the above numbers are after-tax income.


So permit me to give my summary:

We cut taxes in the Reagan years in order to facilitate economic growth. The thought being, if we give tax breaks to corporations and other wealthy folk, everyone will benefit because there will be more job creation, and the wealth will "trickle-down" to the middle class and poor.

But something happened on the way to Reagan's American Dream. Those wealthy that we gave the tax breaks to? Do you know what they did with that money? They KEPT IT! There was no trickling anywhere! How shocked we should all be! :rolleyes:


My apologies for being a bit hard-lined on this, but I simply don't understand people who say this system works.

habsheaven
10-26-2011, 12:26 PM
I think the numbers you posted show that it reluctantly "leaks" down. That is the problem. Even if "trickle down" economics were to work. A "trickle" is just that, a trickle. It is not a "stream" or a "flow". The economy requires more than a trickle.

duane1969
10-26-2011, 12:29 PM
I find it hard to directly connect trickle-down economics and those numbers. There are too many other factors that equate to household income besides the government's economic plan.

Also, trickle-down was about creating jobs, not guaranteeing a salary or income. Income is directly affected by education more than anything else. There aren't many drop-outs that are millionaires and there aren't many people with a doctorate degree living in poverty.

Salaries increased thru the 80's and 90's as the economy strengthened. It is just common sense that the further down the ladder you are the lower your raise will be. Walk into any business and I guarantee you that the manager will be earning more and getting better raises than the staff. That is life.

Trickle-down was about creating jobs and it worked. When Reagan took office in 1981 unemployment was at 7.5% and shot up to over 10% by mid 1983, but when he left office in January 1989 it had slid to 5.4% and it stayed below 6% until almost 1992.

AUTaxMan
10-26-2011, 12:34 PM
So income grew by 18% for the bottom quintile and 40% for the next three quintiles? Not bad.

pghin08
10-26-2011, 12:38 PM
I find it hard to directly connect trickle-down economics and those numbers. There are too many other factors that equate to household income besides the government's economic plan.

Also, trickle-down was about creating jobs, not guaranteeing a salary or income. Income is directly affected by education more than anything else. There aren't many drop-outs that are millionaires and there aren't many people with a doctorate degree living in poverty.

Salaries increased thru the 80's and 90's as the economy strengthened. It is just common sense that the further down the ladder you are the lower your raise will be. Walk into any business and I guarantee you that the manager will be earning more and getting better raises than the staff. That is life.

Trickle-down was about creating jobs and it worked. When Reagan took office in 1981 unemployment was at 7.5% and shot up to over 10% by mid 1983, but when he left office in January 1989 it had slid to 5.4% and it stayed below 6% until almost 1992.

You know me, I'm not for guaranteeing anybody anything. However, this was packaged as being "what's good for the wealthiest is good for everybody". And that plainly wasn't true. Unemployment is a tricky number too, affected by various sources (don't think anyone would say that our spike in 2008-2010 in unemployed people was due to taxes).

I'm no math whiz, but this seems pretty simple to me. Those that got the breaks, KEPT the breaks.

AUTaxMan
10-26-2011, 12:41 PM
You know me, I'm not for guaranteeing anybody anything. However, this was packaged as being "what's good for the wealthiest is good for everybody". And that plainly wasn't true. Unemployment is a tricky number too, affected by various sources (don't think anyone would say that our spike in 2008-2010 in unemployed people was due to taxes).

I'm no math whiz, but this seems pretty simple to me. Those that got the breaks, KEPT the breaks.

What are the unemployment numbers during your time frame? Trickle down economics is about expanding the tax base. That would be more reflected in the unemployment numbers than anything else. Look at the numbers following the Reagan tax cuts and following the Bush tax cuts in particular.

pghin08
10-26-2011, 12:44 PM
What are the unemployment numbers during your time frame? Trickle down economics is about expanding the tax base. That would be more reflected in the unemployment numbers than anything else. Look at the numbers following the Reagan tax cuts and following the Bush tax cuts in particular.


http://data.bls.gov/pdq/SurveyOutputServlet

But again, the tax situation is not the only thing that drives unemployment.

AUTaxMan
10-26-2011, 12:46 PM
Nothing to see there. Server is down.

pghin08
10-26-2011, 12:55 PM
Nothing to see there. Server is down.

Sorry, it's not letting me copy and paste my table. If you go to www.bls.gov, you can find it. Stupid government websites!

mrveggieman
10-26-2011, 01:15 PM
Trickle down economics clearly does not work. Why give tax breaks to the wealthy who clearly do not need them instead of giving them to the poor who clearly does? What regan and bush did with trickle down was a case of reverse robin hood. Robbing the poor to give to the rich. SMH.

AUTaxMan
10-26-2011, 01:43 PM
Sorry, it's not letting me copy and paste my table. If you go to www.bls.gov, you can find it. Stupid government websites!

Can you just post the numbers? I don't have time to find it on the website.

pghin08
10-26-2011, 01:43 PM
Trickle down economics clearly does not work. Why give tax breaks to the wealthy who clearly do not need them instead of giving them to the poor who clearly does? What regan and bush did with trickle down was a case of reverse robin hood. Robbing the poor to give to the rich. SMH.

I'm not in favor of tax breaks for the poor. I'm in favor of one flat income tax. No deductions, no loopholes. You get all of your income (investments and all) taxed at one set rate across all income demographics.

pghin08
10-26-2011, 01:46 PM
Can you just post the numbers? I don't have time to find it on the website.

Hope this is legible.


Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

1980 6.3 6.3 6.3 6.9 7.5 7.6 7.8 7.7 7.5 7.5 7.5 7.2
1981 7.5 7.4 7.4 7.2 7.5 7.5 7.2 7.4 7.6 7.9 8.3 8.5
1982 8.6 8.9 9.0 9.3 9.4 9.6 9.8 9.8 10.1 10.4 10.8 10.8
1983 10.4 10.4 10.3 10.2 10.1 10.1 9.4 9.5 9.2 8.8 8.5 8.3
1984 8.0 7.8 7.8 7.7 7.4 7.2 7.5 7.5 7.3 7.4 7.2 7.3
1985 7.3 7.2 7.2 7.3 7.2 7.4 7.4 7.1 7.1 7.1 7.0 7.0
1986 6.7 7.2 7.2 7.1 7.2 7.2 7.0 6.9 7.0 7.0 6.9 6.6
1987 6.6 6.6 6.6 6.3 6.3 6.2 6.1 6.0 5.9 6.0 5.8 5.7
1988 5.7 5.7 5.7 5.4 5.6 5.4 5.4 5.6 5.4 5.4 5.3 5.3
1989 5.4 5.2 5.0 5.2 5.2 5.3 5.2 5.2 5.3 5.3 5.4 5.4
1990 5.4 5.3 5.2 5.4 5.4 5.2 5.5 5.7 5.9 5.9 6.2 6.3
1991 6.4 6.6 6.8 6.7 6.9 6.9 6.8 6.9 6.9 7.0 7.0 7.3
1992 7.3 7.4 7.4 7.4 7.6 7.8 7.7 7.6 7.6 7.3 7.4 7.4
1993 7.3 7.1 7.0 7.1 7.1 7.0 6.9 6.8 6.7 6.8 6.6 6.5
1994 6.6 6.6 6.5 6.4 6.1 6.1 6.1 6.0 5.9 5.8 5.6 5.5
1995 5.6 5.4 5.4 5.8 5.6 5.6 5.7 5.7 5.6 5.5 5.6 5.6
1996 5.6 5.5 5.5 5.6 5.6 5.3 5.5 5.1 5.2 5.2 5.4 5.4
1997 5.3 5.2 5.2 5.1 4.9 5.0 4.9 4.8 4.9 4.7 4.6 4.7
1998 4.6 4.6 4.7 4.3 4.4 4.5 4.5 4.5 4.6 4.5 4.4 4.4
1999 4.3 4.4 4.2 4.3 4.2 4.3 4.3 4.2 4.2 4.1 4.1 4.0
2000 4.0 4.1 4.0 3.8 4.0 4.0 4.0 4.1 3.9 3.9 3.9 3.9
2001 4.2 4.2 4.3 4.4 4.3 4.5 4.6 4.9 5.0 5.3 5.5 5.7
2002 5.7 5.7 5.7 5.9 5.8 5.8 5.8 5.7 5.7 5.7 5.9 6.0
2003 5.8 5.9 5.9 6.0 6.1 6.3 6.2 6.1 6.1 6.0 5.8 5.7
2004 5.7 5.6 5.8 5.6 5.6 5.6 5.5 5.4 5.4 5.5 5.4 5.4
2005 5.3 5.4 5.2 5.2 5.1 5.0 5.0 4.9 5.0 5.0 5.0 4.9
2006 4.7 4.8 4.7 4.7 4.6 4.6 4.7 4.7 4.5 4.4 4.5 4.4
2007 4.6 4.5 4.4 4.5 4.4 4.6 4.7 4.6 4.7 4.7 4.7 5.0
2008 5.0 4.8 5.1 4.9 5.4 5.6 5.8 6.1 6.2 6.6 6.8 7.3
2009 7.8 8.2 8.6 8.9 9.4 9.5 9.5 9.7 9.8 10.1 9.9 9.9
2010 9.7 9.7 9.7 9.8 9.6 9.5 9.5 9.6 9.6 9.7 9.8 9.4
2011 9.0 8.9 8.8 9.0 9.1 9.2 9.1 9.1 9.1

AUTaxMan
10-26-2011, 02:19 PM
thanks

pghin08
10-26-2011, 02:28 PM
thanks

No trouble, this would look so much better in excel.

mrveggieman
10-26-2011, 03:01 PM
I'm not in favor of tax breaks for the poor. I'm in favor of one flat income tax. No deductions, no loopholes. You get all of your income (investments and all) taxed at one set rate across all income demographics.


Church!! :cheer2:

sanfran22
10-26-2011, 03:21 PM
Church!! :cheer2:

You realize that with his plan the poor would probably pay more?? Goes against your last statement. So now you'll say the gov't is robbing the poor?

mrveggieman
10-26-2011, 04:03 PM
You realize that with his plan the poor would probably pay more?? Goes against your last statement. So now you'll say the gov't is robbing the poor?


The gov't robbs the poor every day. Tell me something that I don't already know.

sanfran22
10-26-2011, 04:06 PM
The gov't robbs the poor every day. Tell me something that I don't already know.

So let me get this straight. You don't support anything that anyone rich would remotely benefit from, but if it's the gov't doing it, it's ok?

duane1969
10-26-2011, 08:55 PM
Trickle down economics clearly does not work. Why give tax breaks to the wealthy who clearly do not need them instead of giving them to the poor who clearly does? What regan and bush did with trickle down was a case of reverse robin hood. Robbing the poor to give to the rich. SMH.

Give tax breaks to people who don't pay taxes? Yup, that is a sure-fire way to fix the economy. People who are taking out of the system but have never put anything in are the whole reason the system is broken.

Trickle-up economics doesn't work either. A $500 tax gift* to the poor will last one trip to the mall and WalMart. People who are struggling to make ends meet do not save or invest. Any Federal tax gift will be spent within days and serve zero purpose and guess who will have the money then...

*it isn't a cut or a rebate when they don't pay anything into the tax system. You can't get a rebate or a cut on zero dollars.

pghin08
10-26-2011, 09:28 PM
Give tax breaks to people who don't pay taxes? Yup, that is a sure-fire way to fix the economy. People who are taking out of the system but have never put anything in are the whole reason the system is broken.

Trickle-up economics doesn't work either. A $500 tax gift* to the poor will last one trip to the mall and WalMart. People who are struggling to make ends meet do not save or invest. Any Federal tax gift will be spent within days and serve zero purpose and guess who will have the money then...

*it isn't a cut or a rebate when they don't pay anything into the tax system. You can't get a rebate or a cut on zero dollars.

I agree.

duane1969
10-27-2011, 09:45 AM
It just kills me. I keep hearing this crap about giving tax breaks to the poor and not the wealthy and I am just baffled by what they need a break for. Is there such a thing as a family living at or below the poverty line that doesn't get every red cent that they pay into taxes right back when they do a return?

pghin08
10-27-2011, 09:48 AM
It just kills me. I keep hearing this crap about giving tax breaks to the poor and not the wealthy and I am just baffled by what they need a break for. Is there such a thing as a family living at or below the poverty line that doesn't get every red cent that they pay into taxes right back when they do a return?

I think a lot of people would agree to just ditch tax breaks PERIOD. No matter who they're for. Everyone pays the same percentage, and that's just it.

sanfran22
10-27-2011, 09:50 AM
It just kills me. I keep hearing this crap about giving tax breaks to the poor and not the wealthy and I am just baffled by what they need a break for. Is there such a thing as a family living at or below the poverty line that doesn't get every red cent that they pay into taxes right back when they do a return?

Actually, a lot get more then they pay......

AUTaxMan
10-27-2011, 12:12 PM
*it isn't a cut or a rebate when they don't pay anything into the tax system. You can't get a rebate or a cut on zero dollars.

They call it a "refundable credit" because they know the masses are too dumb to realize that it is really nothing more than wealth redistribution.

duane1969
10-27-2011, 12:13 PM
Actually, a lot get more then they pay......

I know that and that is a whole other soapbox for me to get on. I just don't get why we need more tax breaks for people who pay no taxes.

marekschwarz33
10-27-2011, 01:20 PM
Here's an idea:
Get the government's spending under control and completely eliminate the income tax for everyone.

sanfran22
10-27-2011, 01:25 PM
I know that and that is a whole other soapbox for me to get on. I just don't get why we need more tax breaks for people who pay no taxes.

I agree with ya. Yet these are the people one side of the isle caters too......buy votes much?

theonedru
10-27-2011, 02:24 PM
Give tax breaks to people who don't pay taxes? Yup, that is a sure-fire way to fix the economy. People who are taking out of the system but have never put anything in are the whole reason the system is broken.

Trickle-up economics doesn't work either. A $500 tax gift* to the poor will last one trip to the mall and WalMart. People who are struggling to make ends meet do not save or invest. Any Federal tax gift will be spent within days and serve zero purpose and guess who will have the money then...

*it isn't a cut or a rebate when they don't pay anything into the tax system. You can't get a rebate or a cut on zero dollars.

" A $500 tax gift* to the poor will last one trip to the mall and WalMart. "

This is more because people/families live way beyond their means. If people go their spending under control it would help immensely.

MadMan1978
10-27-2011, 03:00 PM
It just kills me. I keep hearing this crap about giving tax breaks to the poor and not the wealthy and I am just baffled by what they need a break for. Is there such a thing as a family living at or below the poverty line that doesn't get every red cent that they pay into taxes right back when they do a return?
Yes Duane it is called the MIDDLE CLASS!
I grew up i it and live with in today...although I am falling below that now
....

MadMan1978
10-27-2011, 03:03 PM
Give tax breaks to people who don't pay taxes? Yup, that is a sure-fire way to fix the economy. People who are taking out of the system but have never put anything in are the whole reason the system is broken.

Trickle-up economics doesn't work either.

A $500 tax gift* to the poor will last one trip to the mall and WalMart. People who are struggling to make ends meet do not save or invest. Any Federal tax gift will be spent within days and serve zero purpose and guess who will have the money then...

*it isn't a cut or a rebate when they don't pay anything into the tax system. You can't get a rebate or a cut on zero dollars.

well since they dont save or invest it....they dont deserve it?
what?????

pghin08
10-27-2011, 03:05 PM
well since they dont save or invest it....they dont deserve it?
what?????

I think the point in all of this though is that it's hard to argue the fairness of the tax code if one person is getting something that another one doesn't. No matter if it's a $500 tax credit to someone below the poverty line or a low capital gains tax. If everyone gets taxed at the same rate, then you can't argue a lack of fairness either way.

MadMan1978
10-27-2011, 03:11 PM
I think the point in all of this though is that it's hard to argue the fairness of the tax code if one person is getting something that another one doesn't. No matter if it's a $500 tax credit to someone below the poverty line or a low capital gains tax. If everyone gets taxed at the same rate, then you can't argue a lack of fairness either way.

You surely can....

pghin08
10-27-2011, 03:18 PM
You surely can....

How? If someone who makes $10 million a year pays a 20% tax, and someone who makes $10K a year pays a 20% tax, it's STILL the same 20% tax.

MadMan1978
10-27-2011, 03:26 PM
How? If someone who makes $10 million a year pays a 20% tax, and someone who makes $10K a year pays a 20% tax, it's STILL the same 20% tax.
Only by accounting standards....

In fact all a flat tax will do is raise the taxes OF MILLIONS AND MILLIONS of people working in this country....For me that tax burden is not one I can afford....where presently if my income were 10K I i am paying what 2% is that....raise my taxes 200 to 2000? while you give a person who can afford the tax bill a huge cut nearly 50%????

You might think they are fair now but wait for your tax bill to come....

Not just the federal tax but all those state and local taxes...

pghin08
10-27-2011, 03:34 PM
Only by accounting standards....

In fact all a flat tax will do is raise the taxes OF MILLIONS AND MILLIONS of people working in this country....For me that tax burden is not one I can afford....where presently if my income were 10K I i am paying what 2% is that....raise my taxes 200 to 2000? while you give a person who can afford the tax bill a huge cut nearly 50%????

You might think they are fair now but wait for your tax bill to come....

Not just the federal tax but all those state and local taxes...

I don't like paying taxes, nobody does. But that fact is that we're all in this together as Americans. We all do what we can for a country that affords us the opportunity of upward mobility. I just want to know that Warren Buffett is paying the same share of his income to the Feds as I am. No more, no less. I don't need to be cut any favors. I'll do my best to live within the means I've created for myself.

duane1969
10-27-2011, 05:40 PM
well since they dont save or invest it....they dont deserve it?
what?????

That is correct. If they did not pay it in then they do not get it out. If they pay in $800 in taxes then they do not get a full $800 tax refund + a $500 child tax credit (gift) per child + earned income credit (gift) + a rebate (gift) on their childcare costs adding up to a "rebate" check of $2000-$3000.

What a great deal! pay in $800, get out several thousand? Who wouldn't want that deal?

And people wonder why the system isn't working.


Here's an idea:
Get the government's spending under control and completely eliminate the income tax for everyone.

Eliminate? Never happen. Even in a Utopian society there must be some form of monetary support if there is to be an organized government.


" A $500 tax gift* to the poor will last one trip to the mall and WalMart. "

This is more because people/families live way beyond their means. If people go their spending under control it would help immensely.

Who is going to tell them to do it?...or how to do it? The government??!! If there is one thing that Obama should avoid at all costs it is looking into a camera and telling the American people that they need to be fiscally responsible. LOL

duane1969
10-27-2011, 05:44 PM
i don't like paying taxes, nobody does. But that fact is that we're all in this together as americans. We all do what we can for a country that affords us the opportunity of upward mobility. I just want to know that warren buffett is paying the same share of his income to the feds as i am. No more, no less. I don't need to be cut any favors. I'll do my best to live within the means i've created for myself.

+1

MadMan1978
10-27-2011, 07:45 PM
Well from a person who well remembers the trickle down...

It was a JOKE! Just another Conservative means for the RICH to get tax cuts! More tax cuts were down under Reagan for the rich any ANY OTHER class of people and that includes all the business cuts... it was called VOO DOO Economics for a reason. as with all other past presidents they take credit for something that they REALLY did not have anything to do with..all expect for maybe FDR... all the rest were either victims for a poor economy or the hero of a great one...

tutall
10-27-2011, 10:30 PM
Yes Duane it is called the MIDDLE CLASS!
I grew up i it and live with in today...although I am falling below that now
....

Welcome to America... There are poor people, there are rich people, there are rich people who used to be poor, and there are poor people who used to be rich. Honestly if you want to make more money or have more things you only have one person to look at.

sanfran22
10-28-2011, 09:29 AM
I don't like paying taxes, nobody does. But that fact is that we're all in this together as Americans. We all do what we can for a country that affords us the opportunity of upward mobility. I just want to know that Warren Buffett is paying the same share of his income to the Feds as I am. No more, no less. I don't need to be cut any favors. I'll do my best to live within the means I've created for myself.

See, who says liberals can't be objective...:party0048::party0053::cheer2:

pghin08
10-28-2011, 09:45 AM
See, who says liberals can't be objective...:party0048::party0053::cheer2:

Haha, to me it's not a partisan issue. You have to work hard for things, no matter where you land on the political spectrum.

sanfran22
10-28-2011, 09:46 AM
Haha, to me it's not a partisan issue. You have to work hard for things, no matter where you land on the political spectrum.

This, my friend , is the truth!!!

duane1969
10-28-2011, 10:10 AM
Haha, to me it's not a partisan issue. You have to work hard for things, no matter where you land on the political spectrum.

Unfortunately about 50% of our country disagrees with you.

The definition of irony??...

A country that was built on hard work, long hours and sweat-equity being economically toppled by a bunch of entitlement programs for people who do not work.

pghin08
10-28-2011, 10:13 AM
Unfortunately about 50% of our country disagrees with you.

The definition of irony??...

A country that was built on hard work, long hours and sweat-equity being economically toppled by a bunch of entitlement programs for people who do not work.

But for the most part, these are people who HAVE worked, and on some level, paid into these entitlement programs. It's just that the government did what it ALWAYS does, and overpromised.

duane1969
10-28-2011, 10:18 AM
But for the most part, these are people who HAVE worked, and on some level, paid into these entitlement programs. It's just that the government did what it ALWAYS does, and overpromised.

Recently there has been a large amount of working class taking part in entitlement programs, but up until 4 or 5 years ago entitlement programs were almost exclusively utilized by people who have little work experience.

The simple reality is that up until 4 or 5 years ago jobs were easy enough to find that the only people who were fully dependent on welfare were the ones who wanted to be.