Our tax system explained in beer.

[RED]

Some where there is a youtube video of this but I can't find it.

https://ijr.com/tax-system-explained-beer-2/

[togor]

From the bottom of the link:

UPDATE: Snopes has looked into this essay and determined that Dr. Kamerschen has denied being the author of the essay. The original author of the story remains unclear.

Argument by complex analogy has its limits.

[Vern Humphrey]

Simplistic people have difficulty understanding complex analogies.

[lyman]

From the bottom of the link:



Argument by complex analogy has its limits.

Is the breakdown in the article, regardless of who wrote it, accurate?

[Vern Humphrey]

Is the breakdown in the article, regardless of who wrote it, accurate?

Yes. That's exactly how it works -- and you yourself can recall objections to lowering taxes based on the argument that those who pay no taxes get no reduction.

Ignoring the content and attacking the authorship is called Argumentum ad hominem, and is a widely-known logical fallacy.

[lyman]

I know that Vern,, was asking the guy that posted

[togor]

I know that Vern,, was asking the guy that posted

Well the numbers are all hypothetical, but try to get at the increasing marginal rates, both on taxes owed and taxes saved. OK as far as that goes, in a rough sense. But the beating up of the tenth guy, who leaves the party--that's where the anology breaks down. If someone thinks that an increasing divide between the super rich and everyone else is good for the county, then they have plenty to cheer. The rich are doing exceptionally well and do not need pity from ordinary folk or specious parables about them being beaten up. And after the Trump tax cuts things got even better, which is why nobody on the GOP side bothered to run on them in the last cycle. I do not condemn the rich, but neither do I offer them a drop of sympathy for the peculiar problems their wealth affords them.

[RED]

Yes, the numbers maybe off by $.50 or so but seems to reflect the basic system pretty accurately as I understand it (regardless of who wrote it).

[togor]

Yes. That's exactly how it works -- and you yourself can recall objections to lowering taxes based on the argument that those who pay no taxes get no reduction.

Ignoring the content and attacking the authorship is called Argumentum ad hominem, and is a widely-known logical fallacy.

I was making the point that a false attribution of authorship raises questions of motive. But yes it is possible to take issue with what is written.

[RED]

Does anybody remember the enormous Clinton tax increase on luxerious yachts back in the 90’s? A thriving NE manufacturing system employing hundreds of workers and generating large amounts of Federal, State, and local tax receipts totally disappeared and went to Ireland and other European countries. After 2 years of the tax increase... there were zero multimillion dollar yachts produced in the USA.

[togor]

Yes, Red, boat people feel less attachment to their homeland than they do to their money.

https://nomadcapitalist.com/2017/07/17/ultimate-guide-yacht-registration/

And yes, with offshore tax havens, the wealthy have both means and incentive to elude Uncle Sam's tax man. And yet, the taxes have to be raised somehow, and to the guy earning $20K/yr, an extra $100 is comparatively more valuable than it is to the man earning $2M/yr. Economists call that decreasing marginal utility.

I remember Supply Side tax cuts. A 20% tax cut is supposed to grow the economy and pay for itself, but the problem is that the tax cut immediately adds to the budget deficit, and it will take years to make up that revenue through growth. Meanwhile funds have to be borrowed to make up the difference.

[lyman]

Yes, Red, boat people feel less attachment to their homeland than they do to their money.

https://nomadcapitalist.com/2017/07/17/ultimate-guide-yacht-registration/

And yes, with offshore tax havens, the wealthy have both means and incentive to elude Uncle Sam's tax man. And yet, the taxes have to be raised somehow, and to the guy earning $20K/yr, an extra $100 is comparatively more valuable than it is to the man earning $2M/yr. Economists call that decreasing marginal utility.

I remember Supply Side tax cuts. A 20% tax cut is supposed to grow the economy and pay for itself, but the problem is that the tax cut immediately adds to the budget deficit, and it will take years to make up that revenue through growth. Meanwhile funds have to be borrowed to make up the difference.

you missed his point, and then went on a tangent,

the folks making the boats he mentioned, those are the one's that had to find another job, or move out of country, or go on the dole,
loss of income, so Bob the boat guy lays his workers off ,
they go hungry, move, etc,

lots of suppliers do the same, lost contracts etc, , trickle down and all that,



the folks you posted in your link are the buyers, ,,,,,, they just hop a plane, or go to the local dealer, and then register the boat\ship\whatever where ever they want,

and supply side tax cuts work great if you can get congress to actually cut Gov't expenditures,

[togor]

Actually lyman, I did not miss Red's point, but rather just expanded on it a bit, to point out that "boat people" offshore easily, be it in choice of shipyard or registration.

Regarding supply side tax cuts, not really a tangent but rather a segue to another oddball tax scheme from back in the day. Remember: the whole point of the Laffer Curve (the intellectual underpinning of supply side tax cuts) was to suggest a way to maximize tax revenue. To recap: tax at 100%, minimal economic activity, so no revenue. Tax at 0%, no revenue. Somewhere in the middle, max revenue. So saying supply side tax cuts work great if only the government cuts spending, that's a bit like saying that electric cars work great so long as nothing is 200 miles away. And as you say, spending wasn't cut with the tax cuts, and so what really happens is that the country goes on a credit card spree. Anyone can look like they're doing great if you let them run up a credit card balance, for awhile, but eventually the bill comes due. And cutting expenditures would have left a dent in some part of the economy, because ultimately those government dollars end up in the private sector. A fighter jet--is it a government expenditure or private sector revenue? My point is not that tax cuts shouldn't be popular, but that the whole supply side thing was a sham, sold as a free lunch tax cut that would magically make revenues go up because of how we were repositioning on the Laffer Curve (in fact actually moving in the opposite direction). But the whole thing was (is) bullcrap. I dislike anything sold with bullcrap, as a reflex.

[RED]

Actually lyman, I did not miss Red's point, but rather just expanded on it a bit, to point out that "boat people" offshore easily, be it in choice of shipyard or registration.

Regarding supply side tax cuts, not really a tangent but rather a segue to another oddball tax scheme from back in the day. Remember: the whole point of the Laffer Curve (the intellectual underpinning of supply side tax cuts) was to suggest a way to maximize tax revenue. To recap: tax at 100%, minimal economic activity, so no revenue. Tax at 0%, no revenue. Somewhere in the middle, max revenue. So saying supply side tax cuts work great if only the government cuts spending, that's a bit like saying that electric cars work great so long as nothing is 200 miles away. And as you say, spending wasn't cut with the tax cuts, and so what really happens is that the country goes on a credit card spree. Anyone can look like they're doing great if you let them run up a credit card balance, for awhile, but eventually the bill comes due. And cutting expenditures would have left a dent in some part of the economy, because ultimately those government dollars end up in the private sector. A fighter jet--is it a government expenditure or private sector revenue? My point is not that tax cuts shouldn't be popular, but that the whole supply side thing was a sham, sold as a free lunch tax cut that would magically make revenues go up because of how we were repositioning on the Laffer Curve (in fact actually moving in the opposite direction). But the whole thing was (is) bullcrap. I dislike anything sold with bullcrap, as a reflex.

More double talk and nonsense. The tiny little point togor doesn't understand is that tax cuts have repeatedly increased revenues. Increasing revenues to the government cannot possibly result in more deficit spending unless spending is increased more than the increase in revenues. If I earn a $100K and spend $110 K it is a deficit. If my earnings are increased to $120K but I spend $140K the deficit has increased. If you merely continue to increase taxes you may increase revenues initially but the disastrous effects upon the economy is going to bite you in the butt

Togor is a Socialist/Communist that would tax at the 100% rate and have the Government dole out the to the unwashed masses as the government chooses. He actually believes in slavery and deludes himself into thinking he should be the slave master. Capitalism works every time, Socialism has never worked anytime in human history.

Here are the revenues since 2008... please point out where the decrease in revenues took place because of tax cuts.

U.S. Tax Revenue by Year
Here's a record of income for each fiscal year since 2008.

FY 2019 - $3.422 trillion, estimated.
FY 2018 - $3.34 trillion, estimated.
FY 2017 - $3.32 trillion.
FY 2016 - $3.27 trillion.
FY 2015 - $3.25 trillion.
FY 2014 - $3.02 trillion.
FY 2013 - $2.77 trillion.
FY 2012 - $2.45 trillion.
FY 2011 - $2.30 trillion.
FY 2010 - $2.16 trillion.
FY 2009 - $2.10 trillion.
FY 2008 - $2.52 trillion.

[togor]

Red the economy grows the same way that the population grows, as your numbers show. And tax cuts with no offsetting spending cuts just amount to a credit card spree. Anyone can live large on a credit card, for a little while. The argument that tax cuts fuel growth is a completely different one than what the Laffer Curve is about, which is maximizing tax revenue. Apples and oranges, but most don't understand that, including you, and therein lies the con. Supply Side tax cuts juice the deficit. That's all we really know about them.