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Who would you prefer to be the Republican nominee?

Newt Gingrich
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Mitt Romney
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Author Topic: Romney vs Gingrich  (Read 23661 times)

CraigStern

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Re: Romney vs Perry
« Reply #45 on: October 20, 2011, 07:09:24 AM »

I don't think demand will be hurt that much because the sales tax will be offset by the lower income tax rate.  I think the logic is that if you let people keep more of their income by lowering their income taxes, then they can afford to pay the increase prices caused by the sales tax.

I'm not sure that that's true: as you pointed out, about half of working class people currently pay a 0% income tax rate. There's nowhere to go but up for those people, as far as income taxes are concerned. So unless you're talking about giving them tax credits, their income taxes will remain the same and they'll see a dramatic rise in their sales taxes on top of it. That leaves them less discretionary income to consume anything but core necessities, which will almost certainly affect demand.
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SmartyPants

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Re: Romney vs Perry vs Cain
« Reply #46 on: October 20, 2011, 03:16:44 PM »

In Texas, necessities aren't susceptible to a sales tax.  I imagine that a national sales tax would do the same.  Isn't the logic of not taxing low income earners is that they need 100% of their income to pay for necessities?  If someone is poor enough where they shouldn't have to pay any income taxes, then they don't have much money for discretionary spending because they would be spending all their money on necessities.  Since low income earners already do very little discretinary spending, they will have little effect on the overall demand of the market.  The middle class has the largest amount of purchasing power in America, so the large income tax cut they receive should make up for the sales tax increase.

I find it funny that you suggested "giving them tax credits".   The main purpose Cain had for suggesting the 9-9-9 plan (besides trying to become the president) is that he believes that the 9-9-9 plan would simplify the tax code.  If you start filling the new code with tax credits, then you will no longer be simplifing the tax code.

Perry also suggested that the tax code needs to be simplied.  Both Perry and Cain believe in removing tax credits, tax loopholes, and in using a flat tax.  Perry himself hasn't given an exact percentage of income that the flat tax will take.  According to CNN: if America keeps the current payroll tax, keeps the current capital gains tax, and excepts people who make less then $36,000 per year, then America would need to have a 19% flat tax to have the same amount of revenue as the current tax code (which brings in much less then the federal government is spending).  Many liberals say that both Cain and Perry want a flat tax because they are both unsympathetic millionaires who are ignorant of the hardships that the poor face.  I seriously doubt that, since both Perry and Cain grew up poor.  Perry grew up in west Texas where he was a son of a rancher and where he didn't have access to indoor plumbing.  In order to pay for college, Perry had to go door to door selling encyclopedias and bibles.  Cain was born in Memphis, Tennessee to a mother who was a cleaning woman and a father who was raised on a farm and worked as a barber, janitor, and chauffeur.

CraigStern

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Re: Romney vs Perry vs Cain
« Reply #47 on: October 20, 2011, 04:38:05 PM »

Maybe they've forgotten their roots, or maybe they figure that because they were lucky enough to break into the upper class, everyone else should have been able to also. It doesn't really matter: asking for more money from people who barely have enough to ensure their own continued survival is callous.

The only reason the middle class has the most purchasing power is because it's the largest group of people (population-wise) with any reasonable amount of discretionary income. If you increase the discretionary income the working poor have available to them, that will necessarily have a positive impact on demand because there are so many of them.

Now you might conclude that it won't matter if the working poor lose more money because they don't have much discretionary income right now anyway. Not so: kicking the chair out from under the poor means the government is going to have spend more money on social services (food stamps, uninsured emergency room visits, and so on) because the poor will not even have enough money to cover their own basic necessities. That, in turn, will mean the government needs more money in taxes to make up the difference. It's counterproductive, and precisely the opposite of what we need in order to increase demand.
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Deagonx

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Re: Romney vs Perry vs Cain
« Reply #48 on: October 20, 2011, 06:59:50 PM »

I seriously feel like I'm being ignored. Am I? Because if so I'll stop commenting if that's what you want.
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SmartyPants

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Re: Romney vs Perry vs Cain
« Reply #49 on: October 20, 2011, 10:22:22 PM »

Herman Cain has admitted himself that the 999 plan is merely a blueprint for discussion. It can never happen realistically, but it proves a good point that the tax system needs to be greatly simplified.
Thats interesting.

Maybe they've forgotten their roots, or maybe they figure that because they were lucky enough to break into the upper class, everyone else should have been able to also.
That is a rather pessimistic view.  Based on what I read, they both worked hard to get into college and to pay for it.  They both worked for the US Military inorder to pay for their college.  With a college education, they both entered the middle class.  In the work force, they both worked hard to rise their way up in their respective careers.  Through career advancements and smart investments, they both became millionaires.  You can call it "luck", but I see it as two men who became sucessful through educations and hard work.

It doesn't really matter: asking for more money from people who barely have enough to ensure their own continued survival is callous.
Like the state flat taxes, I am pretty sure a national flat would have exemptions for the poor.  With that in mind, it seems unfair to call them "callous".

Now you might conclude that it won't matter if the working poor lose more money because they don't have much discretionary income right now anyway.
I am offended that you think I am dumb enough to come up with such an idiotic conclusion.  I said that if someone is truly poor, then they wouldn't have any money for discretionary spending because they would spend all their money on necessities.  Since sales taxes don't apply to necessities, the truly poor wouldn't lose any money to a sales tax.  That means that the truly poor will keep their 0% income tax rate and pay a 0% sales tax rate.  I don't see how the truly poor could "lose more money" from their tax rate staying at 0%.

The only reason the middle class has the most purchasing power is because it's the largest group of people (population-wise) with any reasonable amount of discretionary income. If you increase the discretionary income the working poor have available to them, that will necessarily have a positive impact on demand because there are so many of them.
What you are suggesting is similar to the policies of Hugo Chavez.  This is how it is going down in Venezuela:  The government took money that the rich earned and gave it to the poor, then the poor increase spending without earning more money themselves.  Taking money from the earners disincentivizes people to work hard or invest, so the economy becomes less productive.  With a less productive economy, everyone earns less money.  Because the rich make less money, there is less money for the government to take away and give to the poor.  Also, since the rich have less money, they provide less jobs.  Because the government detered the rich from earning, the poor don't have money provided by wages or by the government.

A country needs to do two things to increase economic prosperity.  First, the country has to create polices that encourage businesses and individuals to hire and invest.  Second, you to make sure people have access to education, so they have the skills to do the jobs that the businesses demand.
Tell me which sounds more efficient:
A) Bob being trained and hired as a doctor, and then earning all of his own income.
B) Taxing a hospital, so the government can give minimum wage Bob money that he didn't earn.

CraigStern

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Re: Romney vs Perry vs Cain
« Reply #50 on: October 21, 2011, 12:31:04 PM »

Smarty, where are these exemptions and exceptions coming from? None of the candidates have actually proposed them, so far as I am aware. They have merely proposed a simple, flat tax. Until they actually suggest some of these exemptions, I think I'm perfectly justified in calling their proposed flat tax systems callous.

Besides, based on what you just said a couple of posts up, I wouldn't have thought you'd even want such exemptions in there:

I find it funny that you suggested "giving them tax credits".   The main purpose Cain had for suggesting the 9-9-9 plan (besides trying to become the president) is that he believes that the 9-9-9 plan would simplify the tax code.  If you start filling the new code with tax credits, then you will no longer be simplifing the tax code.

If the overriding goal is simplicity, then it's hypocritical to propose exceptions. If you start filling the tax plan with exceptions, that undermines the system's simplicity every bit as much as credits would.



It is actually incorrect to say that the rich provide jobs: by and large, they don't. Their companies provide jobs. It's an important distinction, because corporations are taxed separately from the people who work for them (even the very rich people who work as the president or the CEO). So when you talk about raising personal income taxes or capital gains taxes on the rich, you're not actually talking about taxing job creators, because those aren't corporate taxes. If a rich person's taxes rise, that has absolutely no effect on his company's ability to hire people--the company, again, pays its taxes separately, and it's the company that hires people.

What's more, a company's money and a rich person's money are required to be separate. That is one of the most basic principles of corporate law. The whole idea behind a corporation is that it is a fictional person under the law, one that has its own money and is liable separately from its shareholders and directors. That's where limited liability comes from. If a rich company owner commingles funds (that is, dips into company funds for his personal use, or dips into personal funds for company use), he opens himself up to something that is called piercing the corporate veil. I won't go into too much more detail about it, but it's basically very very bad.

So, in short: the only possible scenario in which a rich person's assets would have any relevance at all to his company's hiring decisions is one in which he has commingled personal and corporate funds and opened himself up to personal liability for every bad thing his company has ever done. Few rich people are desperate (to say nothing of stupid) enough to do this, so this is pretty rare.



I really don't see what you're trying to get at by saying that Venezuela pursues redistributive practices. So do Denmark and Norway, which (as I explained earlier) enjoy stronger economies and a better average life expectancy than we do.

In fact, we apply redistributive principles here in the U.S. as well: the Earned Income Tax Credit is an example of a limited negative income tax. Research suggests that it is beneficial, producing "substantial positive effects in inducing single parents to go to work." Because the EITC is tied to income from working, it does not diminish peoples' incentives to work.
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SmartyPants

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Re: Romney vs Perry vs Cain
« Reply #51 on: October 21, 2011, 10:14:36 PM »

I find it funny that you suggested "giving them tax credits".   The main purpose Cain had for suggesting the 9-9-9 plan (besides trying to become the president) is that he believes that the 9-9-9 plan would simplify the tax code.  If you start filling the new code with tax credits, then you will no longer be simplifing the tax code.
If the overriding goal is simplicity, then it's hypocritical to propose exceptions. If you start filling the tax plan with exceptions, that undermines the system's simplicity every bit as much as credits would.
To except people who make below a certain income isn't that complex.  It would be like a tax bracket with two levels.  The first level will pay 0%, while every dollar above would pay a flat tax.  Simple.

It is actually incorrect to say that the rich provide jobs: by and large, they don't. Their companies provide jobs. If a rich person's taxes rise, that has absolutely no effect on his company's ability to hire people--the company, again, pays its taxes separately, and it's the company that hires people.
While companies do provide alot of jobs, more then half of all jobs are provided by small business owners.  In fact, small businesses generated 64 percent of net new jobs over the past 15 years.  While companies' money and liabilities are separate from the stockholders, small businesses' money is tied to the owner's personal income.  When you increase income taxes on rich business owners, the owners have less money to hire employees or expand. 

So, in short: the only possible scenario in which a rich person's assets would have any relevance at all to his company's hiring decisions is one in which he has commingled personal and corporate funds and opened himself up to personal liability for every bad thing his company has ever done.
...the rich person owns stock.  Smart people buy assets such as stocks with their extra income.  Stockholders are the ones who own the company, decide who is on the board of directors, and demand the companies to become highly profitable so they can be paid in dividends. Selling stocks is how companies get investment money.  Because of these investments, companies are able to expand.

I really don't see what you're trying to get at by saying that Venezuela pursues redistributive practices. So do Denmark and Norway, which enjoy stronger economies and a better average life expectancy than we do.
Norway, Switzerland, and Denmark have the highest cost of living in the world.  With a higher cost of living, one has to pay more for everything.  If you adjust for cost of living, the United State's GDP is $46,860 per capital, while Denmark's GDP is $36,443 per capital.  22% of Norwegians are on welfare and 13% of Norwegian are too disabled to work, the highest proportions in the world.  Norway, Qatar, and United Arab Emirates are wealthy because they have a small population and an abundance of petroleum and natural gas.  If you want to grow the economy like oil producing companies like Norway, then we have to reduce our population and stop government roadblocks that stop petroleum and natural gas extraction.
Increasing oil production gave Russia a massive economic boom, but that is another topic altogether.

ArtDrake

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Re: Romney vs Perry vs Cain
« Reply #52 on: October 25, 2011, 06:58:21 PM »

The large portion of people in Norway on welfare does not mean the same thing it means in the US. Norway has a highly effective welfare system, and the fact (benefit of doubt given) that 13% of the people are injured so as to be incapable of work speaks in no way to their economic success or prosperity, and quality of governmental policy on job creation and redistribution is also not linked to injury. Nice statistic, but what, exactly, are you trying to say with it?
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SmartyPants

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Re: Romney vs Perry vs Cain
« Reply #53 on: October 26, 2011, 01:48:47 PM »

My eyes were watery because I was laughing so hard at your last post.  It is naive to believe that 13% of Norway's workforce is actually too disabled to work.  What you call a "highly effective welfare system" is clearly being exploited by a large chuck of the population who don't want to work.  Once someone gets disability benefits, they will get large government checks for the rest of their lives without having to work.  Also, a economy can't be considered highly sucessful when more then one out of five people are on welfare.  The statistics prove that Norway doesn't have a highly efficient workforce, since a large amount of the population doesn't work and requires hand outs.  The only reason that Norway has a high GDP is because they have the highest amount of natural resources per capita then anywhere else in the world.

ArtDrake

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Re: Romney vs Perry vs Cain
« Reply #54 on: October 26, 2011, 02:11:27 PM »

There was no trace of irony in your post, and I had no reason to assume that the datum was inaccurate.
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Deagonx

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Re: Romney vs Perry vs Cain
« Reply #55 on: October 26, 2011, 03:27:09 PM »

There was no trace of irony in your post, and I had no reason to assume that the datum was inaccurate.

The datum wasn't. 13 percent of people being classified as unable to work isn't untrue. But that doesn't mean they are all actually unable to drive. work.
« Last Edit: October 27, 2011, 04:25:44 PM by Deagonx »
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ArtDrake

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Re: Romney vs Perry vs Cain
« Reply #56 on: October 27, 2011, 04:21:25 PM »

Who said anything about driving?
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Deagonx

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Re: Romney vs Perry vs Cain
« Reply #57 on: October 27, 2011, 04:25:23 PM »

Who said anything about driving?

No one. It was a goof. Unable to work.
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ArtDrake

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Re: Romney vs Perry vs Cain
« Reply #58 on: October 27, 2011, 04:28:12 PM »

Got it.

Still, I didn't think that he thought that less than the suggested 13% of the populace were unable to work.
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Deagonx

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Re: Romney vs Perry vs Cain
« Reply #59 on: October 27, 2011, 04:39:13 PM »

Got it.

Still, I didn't think that he thought that less than the suggested 13% of the populace were unable to work.

Maybe he assumed that you would agree on the sillyness of that percentage.

Thats more than our unemployment rate. And these people are still getting payed!
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