State of the Union 2014

[Polish Leppy 22]

Working families had a net tax increase under Reagan, look it up. Not saying it was a bad thing as it did save Social Security. Throughout Reagan's tenure taxes were cut both and raised multiple times. Reagan didn't just cut taxes.

I do admire that Reagan didn't give preferential treatment to high income capital gain earners and that he wasn't a pawn for the gun lobby.

Reagan inherited good unemployment numbers but unemployment hit 10.3 percent during Reagans third year. Now the economy did bounce back to a low to just under 6 percent when he left office.

I do think it is important to keep in mind that in the 80s we didn't have NAFTA, CAFTA, GAT, and the all of today's technological advances that increased productivity. All of which have killed American jobs. Made things cost less but killed jobs. I also never understood with NAFTA why we can't buy our prescription drugs from Canada, makes no sense to me. It is supposed to be free trade right? It has nothing to do with the rest of this post but I never understood that.

What does this mean, working families? As opposed to families who don't work? I work 50-55 hour weeks but no one calls me a "worker."

 

[Polish Leppy 22]

So Polish lowering taxes would help the unemployed how?

Remember the 1980's? I was a baby but I've read enough about that time and our economic policies. Lowering taxes on businesses (of all sizes) allowed them to keep more of their money, invest, and grow, which creates more job opportunities. If we were in such a strong recovery our president woudn't be running on free health care and unemployment insurance.

Side note: we have thousands of jobs across the country waiting to be filled, but are in a severe shortage of people with the skills needed for those jobs. See: IT and medical.

 

[Goldedommer44]

Reagan really did tax most Americans more: Tea Partiers love to call Obama a socialist, says Ed Kilgore at Washington Monthly. But in reality, Americans who made less than $200,000 paid more in taxes in "the Golden Era of Reagan" than they have under Obama. One reason is that the share from "relatively progressive income levies" has declined compared to that "from highly regressive payroll taxes." Even those earning over $350,000 in 1982 paid nearly what they do now in income tax.

Did Ronald Reagan tax Americans more heavily than President Obama? - The Week

 

[T Town Tommy]

Reagan really did tax most Americans more: Tea Partiers love to call Obama a socialist, says Ed Kilgore at Washington Monthly. But in reality, Americans who made less than $200,000 paid more in taxes in "the Golden Era of Reagan" than they have under Obama. One reason is that the share from "relatively progressive income levies" has declined compared to that "from highly regressive payroll taxes." Even those earning over $350,000 in 1982 paid nearly what they do now in income tax.

Did Ronald Reagan tax Americans more heavily than President Obama? - The Week

Reagan's tax policy didn't take affect until a couple of years in to his first term. Nice try... but the taxes you lay on Reagan here were really Carter's tax policy that Reagan inherited.

 

[chicago51]

Remember the 1980's? I was a baby but I've read enough about that time and our economic policies. Lowering taxes on businesses (of all sizes) allowed them to keep more of their money, invest, and grow, which creates more job opportunities. If we were in such a strong recovery our president woudn't be running on free health care and unemployment insurance.

Side note: we have thousands of jobs across the country waiting to be filled, but are in a severe shortage of people with the skills needed for those jobs. See: IT and medical.

I agree with the bolded. Right now we have both a job shortage and a job surplus at the same time.

Why would I invest and grow my business when noboby is buying my stuff (good or service) right now? Yes you need capital but capital hasn't bee the issue especially the Fed practically giving money away.

Yes lowering taxes makes hiring more desirable but if I own a business I'm gonna hire someone because there is a demand for the work they can do. I'm not gonna hire someone I don't need just because the government gives be me a big tax break.

Right now consumer spending is low because of high unemployment (especially real unemployment) and low wages. Consumer spending accounts for 60%-70% of the economy depending on who you listen to and it is that area in my opinion we should be focused on.

Heading into 80s we had some inflation issues but we had a rising thriving middle class coming off the best 3 decades in the history of our nation in terms of GDP growth and middle class income growth.

So perhaps during the 80s we didn't have enough investment and capital in the economy and the lower taxes (although a top rate of 28% I think was too low) were a good thing just as the Kennedy tax cuts of 1960s were. We've had 3 decades top tax rates lower than they were prior to Reagan and high income capital gains tax rate of 20% or lower since 1997. So would argue that capital and investing isn't this issue right now.

I think need to focus on education and job training investment specifically in those areas of job shortage that we have. We should also reform the coporate tax system (and I am in favor of dropping the corporate tax rates) to incentive hiring here in the US. I for think that allowing companies to right off there relocation expenses even they are outsourcing expenses is insane. We can easliy make up the Corporate tax cut by eliminating some of our corporate welfare benefits and subsidies.

 

[Goldedommer44]

ok here is the tax rates during Reagans second term compared all the way through 2008.

Federal Income Tax Rates 1987-2008

 

[Polish Leppy 22]

I agree with the bolded. Right now we have both a job shortage and a job surplus at the same time.

Why would I invest and grow my business when noboby is buying my stuff (good or service) right now? Yes you need capital but capital hasn't bee the issue especially the Fed practically giving money away.
Yes lowering taxes makes hiring more desirable but if I own a business I'm gonna hire someone because there is a demand for the work they can do. I'm not gonna hire someone I don't need just because the government gives be me a big tax break.

Right now consumer spending is low because of high unemployment (especially real unemployment) and low wages. Consumer spending accounts for 60%-70% of the economy depending on who you listen to and it is that area in my opinion we should be focused on.

Heading into 80s we had some inflation issues but we had a rising thriving middle class coming off the best 3 decades in the history of our nation in terms of GDP growth and middle class income growth.

So perhaps during the 80s we didn't have enough investment and capital in the economy and the lower taxes (although a top rate of 28% I think was too low) were a good thing just as the Kennedy tax cuts of 1960s were. We've had 3 decades top tax rates lower than they were prior to Reagan and high income capital gains tax rate of 20% or lower since 1997. So would argue that capital and investing isn't this issue right now.

I think need to focus on education and job training investment specifically in those areas of job shortage that we have. We should also reform the coporate tax system (and I am in favor of dropping the corporate tax rates) to incentive hiring here in the US. I for think that allowing companies to right off there relocation expenses even they are outsourcing expenses is insane. We can easliy make up the Corporate tax cut by eliminating some of our corporate welfare benefits and subsidies.

Lower everyone's taxes = more money in pockets = more spending.

 

[Goldedommer44]

I would agree that lowering taxes would do that but we just got done with a payroll tax decrease that the Reps would not extend and we saw know significant growth during that period .

 

[Polish Leppy 22]

I would agree that lowering taxes would do that but we just got done with a payroll tax decrease that the Reps would not extend and we saw know significant growth during that period .

Look back to the Reagan recovery. We did a lot more than that and it had a quick impact on the private sector. There was no need for "shovel ready jobs", or a stimulus, or "pay your fair share", or "punish your enemies" or "free health care and free birth control."

 

[Goldedommer44]

But back when Reagan was president we didn't have the Great Recession, 2 Wars., and a crazy amount of companies cutting jobs. You can't just say it worked in 1987 so it will work now. Their are so many more factors that went into it. The current President walked into a firestorm and had to try to work his way out of it. He did cut payroll taxes and did extend the Bush tax cuts twice.

 

[connor_in]

But back when Reagan was president we didn't have the Great Recession, 2 Wars., and a crazy amount of companies cutting jobs. You can't just say it worked in 1987 so it will work now. Their are so many more factors that went into it. The current President walked into a firestorm and had to try to work his way out of it. He did cut payroll taxes and did extend the Bush tax cuts twice.

A little history is a good thing...does anyone want to remind this one about what occurred at the end of the 70's & start of the 80's...

 

[Goldedommer44]

I do know there was a ression in the early 1980 lasting from July 1980 to November 1981. The problem with that is it is was only half the size of the one we just went through and Obama has kept taxes low and wanted to keep the payroll tax cut but reps said no. Also the current taxes are lower than when Reagan lowered them in the late 80's . All I am saying is lowering taxes is not going to jump start things. The TRICKLE DOWN EFFECT doesn't work!!!!

 

[chicago51]

Every conservative likes to talk about the Kennedy tax cuts which were actually signed into law by LBJ. Yes the tax cuts of the 60s help the economy but it is ver misleading.

Under Kennedy there was a net increase in tax revenue partially from the growing economy but mostly because Kennedy also closed so many damn special interest loopholes that it was actually a net tax increase and the wealthy on average actually paid more. Kennedy in his 1960 debate with Nixon actually says he expects his plan would raise $700 million to $1 billion which in today's inflation adjusted dollars would be considered a significant increase. Kennedy also didn't call it tax cuts even he cut rates 20 percent he called them tax changes.

Romney and Obama both talked about closing loopholes in the campaign. My only issue with Romney was the lack of specifics he about which loopholes he would close. Did some research back in 2012 and unless you eliminated things like the mortgage interest deduction, earned income tax credit, and college tax credits things that help middle class families I saw no way to $5 trillion which was the tax cut Romney was proposing over 10 years. Maybe there is a way but he needed specify but closing fossil fuel, farm, and other corporate loopholes including carried interest gets you less than half way to that $5 trillion. Evening out high income capital gains to high income would close the gap a bit more but the math still wasn't close.

That tangent on Romney aside I do support that kind of tax reform as it could actually bring in more revenue. Last year I believe Obama wanted to lower the corporate tax rate to 28 percent with an even lower rate for US manufactures and close some corporate subsidies and loopholes. We need more of that kind of tax reform but it would have been a good start.

By the way the stimulus was about 40 percent tax cuts as there was increases in the earned income tax credit, college credit for families, as well as the 2 year "making work pay" tax credit in 2009 and 2010. Also as mentioned we followed that up with the payroll tax holiday (which Obama had to trade for with 2 more years of Bush top end tax rates). Obama to wanted an extension to the payroll holiday but both parties for different reasons decided not to continue it.

 

[connor_in]

I do know there was a ression in the early 1980 lasting from July 1980 to November 1981. The problem with that is it is was only half the size of the one we just went through and Obama has kept taxes low and wanted to keep the payroll tax cut but reps said no. Also the current taxes are lower than when Reagan lowered them in the late 80's . All I am saying is lowering taxes is not going to jump start things. The TRICKLE DOWN EFFECT doesn't work!!!!

Google "misery index" & "Jimmy Carter"

 

[Goldedommer44]

I will be honest it has been very nice to talk about this with people who know what the hell they are talking about. I just wish both sides would come up with an actually plan and stick with it.

 

[chicago51]

Google "misery index" & "Jimmy Carter"

I assume you are talking about the rise inflation pretty much through most of the 70s and into the 80s?

Inflation is the rise in prices of goods and services of the economy.

Prices of go up = lower purchasing power of currency = inflation.

Now when people think inflation I think they think of too many dollars in circulation but actually other things can make prices rise which in effect lowers the purchasing power.

The US economy relies heavily on foreign oil not just for cause but for plastics and other things. In the 1970s there was an even greater reliance on foreign oil as we didn't produce as much oil ourselves and we had more oil power plants. So when the Middle East oil embargo happened since so much of the economy relied on foreign oil prices shut up. When prices shot up the purchasing power went down thus we had inflation.

Now Jimmy Carter was a honorable man but I will acknowledge he was week as a leader could have ended the oil embargo quicker as well as the Iran hostage crisis which ultimately cost to him to lose the 1980 election in a landslide when he had been leading in all the polls prior.

I also though have no doubt though if we would have continued Carter's energy programs we would be fully energy independent today and I don't think that is a stretch as we are likely to be fully energey independent in another 15 years or so anyway.

 

[Goldedommer44]

Speaking of energy, what do you guys think about the XL pipeline ? I am personally against it

 

[connor_in]

 

[connor_in]

Misery index = unemployment rate + inflation rate

Highest recorded June 1980 = 21.98
5 months prior to the election of Ronald Reagan

 

[chicago51]

Speaking of energy, what do you guys think about the XL pipeline ? I am personally against it

It basically helps China more than the US. We have deemed the Trans-Canada tarsans oil too horrible to be used in the US.

My understanding is the Obama administration is going to approve it as long as the aquafier can be kept clean as it is largest US source of ground water. The oil is coming out of the ground rather we build the pipeline or not.

Personally I'm against it but I'm not gonna jump up and down and screem if it is approved.

I take climate change very seriously but I would handle it differently than using green energy subsidies which don't always get good return on investment and regulations.

I personally would like to see a carbon tax but one that is revenue neutral. A carbon tax will raise the price of fuel and electricity. So we should because of that we should rebate the entire carbon tax as a dividend check give anually, or quarterly. So every tax payer gets a flat rebate for themselves and their dependents. So it should offset the rise in prices of fossil fuel energy some will save some with long driving commutes will have to pay a little more. All in all though having tax rebated 100 percent will limit the pain on consumers but it will make green energy the more profitable for the private sector. I think once there is a true financial incentive for the big guns in the private industry American innovation will fix the problem. We might also have to give a portion of the carbon rebates to American manufactures to subsidize their increased energy cost as well.

 

[connor_in]

 

[Ndaccountant]

Found this interesting. Basically, the article goes on to explain how the CBO concluded that the ACA would discourage work and lead to reduced hours worked.

Ignoring the obvious political response, I am more focused on the implications for inequality, given the recent national focus. Seems to me that this would only further the divide in the long run, since on a marginal basis, the extra income needed to offset the lost subsidies would be too great. Essentially, some people's income will be capped at the subsidy level.

Obamacare to cut work hours by equivalent of two million jobs: CBO | Reuters

 

[phgreek]

Found this interesting. Basically, the article goes on to explain how the CBO concluded that the ACA would discourage work and lead to reduced hours worked.

Ignoring the obvious political response, I am more focused on the implications for inequality, given the recent national focus. Seems to me that this would only further the divide in the long run, since on a marginal basis, the extra income needed to offset the lost subsidies would be too great. Essentially, some people's income will be capped at the subsidy level.

Obamacare to cut work hours by equivalent of two million jobs: CBO | Reuters

...can't produce upward mobility and new jobs via policy...so you quell the hunger by having people choose to "stay down" ????

 

[Polish Leppy 22]

Found this interesting. Basically, the article goes on to explain how the CBO concluded that the ACA would discourage work and lead to reduced hours worked.

Ignoring the obvious political response, I am more focused on the implications for inequality, given the recent national focus. Seems to me that this would only further the divide in the long run, since on a marginal basis, the extra income needed to offset the lost subsidies would be too great. Essentially, some people's income will be capped at the subsidy level.

Obamacare to cut work hours by equivalent of two million jobs: CBO | Reuters

Fundamental transformation.

 

[RDU Irish]

this gif sums up the circus clown that is Joe Biden. No offense intended to circus clowns.

 

[Cackalacky]

Boehner is like "WTF am i doing here"

 

[Goldedommer44]

is there any data to suggest that companies cut peoples hours or workers all together because of the ACA? last I saw it was only a speculation. I haven't seen any proof that companies have done this. I know in the town I live in with a fortune 500 company they have not reduced hours for part-time staff to try to get around the new law.

 

[GoIrish41]

is there any data to suggest that companies cut peoples hours or workers all together because of the ACA? last I saw it was only a speculation. I haven't seen any proof that companies have done this. I know in the town I live in with a fortune 500 company they have not reduced hours for part-time staff to try to get around the new law.

This may happen is some cases, but I don't think there is any evidence that this is systematic at all. There was some talk about what company execs said they were going to do, but since I haven't heard they actually did, I'm going to assume it was just bluster.

 

[Buster Bluth]

Found this interesting. Basically, the article goes on to explain how the CBO concluded that the ACA would discourage work and lead to reduced hours worked.

Ignoring the obvious political response, I am more focused on the implications for inequality, given the recent national focus. Seems to me that this would only further the divide in the long run, since on a marginal basis, the extra income needed to offset the lost subsidies would be too great. Essentially, some people's income will be capped at the subsidy level.

Obamacare to cut work hours by equivalent of two million jobs: CBO | Reuters

What should we expect from a 1,000+-page bill written by teams of lawyers from insurance companies? Do insurance companies care about raising the costs for the little guys? Noooooooope.

 

[Ndaccountant]

This may happen is some cases, but I don't think there is any evidence that this is systematic at all. There was some talk about what company execs said they were going to do, but since I haven't heard they actually did, I'm going to assume it was just bluster.

Keep in mind that the employer mandate has been delayed, thus employers can simply raise premiums to cover the short run additional costs. I know mine did.

We will see this fall what happens.