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Do taxes hurt the economy?

LastRanger
Posts: 9
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6/14/2015 12:52:45 PM
Posted: 1 year ago
After 30 years of raising taxes on almost everything New York has decided that lowering taxes on business for 10 years will make the economy grow (they are a bit slow up north).
After observing that the strongest economies are those that don"t penalize businesses (Texas, North Dakota).
NY has lowered its corporate income tax to the lowest in the north east (still not as low as others), Plus:
No income tax for employees
No sales tax
No property tax
No business tax
Low cost loans
Investment Tax Credit
Property Tax abatement
Sales tax exempting for purchase of manufacturing equipment
There are two questions here: If taxes don"t hurt the economy why are they doing this?
And just how long will this "bait and switch" last?
sadolite
Posts: 8,837
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6/14/2015 5:20:51 PM
Posted: 1 year ago
At 6/14/2015 12:52:45 PM, LastRanger wrote:
After 30 years of raising taxes on almost everything New York has decided that lowering taxes on business for 10 years will make the economy grow (they are a bit slow up north).
After observing that the strongest economies are those that don"t penalize businesses (Texas, North Dakota).
NY has lowered its corporate income tax to the lowest in the north east (still not as low as others), Plus:
No income tax for employees
No sales tax
No property tax
No business tax
Low cost loans
Investment Tax Credit
Property Tax abatement
Sales tax exempting for purchase of manufacturing equipment
There are two questions here: If taxes don"t hurt the economy why are they doing this?
And just how long will this "bait and switch" last?

It will do nothing because what business needs is long term predictability. None of this is an incentive to me to do business in NY. They will just take it all away and tax the hell out of you later down the road. They even say they will. It's temporary. It's just a credit card with no interest no payments for a few years then it's 50% interest on debt you can never pay back (Metaphor)
It's not your views that divide us, it's what you think my views should be that divides us.

If you think I will give up my rights and forsake social etiquette to make you "FEEL" better you are sadly mistaken

If liberal democrats would just stop shooting people gun violence would drop by 90%
wsmunit7
Posts: 1,318
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6/14/2015 6:02:58 PM
Posted: 1 year ago
At 6/14/2015 12:52:45 PM, LastRanger wrote:
After 30 years of raising taxes on almost everything New York has decided that lowering taxes on business for 10 years will make the economy grow (they are a bit slow up north).
After observing that the strongest economies are those that don"t penalize businesses (Texas, North Dakota).
NY has lowered its corporate income tax to the lowest in the north east (still not as low as others), Plus:
No income tax for employees
No sales tax
No property tax
No business tax
Low cost loans
Investment Tax Credit
Property Tax abatement
Sales tax exempting for purchase of manufacturing equipment
There are two questions here: If taxes don"t hurt the economy why are they doing this?
And just how long will this "bait and switch" last?

I recommend you read up on what has happened in Kansas after the GOP governor lowered taxes to boost the economy; disaster.
debate_power
Posts: 726
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6/14/2015 6:52:32 PM
Posted: 1 year ago
At 6/14/2015 12:52:45 PM, LastRanger wrote:
After 30 years of raising taxes on almost everything New York has decided that lowering taxes on business for 10 years will make the economy grow (they are a bit slow up north).
After observing that the strongest economies are those that don"t penalize businesses (Texas, North Dakota).
NY has lowered its corporate income tax to the lowest in the north east (still not as low as others), Plus:
No income tax for employees
No sales tax
No property tax
No business tax
Low cost loans
Investment Tax Credit
Property Tax abatement
Sales tax exempting for purchase of manufacturing equipment
There are two questions here: If taxes don"t hurt the economy why are they doing this?
And just how long will this "bait and switch" last?

The question "Do taxes hurt the economy?" is rather broad.

First off, the economy by itself is not capable of feeling pain.

Second off, what hurts one person in an economy often benefits another. You have to take policies like that into context and see who they hurt and who they benefit instead of just asking generally whether they "hurt the economy".

In other words, could you be a bit more precise? What counts as economic "hurt", to you?
You can call me Mark if you like.
16kadams
Posts: 10,497
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6/14/2015 7:18:17 PM
Posted: 1 year ago
At 6/14/2015 6:02:58 PM, wsmunit7 wrote:
At 6/14/2015 12:52:45 PM, LastRanger wrote:
After 30 years of raising taxes on almost everything New York has decided that lowering taxes on business for 10 years will make the economy grow (they are a bit slow up north).
After observing that the strongest economies are those that don"t penalize businesses (Texas, North Dakota).
NY has lowered its corporate income tax to the lowest in the north east (still not as low as others), Plus:
No income tax for employees
No sales tax
No property tax
No business tax
Low cost loans
Investment Tax Credit
Property Tax abatement
Sales tax exempting for purchase of manufacturing equipment
There are two questions here: If taxes don"t hurt the economy why are they doing this?
And just how long will this "bait and switch" last?

I recommend you read up on what has happened in Kansas after the GOP governor lowered taxes to boost the economy; disaster.

Not really. If you add in federal tax changes, the tax cuts were overshadowed by federal tax increases. So the net tax impact actually increased. Further, tax effects take years to come to fruition. You cannot expect benefits within 5 years.

The entire Kansas argument is really silly. I wrote a short summary of why Kansas does not disprove supply side economics here: http://social-conservatism.blogspot.com...
https://www.youtube.com...
https://rekonomics.wordpress.com...
"A trend is a trend, but the question is, will it bend? Will it alter its course through some unforeseen force and come to a premature end?" -- Alec Cairncross
DanT
Posts: 5,693
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6/15/2015 10:08:43 AM
Posted: 1 year ago
At 6/14/2015 12:52:45 PM, LastRanger wrote:
After 30 years of raising taxes on almost everything New York has decided that lowering taxes on business for 10 years will make the economy grow (they are a bit slow up north).
After observing that the strongest economies are those that don"t penalize businesses (Texas, North Dakota).
NY has lowered its corporate income tax to the lowest in the north east (still not as low as others), Plus:
No income tax for employees
No sales tax
No property tax
No business tax
Low cost loans
Investment Tax Credit
Property Tax abatement
Sales tax exempting for purchase of manufacturing equipment
There are two questions here: If taxes don"t hurt the economy why are they doing this?
And just how long will this "bait and switch" last?

Yes taxes hurt the economy, because it impacts the normal allocation of money. Taxes are a necessary evil, because the governments must be funded, but taxes should be kept as low as possible. Here in NH we have no sales tax, and as a result we get allot of business from Massachusetts and Maine. Residents of these states come to our state to make large purchases, like buying cars and swimming pools, in order to dodge the sales tax of their state. Those who live right on the boarder of the state do nearly all of their shopping in our state.

Likewise, companies tend to establish their facilities in states that have a long term trend of low taxes. This includes income tax, payroll tax, corporate tax, and sales tax. This is because taxation effects their profit margin. Allot of times you can have two companies with different earnings before taxes (EBT) and after taxes are configured the company with the higher EBT has the lower net profit. This can be due either to location, or do to taxes and deductions.
"Chemical weapons are no different than any other types of weapons."~Lordknukle
Diqiucun_Cunmin
Posts: 2,710
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6/15/2015 7:34:35 PM
Posted: 1 year ago
At 6/14/2015 12:52:45 PM, LastRanger wrote:
After 30 years of raising taxes on almost everything New York has decided that lowering taxes on business for 10 years will make the economy grow (they are a bit slow up north).
After observing that the strongest economies are those that don"t penalize businesses (Texas, North Dakota).
NY has lowered its corporate income tax to the lowest in the north east (still not as low as others), Plus:
No income tax for employees
No sales tax
No property tax
No business tax
Low cost loans
Investment Tax Credit
Property Tax abatement
Sales tax exempting for purchase of manufacturing equipment
There are two questions here: If taxes don"t hurt the economy why are they doing this?
And just how long will this "bait and switch" last?

Isn't that what they're supposed to do if they have a deflationary gap?
The thing is, I hate relativism. I hate relativism more than I hate everything else, excepting, maybe, fibreglass powerboats... What it overlooks, to put it briefly and crudely, is the fixed structure of human nature. - Jerry Fodor

Don't be a stat cynic:
http://www.debate.org...

Response to conservative views on deforestation:
http://www.debate.org...

Topics I'd like to debate (not debating ATM): http://tinyurl.com...
slo1
Posts: 4,322
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6/16/2015 12:18:52 PM
Posted: 1 year ago
At 6/14/2015 7:18:17 PM, 16kadams wrote:
At 6/14/2015 6:02:58 PM, wsmunit7 wrote:
At 6/14/2015 12:52:45 PM, LastRanger wrote:
After 30 years of raising taxes on almost everything New York has decided that lowering taxes on business for 10 years will make the economy grow (they are a bit slow up north).
After observing that the strongest economies are those that don"t penalize businesses (Texas, North Dakota).
NY has lowered its corporate income tax to the lowest in the north east (still not as low as others), Plus:
No income tax for employees
No sales tax
No property tax
No business tax
Low cost loans
Investment Tax Credit
Property Tax abatement
Sales tax exempting for purchase of manufacturing equipment
There are two questions here: If taxes don"t hurt the economy why are they doing this?
And just how long will this "bait and switch" last?

I recommend you read up on what has happened in Kansas after the GOP governor lowered taxes to boost the economy; disaster.

Not really. If you add in federal tax changes, the tax cuts were overshadowed by federal tax increases. So the net tax impact actually increased. Further, tax effects take years to come to fruition. You cannot expect benefits within 5 years.

The entire Kansas argument is really silly. I wrote a short summary of why Kansas does not disprove supply side economics here: http://social-conservatism.blogspot.com...

That blog is so lacking of any substance.

1. The gov said the tax rate cut from 6.45% to 4.9% would be like a shot in the arm.
a. It hasn't been.

2. Despite trickle down rhetoric there are many other factors to consider.
a. Such as deficits - They are piling high, so high in fact that Kansas just passed a tax hike so now their sales tax is one of the highest in the union.

b. You need a relatively closed system. Kansas rich receiving a tax break can just as easily get reinvested in Nebraska as it can in Kansas. State level supply side automatically gets a penalty because there are easily 49 other states that could receive the benefit.

c. There is a reason why the term is "trickle" and not "Free Fall". Due to b above it would be more efficient to use the funds to attract business and other direct investment via tax breaks rather than individuals with hopes it trickles down.

To sum it all up, you may be right that Kansas does not disprove "trickle down", but it surely disproves the fiscal right's ability to implement anything resembling trickle down because they are unwilling to look at any thing but rhetoric.
16kadams
Posts: 10,497
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6/16/2015 12:28:08 PM
Posted: 1 year ago
At 6/16/2015 12:18:52 PM, slo1 wrote:
At 6/14/2015 7:18:17 PM, 16kadams wrote:
At 6/14/2015 6:02:58 PM, wsmunit7 wrote:
At 6/14/2015 12:52:45 PM, LastRanger wrote:
After 30 years of raising taxes on almost everything New York has decided that lowering taxes on business for 10 years will make the economy grow (they are a bit slow up north).
After observing that the strongest economies are those that don"t penalize businesses (Texas, North Dakota).
NY has lowered its corporate income tax to the lowest in the north east (still not as low as others), Plus:
No income tax for employees
No sales tax
No property tax
No business tax
Low cost loans
Investment Tax Credit
Property Tax abatement
Sales tax exempting for purchase of manufacturing equipment
There are two questions here: If taxes don"t hurt the economy why are they doing this?
And just how long will this "bait and switch" last?

I recommend you read up on what has happened in Kansas after the GOP governor lowered taxes to boost the economy; disaster.

Not really. If you add in federal tax changes, the tax cuts were overshadowed by federal tax increases. So the net tax impact actually increased. Further, tax effects take years to come to fruition. You cannot expect benefits within 5 years.

The entire Kansas argument is really silly. I wrote a short summary of why Kansas does not disprove supply side economics here: http://social-conservatism.blogspot.com...

That blog is so lacking of any substance.

1. The gov said the tax rate cut from 6.45% to 4.9% would be like a shot in the arm.
a. It hasn't been.

It wouldn't be, lol. That tax cut is super minimal and federal taxes made the tax burden increase every year except for one since the tax cuts passed.


2. Despite trickle down rhetoric there are many other factors to consider.
a. Such as deficits - They are piling high, so high in fact that Kansas just passed a tax hike so now their sales tax is one of the highest in the union.

I agree with this. Again, you seem to be judging Kansas based on what their Governor said would happen. The post above actually emphasized total tax burdens and long-term factors.


b. You need a relatively closed system. Kansas rich receiving a tax break can just as easily get reinvested in Nebraska as it can in Kansas. State level supply side automatically gets a penalty because there are easily 49 other states that could receive the benefit.


Again, I agree with this. I do think taxes have an effect, especially in the long term (I would say corporate taxes cause the most negatives), but other laws (like unions, regulations, deficits, immigration, and uncertainty) all have larger roles at the local level. At the national level, monetary policy reigns supreme. But I don't think you can just wave off the supply side.
c. There is a reason why the term is "trickle" and not "Free Fall". Due to b above it would be more efficient to use the funds to attract business and other direct investment via tax breaks rather than individuals with hopes it trickles down.

Again, I agree.


To sum it all up, you may be right that Kansas does not disprove "trickle down", but it surely disproves the fiscal right's ability to implement anything resembling trickle down because they are unwilling to look at any thing but rhetoric.

I think it depends. On a local level, you can have some effect, but it won't be like an injection. In the long term taxes do have an effect. States with no income tax grow much faster over a long time period. But cutting taxes wouldn't cause some GSP quadrupling in a year. Most effects are long term on the supply side. It will take years, like it did in California, for the businesses to eventually transfer to Florida, Texas, and the Dakotas. I think we agree on this (well, you probably think the effects are smaller, but we agree on the concept). If I were president but everything I said would happen, I would have the Fed target a growth rate, reduce the corporate income tax to the OECD average, close loopholes at the top to give a tax cut to the middle and lower class. I would then discuss lowering the top marginal rate, but try to do it without losing too much revenue. We know tax cuts for the middle class work (e.g. Zidar 2014) and that corporate tax rates do significantly impact the middle class *and* the rich (Felix and Hines 2009, CBO 2006). I would utilize both trickle down and down up factors to boost growth.
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https://rekonomics.wordpress.com...
"A trend is a trend, but the question is, will it bend? Will it alter its course through some unforeseen force and come to a premature end?" -- Alec Cairncross
Diqiucun_Cunmin
Posts: 2,710
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6/16/2015 1:10:51 PM
Posted: 1 year ago
At 6/15/2015 7:34:35 PM, Diqiucun_Cunmin wrote:
At 6/14/2015 12:52:45 PM, LastRanger wrote:
After 30 years of raising taxes on almost everything New York has decided that lowering taxes on business for 10 years will make the economy grow (they are a bit slow up north).
After observing that the strongest economies are those that don"t penalize businesses (Texas, North Dakota).
NY has lowered its corporate income tax to the lowest in the north east (still not as low as others), Plus:
No income tax for employees
No sales tax
No property tax
No business tax
Low cost loans
Investment Tax Credit
Property Tax abatement
Sales tax exempting for purchase of manufacturing equipment
There are two questions here: If taxes don"t hurt the economy why are they doing this?
And just how long will this "bait and switch" last?

Isn't that what they're supposed to do if they have a deflationary gap?

I feel so sad that nobody's answering my question :(

*nudges 16k*
The thing is, I hate relativism. I hate relativism more than I hate everything else, excepting, maybe, fibreglass powerboats... What it overlooks, to put it briefly and crudely, is the fixed structure of human nature. - Jerry Fodor

Don't be a stat cynic:
http://www.debate.org...

Response to conservative views on deforestation:
http://www.debate.org...

Topics I'd like to debate (not debating ATM): http://tinyurl.com...
sadolite
Posts: 8,837
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6/16/2015 2:03:05 PM
Posted: 1 year ago
At 6/16/2015 1:10:51 PM, Diqiucun_Cunmin wrote:
At 6/15/2015 7:34:35 PM, Diqiucun_Cunmin wrote:
At 6/14/2015 12:52:45 PM, LastRanger wrote:
After 30 years of raising taxes on almost everything New York has decided that lowering taxes on business for 10 years will make the economy grow (they are a bit slow up north).
After observing that the strongest economies are those that don"t penalize businesses (Texas, North Dakota).
NY has lowered its corporate income tax to the lowest in the north east (still not as low as others), Plus:
No income tax for employees
No sales tax
No property tax
No business tax
Low cost loans
Investment Tax Credit
Property Tax abatement
Sales tax exempting for purchase of manufacturing equipment
There are two questions here: If taxes don"t hurt the economy why are they doing this?
And just how long will this "bait and switch" last?

Isn't that what they're supposed to do if they have a deflationary gap?

I feel so sad that nobody's answering my question :(

*nudges 16k*

Describe this "deflationary" gap.
It's not your views that divide us, it's what you think my views should be that divides us.

If you think I will give up my rights and forsake social etiquette to make you "FEEL" better you are sadly mistaken

If liberal democrats would just stop shooting people gun violence would drop by 90%