The Rich Get Richer

[nevergaveitathought]

Originally Posted by CJ7

agreed

I'd say legal creativity in most cases

take deducting $77K for a horse for instance ... legal,sure, creative? indeed, as creative a tax lawyer his money can buy.

You and soft spoken multi millionaire on a government salary goose stepping Harry Reid are two comrades in arms. Toss any old charge out there, hasn't paid tax in ten years, oh yeah the word is out, deducts his wifes horse, oh yeah. The one thing, above all else, yes above any policy position, I hate about liberals is their lack of regard for truth, fairness, rules, you name it's all part of the issue oftheir deceitfulness. Their only principle is to have none.

[joe bloe]

The Laffer Curve is just common sense. It's amazing that liberals get away with dismissing it as crazy. The term "trickle down economics" was coined by Will Rogers, a loyal FDR Democrat, as a way of ridiculing those who believed that lower taxes would stimulate the economy. The left has been using it ever since.

From Wikipedia.Com

The term has been attributed to humorist Will Rogers, who said during the Great Depression that "money was all appropriated for the top in hopes that it would trickle down to the needy."

http://en.wikipedia.org/wiki/Trickle-down_economics

[CuteOldGuy]

Originally Posted by joe bloe

The Laffer Curve is just common sense.

Which is why WDF has so much trouble understanding it.

[CJ7]

Originally Posted by nevergaveitathought

You and soft spoken multi millionaire on a government salary goose stepping Harry Reid are two comrades in arms. Toss any old charge out there, hasn't paid tax in ten years, oh yeah the word is out, deducts his wifes horse, oh yeah. The one thing, above all else, yes above any policy position, I hate about liberals is their lack of regard for truth, fairness, rules, you name it's all part of the issue oftheir deceitfulness. Their only principle is to have none.

willard didnt deduct 77k for the horse ?

guess willard lied on his tax return ... the one he made public

oooooh the deceit ........

[Sidewinder]

Originally Posted by joe bloe

The Laffer Curve is just common sense.

Actually, Joe, the Laffer Curve is NOT "just common sense".

It is solid mathematics.

The Laffer Curve is a trivial application of Rolle's Theorem from elementary calculus. Loosely stated, Rolle's Theorem says that, for ANY continuous function defined between two points a and b, whose value is zero at both a and b, there will be at least one point c in between them at which the slope of the function is zero.

This is stated, and proved, in the first couple of weeks of first semester freshman calculus. It is usually presented as a critical lemma, proved in the course of proving the Mean Value Theorem. (The Mean Value Theorem is what you get when you do a simple change of value on Rolle's Theorem.)

Laffer, in one of the earliest papers on the Laffer Curve, himself cites Rolle's Theorem as its basis.

The key point of the Laffer Curve is not, as the liberals like to think, that there is an OPTIMUM tax rate, that maximizes taxpayer ripoff, but rather that raising tax rates at SOME point will hit diminishing returns. This point is absolute anathema to liberals: they desperately want and need to believe that tax rates can be raised forever.

It is not necessary to assume that the second zero point is at 100% tax. Consider what happens if you set the tax rate at, say, 500%. Very few people are going to work, and pay taxes, if they have to pay all that they earn, and 4x as much to boot, for the privilege of working. (Special cases of this scenario occur frequently: look what happens when someone has to choose between making a few dollars more, or keeping his welfare medical coverage.)

[WTF]

Originally Posted by Sidewinder

The key point of the Laffer Curve is not, as the liberals like to think, that there is an OPTIMUM tax rate, that maximizes taxpayer ripoff, but rather that raising tax rates at SOME point will hit diminishing returns. This point is absolute anathema to liberals: they desperately want and need to believe that tax rates can be raised forever.

.)

That is a bald face lie and I am going to call you exactly wtf you are on this issue, which is a bald face liar.

If there are some liberals that actually believe that, then they are as ignorant on the issue as Tea Nuts who think lower tax rates always will result in higher tax revenue.

You are showing so far that you know partial history of the Laffer Curve but not what OPTIMUM tax rate actually means. For if you did, you would understand that there are way to many variables to put a set number on that question.

Originally Posted by Sidewinder

It is not necessary to assume that the second zero point is at 100% tax. Consider what happens if you set the tax rate at, say, 500%. Very few people are going to work, and pay taxes, if they have to pay all that they earn, and 4x as much to boot, for the privilege of working. .)

Another lie or at best a distortion. People do not pay 50% tax rate on all their income. (If in fact the marginial tax rate was raised to 50%)

A person making say 1 million dollars would pay the exact same rate as you on the first 200k he/she made. 50% on the next 800k.

Originally Posted by Sidewinder

. (Special cases of this scenario occur frequently: look what happens when someone has to choose between making a few dollars more, or keeping his welfare medical coverage.)

Let us look at the other side.Let us say that in fact a person had the potential to make 1 million but did not want to because of the higher marginial tax rate. Then another person would/could produce the widgets that the first person decided not to produce and make a 200k profit. And say three more people started three more business that produced 600k in profits.

You now have the exact same tax revenue but you have 5 people making 200k a year instead of one making 1 million. Resulting in much less income inequity and the resulting damage that income inequity causes. Things like a wealthy person like Mitt Romney making 20 million a year paying a 13% rate. Ans liar like yourself trying to justify it.

Go spread that manure at Tea Rallies where people do not question Ayn Rand type logic....whoops, I mean lies! Do not want to insult the word logic.

You then have

Originally Posted by Sidewinder

Actually, Joe, the Laffer Curve is NOT "just common sense".

.)

If you and joe had any common sense, you'd know how full of caca each of you are

[CuteOldGuy]

Proving, again, you don't understand shit. Why do you bother, WDF?

[Fast Gunn]

Well, if we're going to take this like side road in this discussion, we may as well have a decent chart and a better explanation of this Laffer Curve that some of you folks like to lord over the rest of us.

I am willing to show my ignorance and say I had never heard of this damn thing before.

. . . However, even without reading the text, I am willing to bet that the equilibrium point is a very dynamic point that changes with every gust of wind and difficult as hell to get "just right".






http://finxknowledgeatcbsdu.wordpres...ve-inside-out/

[CuteOldGuy]

That being said, FastGoon, why not support a tax system that doesn't depend on theories like the Laffer Curve?

Oh, wait, you have me on ignore. Never mind.

[Texas Contrarian]

Originally Posted by Sidewinder

The Laffer Curve is a trivial application of Rolle's Theorem from elementary calculus. Loosely stated, Rolle's Theorem says that, for ANY continuous function defined between two points a and b, whose value is zero at both a and b, there will be at least one point c in between them at which the slope of the function is zero.


This is stated, and proved, in the first couple of weeks of first semester freshman calculus. It is usually presented as a critical lemma, proved in the course of proving the Mean Value Theorem. (The Mean Value Theorem is what you get when you do a simple change of value on Rolle's Theorem.)

It's nice to see that someone else around here has an appreciation of calculus, a subject that's been dear to my heart for about fifty years! By the way, Rolle was a French mathematician who did his work more than 300 years ago.

Originally Posted by WTF

That is a bald face lie and I am going to call you exactly wtf you are on this issue, which is a bald face liar.


If there are some liberals that actually believe that, then they are as ignorant on the issue as Tea Nuts who think lower tax rates always will result in higher tax revenue.

Whoa! Calm down there, WTF. I don't see where Sidewinder is "lying" about anything. All he said is that a lot of liberals want to push the marginal tax rate to levels far beyond what is likely to be the point on the curve where the first derivative is zero. That's obviously true, just as a lot of Republicans make the disingenuous claim that tax cuts always increase revenue, no matter what the current statutory rate is.

Many of the liberals pushing for sky-high rates picked up on a piece of work done recently by Christina Romer and her husband. (Why anyone still pays any attention to what Romer says is beyond me, but that's another issue!) The Romer paper claims that some research using data compiled long ago indicates that the elasticity of taxable income at the very high end of the distribution is 0.19, and the Romers calculate therefrom that the revenue-maximizing rate is 84%.

There's not a shred of evedence that such modeling works in the real world. The UK raised the top rate from 40% to 50% recently, but decided to try backing it down to 45% after the higher rate didn't work. After the initial increase, a report from the office of the Chancellor of the Exchequer (that's their equivalent of our Department of the Treasury) indicated that business owners and high-income earners were "maneuvering" in ways designed to reduce their tax liabilities. (What a surprise!)

Another point I would make is that it isn't good policy to simply look for the revenue-maximizing rate. Policymakers also need to avoid producing distortions in the way of disincentives to capital formation. If the government just encourages a lot of people to undertake sheltering activity, capital doesn't flow to its highest and best uses. That was a lot of the problem with the 1970s, when inflation pushed millions of people into high brackets and the tax shelter industry took off like a rocket. That's when lawyers and doctors got sold a bunch of crap like tax-advantaged ostrich breeding partnerships.

Originally Posted by Fast Gunn

. . . However, even without reading the text, I am willing to bet that the equilibrium point is a very dynamic point that changes with every gust of wind and difficult as hell to get "just right".

Quite true, as you're dealing with a quite fluid set of variables that change over time and with shifting sets of circumstances.

Although I appreciate the beauty of modeling something in a rigorous mathematical fashion, this issue involves judgment calls. And, of course, it's heavily politicized by people on both sides of the aisle.

[Ducbutter]

I am willing to show my ignorance and say I had never heard of this damn thing before.



FastGunn, that is a bold admission and I commend you for it. You don't see much of that in this forum.

[Fast Gunn]

There would then appear to exist a natural natural tension between the government who would naturally want to draw in maximum funds to the treasury as opposed to the citizens who would hope to pay only the minimum they can get away with.

How does any government establish this fine line of maximizing returns while its citizens are naturally inclined to pay only the minimum amount they can justify?

This must be the $64,000 question and the eternal dilemma of every country that needs to collect taxes from its citizens, but realizes that it is taking a portion of their blood and livelihood.

You need an egg from the goose, but you must not kill the goose that lays the golden eggs.

. . . That sweet spot must be an ever elusive point that changes from day to day depending on factors too numerous to capture.

[Texas Contrarian]

Originally Posted by Fast Gunn

You need an egg from the goose, but you must not kill the goose that lays the golden eggs.

Here's a famous quote attributed to Jean-Baptiste Colbert, who served as French Finance Minister at about the same time that the aforementioned French mathematician Michel Rolle did his work:

"The art of taxation involves so plucking the goose as to obtain the largest quantity of feathers with the least possible amount of squawking."

[CuteOldGuy]

A much simpler solution would be to eliminate the income tax with all its fraud and loopholes, and adopt the FairTax.

[WTF]

Originally Posted by CaptainMidnight

It'



Whoa! Calm down there, WTF. I don't see where Sidewinder is "lying" about anything. All he said is that a lot of liberals want to push the marginal tax rate to levels far beyond what is likely to be the point on the curve where the first derivative is zero. That's obviously true, just as a lot of Republicans make the disingenuous claim that tax cuts always increase revenue, no matter what the current statutory rate is.







.

He made an absolute statement. See below. It was a lie and I called him just exactly wtf he was when he said that lie, a liar.

I went on to point out that there are idiots on both the left and right that get the Laffer Curve wrong.

Originally Posted by Sidewinder

The key point of the Laffer Curve is not, as the liberals like to think, that there is an OPTIMUM tax rate, that maximizes taxpayer ripoff, but rather that raising tax rates at SOME point will hit diminishing returns. This point is absolute anathema to liberals: they desperately want and need to believe that tax rates can be raised forever.

.)

Originally Posted by CaptainMidnight

It'









Quite true, as you're dealing with a quite fluid set of variables that change over time and with shifting sets of circumstances.

.

Please explain this to COG. He wants me to give him a hard and fast number. It is exactly why I say he does not understand the concept. You do not ask a question like that if you understand the concept of the Laffer Curve. Be like saying he understood addition and then turn around and ask me the answer to 2 + 2..