Federal deficit appears on track to fall below $300 billion

[jackie hayes]

TrickS.

 

You used both "trick" and "tricks".

 

First is the played out class warfare card. Let me make this simple, if rich people are making money, poor people have jobs. If rich people are losing money, poor people lose jobs. Its the same with corporate profits... If coroporations lose money, people lose jobs, see also the airline and auto industries of today. Guess what. Corporations are making money, and since August of 2003, 5.4 million new jobs have been created. Guess what else, corporations are paying lower rates, but paying more money in taxes, which is exactly what conservatives said would happen.

 

It's not class warfare, it's accounting. Even the WH budget director acknowledges the fact that the increase in tax revenue is coming from high income taxpayers. Why are Republicans so worried about mere fact?

 

And frankly, your "simple" argument is flat wrong. If inequality is so great for growth (as you claim it creates oodles of jobs), why didn't payroll outstrip WH projections? Why did it fall below WH projections?

 

The WH itself has admitted that the tax cuts do not create more revenue on their own. But it's true that whatever 'revenue effect' you get from a tax cut, it will be stronger for corporations than for individuals.

 

How about showing the increase in corporate profits as a percentage, and then comparing it to income tax collections for a comparison? For #1, corporate profits are HUGELY volitile, and a prone to large swings. #2, you can actually have negative coporate profits, while you can't have negative income tax collections. The lowest you can have is zero. #3 income tax collections are a much bigger piece of tax revenues than corporate profits, but the implication in the article is that they are somehow equal. #4, because of the size difference in between the two it takes a much smaller dollar figure move in profits to make a larger percentage difference than it does the other way around. #5, payroll taxes are incredibly stable because of the fact that there has been a nearly stable unemployement rate in this country for the past year, which means the group has not grown at all, and the simple fact remains that there can't be huge growth because the growth potential is capped by the income limit. If a guy doubles his salary from 90000 to 180000 his taxes paid rise a ton, but the amount he pays for payroll taxes only goes up 7.75% X $4200. It makes liars out of the percentages because they don't tell the whole story.

 

The volatility's sort of the point. Although corporate taxes are only about 1/5 of personal income taxes, because they are so volatile, a large increase can have a sizeable effect on overall tax revenue. It's like suggesting that GDP numbers should ignore investment, because it's small and volatile.

 

As far as records exist, the only time aggregate corporate profits have been negative was in the Depression. I can only hope that Bush isn't that incompetent.

 

And forget income, what happened to all those jobs that come from inequality, btw? That would push up payroll taxes, right? Hmm...

 

Anyway, we know that there aren't too many people jumping from 90k to 180k, since the WH itself "trimmed its estimate of wage and salary income by 1%". All evidence suggests that wages are stagnant, except at the top end.

 

I don't see any "implication" that corporate taxes are of the same size as income taxes, either.

 

Another cute little trick is using whole numbers in some sections, while using percentages in others, and comparing percentages to percentages in other areas. Just because the percentages don't match up, doesn't mean there is something sinister going on. I really like the part where they adjusted for inflation in one section, and didn't in another, and then used that to make it look even more outlandish when comparing the two percentage changes. I guess total tax revenues aren't effected by inflation, just econmic output? Come on.

 

They don't compare the percentages, they just report them. As for GDP, they provide both inflation-adjusted and non-adjusted numbers, one right after the other, clearly labelled. The inflation-adjusted number is mentioned second, almost as a curio. Basically useless, I agree that it would be better left out. Everywhere else they seem to use non-adjusted numbers, which is the right thing to do.

 

This is a simple accounting point they're making. They're not ripping the WH numbers, just the way Bush interprets them in public statements. Since those interpretations don't agree with his own administration's analysis, that does not seem difficult to justify.

Edited July 21, 2006 by jackie hayes

[southsider2k5]

You used both "trick" and "tricks".

It's not class warfare, it's accounting. Even the WH budget director acknowledges the fact that the increase in tax revenue is coming from high income taxpayers. Why are Republicans so worried about mere fact?

 

And frankly, your "simple" argument is flat wrong. If inequality is so great for growth (as you claim it creates oodles of jobs), why didn't payroll outstrip WH projections? Why did it fall below WH projections?

 

The WH itself has admitted that the tax cuts do not create more revenue on their own. But it's true that whatever 'revenue effect' you get from a tax cut, it will be stronger for corporations than for individuals.

The volatility's sort of the point. Although corporate taxes are only about 1/5 of personal income taxes, because they are so volatile, a large increase can have a sizeable effect on overall tax revenue. It's like suggesting that GDP numbers should ignore investment, because it's small and volatile.

 

As far as records exist, the only time aggregate corporate profits have been negative was in the Depression. I can only hope that Bush isn't that incompetent.

 

And forget income, what happened to all those jobs that come from inequality, btw? That would push up payroll taxes, right? Hmm...

 

Anyway, we know that there aren't too many people jumping from 90k to 180k, since the WH itself "trimmed its estimate of wage and salary income by 1%". All evidence suggests that wages are stagnant, except at the top end.

 

I don't see any "implication" that corporate taxes are of the same size as income taxes, either.

They don't compare the percentages, they just report them. As for GDP, they provide both inflation-adjusted and non-adjusted numbers, one right after the other, clearly labelled. The inflation-adjusted number is mentioned second, almost as a curio. Basically useless, I agree that it would be better left out. Everywhere else they seem to use non-adjusted numbers, which is the right thing to do.

 

This is a simple accounting point they're making. They're not ripping the WH numbers, just the way Bush interprets them in public statements. Since those interpretations don't agree with his own administration's analysis, that does not seem difficult to justify.

 

Ah yes, so easy to explain it all away isn't it Aren't numbers just grand. The irony is you managed to cherry pick out what you wanted, and throw in a few irrelevant things, just like the author of that story did, and like I did. Congrats we are all biased economists now.

[Balta1701]

Congrats we are all biased economists now.

Woo-Hoo! (Does the biased economist dance!)

Edited July 21, 2006 by Balta1701

[jackie hayes]

Ah yes, so easy to explain it all away isn't it Aren't numbers just grand. The irony is you managed to cherry pick out what you wanted, and throw in a few irrelevant things, just like the author of that story did, and like I did. Congrats we are all biased economists now.

And you managed to be totally nonspecific and avoid any substance at all. Congrats?

 

I don't see a single disagreement between economists on these numbers or the WSJ analysis. Only between pundits and politicians.