ThinkAloud,

Very good analysis of what Reagan did ... cut taxes (prices/profit per item in your example) and realized more revenue as a result of the increased tax base (made more money).

Although I guess he got the idea from Kennedy.

It's good to see more people understand that concept.

Walmart does this when sell. They take a smaller % in the markup but the volume they sell makes up for the loss .

Volume has always been the aim--I suppose since the old white sales of Woolworth and Macy's--to reduce prices so that in the end you make more by thinking smarter and working harder. Model Ts, too, showed this in order to produce for the masses, not to mention the move to raise wages to make products more affordable. That's also the theme behind progressive taxes: indeed, spread the wealth to make more products available for the little guy and as TA suggested the rich still get richer.

Yea them wascally wepublicans!  Always stealing ideas from the democrats!

I ahve no issues with that as long as they are providing growth. Thats the bottom line for me. If most willing americans can find jobs that pays somewhat decent then no problems for me how rich people get. Each to thier own

First of all, let me say that your comments on this single post had more hopping than the easter Bunny. Couldn't figure out if you were against the person you were quoting or defending them on the next comment.

You didn't get anything straight in you analysis on my comments. Please tell me where I said anything about living with a rich person? I said that a person earning $100 a week is more likely someone like a teen living with his parents or in a college dorm where they pay little or no bills, or maybe an adult who live with their parents, has several roommates or livings in an efficiency (highly unlikely with that kind of pay) and either pays little or no bills or splits the bills. In the end, no one could live with a $100 paycheck a week, not unless you are extremely poor, homeless and live in some kind of shelter where they helped you get a job or something but that is extreme and not the average American. This isn't about leeching, it's about how someone with a $100 a week paycheck is more likely to be living with someone else sharing in the bills and rent. I did write in English, not Chinese.

You do realize that not only do poor people get taxed very little but on top of that they get all of it back and then some. So please tell me what the hell is anyone complaining about. What they need to do is get their asses in gear and find better jobs or create jobs and stop BSing people. I stopped being dependent of my parents when I was 18. Lazy ass people making $100 a week need to stop depending on others and work harder for themselves.

Isnt that amazing that some one had to explain that to him?!!!!!

unfortunately, you make a similar mistake !!!!

why 48 hrs and why 96 hrs ???!!!!....

the basics still the same ... no change in hrs worked for anyone...

where did that come from?

it is amazing that people talk about these issues and then you have to explain to them every little bit of the argument !!!!!

if you cant grasp the idea i presented in a very simple terms .. then there is no hope that you will ever understand the argument..

i guess that is why so many are deceived by the slogan "Cut Txes on the rich" ... of course it sounds good ... who doesnt want to keep more of his paycheck ... until you realize ... usually a year later, that you lost your job after that "Tax Cut" .... because the demand for the product you were making dropped and the busn no longer needs you. at that time the busn owner is making that $1000 instead of the $2000 he was making when the demand was higher and you were there to produce it.

after the tax cut for the rich , his income dropped to $1000 (multiply it by 10 to the nth power of you like) instead of the $2000.

it is not that you worked 48 hrs to make 1000 then worked 96 to make 2000 !!!!!

it is not you making $100/wk or $500/wk .... use any multiplier your head desires ... it is the same thing....

if you cant see what is happening now and how consumers are cutting on their purchases as a result of stretched budgets after 8 yrs of tax cuts for rich, i dont know what else will convince you?????

As a result of busn not giving people enough raises (look at how much the avrg income decreased in the last 8 yrs) despite the tax cut they got,  consumers stretched their budgets till it is all to the limit now. ....

with all that tax cuts for the rich... where are the jobs that was supposed to be created as a result?

compare that to 24 million jobs during Clinton yrs DESPITE the fact he increased taxes mostly on the rich..... and most of those jobs were created after the tax increase of 94 .... even Bush senior ... raised taxes on the rich to fix job losses ... and Reagan did the same after his initial tax cut that resulted in 82 recession

you know why there were no jobs created after those 3 tax cuts for the rich and lots of them were created after each time Reagan, Bush I and clinton reversed some of that cut?

here is why:

It is a Myth that tax cuts for the rich  create jobs ... designed to fool people ... who get sooo happy with $500/yr less in taxes ... but they lose their entire pay check in a yr or so ...

the proof of that statement above is very simple: it is a fundamental principle in capatalism that you NEVER EVER higher anyone just because you have more money !!!!!

just because the busn owner or rich people have more money because of the tax cut, no one will ever higher anyone unless there is a need to produce more. and the rich increase their spending by very little and mainly on luxury items which is not the spine of the economy.

but due to the tax cut for the rich, local services get cut or people pay more for it, education costs more, local taxes increase, and middle class and the working poor people start to cut on their spending to meet those increased expenses ...

that is how the demand for goods and services decreases after each tax cut for the rich .... and that is how the economy starts to slow and you lose your job ....

if busn give the poor and the middle class more raises Or the government increase taxes on the rich to pay some of the cost of services for the poor and middle class, they will spend that extra money on goods and energize the economy ...

did you see any energizing of the market after BushII tax cut?

it resulted in what they called a "Jobless Recovery" ....... busn and rich people made more ... but there were no jobs created and the economy just staggered along untill it finally collapsed

what other proof you need !!!!!!

Nice try !!!

In the beginning yes it did ... till recession of 81/82 started .. then he was forced to increase it on the rich ... bush I did the same thing (and lost election because of it) ...

I am not against ALL tax cuts ... you must understood that by now ... i am talking about "Tax Cut for the Rich" as Bush II is ... tax cut for the middle class and the working poor is the engine to increase demand .... ( and for those who think i am a beneficiary of this kind of tax cuts .... i am sorry to tell you i and every one in my immediate family are paying taxes through the nose ... why sorry?? because i hate paying those taxes too ... it is just i know either that or i will get paid less or lose my job ... that is why?)

my argument is answering those who keep crying for the rich (and the Gov considers me rich ... which is the funniest joke i ever heard) .... because they pay more in taxes ...

stop fooling people .... if we dont pay more we will get less ... it is as simple as that.

like they say ... money makes money ... i pay more in taxes but i  get paid more than i would if i didnt .... or may be i will lose my job completely....

They know that you exist ... but according to them it is your fault that you are not smart enough to make lots of money ... ( btw, these are the same people who make Joe the Plumber their hero) ...

and if you have to throw your kids in the sea and dont eat for 3 weeks ... so what? that is life, tough luck... the constitution doesnt give you the right to easy life

The stupidity of that position is beyond belief !!!!! it is a self-destructive position ... their greed is clouding their eyes to the fact that by doing that they are cutting their own throats ... it just happens after a while .... and by the time it happens they will always come up with an excuse other than their stupidity ...

and the sad fact is .. most people believe that ... they forget the real reason for the trouble ... and they defend them ... all because of $500/yr less in taxes (they get that fast) even if it costs them their job after a year !!!!! and that is the problem ... a year is a loooong time for many people .... for them there is no connection between "Cut taxes for the rich/ I lose my job" ... that connection is not obvious or clear to them .... and that is what the "trickle down economics" rely on ... ignorance and short memory .... what a fatal combination !!!!

They even go further than that and convince people that the connection "Cut taxes for the rich/ I get/keep my job" is a real one not a fallacy while it is the exact opposite ... (see previous comment for proof of that fallacy)

Thnk... you for some reason support more taxes so why on earth would you give the politicans more money to waste? Why on gods green earth would you want to do this? are you not sick of them tossing money left and right for no real benifit except to those that dont need or deserve it?

Look I have no issues with more taxes if they are put to good use... none of this over budget crap.... non of this helping the illegals ....

As for the groth thing I think that tax breaks should include that.... i mean what better way to incourage growth besides tax breaks? I would invest ever single dime I had into the buesness if that was the case.

Huh? You just made that mistake, not me. The point isn't about 48 and 96 hours, the point is about both the proportion of increase in effort relative to wages, and also that there are other factors to bear in mind with increases in effort (like the increasing value of the alternative, leisure).

So where did those numbers come from? 48 hours is your '9-5' job for 6 days a week. 96 hours is double that, and means you're getting pretty well no sleep or free time meaning the value of 1 hours leisure is much more.

Since I expect you still don't understand, let me go through it more simply:

You asked which was better, earning $1000 and paying 25% taxes on it ... net ($750) OR

making $2000 and paying 33% taxes on it ($1340). Now if you could just choose to earn more without doing anything, everyone would. In reality if you wanted to increase what you earnt from $1k to $2k it would involve more effort. Since you're doubling your income, it stands to reason you'd need to roughly double your effort (although it would be more/less depending on how it affected your productivity, overtime, etc.). So there you get your '100% increase in effort for 79% increase in takehome pay' that I used in my example.

Now lets give another example to look at it (since 96 hours is an unrealistically high amount). You could work part time (25 hours) and get $750, or work full time (50 hours) and get $1340. You also want to sleep 8 hours a day (recommended amount), and will need on average 1 1/2 hours a day to travel to+from work, eat, go to the toilet, etc.; your total available time in a week is therefore 105 hours. At 25 hours a week 1 hours leisure basically means a 1.2% increase in your leisure time, so likely won't be worth as much to you as at 50 hours a week where 1 hours leisure would mean a 1.8% increase in your leisure (that is, a 45% increase in the proportion of leisure increase from 1 hour). This will then be measured against the increase you're getting in your takehome pay.

Are you really still telling me you can't understand how those higher taxes might just discourage you from working more (and hence earning more)?

Even if the figures are accurate (I can't be bothered to check), that doesn't disprove it. If you inherit the economy at the start of a nice boom period, jobs will likely be created. If you inherit it and suffer external events that have a negative impact on the economy, jobs may be lost. Hence you need to account for other key factors before trying to work out whether a tax policy was that effective.

To give you an example, lets say you're right with your implicit statement, and raising taxes on the rich will create jobs, and lets say Obama does just that. However jobs actually fall marginally. Does that mean the policy was a failure? Probably not if it was only a slight fall, since Obama's taken over when the US is starting into a recession. Not to say a recession/cyclical effects are the only thing that should be taken into consideration, they're just an example of just one factor.

Really? Where do you get your data for this claim?

According to a NY Times article published 8/25/08, IRS figures indicate...

And despite claims that the rich are gaining while the rest of us are falling behind:

It seems that the highest paid folks are the ones who's incomes have actually decreased in the past 8 years, not the average worker. But then perhaps the NY Times is just spreading false income information to help defend the Bush administration?

These figures come from analysis of IRS tax return data, as reported by the NY Times and they indicate quite clearly that average incomes for all but the top tier salried people have been increasing since the tax cuts, not decreasing as some try to claim. One should note that average income grew significantly following the 2003 tax cuts.

Ah, the clueless liberals of the world.

When someone buys a car or orders a pizza or pays their electric bill, the price would depend on how much you make if liberals ran the world.

My lifestyle won't change if my taxes are raised. Not in the slightest. But it'll result in either fewer people being hired or me having to lay people off. That's the real world.

well mason, from those same numbers you posted. if you took time to just add things up here is what you would have discovered:

$51970 is 90% of the income in 2000. i.e income in 2000 was$57633.

now, the total increase up to 2006 was $5770 ... that puts the avrg income by 2006 at $57740 ..... is that the increase they are talking about Mason... 0.2%? and that is up to 2006

now consider the slow down in 2007 and 2008 ... and you will realize, according to the same NY times, that NOW (and that is the time frame i was talking about) the avrg income is around $1000 less than what it was 2000.

and even assuming it is a 0.5 or 1 % higher (which it is not)... do you really consider that an increase? 1% increase in 8 yrs????

from 1993 to 2000, the increase was a total of about $7500 i.e 13% (7500/57633) during those 8 yrs ... (all figures are adj for inflations and from the NY times also)

you could have done those same calcultaions yourself ...

now you see why i always said that there is another fallacy i.e. "the MSM is a left-biased media" .. in fact they twist everything (as the above openning statement does and which is disproved by the details they provided) to the benefits of the Right not the Left... where is that "avrg higher income" that Americans enjoyed????

Correction: that should have been 15% (7500/50133) ...

the editor stinks ... impossible to edit sometimes

I understand completely what you and the others said, but as you can see if you read your comments again,  you and the others are ignoring the main argument.

you just assumed that you can choose on your own and according to your own wishes to work 50 hrs instead of 25 hrs !!!! is that how the "real world" works? ... really?? ... you never asked yourself ... how did I get the chance to work those extra 25 hrs...?

not only that .... 50 hrs are more than the normal working hrs ... which is 40 ... did you ask yourself how did the busn owner get the need to ask you to work that overtime? ... my argumnet answers that for you .. but you ignored it .... he, the busn owner,  is the one who now makes 2000 instead of 1000 ... that is why he asked you to work overtime ....

and as you noticed ... it is not going to be that much good for you .... you know why? ... because it is designed to create more jobs i.e. higher more people ... not to make people work overtime ... yes the busn owner can use overtime for a short period ... but if the need is a long-term then he should hire more people ... that is how more jobs are created.

and by expanding his busn and his work force .. and if you are good at what you do ... the busn owner will be forced to make you train and supervise those new people ... and that is when you will get your extra income WITHOUT WORKING EXTRA HOURS

do i have to spell every little detail of the dynamics of the whole process???? whoever didnt know what i said beforehand ... then they dont know what they are talking about

NO .. but it means HE was a failure .... the system is not just TAX CUTS ... and that was one of my points .... the fixation of the TAX CUTS is a terrible fallacy ... along with a targeted tax cuts designed to lift the middle class and the poor ... it must be accompanied by making sure that the jobs are created here not outsourced ... which is tied to trade policies ... and also Busn tax policies ...

If Obama cut taxes for the middle class and the poor but neglected the other actions needed to encourage busn to expand here not abroad ... then he fails ...

The middle class and the poor are the backbone of Busn (they are the workforce and the consumers)  ... both sides ARE the economy ... and both must be encouraged to grow and prosper .... ... that is how the whole country prospers and the Rich will be the first to gain from that. as they should ... they provided the capital and the management that made busn itslef possible ... and they should be rewarded ... the question is how far do you go about that ...... they provide the seed for growth (though taxes and capital) .. if you cut that ... busn suffer and things slow ... and they make less

hope that expalins the whole cycle for you ... it is not a Left or Right policy it is economics, markets and their dynamics and interdependence....

but to gain elections ... the Right focuses on what people see in their paycheck and make them ignore all other issues involved ... and people believe it ...

as long as you look at the issue as an ideologue ... the issues never get resolved ... as i said above it is not Liberal or Conservative ... it is demand to be created by a workforce with wages to spend ... you provide the capital (your higher taxes and your assets) to satisfy that demand and the power to spend... and in the process make more money ... much more than if you only provide assets .. your higher taxes create more demand for your product

no one ever said prices to be set by anything other than by what the market will bear .... please dont imagine things that do not exist ...

btw, thanks for providing the proof that cutting taxes for the higher-income group of the consumers doesnt create that much more demand for most of the products .... that is exactly my point .... but cutting taxes for the poor and the middle class increases the demand for all products ... that is when you will need to hire more people and that is how you make more money ...

also, does the real world make you hire more people just because you got more income from a tax cut? C'mon now .... you know much better than that !!!!

you and I know the following as facts (and please tell me if i am wrong in these facts":

1- If a busn have a need to expand based on a solid evidence of a need for the product, all they have to do provide the feasibility study, the plan, and the design to a bank and they will provide the capital needed ...

2- based on the above the Bank gladly provide the capital needed .... your downpayment is your design and your plans and your technology .... nothing else is needed

(now you know why it was a disaster when the credit market froze!!!!! because all Banks got scared !!!)

3- you dont use your own money ....

for your information ... i done that for hundreds of projects for chemical and pharmaceutical companies ... the last one was $1.5 B  project .......unfortunately in China ... the capital came from here .... to hire people there and produce products to be used here !!!!! amazing isnt it?