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Tax cuts aimed at making the tax system more regressive.........sold as expansionary measures. This, of course, in the face of the demographic problems to be faced by all developed economies in the next few decades.
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Are you saying "less progressive" rather than "more regressive"? Also, as a matter of economics, do you believe that removing capital taxes will encourage economic growth?I came upon a barroom full of bad Salon pictures in which men with hats on the backs of their heads were wolfing food from a counter. It was the institution of the "free lunch" I had struck. You paid for a drink and got as much as you wanted to eat. For something less than a rupee a day a man can feed himself sumptuously in San Francisco, even though he be a bankrupt. Remember this if ever you are stranded in these parts. ~ Rudyard Kipling, 1891Comment
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I haven't heard DanS say that they aren't demand-sided yet."When you ride alone, you ride with Bin Ladin"-Bill Maher
"All capital is dripping with blood."-Karl Marx
"Of course, my response to your Marx quote is 'So?'"-Imran SiddiquiComment
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Eh?I came upon a barroom full of bad Salon pictures in which men with hats on the backs of their heads were wolfing food from a counter. It was the institution of the "free lunch" I had struck. You paid for a drink and got as much as you wanted to eat. For something less than a rupee a day a man can feed himself sumptuously in San Francisco, even though he be a bankrupt. Remember this if ever you are stranded in these parts. ~ Rudyard Kipling, 1891Comment
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Not much. There's no demand.Originally posted by DanS
Also, as a matter of economics, do you believe that removing capital taxes will encourage economic growth?"When you ride alone, you ride with Bin Ladin"-Bill Maher
"All capital is dripping with blood."-Karl Marx
"Of course, my response to your Marx quote is 'So?'"-Imran SiddiquiComment
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Are you still saying that the stimulus package will stimulate demand?Originally posted by DanS
Eh?"When you ride alone, you ride with Bin Ladin"-Bill Maher
"All capital is dripping with blood."-Karl Marx
"Of course, my response to your Marx quote is 'So?'"-Imran SiddiquiComment
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Sure, less progressive. For what its worth the recent changes in capital taxes have the support of most economists........but the effects on growth, whilst positive, are marginal at best.Originally posted by DanS
Are you saying "less progressive" rather than "more regressive"? Also, as a matter of economics, do you believe that removing capital taxes will encourage economic growth?
The effect of sustained large budget deficits on growth would be far from marginal however.Last edited by DrSpike; March 11, 2003, 17:58.Comment
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For what its worth the recent changes in capital taxes have the support of most economists
Do you mean that most economists support Bush's proposal to eliminate dividend taxes?
but the effects on growth, whilst positive, are marginal at best
The White House claims it will increase growth by about .5 percentage points per annum. Does that sound about right?I came upon a barroom full of bad Salon pictures in which men with hats on the backs of their heads were wolfing food from a counter. It was the institution of the "free lunch" I had struck. You paid for a drink and got as much as you wanted to eat. For something less than a rupee a day a man can feed himself sumptuously in San Francisco, even though he be a bankrupt. Remember this if ever you are stranded in these parts. ~ Rudyard Kipling, 1891Comment
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There will be no actual growth in the long run because taxes are going to have to be increased again in the near future. They will have to be increased even more so if interest rates go up because that will increase the tax burden. In the short run the growth (if any) wont be significant."When you ride alone, you ride with Bin Ladin"-Bill Maher
"All capital is dripping with blood."-Karl Marx
"Of course, my response to your Marx quote is 'So?'"-Imran SiddiquiComment
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STOP DANS'ing me!!Originally posted by DanS
For what its worth the recent changes in capital taxes have the support of most economists
Do you mean that most economists support Bush's proposal to eliminate dividend taxes?
but the effects on growth, whilst positive, are marginal at best
The White House claims it will increase growth by about .5 percentage points per annum. Does that sound about right?
Ok, economists don't like capital taxes in general, but I don't want to lead you to believe all economists are behind the abolition of taxes on dividends. You see this too is a cut that lowers the progressivity of the overall tax system since if you have stocks in a 401(k), your dividends are already tax-sheltered. Hence Bush's plan helps only people who have lots of stock outside their retirement accounts.
What is more it was sold as expansionary (which it isn't), and as the end of double taxation in this circumstance, though of course much income is taxed twice anyway. I can see why people like Krugman get worked up over these issues.
So it is a little underhand. We're talking about reducing distortions that hinder a market economy when allocating scarce resources. Now this is of course desirable, which leads to many economists supporting such changes, but I don't see how anyone could credibly come up with a figure of .5% per annum additional growth.Last edited by DrSpike; March 11, 2003, 18:26.Comment
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Maybe it is just a typo from .05%.Originally posted by DrSpike
but I don't see how anyone could credibly come up with a figure of .5% per annum additional growth.
It is good, as you say, from allocating capitalist viewpoint, though I would make it the same as the capital gains tax.
Peter Fisher, the Under Secretary of the Treasury for Domestic Finance has been quoted as saying as much:
1) reduce corp debt reliance
2) reduce tax avoidance incentives
3) encourage investment in stable capital intensive industriesBe the bid!Comment
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From what I've read, Snow is saying that the tax cuts will increase tax revenue. I'm sure he's counting on atleast .5% extra growth. That certainly doesn't mean it's going to happen. It's just politics."When you ride alone, you ride with Bin Ladin"-Bill Maher
"All capital is dripping with blood."-Karl Marx
"Of course, my response to your Marx quote is 'So?'"-Imran SiddiquiComment
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Hmm... what do you mean? Taxes on capital, taxes on capital gains, or taxes on capital income?Originally posted by DrSpike
Ok, economists don't like capital taxes in general...
"We're talking about reducing distortions that hinder a market economy when allocating scarce resources."
Hmm... will the abolition of the taxation of dividends really achieve this?“Now we declare… that the law-making power or the first and real effective source of law is the people or the body of citizens or the prevailing part of the people according to its election or its will expressed in general convention by vote, commanding or deciding that something be done or omitted in regard to human civil acts under penalty or temporal punishment….” (Marsilius of Padua, „Defensor Pacis“, AD 1324)Comment
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but I don't see how anyone could credibly come up with a figure of .5% per annum additional growth
I'll try to find more backup for these calculations. I believe the .5% per annum is how they derive the expected bump up in equities prices as well--i.e., discount .5% additional growth per annum with a suitable discount rate to get a 9% increase in equities prices.
On another topic, it's pretty amazing how bad the CAC40 and DAX have been doing. Here's the DAX...
Does this suggest that the S&P/FTSE are trailing CAC40/DAX and still have a ways to go on the downside? It's amazing to me that Germany and France aren't in a depression. Are these markets really that small? Or have we learned our lessons sufficiently well that a 70% plummet in equities prices doesn't create instability?Attached FilesLast edited by DanS; March 12, 2003, 14:21.I came upon a barroom full of bad Salon pictures in which men with hats on the backs of their heads were wolfing food from a counter. It was the institution of the "free lunch" I had struck. You paid for a drink and got as much as you wanted to eat. For something less than a rupee a day a man can feed himself sumptuously in San Francisco, even though he be a bankrupt. Remember this if ever you are stranded in these parts. ~ Rudyard Kipling, 1891Comment
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And the S&P. FTSE looks a lot like it.Attached FilesI came upon a barroom full of bad Salon pictures in which men with hats on the backs of their heads were wolfing food from a counter. It was the institution of the "free lunch" I had struck. You paid for a drink and got as much as you wanted to eat. For something less than a rupee a day a man can feed himself sumptuously in San Francisco, even though he be a bankrupt. Remember this if ever you are stranded in these parts. ~ Rudyard Kipling, 1891Comment
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