@radx @enoch @eric3579

For one thing, give the executive or legislative power over the printing press in a crisis and they will not willingly give that power up and end up abusing it. For another, if you're simply printing money to spend then you depreciate and inflate your currency commensurately, at least in the long term. Relying heavily on this is the kind of thing that Venezuela does. There's a reason that governments instead take on their fiscal spending as debt. On that I would say, I've also become much more skeptical of fiscal stimulus in general but particularly in corrections or recessions. I'm okay with automatic stabilizers (unemployment benefits, the largely limitless kind with strings attached we have here in Australia) but not so much direct fiscal stimulus.

The fundamental issue to me is large, even extremely large fiscal spending will not affect business confidence levels of economic conditions. There is some fiscal multiplier effects (the multiple of the effect on national income over the spending injection by the government) but the worse economic conditions are, the lower this will be. Also, yes with say infrastructure spending, you're creating immediate jobs. Problem is these are in no way permanent jobs and simply pushes the can down the road on them finding new employment. Better to provide unemployment benefits and training to get them into a more permanent job faster.

Also large bouts of spending (again to use infrastructure as an example) tends to be hugely wasteful. Good projects require appraisals, consultation and careful planning. The notion of handfuls of 'shovel ready' projects is a political myth. You can instead span it out but then you don't get the mooted fiscal boost. In fact I would argue infrastructure spending is never appropriate as fiscal stimulus. It should be in a constant, planned process of improvement irrespective of business cycles or downturns. The US stimulus under Obama was largely long term spending projects like this as giveaways to the states. There is little evidence it eased the recovery or altered behaviour though. Many states simply enacted the same civic projects they would have otherwise and used this money instead of issuing debt like they would have otherwise - effectively they saved on interest.

So what are the alternatives then? The government here in Australia also heavily spent on roads, home subsidies and schools but notably also gave all income earners a cash deposit of AUD $300-950. The latter is probably the closest you can get to a pure fiscal stimulus - immediately cash to spend, injected not into banks than might save it but given particularly to low / medium income earners most likely to spend it. Again what we saw is that it hardly altered consumer / household behaviour. Many saved it, many spent it on large one off purchases (e.g. TVs, in which case most of that value was transferred overseas). So we gave a dollop of cash as stimulus to the global economy of which Australia is a drop in the ocean. Basically my attitude is, if you maintain good infrastructure, effective education systems, adequate but efficient regulation, reasonable tax rates, and importantly competitive markets, the best way to get through a crisis is to let the market stabilize by itself. Provide assistance and retraining to workers who lose their jobs by all means, but don't expect government spending to be some kind of savior.

I agree on the inflation aspect of your post. There were certainly no shortage of self-declared monetarists buying up gold in anticipation of high inflation, but as you say dollops of cash in the economy are meaningless if they are idle and the economy under capacity. The question now with unemployment in the US at 5.5% whether capacity is finally pushing LRAS levels. Probably not, participation rate is low and falling, and the unemployment rate is woefully underrepresenting forced part timers. Also as you mention the dip in oil will temper prices on the input cost side. The Fed certainly seems to think so and has started tightening rates but as so much commentary in the investing world is saying, this may turn out to be a mistake and they may end up having to reverse course.

That conveniently leaves out the fact that income tax rates have plummeted since the 1940s. That's been the big consistent change, not the government increasing spending as a percentage of GDP, which wildly fluctuates.

The reason why there's a fight to get this funded is because there's a portion of this country that thinks you must pay for every new expenditure by cutting spending elsewhere because the national debt will kill us if it doesn't come down, and taxes can never ever ever ever ever be raised ever ever ever ever. They will absolutely never consider that raising taxes is worth funding anything, and are completely okay with cutting funding for things that are even needed and are worth the money (see cutting funding for PBS).

I say "principled" because they sure don't ask for reduced spending to pay for when they need help. See Katrina and other disasters, Mitch McConnell's fund to help nuclear power workers, etc.

But the fundamental problem here is the flat refusal to accept the reality that:
1. The national debt and annual deficits can, will, and should fluctuate depending upon circumstances. The "sky is falling" reaction to added debt is beyond ridiculous. This country has flourished economically under almost non-stop deficit spending. This isn't to say raising the national debt and running annual deficits is always good, but it sure as hell isn't always bad.
2. The same reaction to tax raises is also ridiculous. Tax rates can be increased or decreased, depending on circumstances, and raising or lowering them isn't inherently good or bad.

A sane reaction to this whole thing isn't - "well, they spend money on things that don't matter, so that's why this can't be funded."

It's "I don't care if it costs every single one of us an extra dollar in taxes in a year, or we need to cut funding on (insert wasteful program here), we need to get this done."

Japan was supposed to buy us out too at one point, don't get your hopes up.

I am not saying that the US is a great place vs the rest of the world, I am just saying that you don't get the 'utopia' that people claim Norway to be without huge sacrifices by the people and also being a net exporter of natural resources.

Norway has one of the highest tax rates and one of the highest VAT rates in the world. They are net exporters of Oil, Natural Gas, and Seafood, almost all profits of which are nationalized by the government and rerouted into pension funds.

They are one of the highest cost of living places in the world and that is not factoring the taxes, but goods and services. If you take your family out to eat and spend 100 dollars, you are going to pay an additional 25 in just taxes.

The society is conditioned to believe in Jante's Law, so this suits them because everyone is 'equal'. However, with the immigration rates rising from poorer EU countries, there are cracks appearing in the laissez faire attitude. Protests and even a mass atttack have happened once people realized that they are now supporting people that are lower than them.

The point is, you can't simply point to the nordic socialist countries and say "Oh, what a wonderful place, if only everyone was so enlightened!" because it won't work without a specific set of circumstances. Most countries don't have those circumstances and must forge ahead in their own path. Additionally, almost no other country has the unique set of challenges that the US faces due to our position as the supposed world leader. Personally, I've long wished we would back off and let the rest of you all figure out stuff on your own. I think, however, that it wouldn't be long before one or more countries would come bitching to us to fix something.

The tax level in Norway has fluctuated between 40 and 45% of GDP since the 1970s. The relatively high tax level is a result of the large Norwegian welfare state.

You literally dwarf the US tax rate per person, almost by double the amount.

You have a VAT tax of 25%, among the highest in the world. My equivalent is sales tax, which is 8.25% on the dollar, and it should be 2.5% lower than that, but Austin is a super-left city that taxes extra to cover all their feel good plans.

To be clear, the average Norwegian household pays roughly $70,000 per year in tax. Including the state’s oil income, government tax revenue exceeds $100,000 per household.

Discretionary spending is kept to an extreme minimum, because you don't have much left after taxes. The cost of living and recreation in Norway is through the roof compared to other countries.

Workers come to the office, punch a clock, shuffle papers, and go home. There is no cultural drive to work hard and get promoted. Norway has created a system that makes it virtually impossible to pull ahead of your peers financially. In fact, culturally, there is a thing where you are NOT supposed to do better than someone else.

What major worldwide innovations or brands do we get out of Norway? None that I can think of offhand, but here is a list of some of their more important companies http://en.wikipedia.org/wiki/List_of_companies_of_Norway.

So, you get taxed a ton, cost of living is incredibly high, there is no incentive to do better than anyone else, and in return you get to have free stuff like healthcare and education. Not that it matters really, because once you get out of school you get to become a worker bee drone. Unless of course you move to another country and get to achieve something there.

So, yeah, enjoy your hive mind country. As screwed up as mine is, at least there is a chance to become something if you work hard and invest correctly.

The Labour Party Manifesto is quite the mixed bag, if the Guardian's bullet points are reasonably accurate.

Some good ideas in it, but looming over all, again, is the one-two of deficit reduction and "competetive" (aka miniscule) corporate tax rates. Any guess on how many of their decent ideas would be scrapped due to budgetary constraints? My money would be on 70%+.

The middle class has been disappearing since trickle down economics was instituted under reagan. Tax rates on rich was 70% and he lowered it to 35%. Note: my numbers are off, but the change was that drastic.

Support for newt's point... https://www.americanprogressaction.org/issues/economy/news/2004/07/28/964/economic-prosperity-and-the-presidents/

"The high-income tax increase sapped 0.25 percentage points from GDP in 2013, estimates Mark Zandi, chief economist at Moody’s Analytics Inc. in West Chester, Pennsylvania."

"Politicians who support tax increases operate under a misconception that there is little real effect, Maloney said.

“A higher tax rate reduces our ability to recapitalize and reduces our ability to expand,” he said. “You keep your forklifts a little longer, you do whatever you can to stretch the dollars you’re left with.”"

"According to Zandi’s estimates, the payroll tax cut subtracted 0.6 percentage points from U.S. economic growth, more than twice the effect of the high-income tax cuts."

“Clearly, taxes affect behavior; they affect some behaviors more than others. What has not been established is that the level of taxes has a clear and important impact on economic growth. And one reason is that this is not a well-posed question. How government activity affects prosperity depends not only on the level of taxes, but also on what the money is used for.”

"Thus, the proper answer to a question as broad as whether tax increases are “positive” or “negative” for growth is: “It depends.”"

@speechless

UKIP's support from what I've read, comes significantly from smaller country towns with jobs like manufacturing which are disappearing largely due to continued global trade and outsourcing trends. UKIP's popularity comes from being able to scapegoat these global trends on immigration. I was more arguing from the point of view that countering Farage's demagoguery is best done by explaining why it is incorrect rather than necessary pointing to alternative solutions, although that should certainly be part of it. But citing taxing finance as your one and only solution is demagoguery in itself.

I'm not too familiar with the level of tax avoidance and cronyism in UK politics, at least relative to other rich countries. Would a higher personal or corporate tax rate, particularly in finance help? Maybe. As it is, the UK is a finance hub for Europe disproportionate to its economic size and contributes some 16% of GDP and significantly to the trade balance (boosting the pound to improve international buying power).

Finance is very globalized and business could shift very easily to Hong Kong or New York if taxes were raised to a sufficient extent. I would be not be surprised if a higher tax take could be generated from higher tax levels though, however a political overreaction to tax and regulate finance could be just as damaging as focussing on immigration in the greater scale of things.

@Jerykk You're trolling (and you're doing a great job of it actually) but I know a lot of people who actually believe what you wrote here so I'd like to address it.

First, if you're going to make possession a crime, you're making all addicts into criminals and guaranteeing they're not going to get the medical help they need thanks to our privatized prison system. The answer here is obvious--stop making possession of small amounts of narcotics a crime.

Second, there is PLENTY of money to go around. Let's start with the U.S. military budget. How much has been spent on the F-35 again, a warplane which has been in development for over 10 years and still can't actually fly without potentially blowing itself out the sky? Or how about we actually tax corporations instead of giving them an effective 0% tax rate and allowing them to shelter all their money offshore? Or maybe we could raise taxes on the top 1% earners in the country instead of reducing them by 37% like we have over the past 10 years.

In any event, the money is there, but what do we do with it? Well, we could create a nationalized health care system for starters and finally and truly ensure that everyone has access to affordable health care. We could also make education free up to at least the high school level and institute some national standards (in terms of equipment, staffing, and facilities) that reduces the inequality in schooling that currently exists. And since you're worried about all those people having babies maybe we could distribute free birth control and teach people (in the now free schools) about family planning?

What do you think?

Put the tax rate back at 100% for those who make over $2 million a year. You don't want to live here anymore than that's fine, we're better off.

You know what buggers the hell out of me?

This country's most important company (# of jobs, very high wages, etc) is right on the edge of tax fraud. They pay a metric fuckton in absolute terms, but their real tax rate has been decreasing for years, mostly through offshore shenanigans. It's too bloody low to not get pissed at them, yet still too high to get people to call them out on it. Also, they manage to whitewash their image by having just about the highest entry level wages in the country, which shields them from any sort of substantial criticism.

I'm 5 months too late for this conversation, but whatever. @renatojj the problem here is you're misquoting @dag. Let's go with the phrase he actually used, "big earners like mining companies. "

Your comment assumes that he's proposing taxing individuals. @dag did not say that. He referred to the mining companies themselves. By squirreling the argument into an issue of personal taxation (and the incentives/disincentives to work based on tax), that's an unfair twist to the topic.

Mining companies are the topic in this case. The companies are extracting a national resource. They are benefiting from the country's own assets, therefore the country has every moral and economic right to demand its fair share. If the company can still make a profit, and heavens know they do, then you can't in any seriousness find fault with that.

Unlike individuals, who one may argue have a disincentive to work past a certain marginal tax rate, companies will keep operating in a given industry if they're still achieving profits.

The idea that taxes on mining profits (i.e. resource royalties) are *holding back* Australia is just a head-shaker. Where's evidence of that? How exactly would Australia be in a stronger position if it had less royalty revenues, and instead the cash was sprinted out of the country to whatever offshore haven allowed the company to retain profits for its shareholders, who may or may not even be Australian? How would that help?

We have the highest corporate tax rate in the ENTIRE world (if you are dumb enough to pay it)

@bobknight33 your oversimplified numbers don't tell the entire story, because you don't understand marginal tax rates.

http://www.consumerismcommentary.com/2013-federal-income-tax-brackets-and-marginal-rates/

"Keep in mind that the tax rates listed in these tables are marginal rates. That means that you do not owe your rate on all of your income. For example, if you single, you earn $100,000 per year, and Scenario 2 (tax cuts expire for all) is the prevailing law, you would not owe 31% on all of your income — you would not owe $38,000 to the federal government. You would owe 15% of 36,250, 28% of $51,600 (the difference between the top and the threshold of the second tax bracket), and 31% of $12,150 (the difference between your income and the threshold of the third tax bracket).

That calculation results in $5,437.50 plus $14,448 plus $3,766.50, or $23,652. That’s an effective tax rate of about 23.7% before your credits are taken into account, assuming your taxable income is the same as your gross income. Your effective tax rate could be much lower if deductions have already reduced your taxable income to $100,000 from a larger gross income. For example, if a 401(k) contribution reduced your taxable income from $115,000 to $100,000, you would still use the same tax calculation I’ve described here, but your effective tax rate would be 20.6%."

The rich pay a higher rate than the poor.

Tax Bracket Married Filing Jointly
10% Bracket $0 – $17,400
15% Bracket $17,400 – $70,700
25% Bracket $70,700 – $142,700
28% Bracket $142,700 – $217,450
33% Bracket $217,450 – $388,350
35% Bracket Over $388,350

These are just Federal Tax rates. Then add state and local and you could end up paying over %50 in taxes. Is that fair?
At the top rate if one was earning 400k then they would pay 140k just in Fed tax. That's a big chunk of government cheese.


My CEO pulls down a base of $3million a year. That would give him a $1 - 1.5 million in Federal / State and local tax.

Sure he makes a lot but he also pays a lot.

The left would say that he needs to pay more of his "fair share" .

Even though I think he could pay more I believe that he is paying his fair share.

I am sure he hires the best accountants to take every possible deduction, as you and I would do in that situation.

IF you want the rich to pay more then eliminating some deductions form the rich seem like a good approach.