Author Topic: Boehner: We're ready to be led on taxes  (Read 12304 times)

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Re: Boehner: We're ready to be led on taxes
« Reply #105 on: November 17, 2012, 11:04:23 AM »

Offline Brendan

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There is lots of speculation about what stimulus would work, how much, how it should be spent, etc. I've seen plenty of economic studies that showed:

1. Economic stimulus rarely effects spending during a recession (by the time the money gets spent, the recession is already over)

2. That increasing marginal tax rates, decreased marginal income.

For #2 here's a good article about why (with study linked):

Bottom line is taxes decrease incentive from labor to luxury. Which also explains why tax rates going down increase wealth disparity - it encourages the people who have high incomes to earn less money and conversely may encourage them to spend more (depending on how they spend their luxury time). What it doesn't tell us is how much wealth volatility is in the system. This is speculation on my part, but based on some history: in higher growth times (which usually have lower taxes) there is more volatility amongst individuals in wealth quintiles. Why? Well in a growth economy, sitting on $1m and spending it down means you have less money AND other people (through growth) on average have more. In low, flat, or negative growth - this doesn't happen, things stagnate. I've also felt that's why some top % of the very wealthy embrace progressive policy. They stagnate the economy (locking in their wealth advantage) and they create regulatory systems that their wealth and connections ensure them short cuts through.

Re: Boehner: We're ready to be led on taxes
« Reply #106 on: November 19, 2012, 10:10:56 AM »

Online Cman

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Romney's top economic advisor also in on everyone's new favorite mantra: "we need to raise revenue"
Celtics fan for life.