I think the return on stimulus would be better simply because it's more direct. If you remember the original bush era stimulus where we all got checks in the mail the explicit goal was that you go out and spend that money. The last stimulus was slightly more abstract in that it was the government basically spending it, but with the same idea, that money in = jobs out, which in turn of course the government taxes their incomes netting some return.

The funny part about tax cuts to me, along with the discussion here about luxury boats is that rich people as a group aren't rich because they are buying boats all the time or really, spending all their money. Buying boats and ferraris in bulk is how rich people become poor people (see: Professional Athletes).

If you give me a tax cut, there certainly is a chance that I'd spend it, but there's a near equal chance that I'll do something that has 0 economic affect like putting it into my savings account. If I made twice as much, that wouldn't change and I can't imagine Greg for example getting a tax cut and then going and blowing it on stuff. On an absolute basis rich people spend more than poor people, but as a percentage, I'm going to say that poor people spend more, out of necessity or in some cases out of stupidity (aka, that's why they are poor).

That isn't me saying take from the rich savers to give to the poor spenders, but just saying that a 1$ tax cut for people even moderately successful people, is probably less in terms of trickle down than some people want to believe.

I guess I should have put sarcasm in brackets or something. That's what the roll eyes was meant to indicate. Sorry you missed it. I know sarcasm doesn't come across well with words on a screen. I should have done more to make it obvious.

That comment right there shows your lack of understanding of how the economy in this country works. Putting money into a savings account is not letting it sit idle. It has a huge affect on the economy. There is not a vault in a bank with your cash in it just waiting for you to come take it out. It's being used for investments and loans. It is generating wealth for people.

You should read more on Austrian Economic principles, mises.org is a good start, and read more on Hayeck. It will better explain how and why capitalism works with history and facts unlike those extremely intelligent and perfect academic theories that just never seem to work for some reason proposed by Keynsians. That last part is me being sarcastic again. Sorry, but I am not going to listen or follow anyone's theories when one of them is that it would help the economy if the government buried money and then paid someone to dig it up. That's stupid. That's Keynes for you.

We need Andrew in this thread.

You are correct in terms of math with your example. A few dollars won't matter even though we are talking a lot more than a few dollars in the real world. However, psychological effects must be considered as well. That's why when tax rates are lowered, tax revenue goes up and stays up. It's not just the $1 that the rich are getting to save that makes the revenue go up. It's the feeling that they aren't being punished that matters.

If you're in the top tax bracket in this country, you're being tax almost 50% of your income by state and federal. The majority is federal. You have to make arguments and provide proof to keep more than that. Personally, that's a huge downer to me. Especially, when you go to the grocery store and the person in front of you buy food on food stamps and then hops into a car that costs more than the one you own. The number one vehicle of millionaires for a number of years was the F150. The Honda Civic was on the list too.

Couple that with the fact that nearly 50% of the people in this country who work pay no Federal income taxes. None not one red cent! That's people who make up to nearly 50k a year that supposedly can not even pay $100 to the funding of this government. That's just over $8 per month or 27 cents per day that they can't be burdened to pay. Yet, we are told the rich need to pay their fair share? Huge psychological downer on those of us that work very hard for our money.

Not all of the spending government does is justifiable and necessary. The majority of people, including those supposedly crazy Tea Partiers, are not trying to stop government spending. People just want it under control. Is it too much to ask that duplicate programs or programs that don't work be reformed and have their costs amended?

Also, keep in mind government employees do not pay taxes. As more of the work force becomes government employed, the burden of paying them fails on private sector companies. A private sector that also has to pay its own employees and supply them with benefits in many cases while keeping costs low enough to compete against other countries that have lower standards of living, where employees are paid less, and where corporate income taxes are less. We have the highest corporate income taxes in the world.

I think the tax issue is one of personal perspective. Most people look at their neighbor and think "they" must be rich or have a better job - etc. People tend to think everyone is better off than they are.

Here's my TAX perspective.

I'm the 1% guy that everyone hates... Too bad. In 2011 I bought almost a million dollars worth of cars - In Washington I pay 9.9% sales tax on those purchases. That's 100K to the state just in car tax alone.... forget the license fees etc.

I just bought a big truck - I paid 24K in FEDERAL excise tax and 20K in state tax - plus license fees.

This is the problem that people don't understand.... people spending money... is what makes an "economy"..... People NOT spending money creates a recession. If there is a recession... I will still live GREAT! But I might not spend as much money because I just don't have to, and or, I just don't feel like it. Who does that affect? It affects how much sales tax I pay -- it affects all the people that MIGHT have made money off me - thru commissions... profits... etc.

I don't mind paying taxes at all... I pay HUGE taxes (dollar wise).... I don't mind it. What I mind is people paying nothing - then bitching that their lives aren't good enough... that it's someone else's fault that their lives suck... and that the "government" should do more for them.

2/3rds of the Federal budget is now SOCIAL PROGRAMS.... it used to be 1/3rd of the budget. I would like to see that reversed so that we can get back to spending money on building and maintaining roads - improve our education system - national defense etc. In other words - I'd be HAPPY if I thought Obama was going to increase my taxes to build stuff - create stuff - etc. But his agenda is to take from me - and spend even more on "social programs". We have so many of them now we can't afford to pay our bills. I think that is what half the country is fed up with. The other half (according to the popular vote) seem to have their hands out...

Greg, you're a lot smarter than you look.

Could not agree more with you. Pay the minimum legal taxes you can (call it creative, calling it using the tax code, whatever) and use the savings to consume and invest and stimulate! :thumbsup:

Certainly. Outside of burying money in my yard, anything I do with it benefits the economy to some degree.

Take a step back though from questioning my intelligence and consider what was going on in 2008. Consumers, aka people buying things, slowed down buying things. Rich consumers, poor consumers, everyone was freaked out and started saving more and spending less.

My company saw it, our customers are not poor people, they are businesses and they stopped spending money. I presume they were saving money where they could but the reality of them not spending money is that other businesses slowed, and had to slow their spending or start to lay people off

Consumer spending dropped, and the saving rate skyrocketed, and yet the economy kept falling. You could argue that banks weren't lending that extra money being saved and that is certainly true, but at my company business dropped and people don't take out loans to buy our products, so the banks had zero impact in terms of us having a bad year.

Any honest person with a business saw demand drop, and many businesses closed as a result. Certainly some places got jammed up because some banks didn't loan, and their customers used loans to buy their products, but in general? It was because everyone started saving money.

I agree pretty much completely about spending being what helps the economy and that we clearly cannot just keep spending as a nation like we have been. Functionally the increase in social programs has a lot to do with things that Obama has no control over.

For example, Old people! With more and more baby boomers retiring, that is far more spending on medicare, and social security. In terms of the other aspects like welfare and food stamps, unemployment, I can certainly see them all being higher than usual due to the recession in general.

What people forget about fixing all of this is that Obama and Boehner were very close to a deal that would have made cuts to these programs, and had some additional tax revenue. They both should shoulder the blame for it not happening and putting us into the current fiscal cliff situation but I think that they will most likely come into agreement on a balanced package of cuts and revenue increases (maybe taxes maybe not).

I don't think it's an us versus them, makers vs takers thing, you can't tax your way out of debt, and you can't cut your way out either. We all got some benefit out of the deficit spending, it's time we all got a little pain to pay for it and I feel like that's what is going to happen.

.... And I don't mind people being on welfare etc... or getting unemployment..


What I DO care about is that someone isn't LOOKING for a job - of any kind...

Being out of work - or being out of/down on your luck... I'm okay with that... but you'd better be trying to do something to change that. 'Cause sitting around doing nothing is what I get pissed about.

Personally - I'd like to see us return to a more WPA style program. If you're getting a "pay check" -- then you are "on the payroll" -- either the state or the county or the fed is sending you a check and taking care of your needs. IF that is the case --- then you need to "DO SOMETHING" for that check. You need to mow grass or rake leaves - or sweep streets - clean graffiti off - paint a government building - help the cooks at the public schools..... SOMETHING. If you're incapable - incapacitated - "slow" - etc.... then you should probably get more because we need to take care of those that can't take care of themselves. I'm totally for that. But if you can get out of bed in the morning... and walk and talk... then we have plenty of work that needs to be done. Doesn't have to be hard work - there's plenty of "hands"... but ya gotta do something.

Gregg....clap clap clap clap!! Spot on!! ALL of it!!:cheers: