Republicans call proposed middle class tax cut a tax hike

[laughing dog]

No, they're $1,000 and $2,000 tax credits.

And again, for the last 20 years conservatives have gone on ad nauseum about how tax cuts are not additional spending. You should call Rush and have him update that to "tax cuts are not additional spending unless democrats propose them."

A tax cut would actually cut the taxes - meaning that the amount owed before any credits (i.e., checks that the government has tasked the IRS with distributing) is reduced.

A tax cut is a nebulous term. It can refer to a reduction in marginal (effective or actual) tax rates or average (actual or effective) tax rates. This reduces effective average tax rates for a large number of tax payers - it cuts their taxes.

 

[ksen]

"vast" majority?

prove it.

are you also against broker and management fees on tax portfolios? Because a financial transaction tax is no different than those things that are already in place without destroying stock markets.

Did you bother to look at the published paper I linked to that made the claim?

Not yet, but I will.

Are you going to substantiate "vast" majority? Or do the authors of the paper do it?

What about my question about broker and management fees?

 

[Axulus]

A tax cut would actually cut the taxes - meaning that the amount owed before any credits (i.e., checks that the government has tasked the IRS with distributing) is reduced.

A tax cut is a nebulous term. It can refer to a reduction in marginal (effective or actual) tax rates or average (actual or effective) tax rates. This reduces effective average tax rates for a large number of tax payers - it cuts their taxes.

Then in that case, we need to be consistent. Social security benefits also cut the taxes of those who receive the benefits. Or is it only a tax cut when the payment received appears on the tax return? If so, what is the relevance of the method of the payment distribution? How does that change the reality of what we should be calling it?

 

[Axulus]

Did you bother to look at the published paper I linked to that made the claim?

Not yet, but I will.

Are you going to substantiate "vast" majority? Or do the authors of the paper do it?

The authors substantiate it - it is really a good paper that looks at HFT in depth and cites the empirical research in support of the various claims made. See section 6 if you are interested in the empirical studies related to HFT.

What about my question about broker and management fees?

Broker and management fees certainly reduce the amount of trades that take place (so as to avoid these costs). If they were eliminated, don't you think that would improve our markets? Don't you think that a substantial increase to these fees would be a negative as demonstrated in the paper I linked to in the section discussing a financial transaction tax (Section 9D)?

 

[Jarhyn]

A tax cut is a nebulous term. It can refer to a reduction in marginal (effective or actual) tax rates or average (actual or effective) tax rates. This reduces effective average tax rates for a large number of tax payers - it cuts their taxes.

Then in that case, we need to be consistent. Social security benefits also cut the taxes of those who receive the benefits. Or is it only a tax cut when the payment received appears on the tax return? If so, what is the relevance of the method of the payment distribution? How does that change the reality of what we should be calling it?

'What we shoul be calling it' is a function of linguistics and context, not a function of economics. Because you included that pesky word 'should', it's also a matter of linguistic philosophy.

The thing is, words carry feels, as a part of their meaning to people. People in general hear 'tax hike' and the sentiment delivered, the knowledge embedded in the phrase contains 'this means we will pay more or get less. We will be poorer for this'. The only group for whom that language is truthful would fit comfortably on piece of printer paper, perhaps even a notecard if you use a cramped hand and both sides.

It is a new tax, for the extremely wealthy, and a new benefit for pretty much everyone else.

 

[Axulus]

Then in that case, we need to be consistent. Social security benefits also cut the taxes of those who receive the benefits. Or is it only a tax cut when the payment received appears on the tax return? If so, what is the relevance of the method of the payment distribution? How does that change the reality of what we should be calling it?

'What we shoul be calling it' is a function of linguistics and context, not a function of economics. Because you included that pesky word 'should', it's also a matter of linguistic philosophy.

The thing is, words carry feels, as a part of their meaning to people. People in general hear 'tax hike' and the sentiment delivered, the knowledge embedded in the phrase contains 'this means we will pay more or get less. We will be poorer for this'. The only group for whom that language is truthful would fit comfortably on piece of printer paper, perhaps even a notecard if you use a cramped hand and both sides.

It is a new tax, for the extremely wealthy, and a new benefit for pretty much everyone else.

Yes, I can agree to all of this. I'm all for using clear language and avoiding talking points for those who are uninterested in the details. Your last sentence seems fair except that it isn't just a tax on the extremely wealthy, but rather anyone who purchases stock (such as in 401ks).

 

[Jarhyn]

'What we shoul be calling it' is a function of linguistics and context, not a function of economics. Because you included that pesky word 'should', it's also a matter of linguistic philosophy.

The thing is, words carry feels, as a part of their meaning to people. People in general hear 'tax hike' and the sentiment delivered, the knowledge embedded in the phrase contains 'this means we will pay more or get less. We will be poorer for this'. The only group for whom that language is truthful would fit comfortably on piece of printer paper, perhaps even a notecard if you use a cramped hand and both sides.

It is a new tax, for the extremely wealthy, and a new benefit for pretty much everyone else.

Yes, I can agree to all of this. I'm all for using clear language and avoiding talking points for those who are uninterested in the details. Your last sentence seems fair except that it isn't just a tax on the extremely wealthy, but rather anyone who purchases stock (such as in 401ks).

The tax on 401k is negligible unless the manager and the employee are both extremely unethical in how they operate. It's not ethical to call it a tax for someone for whom it functionally is t, and it's appropriate for anyone for whom it is applicable. The effect on the traders and the 'liquidity' market is also ethical, since it makes the economy as a whole more dynamic and fluid, even if not more 'liquid'. Exonomies far more redistribution-centered happen to be more successful and dynamic, and otherwise happier. It's not an accident that the more people granted buying power within a society, the happier that society becomes.

 

[laughing dog]

A tax cut is a nebulous term. It can refer to a reduction in marginal (effective or actual) tax rates or average (actual or effective) tax rates. This reduces effective average tax rates for a large number of tax payers - it cuts their taxes.

Then in that case, we need to be consistent. Social security benefits also cut the taxes of those who receive the benefits.

They can reduce the average tax rate but they do not reduce the tax liability, so most people would not consider that a tax cut.

 

[Loren Pechtel]

No. It's a new tax on high volume trading. It isn't a tax hike; it's a new tax. And it's a new tax that doesn't take anything from anyone who isn't already disgustingly rich. It will have an impact on the economy: Joe Average will have more money to spend on things like food and houses and bills. Joe average will spend that power on things, which will fund the people who make those things, and the wheels of the economy turn with the movement of that money.

There is no way they can raise hundreds of billions with just this one tax without seriously fucking up our capital markets. If you think otherwise, you are living in fantasy world. Time to get out of that bubble.

Yeah. Without knowing the details I'm not sure what it's going to do but I strongly suspect it's the usual game of figuring behavior won't change. It won't take much of a tax to wipe out the profitability of high frequency trading and thus removing the expected tax revenue. Wiping it out might be a good thing for our economy, though.

 

[Loren Pechtel]

The amount you get back has no relation to the amount you paid in, whether it is $0 or $10,000. It would be like getting 2 free shirts regardless of how many shirts you buy. If the government gave everyone two free shirts, would you call that a tax cut equal to the dollar value of the shirts?

I think it is fascinating that a reduction in someone's tax liability is called a spending increase. The same people who make that claim do not call a reduction in tax rates that cause increases in the deficit "tax increases" when they will cause increases in future taxes.

Some things in that measure are spending increases. Tax credits are basically spending, the EITC is basically spending.

 

[Togo]

Also another case of the left's failure to understand how capital markets function and how their liquidity and efficiency helps the real economy:

Based on the vast majority of the empirical work to date, HFT and automated, competing markets improve market liquidity, reduce trading costs, and make stock prices more efficient. Better liquidity lowers the cost of equity capital for firms, which is an important positive for the real economy. Minor regulatory tweaks may be in order, but those formulating policy should be especially careful not to reverse the liquidity improvements of the last twenty years.

http://pages.stern.nyu.edu/~jhasbrou/Teaching/2014 Winter Markets/Readings/HFT0324.pdf

But we all know how much the left dismisses empirical evidence when it doesn't fit their political bias.

Hm.. I note, however, that the section on transaction taxes has no hard data. The only evidence cited is an estimate from a market participent, a discussion on what 'intuition' would suggest, and a single study from 1997 that claims that trading volatity would increase, without any mention of which definition of volatility they're using. Oh, and an anecdote from Sweden.

The studies cited in the first half of the paper are interesting, but not particularly relevent to the discussion on the tax, since they deal with the effects of HFT on the market, and not the effects of a tax on HFC. They also, without exception, deal entirely with the market economy and not the 'real' economy, so I'm not clear what distinction you're seeking here. The paper as a whole largely ignores the systemic and operational risks that such a tax is designed to reduce, and while they cite some of the advantages claimed for the tax, they don't attempt to discuss or refute them in any way.

I'm not seeing what 'emperical evidence' is being dismissed by 'the left' here. Can you be more specfic?

 

[dismal]

But the key point is that they amount received has no relation to the amount of taxes paid.

It does as long as the credit remains more than the total taxes paid.

You are taxing group A to give a check to group B. Taxing group A increases revenue and giving a check to group B is spending.

I think I've shown that this is a nonsensical issue of semantics. One could say they cut revenue from one source and increased it elsewhere to cover the shortfall. Cut the price of burgers but increase the price of fries in order to have the same final revenue.

Would you use the same argument for social security taxes and payments? That the payments really just reduce revenue and that the payments are a tax cut for retirees?

I'm having trouble seeing the parallel there. The payment is an actual outlay.

If the government sends everyone a check for $1000 just for existing that's spending, right?

I mean, no one seemed to be able to answer this question when I first asked it for some reason. But I think it was a more of a "must not answer" than a "can not answer" sort of mass evasion.

So, now if the government gives everyone a $1000 tax credit just for existing isn't it the exact same thing? Spending?

 

[ksen]

It does as long as the credit remains more than the total taxes paid.

You are taxing group A to give a check to group B. Taxing group A increases revenue and giving a check to group B is spending.

I think I've shown that this is a nonsensical issue of semantics. One could say they cut revenue from one source and increased it elsewhere to cover the shortfall. Cut the price of burgers but increase the price of fries in order to have the same final revenue.

Would you use the same argument for social security taxes and payments? That the payments really just reduce revenue and that the payments are a tax cut for retirees?

I'm having trouble seeing the parallel there. The payment is an actual outlay.

If the government sends everyone a check for $1000 just for existing that's spending, right?

I mean, no one seemed to be able to answer this question when I first asked it for some reason. But I think it was a more of a "must not answer" than a "can not answer" sort of mass evasion.

It was probably more of a "wtf is dismal talking about since the article doesn't say anything about sending people a $1,000 check" thing.

So, now if the government gives everyone a $1000 tax credit just for existing isn't it the exact same thing? Spending?

Not according to the last 20 or 30 years of conservative rhetoric.

 

[dismal]

So can you answer the question?

It seems a devilish challenge for some reason.

 

[ksen]

Yes, I can answer the question. Can you ask a question that actually has anything to do with the topic?

 

[dismal]

Yes, I can answer the question. Can you ask a question that actually has anything to do with the topic?

That seemed more like a "no".

 

[Jarhyn]

Because, it isn't a spending package. It's a stimulus package. This time it's targeted at people who DON'T already have more money or power than they could hope to spend.

 

[laughing dog]

Yes, I can answer the question. Can you ask a question that actually has anything to do with the topic?

That seemed more like a "no".

And that seemed like a no to ksen's question.

 

[Loren Pechtel]

It was probably more of a "wtf is dismal talking about since the article doesn't say anything about sending people a $1,000 check" thing.

Did you not see the tax credits in the measure?

So, now if the government gives everyone a $1000 tax credit just for existing isn't it the exact same thing? Spending?

Not according to the last 20 or 30 years of conservative rhetoric.

And that's supposed to be evidence? All it's evidence of is their hypocrisy.