TPS

A good piece from Bloomberg this morning on global central banks and inflation. Of course, it supports the view (I've argued here for the past 4 years or so) that the Fed's "money printing" will not lead to significant inflation while there is a glut of labor and capital. A good test case coming up again as the Fed is expected to buy $40 billion of MBS and treasuries per month (until unemployment comes down).. http://www.bloomberg...n-mandates.html

Another sign of the coming apocalypse...

Buy more paper assets and cause bubbles

If you assume no change in the cap gains tax and revenues are ='96 value, how much more revenue was generated in each year from 97-00 by cap gains? $13; $23; $46; $61 (add $66 to each of these to get the actual cap gains revenue each year).So you think those values are more important than the additional revenues generated by increased income? The unemployment rate dropped a bit faster in the latter period because real growth was faster. From 93-96 growth averaged 3.5%, and from 97-00 it was 4.4%. Y2K and the internet bubble were the big pushers of real investment expenditures. Cap gains increased, but it was NOT the main driver of the revenue increase--it helped, but real GDP growth generates more income taxes because it spreads income gains across a wider base. And, No, a cap gains tax rate cut did not stimulate higher growth. It generated a higher after-tax return for wealthholders, and that doesn't impact the investment decision of corporations.

Well, duh! though, going off 1996 as a base, take away the extra $50 bil in 1999, there's no surplus; take away an the extra $60 bil, there's still a surplus.There is no comparison on which factor is more important for the total additional revenues generated--growth and lower unemployment generated 80% of the ADDITIONAL revenues from 1997-2000; capital gains 20%.

No. You said, "The rise in cap gains receipts contributed more to the rise in total revenues." I responded to that sentence, saying it's not true. Appropriate that you bring up clinton and morris, because you are now redifining what "is" is.... No one denied that capital gains did not contribute. The debate, AND bet, was on what had a bigger impact on generating the surpluses. I said higher income taxes paid from the u-rate falling to 4%, and you said cap gains. I'll go easy on you and hold you only to one beer....

Total taxes paid from 93-96=$2,283.929 Total taxes paid from 97-00=$3,373,568 Change in taxes paid 97-00=$1,089,639 Change in Cap gains 97-00=$224,000 %contribution from cap gains 20.5%; %contribution from ordinary income=79.5% As you said, Now if you are going to come up with a different definition of "contributed more than" that's up to you...

Here's a source for the cap gains.http://taxfoundation.org/article/federal-capital-gains-tax-collections-1954-2009

You are correct. I had the 5.6 figure in my head and worked off of that. You've hung me out to dry. I admit it, Bush's deficits were good, Obama's bad.

Yes, if $2 trillion is your definition of "not too far off....."

That is not true. I'll bet you two beers on that one. Cap gains increased, but it was in no way the majority of the source for the revenue increase each year.

I think I started one of these two threads saying why not just let it all expire on Jan 1? We go back to the tax structure that generated the surpluses and there are automatic spending cuts, especially needed for defense as we continue to spend like it's the Cold War. The issue is the fragile economy. Yes.

http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt_histo5.htmGross debt outstanding.

Yes, it's a combination of both--spending needs to come down and revenues need to rise.On the piece, I'm sure much of Bush's non-defense increase went to domestic security spending. For BO, the increase was from the stimulus, TARP and unemployment extensions which are all temporary. The spending ratio is now 24% and will continue to fall back to the 22% range as the economy recovers. To "fix" the long term, it will have to come down further.

No worries. Historically, both sides have been addicted to spending, they just focus their spending increases on different "friends" and supporters.

I appreciate the shout, but I understand we all get very emotional over politics. DC has toughened all of us up over the years... The income is AGI, so it's pre-tax. We're talking the housing bubble with the FIRE sector generating 40% of corporate profits in 2007, and the huge bonuses that went with those profits. Real growth averaged 2.3% from 2001-2007, which is significantly below historical average of 3% (I even excluded 2008 which was negative). The share of AGI income for the top 1% increased from 17.5% to 23% over that period. So to answer your question, since the tax cuts did not lead to greater growth for the economy as a whole, one can't argue they were the cause of the huge increase in the income going to the top 1%--they would've received it anyway. The BIG difference is they paid only a 12% tax rate on that income additional income. Crap! This of course made me compare it to another period. From 1993-97 (I'm trying to stay away from GG's cap gains issue, otherwise I'd go to 2000), the additional income earned was $353 bil and taxes paid of $96 bil, which is a 27% rate. Had the top 1% paid the same 27% rate in 2007 they would've paid an additional $100 billion in taxes., They did pretty well with those tax cuts.

You are describing yourself very well... I really didn't feel like doing more work for you--if you are a big boy, you can find the answers; however, you made me curious... The actual revenues from personal income taxes only, from 2001-08, were $1.5 trillion less than their projected cut of $1.2 trillion!!! That is, the actual decline in personal income tax revenues from 2001-2008 was about $2.3 trillion!!!! (I shaved the last 3 years off their 2001-11 projection of $1.2 to end with Bush's term). Take your blinders off man. $4.4 trillion in debt was added over Bush's 8 years, and half of that came from lower revenues due to his tax cuts.

My aren't we testy. That is one illogical argument, "if they paid more taxes, how'd they make out?" Anyone who earns more income will pay more taxes. You jokers are worried about the deficit, but you are more concerned that the top 1% not pay taxes? They had an increase of $660 billion in income from 2000-07, and paid a 12% rate on that additional income. but you'd be happier if they paid no taxes? Then you want the deficit down? You tell me how will you rationalize that? No one denies that everyone got tax breaks, so you are creating a straw man. However, since 51% of all income goes to the top 20%, then the biggest impact on generating the deficit in revenues comes from their tax savings. That shouldn't be difficult to understand. The argument now is whether to let them all expire or just the top rate expire. Again, you create a strawman argument. And, yes, higher expenditures also helped drive the deficits, which is why the CBO was so far off. Though their use of "dynamic scoring" was also part of the error. Flavor of the week name, that's funny. I've been here as long as anyone--before PPP was even born, and using the same handle. So take a hike sonny.

Yes, and if you read the dang report it says on-budget balance goes into deficit (from the tax cuts) but the off-budget items (which they say 3/4 is due to the SS trust fund surplus) generate an overall projected surplus. It turns out their projections weren't all that good and we had deficits even with the SS surplus added in. If you accept their projections dude, then read what they wrote about the impact from the tax cuts--they wre projected to decrease revenues by $1.2 trillion! You're hopeless.

It's clear that your bias prevents you from seeing reality. Here's what the CBO report, linked in the editorial you posted, states: There, I've done your homework.

You miss the point. The point is that unemployment of 4% vs 6% was a huge cause of the surpluses. Ahhh...reminds me of school days...it's been used before, so to speak....I love it when people tell you what you are saying... I'm saying government did not have to raise rates in the 1980s, because the PayGo system was sufficient to cover at the current rates. I'm not saying no SS taxes--"read my lips!"

Funny Wanker.Never said that. What I'm saying is that if the trust fund isn't there, then we were hoodwinked into believing that the increase in SS taxes in the 1980s was needed to "fund" SS payouts now. If you accept the Kraut's words, then the excess taxes paid on SS for the past 30 years has gone to support general government expneditures as well as SS. The Reagan tax cuts for the top were financed by higher taxes on workers. I'm sure you were all for that...

The Census data that measures inequality excludes cap gains, so it's even worse than 50%. Re-read my Krauthammer rag. The Reagan-Greenspan increase in SS taxes was supposedly to solve a future deficit. The surplus revenues were used as general revenue. The implication is that SS and Medicare taxes are viewed as income taxes that support ALL government spending. We've been over this. The surplus was a combination of higher cap gains from the internet bubble along Greenspan's belief that NAIRU had fallen below 6%, so he allowed the expansion to continue, and unemployment hit 4%--a greater % of the labor force working means more revenues. I'll bet you a beer that was the bigger impact. So let's see if he's grown up in office yet.

It's time to do your homework.

Give Obama his 8 years, then we'll see.Real growth was higher under carter than bush. Do your homework.