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View Diary: Stimulus spending: Paul Krugman was right (210 comments)

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  •  Reagan's tax cuts were followed (3+ / 0-)
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    3goldens, Virginia mom, Betty Pinson

    by the economy going down. When he raised them, the economy improved. That's just the historical record.

    The current monies saved by the leech-class on tax cuts are not being reinvested in the US economy, no matter what the theory says will happen.

    It's self-evident if you look at what has actually happened since the Bush cuts went into effect.

    Until we break the corporate virtual monopoly on what we hear and see, we keep losing, don't matter what we do.

    by Jim P on Mon Jun 14, 2010 at 09:42:21 AM PDT

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    •  No...that's not accurate... (1+ / 0-)
      Recommended by:
      Orange County Liberal

      He lowered taxes in 1982. The upper-income rates proceeded as follows:

      1983 50%
      1984 50%  
      1985 50%  
      1986 50%  
      1987 38.5%
      1988 28%  
      1989 28%  
      1990 28%  

      Now, Clinton raised upper-income tax rates to 39.6%, but he also increased the taxable-income exemption by 280%.

      •  Why not start with '81 & '82 just like (1+ / 0-)
        Recommended by:
        3goldens

        Ronald Reagan did? And in fact, for most citizens, their taxes went up. I'll take Krugman's word.

        But Ronald Reagan does hold a special place in the annals of tax policy, and not just as the patron saint of tax cuts. ....he followed his huge 1981 tax cut with two large tax increases. In fact, no peacetime president has raised taxes so much on so many people.

        ...The first Reagan tax increase came in 1982. By then it was clear that the budget projections used to justify the 1981 tax cut were wildly optimistic. In response, Mr. Reagan agreed to a sharp rollback of corporate tax cuts, and a smaller rollback of individual income tax cuts. Over all, the 1982 tax increase undid about a third of the 1981 cut; as a share of G.D.P., the increase was substantially larger than Mr. Clinton's 1993 tax increase.

        ...Mr. Reagan's second tax increase was also motivated by a sense of responsibility; or at least that's the way it seemed at the time. I'm referring to the Social Security Reform Act of 1983, which followed the recommendations of a commission led by Alan Greenspan. Its key provision was an increase in the payroll tax that pays for Social Security and Medicare hospital insurance.

        For many middle- and low-income families, this tax increase more than undid any gains from Mr. Reagan's income tax cuts. In 1980, according to Congressional Budget Office estimates, middle-income families with children paid 8.2 percent of their income in income taxes, and 9.5 percent in payroll taxes. By 1988 the income tax share was down to 6.6 percent; but the payroll tax share was up to 11.8 percent, and the combined burden was up, not down.

        Until we break the corporate virtual monopoly on what we hear and see, we keep losing, don't matter what we do.

        by Jim P on Mon Jun 14, 2010 at 10:10:54 AM PDT

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        •  Now wait a sec...you just wrote: (0+ / 0-)

          When he raised them, the economy improved. That's just the historical record.

          Now, apropos Krugman's argument, you're saying the aforementioned tax increases were bad for the economic recovery post-1982?

          Which is it...were the tax increases (combined with the federal tax cuts) good or bad for the recovery of that time span?

          •  No, the tax increases were good, (0+ / 0-)

            for the economy, except they came from my ass, and every other working stiff's. So they were bad for ordinary people's budget, though they helped the overall economic picture.

            In short, ordinary people subsidized the share the rich used to pay.

            His original tax decreases were bad, which is why he raised them on the rich as well as the workers after the 1981, 1982 failures.

            You'll also note that his decreases on rich people's taxes in his later years played a part in the recession which got Clinton elected in '92.

            Until we break the corporate virtual monopoly on what we hear and see, we keep losing, don't matter what we do.

            by Jim P on Mon Jun 14, 2010 at 10:30:01 AM PDT

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            •  Hmm...I'm not so sure... (0+ / 0-)

              Remember, Bush Sr. raised them back to 31% beginning in 1991 - while at the same time only marginally increasing the taxable-income limits.

              Recession ensued subsequent to that point - and even though Clinton raised taxes, his near-tripling of the taxable-income limits (limits that continued to rise each year until Clinton left office) left a hell of a lot more money in affluent pockets than people are willing to admit.

              •  However you figure it (0+ / 0-)

                all I know is that I pay a hell of lot more in taxes, when I'm working, than do financial speculators, big corporations, and the chief people running said corporations. Even after my tax refund.

                So that has to be made equitable, imo. I'm pretty sure taking more from the aforesaid isn't going to hurt our economy, and will definitely help our deficit, and might well make it easier to engage in some intense job creation.

                The coddle-the-wealthy approach of Voodoo Economics seems to have failed spectacularly.

                Until we break the corporate virtual monopoly on what we hear and see, we keep losing, don't matter what we do.

                by Jim P on Mon Jun 14, 2010 at 11:05:54 AM PDT

                [ Parent ]

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