Signs of the Times - and a question

[whell]

Originally Posted by BlueStreak

For my part it is not so much that tax reductions are bad, (They not, per se.), it's how they are targeted and what we are told must be cut to pay for them.

I wouldn't mind seeing tax cuts for struggling businesses. I would not have a problem with government truly reducing waste and corruption to free up the funds to pay for for said cuts.

The problem is, this is usiually not what we get. With Dems we seem to get higher taxes with no reduction in waste and fraud. Republicans always seem to suggest reductions in benefits for working folks and the poor while protecting tax cuts for the top earners, and no reduction in fraud and waste.

These two models make no sense to me. In one, we keep throwing money into a bottomless pit of corruption. In the other we give taxcuts to people who have no need of them and cut benefits to those most in need*,....while continuing to throw money into a bottomless pit of corruption.

So, like the rest of the country, I struggle to discern the lesser of the two evils.

Dave

*(To my mind, reducing benefits to the poor and working classes in order to give cuts to the top of the economic strata----IS a form of corruption.)

I agree with much of this, believe it or not. To me, the nature of our current tax code is such that the government is picking winners and losers with targeted tax breaks and loop holes. Protecting that structure is what the debate about "taxing the rich" is really all about. It's not about the rich. It's about protecting the tax system that keeps politicians in a position of power, able to elicit "tribute" in the form of campaign contributions from beneficiaries of certain tax treatment.

[piece-itpete]

There is so much state specific it's difficult to address one area.

We in the rust belt states have tended to over regulate as well.

That said I agree, there's talking about how raising taxes would be good but bottom line both parties end up cutting them for growth.

Btw, ny city has been pretty aggressivve in tax breaks, and the business has mostly stayed.

Pete

[beej]

Originally Posted by piece-itpete

There is so much state specific it's difficult to address one area.

We in the rust belt states have tended to over regulate as well.

That said I agree, there's talking about how raising taxes would be good but bottom line both parties end up cutting them for growth.

Btw, ny city has been pretty aggressivve in tax breaks, and the business has mostly stayed.

Pete

I'm guessing they stayed, Pete, because it was NYC.

[ebacon]

Republican and Democrat stereotypes aside, it is still bad practice for a city to lower their community standards in order to attract business. The unavoidable problem is that once someone does it then others have to do it to compete. That's when the dominoes start to fall.

[whell]

Originally Posted by ebacon

Republican and Democrat stereotypes aside, it is still bad practice for a city to lower their community standards in order to attract business. The unavoidable problem is that once someone does it then others have to do it to compete. That's when the dominoes start to fall.

At least here in MI the practice has been "managed" to a great extent. A community must petition the state legislature to creat the zone, and if approved, favorable tax treatment is bestowed by local and state government. A zone is only created if it is deemed in the best intetest of many stakeholders, public and private. In this manner, the issue you've cited is not avoided, but reduced or controlled.

However, I'm still wondering why an "across the board" reduction in taxes - yes, for business and capital gains taxes - would or would not have a similar positive impact.

[piece-itpete]

Originally Posted by ebacon

Don't be a dick. I'm just saying that there are known causes and effects.

One of the biggest games politicians play after they make a big mess is shrug and say well, no one could predict such an outcome. That's bullshit. History has repeated itself so many times that's it not even funny to hear the excuse any more.

Sarcasm like yours lets the sh*tsticks get away with it.

With a name like mine what do you expect?

Btw, I'm dead serious, no sarcasm. There is only so much tax percentage sustainable.

Peter

[d-ray657]

Originally Posted by whell

At least here in MI the practice has been "managed" to a great extent. A community must petition the state legislature to creat the zone, and if approved, favorable tax treatment is bestowed by local and state government. A zone is only created if it is deemed in the best intetest of many stakeholders, public and private. In this manner, the issue you've cited is not avoided, but reduced or controlled.

However, I'm still wondering why an "across the board" reduction in taxes - yes, for business and capital gains taxes - would or would not have a similar positive impact.

Wouldn't one answer be that, as you mentioned, the tax abatements are carefully targeted to areas where there otherwise would not be investment. It is presumed that there are plenty of areas where the infrastructure and other market conditions make investment a reasonable business proposition without a subsidy. Bottom line is that we really can't afford to subsidize business across the board, any more than we already do with the investment in infrastructure, police and fire protection, and education.

Regards,

D-Ray

[whell]

Originally Posted by d-ray657

Wouldn't one answer be that, as you mentioned, the tax abatements are carefully targeted to areas where there otherwise would not be investment. It is presumed that there are plenty of areas where the infrastructure and other market conditions make investment a reasonable business proposition without a subsidy. Bottom line is that we really can't afford to subsidize business across the board, any more than we already do with the investment in infrastructure, police and fire protection, and education.

Regards,

D-Ray

How is it a subsidy, rather than reducing the cost of capital and the cost of engaging in business activity? And if that reduction in cost results in an increase in GDP and in increase in employment (and a resulting increase in payroll tax revenue) doesn't that make the exercise pay for itself?

On the contrary, of what economic value - and what economic benefits are generated - value are all of the empty or half empty buildings, all of the idle production equipment, and all of the idle workers? The "For Lease" signs represent an economic cost all by themselves.

[d-ray657]

Originally Posted by whell

How is it a subsidy, rather than reducing the cost of capital and the cost of engaging in business activity? And if that reduction in cost results in an increase in GDP and in increase in employment (and a resulting increase in payroll tax revenue) doesn't that make the exercise pay for itself?

On the contrary, of what economic value - and what economic benefits are generated - value are all of the empty or half empty buildings, all of the idle production equipment, and all of the idle workers? The "For Lease" signs represent an economic cost all by themselves.

Would you be open to a stipulation that the decreased taxes are only available to those who can document new investment in productive activity? Our experience of the past few years have been that despite the protection of these "job creators" from any increased tax burden, they have been sitting on piles of money. I don't have any reason to believe that a further reduction in taxes would result in putting the additional capital to work instead of simply adding to the pile.

Regards,

D-Ray

[BlueStreak]

Originally Posted by ebacon

Republican and Democrat stereotypes aside, it is still bad practice for a city to lower their community standards in order to attract business. The unavoidable problem is that once someone does it then others have to do it to compete. That's when the dominoes start to fall.

I can see it now;

"Welcome to Pig Knuckle, Arkansas!

Pop. 1,312

Motto;

Pride is NOT an issue,
we'll do anything for a Buck!"

Dave