Trump's tax cuts for the rich could have been $1,875 stimulus checks for 8 months

Chew Toy McCoy

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SuperMatt

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Maybe that trickle-down economics from the 80's will start kicking in.
But if you gave it to poor people they’d spend it all at Walmart, Home Depot, and the grocery store... which apparently is a bad thing in the eyes of right-wingers. How instead of giving money to the rich via tax-breaks, we give poor people more money? They will buy stuff from big businesses, who will get to profit after they’ve paid their employees, rent, etc..... But no, let‘s drastically cut their taxes despite a booming economy so they can buy more yachts.
 
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But if you gave it to poor people they’d spend it all at Walmart, Home Depot, and the grocery store... which apparently is a bad thing in the eyes of right-wingers. How instead of giving money to the rich via tax-breaks, we give poor people more money? They will buy stuff from big businesses, who will get to profit after they’ve paid their employees, rent, etc..... But no, let‘s drastically cut their taxes despite a booming economy so they can buy more yachts.
If you guys are into a long boring read (I myself still have yet to get to the end but the abstract is telling):

"This paper uses data from 18 OECD countries over the last five decades to estimate the causal effect of major tax cuts for the rich on income inequality, economic growth, and un- employment. First, we use a new encompassing measure of taxes on the rich to identify instances of major reductions in tax progressivity. Then, we look at the causal effect of these episodes on economic outcomes by applying a nonparametric generalization of the difference-in-differences indicator that implements Mahalanobis matching in panel data analysis. We find that major reforms reducing taxes on the rich lead to higher income inequality as measured by the top 1% share of pre-tax national income. The effect remains stable in the medium term. In contrast, such reforms do not have any significant effect on economic growth and unemployment."

 

Chew Toy McCoy

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If you guys are into a long boring read (I myself still have yet to get to the end but the abstract is telling):

"This paper uses data from 18 OECD countries over the last five decades to estimate the causal effect of major tax cuts for the rich on income inequality, economic growth, and un- employment. First, we use a new encompassing measure of taxes on the rich to identify instances of major reductions in tax progressivity. Then, we look at the causal effect of these episodes on economic outcomes by applying a nonparametric generalization of the difference-in-differences indicator that implements Mahalanobis matching in panel data analysis. We find that major reforms reducing taxes on the rich lead to higher income inequality as measured by the top 1% share of pre-tax national income. The effect remains stable in the medium term. In contrast, such reforms do not have any significant effect on economic growth and unemployment."


But job creators!!!!

/discussion
 

JayMysteri0

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But if you gave it to poor people they’d spend it all at Walmart, Home Depot, and the grocery store... which apparently is a bad thing in the eyes of right-wingers. How instead of giving money to the rich via tax-breaks, we give poor people more money? They will buy stuff from big businesses, who will get to profit after they’ve paid their employees, rent, etc..... But no, let‘s drastically cut their taxes despite a booming economy so they can buy more yachts.
You're skewing a bit. It isn't giving it ONLY to poor people. Because we all know that some of the people complaining loudest are poor themselves and inches from complete financial disaster from ANYTHING health related let alone Covid. It's if a certain groups of people get money AS well as themselves. Because THOSE people may benefit as well. As we've seen in past discussions, it's when others get things it's bad, because the people complaining don't see when THEY get things as bad, Or even as them getting things, it's things they deserved for being hard working Americans, as opposed to those lazy unreligious criminal types who have numerous children who made our country NOT great anymore.

Businesses who benefitted from tax breaks will happily take that gov't money, then cry they need another tax break when sales go down again.

Sowing the seeds of division for short term political gain, is going to cripple us long term.

The tribal obsession with "It's about me, F them" has screwed our country in so many different ways, I argue that's the next biggest thing we need to deal with after the pandemic.
 
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But job creators!!!!

/discussion
Yup, that's an argument people complain about. I'm sympathetic to it to some extent, like stimulating ethical enterprise is generally a good thing. The paper really goes into how top earners also have disproportionately high influence on policy. The end result is a positive feedback loop leading to more inequality.
 
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Businesses who benefitted from tax breaks will happily take that gov't money, then cry they need another tax break when sales go down again.
Yup. This is covered in the paper.

THis also reminds me of a study showing that "attractive" people are much more likely to find life to be "fair". Successful people with a head start will be also much more likely to think the system is fair.
 

Chew Toy McCoy

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You're skewing a bit. It isn't giving it ONLY to poor people. Because we all know that some of the people complaining loudest are poor themselves and inches from complete financial disaster from ANYTHING health related let alone Covid. It's if a certain groups of people get money AS well as themselves. Because THOSE people may benefit as well. As we've seen in past discussions, it's when others get things it's bad, because the people complaining don't see when THEY get things as bad, Or even as them getting things, it's things they deserved for being hard working Americans, as opposed to those lazy unreligious criminal types who have numerous children who made our country NOT great anymore.

Businesses who benefitted from tax breaks will happily take that gov't money, then cry they need another tax break when sales go down again.

Sowing the seeds of division for short term political gain, is going to cripple us long term.

The tribal obsession with "It's about me, F them" has screwed our country in so many different ways, I argue that's the next biggest thing we need to deal with after the pandemic.
I’ve been saying that for years. I acknowledge deadbeats will also benefit by so will myself and many others. I’m sure there are many rich who make more money annually on interest than people working a 40 hour work week.

Meanwhile we keep the status quo and keep shoveling money to people who already have more then they know what to do with.

It completely baffles my mind the amount of people who buy into the “this could be the rich you” false narrative despite getting slapped in the face with the opposite reality every time they wake up in the morning and regularly throughout the day.
 

Chew Toy McCoy

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Yup, that's an argument people complain about. I'm sympathetic to it to some extent, like stimulating ethical enterprise is generally a good thing. The paper really goes into how top earners also have disproportionately high influence on policy. The end result is a positive feedback loop leading to more inequality.

I’d argue giving more money to spend on a business has a better economic impact of that business and the country than freeing up more money for them to hire more people...which they also aren’t obligated to use the money on.

I’d also argue that there are plenty in business, especially small business, who feel they are better off keeping the extra money than taking the risks of expansion, especially if consumers don’t have money to spend.
 

Chew Toy McCoy

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Yup. This is covered in the paper.

THis also reminds me of a study showing that "attractive" people are much more likely to find life to be "fair". Successful people with a head start will be also much more likely to think the system is fair.

This reminds me of a study, or maybe several, that determined pessimists are generally closer to reality than optimists.
 
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This reminds me of a study, or maybe several, that determined pessimists are generally closer to reality than optimists.
We are biologically hardwired for pessimism. Nice things can happen many times in life, but you only die once.

I’d argue giving more money to spend on a business has a better economic impact of that business and the country than freeing up more money for them to hire more people...which they also aren’t obligated to use the money on.

I’d also argue that there are plenty in business, especially small business, who feel they are better off keeping the extra money than taking the risks of expansion, especially if consumers don’t have money to spend.
Agree. One of the issue is the education gap. College tuitions are out of control rise beyond interest. There are also studies showing that state spending on precollege education translates very well into better educational outcomes.

A robust middle class is an excellent way to make sure policies benefit the largest proportion of society, maintain a pool with the next great idea the largest possible, etc. America's golden age wasn't associated by the rise of the middle class by accident.
 
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I can create jobs. Spit my gum on the sidewalk; now somebody has to clean it up. “But they create jobs” is a sad, tired argument for propping up billionaires.
Or the everyday example: I won't return shopping carts.
 

Alli

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Agree. One of the issue is the education gap. College tuitions are out of control rise beyond interest. There are also studies showing that state spending on precollege education translates very well into better educational outcomes.
I’m in the process of finishing a paper on this very topic. Higher funding outcomes equals higher student outcomes.
 
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I’m in the process of finishing a paper on this very topic. Higher funding outcomes equals higher student outcomes.
Yup. I just looked it up on a government website. This came up in the summer when I commented on the level of acalculia i've seen in the USA (I actually make people count as part of an exam). Seddy got upset, so I provided OECD data on math scores from the USA. Then I got slapped with the claim that China cheats on the test. Then I pointed out that there's plenty of European countries that definitely don't, then the claim came that the US's OECD score is driven by overrepresentation of underprivileged kids. :D He then pointed out the education spending doesn't change outcomes, which is untrue, but you have to spend it on early education. I suspect your finding is along those lines too.
 

Zoidberg

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Yup. I just looked it up on a government website. This came up in the summer when I commented on the level of acalculia i've seen in the USA (I actually make people count as part of an exam). Seddy got upset, so I provided OECD data on math scores from the USA. Then I got slapped with the claim that China cheats on the test. Then I pointed out that there's plenty of European countries that definitely don't, then the claim came that the US's OECD score is driven by overrepresentation of underprivileged kids. :D He then pointed out the education spending doesn't change outcomes, which is untrue, but you have to spend it on early education. I suspect your finding is along those lines too.
Who's Seddy? (I've been out of MR for a while)
 
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He likes to play doctor... and professor.
Over time I got less and less impressed by him. At one point he was trying to tell people that it's legitimate to compare COVID to the Flu, and he consistently cited the wrong mortality rates for the Flu. The people I know who went to Harvard are smarter than that...
 
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