The Republican Primary/Debates/Race

[WuDrWu]

So keep giving the government more money until we find the ceiling for consumer prices? Hmmm....that sounds fiscally responsible.

Give the middle class more money, exactly how? And when you explain how you plan to "give" the middle class more money, please tell me why the middle class is more capable of driving demand than the lower class or the upper class (however you define each).

[RoyalShock]

I really hate the idea of government "giving" money to anyone. How about we call it letting the middle class keep more fruits of their labor?

[1979Shocker]

So keep giving the government more money until we find the ceiling for consumer prices? Hmmm....that sounds fiscally responsible.

Give the middle class more money, exactly how? And when you explain how you plan to "give" the middle class more money, please tell me why the middle class is more capable of driving demand than the lower class or the upper class (however you define each).

THe same way the upper class was given more money for the last 30 years. I don't know the exact percentage (I don't have time to look it up right now.), but I believe the middle class does most of the consumer spending that drives the economy.

[WuDrWu]

THe same way the upper class was given more money for the last 30 years.

Interesting. Please expound upon this occurrence. I am curious to hear how exactly the upper class was "given more money for the last 30 years".

I don't expect exact numbers, but roughly how much money was the upper class given in those 30 years, and where did that money originate? Did the government borrow money to give to the upper class in a unique welfare program or was money collected from the lower and middle class and given to the upper class in a kind of reverse income redistribution plan?

[Maggie]

Someone once said if corporate taxes were raised, then the costs would just be passed on to the consumers. I say let them pass them on. Evidentally, there will be a balancing point between what the consumer is willing to spend on a product and what the corporation is trying to get for that product. Will reducing corporate taxes actually cause any of that savings to be passed on to the consumer (trickle down)?

On another question, do corporate tax cuts really produce more jobs, or are there other things that actually produce more jobs? If it's played out and corporations increase jobs because of a tax cut, but then consumers turn around and don't buy their products because they aren't in a buying mood, then all that the corporations are going to have is just higher inventories. If you want to increase jobs, give the middle class more money to spend. Then the corporations will have to hire more people in order to meet consumer demand.

People do assert, often in fact, that if corporate taxes are raised that the costs would be passed on to the consumer. But the passing on of either higher costs (be it taxes, the price of gasoline, or a variety of other costs) or savings of costs, is not an automatic process and, in both cases, it depends on the kind of competition faced by each business and how many of the competing companies have the same costs increases or decreases.

For example, if you are running a coalmine in West Virginia and the government increases the tax on coal, you cannot pass that on to buyers of coal in the world market because other coal producers in other countries do not have to pay the same tax. The same principal applies with regard to rising transportation costs. If you ship our product one way and the cost rises, you can pass that on to buyers only to the extent that your competitors also ship in the same manner and even then you may not be able pass on the entire cost – if all your competitors ship by rail, for example, you can pass off increased freight charges to all you customers; however, if you ship your output an average of 100 miles and your competitors ship theirs only an average of 10 miles, then you can only raise your prices to cover the freight charges for 10 miles.

The same logic applies when passing on savings to customers.

[Kung Wu]

For example, if you are running a coalmine in West Virginia and the government increases the tax on coal, you cannot pass that on to buyers of coal in the world market because other coal producers in other countries do not have to pay the same tax. The same principal applies with regard to rising transportation costs. If you ship our product one way and the cost rises, you can pass that on to buyers only to the extent that your competitors also ship in the same manner and even then you may not be able pass on the entire cost – if all your competitors ship by rail, for example, you can pass off increased freight charges to all you customers; however, if you ship your output an average of 100 miles and your competitors ship theirs only an average of 10 miles, then you can only raise your prices to cover the freight charges for 10 miles.

But you can lay people off and eventually file for bankruptcy and close your doors causing everyone to lose their job, so you do have options.

[Maggie]

But you can lay people off and eventually file for bankruptcy and close your doors causing everyone to lose their job, so you do have options.

Oh sure – those are options not necessarily desirable options but they are options.

[SB Shock]

But you can lay people off and eventually file for bankruptcy and close your doors causing everyone to lose their job, so you do have options.

or send your company production to mexico (and layoff your union workers) ala Cessna, Hawker Beechcraft

[1979Shocker]

Interesting. Please expound upon this occurrence. I am curious to hear how exactly the upper class was "given more money for the last 30 years".

I don't expect exact numbers, but roughly how much money was the upper class given in those 30 years, and where did that money originate? Did the government borrow money to give to the upper class in a unique welfare program or was money collected from the lower and middle class and given to the upper class in a kind of reverse income redistribution plan?

From 1979-2009 when we started to see all these tax cuts, the top income earners in the U.S. (the 1%) have seen their incomes increase by over 240%. All others have seen their incomes stay basically flat over that same period.

[Maggie]

From 1979-2009 when we started to see all these tax cuts, the top income earners in the U.S. (the 1%) have seen their incomes increase by over 240%. All others have seen their incomes stay basically flat over that same period.

The rich are getting richer? Based on what I have read, the numbers generally cited in support of your argument do not actually tell us much about what has happened to the incomes of wealthy households over time. That’s because the people who are in the top bracket today are not the people who were in the top bracket last year. There’s a good deal of socioeconomic mobility in the United States - more than you’d think.

You need to look at actual per capita income. Most of the studies, I assume, on which you are basing your argument cite household income. If you want to make a solid comparison look at per capita income; if you want to score political points look at household income.

[Maggie]

Also, even if you deal with household income:

http://www.treasury.gov/resource-center/tax-policy/Documents/incomemobilitystudy03-08revise.pdf

"The mobility of the top 1 percent of the income distribution is also important. More than half (57.4 percent = 100 – 42.6) of the top 1 percent of households in 1996 had dropped to a lower income group by 2005. This statistic illustrates that the top income groups as measured by a single year of income (i.e., cross-sectional analysis) often include a large share of individuals or households whose income is only temporarily high. Put differently, more than half of the households in the top 1 percent in 2005 were not there nine years earlier. Thus, while the share of income of the top 1 percent is higher than in prior years, it is not a fixed group of households receiving this larger share of income. As suggested by the Schumpeter hotel analogy, many of the more luxurious rooms are occupied by different people at different times."

[SB Shock]

From 1979-2009 when we started to see all these tax cuts, the top income earners in the U.S. (the 1%) have seen their incomes increase by over 240%. All others have seen their incomes stay basically flat over that same period.

Are you saying your income has stayed flat since 1979?

Are you expecting a high school graduate to be able to get a job for $50,000 out of high school? Do you think a college graduate should get a job out of college at $100,000?