Payroll tax cut end Jan 1.

Well I agree with the tax cut ending. For two reasons, it's a tax cut on SS which is creating more debt in general and unstablilty in SS. And, the tax cut should be on the Federal Income Tax. I would be ok with this ending right along with the Bush tax cuts. The reasons the GOP gives are BS, IMO, but they are right in that it should end.

Payroll tax cut end Jan 1.

Well I agree with the tax cut ending. For two reasons, it's a tax cut on SS which is creating more debt in general and unstablilty in SS. And, the tax cut should be on the Federal Income Tax. I would be ok with this ending right along with the Bush tax cuts. The reasons the GOP gives are BS, IMO, but they are right in that it should end.

I don't really like the article tbh. The writer is obviously quite biased against republicans. Had he done the same article without letting his personal feelings show I would have liked it a lot better.

From the article:

"We don't need short-term gestures. We need long-term fundamental changes in our tax structure and our regulatory structure that people who create jobs can rely on," said Sen. Lamar Alexander, R-Tenn., when asked about the payroll tax matter.[/quote]

I generally agree with this. It seems like a waste to support short term tax cuts/subsidies when my ideal candidate would want tax reform that makes them redundant but also less confusing.

So you're in favor of letting the Bush tax cut expire on Jan 1 as well?

So you're in favor of letting the Bush tax cut expire on Jan 1 as well?

I'm in favor of rewriting the entire tax code as soon as possible. Was that not clear from my previous post?

I don't believe the article. I think a few repubs might be for this but I doubt a majority or even a decent amount of the republicans are. It would completely go against the grain of all the major talking points about keeping taxes low.

[quote name='Alpha_ProgDes' timestamp='1314025192' post='4852325']
So you're in favor of letting the Bush tax cut expire on Jan 1 as well?

I'm in favor of rewriting the entire tax code as soon as possible. Was that not clear from my previous post?
[/quote]

This is an ironic sentiment for someone who frequents an internet forum full of programmers. One of the most important lessons in programming is that it's usually a bad idea to rewrite things from scratch. What makes you believe that this lesson does not apply to the tax code as well?

As to the topic itself, there are two levels at which this can be looked at:

1) Pretty much all Western societies have huge deficiencies in their tax codes in terms of equality. Wage shares in national income are close to or at a century low in most countries, thanks to decades of neoliberal policy influence. This leads to a drastic increase in inequality, and that inequality is pulling our societies apart. Since the bottom 50% of the income and wealth distributions have almost no stake in out societies, they just won't truly care about what happens to them, and so it is only a matter of time until even more violence erupts. Fixing all this involves cranking up the maximum tax rate (but other adjustments will be necessary as well).

2) Irrespective of the fact that tax hikes for the rich are necessary to stabilise our societies, the fact is that macro-economically speaking, there is insufficient demand in the system right now. Insufficient demand leads to a job shortage, which makes the problems under point (1) even worse. So in net terms, more government spending is absolutely necessary practically everywhere. Of course, this can go hand in hand with tax hikes, so long as the spending increases are larger than the tax hikes. It is crucial that sum of all spending in the economy increase.

The last point is actually a kind of tautology, because the size of the economy is the sum of all spending. The people who fantasize about growth while cutting spending are idiots (and unfortunately, being a politician or even an economics professor is not mutually exclusive to being an idiot).

The last point is actually a kind of tautology, because the size of the economy is the sum of all spending. The people who fantasize about growth while cutting spending are idiots (and unfortunately, being a politician or even an economics professor is not mutually exclusive to being an idiot).

Well I have to disagree with this to some extent.
Americans could cut their "defense" ( the doublespeak word for war ) spending and invest some of it into developing their education, so that they will be able to produce more goods in the end. ( more educated workforce usually ends up being more productive, not to mention the technical innovations that increase efficiency )
That + taxing the rich normally again would get them enough money to give some (financial) support to the middle class ( as transfers for example ), which would probably generate some demand, which ofc stimulates the economy thru the multiplier effect.

In other countries (like in the EU atm ) ofc you are most likely correct. I don't see taking away transfers, and increasing costs generating much more demand...

Well I have to disagree with this to some extent.
Americans could cut their "defense" ( the doublespeak word for war ) spending and invest some of it into developing their education, so that they will be able to produce more goods in the end. ( more educated workforce usually ends up being more productive, not to mention the technical innovations that increase efficiency )
That + taxing the rich normally again would get them enough money to give some (financial) support to the middle class ( as transfers for example ), which would probably generate some demand, which ofc stimulates the economy thru the multiplier effect.

In other countries (like in the EU atm ) ofc you are most likely correct. I don't see taking away transfers, and increasing costs generating much more demand...

In the long term, cutting funding from the military and investing it in education would very likely lead to a stronger economy. In the short to medium terms, they would have the opposite effect.

Education is a long term investment, and we have a very serious and immediate employment crisis along with a liquidity trap. Funding education directly, while extremely important, resolves neither. And even if the effects of education investment were immediate, there aren't enough jobs for educated workers either-- look at the employment rates of recent college graduates.

The military, while expensive, is essentially stimulus spending. The country is spending huge amounts of cash on both production of war materials as well as the pay of soldiers themselves. It's too big a chunk of the economy to continue spending at this level in the long term, since it doesn't produce anything (except some good research, though inefficiently), and it really generates problems for the US anyways. But in that it's really the most extreme Keynesian application, not much different than paying workers to dig ditches and then fill them in again. If a sizable portion of that were suddenly withdrawn, you'd have a drop in manufacturing as well as a burst in suddenly unemployed people with no options (the ranks of the military are overwhelmingly drawn from lower-income populations).

Long term you're absolutely right about shifting that funding allocation from defense towards education. But doing so now wouldn't really help our most pressing issues.

I can absolutely see Republicans letting the payroll tax expire. They are generally anti-tax (though pro-spending), but that only becomes a core tenet if the wealthy are the ones in the crosshairs. They were willing to let all of the Bush tax cuts expire rather than let them be extended only for the middle class; can you see them behaving that way if the situation were reversed? With neo-con Republicans (more nakedly than with most politicians at least) you must be this tall to ride the ride. Otherwise go eat cake or something. Just show up at the factory.

The last point is actually a kind of tautology, because the size of the economy is the sum of all spending. The people who fantasize about growth while cutting spending are idiots (and unfortunately, being a politician or even an economics professor is not mutually exclusive to being an idiot).

No one wants to cut all spending, they want to cut government spending. Considering that there are many fortune 500 companies hoarding cash, our economy does not require government spending to grow. As government spending goes down, businesses feel more secure about their taxes staying the same or maybe even going down. Lower taxes encourages businesses to spend more money in this country and hire more people. As businesses spend more of their cash, and hire more people, the economy improves. You may not agree with it, but it's not idiotic. The worst thing that can happen to our economy is that businesses take their cash and elect to spend it in foreign countries. Something which is happening today on a regular basis, and instead of making it more attractive for businesses to hire in the US, we get situations like the NLRB vs Boeing.

[quote name='way2lazy2care' timestamp='1314025526' post='4852332']
I'm in favor of rewriting the entire tax code as soon as possible. Was that not clear from my previous post?

This is an ironic sentiment for someone who frequents an internet forum full of programmers. One of the most important lessons in programming is that it's usually a bad idea to rewrite things from scratch. What makes you believe that this lesson does not apply to the tax code as well?
[/quote]

Iterating on a broken product doesn't unbreak it; it just makes it more broken. Much like rapid iterative development where fixes are put in to fix short term problems, they end up being no longer effective in the long term. One of the keys of iterative development even in programming is that if things become difficult, a redesign is probably necessary.

Things have been difficult with the tax code for decades. That signals to me that at the least we'd have to roll back our tax code decades, and by doing that you may as well just start over from scratch. There's a lot to be said for starting from scratch with what we know now.

edit: on education spending, I'd agree it won't impact us effectively immediately, and actually in america it is a horrible investment. We spend more for worse results already. What we do need is a real reevaluation of the education system to get it running efficiently.