Avoiding the simplistic, re: tax cuts and spending

[cthulu2016]

9. Yes, you are correct.

"wouldn't allowing those on the rich to expire have less negative effect on the economy than that on the poor no matter which would produce more revenue to the government no matter what the government does with the money?"

Yes. For the same reasons that tax breaks for the poor are more effective, tax hikes on the rich are less damaging.

Ranked by positive/negative economic effect, best to worst:

1) Cancel Bush tax cuts over $250K and use that revenue for some more stimulative purpose —unemployment insurance, infrastructure, government hiring, etc.

2) Leave all Bush tax cuts in place.

3) Cancel Bush tax cuts over $250K and use that revenue to reduce the deficit. (Meaning really reduce the deficit. If the lower deficit is used as an excuse for more spending then it would be just a more complicated version of #1, and would be good.)

The poster who keeps accusing my socialist ass of being pro-tax cuts for the rich seems unable to grasp that the fact that #2 would constrict the economy less than #3 is not an argument for #2 in the abstract. #1 is clearly the best so of course I do not support #2... except in the hypothetical instance where the only options were 2 and 3, in which case 2 would increase unemployment less.

I swear... if I said cat shit is better than dog shit (which it is, by virtue of being smaller) some bozo would doubtless accuse me of saying everyone should be eating cat shit.

But such is the internet.

Anyway, you are correct all around. Trickle down is very inefficient. Trickle up is very efficient.

Trickle down did hurt all of us ordinary people, but not by directly contracting GDP. It provided an inefficient stimulus that did little to help ordinary people, but did not hurt them directly. What hurt us directly was that trickle-down created deficits which were then, as a political matter, used as a weapon to cut services that help ordinary people. We got the bill for it without getting the benefits.

I am very opposed to lower taxes for the rich.

If I was running things I would eliminate the Bush tax cuts over $250K and DOUBLE the Bush tax cuts for those under $250K, and if someone wanted that "paid for" then I would pay for it by raising taxes over $250.

But I would do all of this within the bounds of normal economics. I would calculate what we would gain by doubling the tax cut for the middle class and what we would lose by raising taxes on the rich and arrive at an ethical and economic cost-benefit analysis.

But doing that would not be the same as pretending that taxing the rich has no contractionary effect. Of course it does, and that is part of the equations. The expansionary effect of cutting for the littles would more than offset the (real) contractionary effect of taxing the rich.