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Originally Posted by Evil_inKarlate
All you anti-supply-siders need to actually read what the article said instead of what you expected it to say.
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I did.
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The articel quite properly states that Taxable Income will fall if tax rates are raised.
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No, that's an improper claim. And also, it's a misstatement not only of fact but also of supply-side theory. Supply-side theory doesn't say that people will reduce their taxable income to avoid higher taxes, but that the removal of investment capital from the market will result in lower economic activity, hence a smaller tax base, hence lower taxes overall. This is also fallacious, but for a different reason: the bottleneck in the investment in job-creating ventures is not the amount of investment capital available, but the incentive to invest it in job-creating ventures, which in turn is a function of consumer demand, which in turn is a function of median real net wages. So in fact, what hurts the economy and lowers revenue is not a tax increase on the rich but a tax increase on those making from about $20,000 to $100,000 a year, which represent the great majority of consumers. (Hence the economic disaster caused by Roosevelt's introduction of the Social Security payroll tax in 1937. To get back on topic.)
Regarding Social Security, we must ask ourselves, first, whether we want a government-run old-age retirement support program at all. Yes? No? Assume yes, for the sake of argument.
We then must face the fact that Social Security as FDR constructed it is not viable. Life expectancy has increased, and it is no longer the case that most workers never live to collect benefits, and population growth has slowed and must soon cease altogether and even reverse temporarily. So, Social Security as FDR designed it will not continue to work much longer. As I see it, we may replace it with one of two things:
1) A welfare program, in effect, in which all retired persons are guaranteed a minimum income and this is paid for out of general progressive taxes. OR:
2) A contribution program similar in general concept to Social Security, but in which the funds in the program cannot be borrowed by the federal government to cover general expenses and must instead be invested profitably, so that it becomes something like a national 401(k) plan. But if we go that route, then we will also need to implement emergency welfare provisions to cover retirees who did not contribute to the new system during their working years, or contributed to it only partially.
Obama does seem to be moving towards #1. IMO if he's going to do that, he should not do it halfway, but should simply abolish the payroll tax altogether, increase income taxes to compensate, and make no bones about it.