From: hulsey@dbsun.uucp (hulsey)
Subject: Re: Capital gains idiocy (was Clinton's broken promise)
Organization: BioMerieux-Vitek, St. Louis Mo.
Distribution: usa
Date: Thu, 27 Aug 1992 17:10:22 GMT

tedr@athena.cs.uga.edu (Ted Kalivoda) writes:
>hulsey@dbsun.uucp (hulsey) writes:

>>There is a point where lowering the tax rate will reduce the revenue.
>>Theories I've heard say that the tax rate of maximum return is around
>>30%.  Do you have any theory to back up your rates, or did you just
>>make them up?
>
>Do this theory mean 30% in real terms or 30% from the feds + all the rest
>from state and local.  As it stands, the middle class pays over 40% in
>taxes.

What I heard was that this was approximately the optimum Federal rate.  I
also think it was without FICA.  I was responding to a previous posting
which said that lowering the tax rate to 20% would raise revenue.  I
wondered where those numbers came from.  I can't back up my number anymore
than saying "it was in the paper".  What about him?

>>Also, do you think that the deficit spending during the Reagan years
>>have anything to do with "more money into the economy?"
>
>Deficit spending during the Reagan years did not have anything to do with
>more money in the economy, rather it was that congress wanted to spend more
>money than it had, plain and simple.  This is the same with the 1990 tax
>deal, where Bush signed in hope to secure spending freezes which congress
>avoided

Non-sequitur.  Unresponsive.  Try again.

There's an old saying, "You have to have money to make money."  The classical
Keynesian way to get out of a recession is governmental deficit spending.
I don't see how you can say it had nothing to do with "more money into the
economy".  If I borrow a dollar, I remove that dollar from the economy until
I spend it.  When I spend it, macro-economic theory says that portions of
that dollar get spent and spent again, creating a multiplier effect.  If we
have a savings rate of 10%, that dollar will become 10$. (I am ignoring the
effects of taxes and goverment spending for simplicity, but they will 
reduce the amount.)

So, doesn't the goverment spending pump money into the economy?  And deficit
spending too?  In this case, does it matter which part of the goverment is
responsible for the spending?

>>Sorry, I don't think the conservatives in their big houses and country
>>clubs know what "problems of the lower and middle classes REALLY are"
>>either.  I don't agree with paternalistic liberalism, but I also don't
>>agree with laissez-faire conservatism either.  There must be a happy
>>medium.
>
>There are many liberal and conservatives that are poor and have nothing.  A
>characterization of either liberal or conservative in terms of wealth is a
>false implication.

But those are the conservatives in power, aren't they?  They certainly
aren't listening to Jack Kemp.  At least not before the L.A. Riots.

-----------------------------------------------------------------------------
hulsey%dbsun.uucp@wupost.wustl.edu (Jim Hulsey)   TBDBITL '84 ('85 Rose Bowl)
An Ohioan living in Misery (Missouri, same difference)

Watch what you say!                Won't you sign up your name
They'll be calling you a radical   So you can be their dependable
A liberal, fanatical criminal      Respectable, presentable vegetable
--  Supertramp "The Logical Song"