Wow! Why would the Republicans try to SQUASH this nonpartisan report?

So now you get to go out and do research on what factors YOU believe are driving the correlation; that's how the academic community works. I'm sure you don't have the ability to do that, as you don't know the difference between affect and effect.

 

It won't make any difference. We already know it is a false study with a pro-obama agenda. There is nothing to see here. Move along.

 

We'll see.

 

It won't make any difference. We already know it is a false study with a pro-obama agenda. There is nothing to see here. Move along.

 

As I mentioned above. OUTSIDE factors were not considered because that's not what the Republicans have been screaming about for the last couple of years. They have been saying that the current income tax and corporate tax rate is too high and is hurting economic growth. The Republicans are wrong on this claim.

The study was using current political term such as "Bush's tax cuts"...........since that's the colloquial name for them. Its what's familiar to the american people. Calling the Bush tax cuts the "Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA)" or "Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA)".........people would have no idea what they are talking about.

But even if we remove the words "Bush's tax cuts" from the study and replace it with the proper name.............that still doesn't change the findings of the study. Try again!

 

We'll see.

 

Except that no one has proven its wrong! LOL

 

Wait, what am I talking about? He's proven there IS NO CORRELATION, therefore there can't be a "correlation/causation" fallacy.

 

I'm going to go ahead and challenge you to provide one biased phrase from the actual text of the report, with page number cited (I have to add that, since I doubt you know how to do in-text citation).

If you can't, you're trolling and/or just a general moron.

 

Ok. Again, I need someone to translate this nonsense.

Don't forget: These are the same ppl who's historical data includes the earth being 6000 years old.

C'mon Dave, tell us something we didn't know!

 

(Ducks head in embarrassment.) How could I forget THAT? Gotta get my head checked!

 

I forgot a rule I learned the 1st grade. You are right - how foolish of me. I will now cede any argument over 1st grade material. I recognize your superior knowledge of finger painting, glues, colored markers, and nose picking.

I wasn't actually responding to you, so I hope you won't feel slighted that I missed that.

Still, you missed my point. The study made two errors. First, it's the correlation=causation error. Ever heard, "corrleation doesn't mean causation"? Basically, the study found that there was no significant correlation between top-tier taxes and economic growth. The assumption then made is that no correlation=no causation. Basically, because there's no significant correlation between top-tier taxes and GDP growth, taxes don't affect GDP growth. You see the error, right? The think that no correlation=no causation is the same as to think that correlation=causation.

The second error is not considering outside factors. There were many outside factors that affected GDP: immigration waves, population booms, oil crises, etc.

It's been a generally known fact for thousands of years that taxes deter economic growth. The golden age of Augustus started with tax reform, which were really tax cuts (he abolished tax farming). There's an old article on Rome & taxes written by Bartlett in 1994. But, essentially, everyone free of dogmatic propaganda can figure out that taxes deter economic growth. At the lowest end possible (anarchy) a man is able to reap the entirety of what he sows, and at the highest end (state-economy) he reaps none of what he sows. There's a clear difference in first, what trade will result (in the first, maximum, in the second, minimum). Second, there's a clear difference in incentive to produce (in the first, maximum, in the second, none - unless you put a pike to his back).

well, since you obviously don't know the correlation/causation fallacy...

 

If there is no proven correlation, then there can't be a causation fallacy. That's a basic tenet of the concept. You really are an idiot.

 

DOES ANYBODY ACTUALLY READ THE REPORT THEY COMMENT ON?

I read the report. Its incredibly simplistic. Its nothing more than a least squares fit of data, and in several cases the correlation is so weak even the study author admits its weak and worthless.

Economics isnt that simple. GDP, productivity and other such broad measures of the economy are impacted by many variables. No simple least squares fit is worth sheet, if there was such a simple relationship it would have been found decades ago and there would be no arguement.

To examine the impact of a parameter on GDP or productivity or growth or any broad metric requires a multivariable analysis examining correlation between multiple variables, and then examining the affect of the one variable of interest when all other variables are held constant. Not a trivial task.

This study is worthless.

 

If there's a direct correlation between tax rate (as claimed by Republicans) and GDP growth, it should have been seen in this study. Was it?

 

If there's a direct correlation between tax rate (as claimed by Republicans) and GDP growth, it should have been seen in this study. Was it?

 

So the Republicans claim of reducing taxes to spur economic growth is false? Remember, when faced with the deficit/debt, Dems were willing to raise taxes and reduce spending. The Republicans were only willing to consider a reduction in spending and they claimed that Dems attempt to raise taxes would hurt the economy and that we needed to lower them more. They said high taxes were hindering economic growth or recovery and that's how they tried to defeat the raising of taxes(letting bush tax cuts expire) to conquer the deficit/debt.

First sentence: See "debt reduction"?
Income tax rates have been at the center of recent policy debates over taxes. Some policymakers
have argued that raising tax rates, especially on higher income taxpayers, to increase tax revenues
is part of the solution for long-term debt reduction.

We argued for a tax hike(letting bush tax cuts expire) to reduce the debt.

Also notice this:
Advocates of lower tax rates argue that reduced rates would increase economic growth, increase
saving and investment, and boost productivity (increase the economic pie). Proponents of higher
tax rates argue that higher tax revenues are necessary for debt reduction, that tax rates on the rich
are too low (i.e., they violate the Buffett rule), and that higher tax rates on the rich would
moderate increasing income inequality (change how the economic pie is distributed).

You see the Republicans argued against any tax hikes(letting the bush tax cuts expire) because it would hurt economic growth? Democrats want the pie distributed differently.

Again, they were not considering any outside factors because that's not what the Republicans used to defeat the bush tax cuts expiring. When the Dems wanted to lower the debt, by raising taxes(letting the bush tax cuts expire) and by reducing spending, the Republicans were ONLY supportive of reduced spending and claimed that lower taxes would cause economic growth. Were they correct? According to the study, they found NO CORRELATION.....therefore the Republicans were dead wrong!

 

spu·ri·ous   [spyoor-ee-uhs]
adjective
1.
not genuine, authentic, or true; not from the claimed, pretended, or proper source; counterfeit.
2.
Biology . (of two or more parts, plants, etc.) having a similar appearance but a different structure.
3.
of illegitimate birth; bastard.

 

Its a terrible report and its worthless. He does state there is no relationship between top tax rate and productivity growth rate, and he is sort of right but for the wrong reason. Its been known for decades that in the US tax code there is no relationship between TOP TAX RATE and productivity (or federal revenue, or savings rate, or many other things). Thats because TOP TAX RATE alone is WORTHLESS.

Think of it like this - raise the top tax rate from 38% starting at $388,000 to 99% starting at $10 Billion. Anything change? No, but taxing those rich dudes at 99% sounds impressive.

---

As to the study itself, its crap. Right away the study makes a fatal flaw - he does a cross-sectional analysis. For example,

The simple relationships between the private saving ratio and the top tax rates are displayed in the
top two charts in Figure 3. Each point represents the private saving ratio and top tax rate for
each year since 1945. The nature of the relationship is illustrated by the straight line in the figure,
which graphically represents the correlation (fitted relationship or fitted values) between the two
variables. The slope of the fitted values line indicates how one variable changes when the other
variable changes. ​

He compares the top tax rate of year X with the productivity of year X. Wrong. There is a lag in the economy, he has to do a time-series analysis so the effect of tax rate in year X can be tracked in year X, X+1, X+2, etc.

But then tax policy changes and the tax rate in year X+2 may change.

He has to do a multivariable time series analysis to try to decouple the impact of all the changes in tax rate, plus the many other variables that affect productivity (natural disaster, war, changes in tax credits and deductions, other policy decisions such as Fed interest rate, etc). Then he has to try to determine the relationship between the 2 variables of interest - in his case tax policy and productivity - when all other parameters are held constant.

Its not easy which is why there is so much debate over tax policy vs. productivity. NOBODY has mathematically proven an answer.

 

If there's a lag, as you say, why are we criticizing Obama for the slow recovery instead of Bush?

 

No, that's where you are wrong.

1)The Democrats wanted to raise taxes(let the bush tax cuts expire) to help reduce the DEBT. So, pointing out that 'there's a lag in the economy' has nothing to do with the reason why Democrats were trying to let the tax cuts expire. It had nothing to do with economic growth.
2)The Democrats wanted to let the tax cuts expire and the opposition(Republicans) claimed that letting them expire would hurt economic growth. According to the study, the Republicans are wrong since raising or lowering taxes has no correlation to economic growth.

Now, if this study found no correlation between raising taxes and debt reduction, then it would prove democrats are wrong.

 

What I want to know is that if there is no correlation between tax rates for the rich and GDP...................why is "lag" any issue at all? Should it matter if it moved at the speed of light when there is absolutely no correlation between tax rates for the rich and GDP in the first place?

 

Some things have a short lag before you see an impact, such as a cut in the payroll tax may take a month or 2 to show up. Other things have a longer lag, such as a deduction for manufacturing which may phase in over a year or two since it takes companies time to build facilities and develop customers. Some things have a very long lag, such as spending on education which may take decades to show up (public school reform takes years, then kids have to go through the new schools, get jobs, mature, and then you see the benefits).

But for almost everything the lag is much less than 4 years. You can say obama inherited a bad economy and he did, but the economy today is defintely a reflection of the dems and obama.

And the economy is not time invariant. That means people react to future policies before they are actually implemented. If the govt says the tax rate is going to be raised to 90% in 2 years, people and business start reacting today.

So when obama and the dems passed all that big legislation to "fundamentally transform America", people reacted immediately. Businesses dont know exactly what the "transformation" is but its safe to assume from the rhetoric and tone thats its not going to be good, so they play it safe and hunker down and prepare for the worst. Same with employees, they dont know whats going on with their job or health care, they dont take out loans or buy a new car, they pay off their debts and save as much as they can.

Thats why I say the dems idiots. They did a stimulus to energize the economy, and at the same time did all this other legislation (obamacare, dodd frank, epa) that stopped the economy. The immediate positive impact of the stimulus was canceled by peoples anticipation of the negative impact of all the legislation.

 

This is the biggest load of partisan bull**** in the world, and I'm sure you realize this. "The lag for Republican policies takes hundreds of years to see, that's why there's no correlation! But the lag for Democratic policies is instantaneous and that's why Obama is an idiot and we need to fire him."


You're an absolute joke.

 

Troianii and Gator...........how are you going to learn that you are wrong if you continue to run away without learning?