Redpill me on Tax Breaks
Why are tax breaks good for the economy while printing money is bad for the economy
Tax Breaks
Ryan Brooks
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Elijah Hall
Money doesn't disappear when it's taxed you fucking idiot. It's used to pay people for services or goods on behalf of the population.
Whereas printing money "creates" money out of thin air, devaluing the rest.
Nolan Wood
use your brain and figure it out yourself
Ayden Barnes
1 is a straw man argument that nobody uses
2 is true regardless of taxes
Tyler Clark
>Money doesn't disappear when it's taxed you fucking idiot. It's used to pay people for services or goods on behalf of the population.
It's used to pay off the national debt, so yes it's destroying money
youtube.com
When a government pay for goods and services it does so through debt. The taxes are used to pay off that debt. So in a sense taxes are taking money out of the system. The government could and does spend money without any taxes.
Why do you think inflation happens in the first place?
Luis Roberts
>1 is a straw man argument that nobody uses
It is not a strawman. People often argue that if you raise taxes then people can't invest that money back into the economy. So you're taking the money out of the system.
They don't use these exact words but this is what their argument amounts to.
Brandon Rogers
Both are true
I dont get it
Carter Hill
A tax cut increases GDP. Full stop. It raises the GDP by a dollar amount to the tax cut multiplied by (Marginal Propensity to Consume) / (1 - Marginal Propensity to Consume)
where MPC is the fraction of money received that gets spent.
Printing more money indefinitely without any change to GDP is how you end up like Zimbabwe with trillion dollar bills that are worth nothing. OP, read a book about economics.
Nicholas Garcia
>It's used to pay off the national debt, so yes it's destroying money
The national debt isn't some black hole they throw money into. It's money leant from people investing in government bonds. The "national debt" is the money owed to those people who bought those bonds. When they pay the debt off, they are fufilling those bond orders, meaning private investors are then given that money, hence, being put back into the economy.
The problem with the national debt is that the money generally get's siphoned off to very wealthy lenders and the problem is the government takes on debt in the first place.
The only way money could "disappear" is if someone physically destroys it. Even if the government decided to pay 100 trillian dollars for a giant pink dragon dildo building, that may be a massive waste of money, but it doesn't mean it's gone. Some private individual now has 100 trillian dollars and is likely to spend it on economy shit.
Adam Price
Dollar amount *equal to the tax cut multiplied etc.
Jeremiah Hall
>Why are tax breaks good for the economy
Because government is retarded.
>while printing money is bad for the economy
See above.
Brandon Bell
>Both are true I dont get it
If printing money is bad solely because it produces inflation, then why is reducing taxes good?
Lower taxes means an increase in money supply which also produces inflation.
>The "national debt" is the money owed to those people who bought those bonds. When they pay the debt off, they are fufilling those bond orders, meaning private investors are then given that money, hence, being put back into the economy.
The central bank is the de facto main purchaser of these bonds. Once the debt to the Federal Reserve/ECB/BOE is paid off it doesn't really go back into the economy. You've reduced the money supply
Wyatt Morales
Big government costs a lot of money goy. Remember when Hillary was talking about tax cuts being a ludicrous ans terrible idea? We should raise taxes. In fact we should give the government all of our money and let them decide for us how it should be sent.
Cameron Cox
Doing both takes a wrecking ball to the country. Which is the goal of libtards.
Nolan Watson
Because reducing taxes doesn't create money out of thin air. It's a redistribution of ***ALREADY EXISTING*** money back into the hands of the people. It is the people who ultimately drive the economy, not the government taxing them. ***TAXES DO NOT LOWER THE MONEY SUPPLY. LOWERING TAXES DOES NOT REDUCE THE MONEY SUPPLY. PRINTING MONEY ENDLESSLY ARTIFICIALLY INFLATES THE MONEY SUPPLY.***
Seriously, you meme-flag-loving faggot, read an economics book for once in your stupid life.
Isaac Stewart
OK Why does one increase the GDP but the other turns into Zimbabwe
You're saying that the tax cut increases gdp by a factor of x*(M)/(1-M)
Where x is the money the tax cut saved them
M is their marginal propensity to consume
Then why doesn't that imply GDP increases as a result of money printing where y = the amount of money printed
gpd increase = y *(M)/(1-M)
Lincoln Cruz
We went through this the other day. Walter Williams discussed this many years ago. We do not need taxes AT ALL. The gummint can just print the money it spends. Nb4 “It’s inflationary!” Yes it is. For it to work gummint would have to limit spending to 7% of GDP. Nb4 “but there wouldn’t be money for corrupt politicians”. Yeah. That is the point.
Pt: you can’t
Jaxon Mitchell
Government cannot redistribute wealth.
Government can only redistribute poverty.
Christopher Roberts
>It's a redistribution of ***ALREADY EXISTING*** money back into the hands of the people.
If they invest that money it's going to cause money printing anyways by regular banks. So by not taxing them people will leverage their money via the banking system to create more money
Nathaniel Adams
>Why are tax breaks good for the economy
Because it leaves more money for private investments, simultaneously increasing ability and incentive to invest.
This is assuming the tax breaks are general, and not designed (as they often are) to give artificial advantages to some businesses over others. (e.g. big businesses usually pay a lot less taxes than smaller businesses, arresting the development of competition).
>while printing money is bad for the economy
Same reason other taxes are bad for the economy. The state, through printing money, lays claim to a portion of the economy, which is the same as taxing, the only difference being how it's noticed.
Taxation through inflation also cannot be dodged; even if you save your money in precious metals or other objective currency to escape the direct devaluating effect of inflation, the government was still able to lay claim to a portion of the economy leaving less trade for your savings and investments.
Ryder Barnes
>Taxes take money out of the system
>Take breaks = devaluation
Yeah, but I shouldn't have to pay money for my civil rights to the gov.
Ryan Moore
>Taxation through inflation also cannot be dodged
But they both create inflation. The monetary system, as it exists today, allows ordinary people to inflate the money supply and thus create inflation. The more money they have the more inflation they can cause.
Elijah Stewart
>Some private individual now has 100 trillian dollars and is likely to spend it on economy shit.
those private individuals just hand it over to oligarchs, they don't spend the money back in, in any meaningful way
Carter Myers
Because the tax cut is an already existing sum of money rippling through the economy. A tax cut does not increase the money supply. I don't know where you got that dumbass idea, but it's wrong.
Let me explain it to you like this:
The government decides to cut taxes. That means I get to keep more of my money that I earn by adding value to the economy through my work. Say I now have thirty dollars. I then take this money, and I give it to a guy who cuts my lawn in an amount of, say, twenty dollars. He takes the money I gave him and spends ten dollars on lunch. That thirty dollars I got back added another thirty dollars of value to the economy because twenty of it procured a service and ten of that procured goods. A tax cut of thirty dollars added an *extra* thirty dollars to the GDP.
Printing more money artificially inflates the money supply. No value is generated in the economy as a result of this action because you've just bumped up supply without even considering demand and the purchasing power of an individual dollar goes down.
These are not even remotely equal proposals. Where did you get this retarded notion that money printing equals a boosted economy?
Cooper Morris
taxes take money out of the system
and printing more of it devalues it
how dense are you ?
Oliver Ortiz
Take your baby boomer platitudes and shove them up your ass. I said money, not wealth. Those are two different things in economics. Taxes redistribute money from the people to the government. A tax cut distributes money back from the government to the people.
Tax cuts do not create inflation. That's a blatant lie. Seriously, who told you this nonsense?
Henry Young
>Because the tax cut is an already existing sum of money rippling through the economy. A tax cut does not increase the money supply. I don't know where you got that dumbass idea, but it's wrong.
People have more money > they leverage that money via the banking system > this creates more money and thus inflation
Nicholas Sanders
>The monetary system, as it exists today, allows ordinary people to inflate the money supply and thus create inflation.
And how the fuck do you think that happens.
I don't know what the fallacy you're committing here is called but you're lumping an unrelated bad in with tax breaks to make tax breaks look bad because of that unrelated bad. When it is that unrelated bad (printing money) that is the bad thing that needs to go die in a fire.
You also have no means to evaluate whether the potentially greater inflation caused by greater investments following tax breaks are a bigger bad than that increase in investment is a good. But they probably aren't because without government interference banks can make rational evaluations about what loans make sense or not.
Landon Bennett
Pause to think about it for a moment and you will realize I am on your side. Let’s call it friendly fire.
Easton Smith
>the banking system
So this isn't about tax cuts at all. You're talking about fractional reserve banking versus money printing. Here's the deal, your argument is stupid and this is why: fractional reserve banking does inflate the currency but you imply a proposal to reduce the amount of money of money that people are allowed to have. If you reduce the amount of money that people are allowed to have, you cripple GDP growth because nobody can buy goods or services and any money will become worthless in time because of stagflation.
I get that you want to have a valid point, but you really don't know what you're talking about.
Zachary Thomas
youtube.com
really activates your koshers.
Kevin Mitchell
>The government decides to cut taxes.
>hat means I get to keep more of my money that I earn by adding value to the economy through my work. Say I now have thirty dollars. I then take this money, and I give it to a guy who cuts my lawn in an amount of, say, twenty dollars.
If you increase the amount of money in circulation you cause inflation. Which is what's happening here
>I don't know what the fallacy you're committing here is called but you're lumping an unrelated bad in with tax breaks
I'm trying to show that the problem is inherent to the monetary system as it exists today.
Luis Cooper
I know you agree. But we're talking real, in-the-weeds economics here, not vague platitudes. Sorry if I'm a dick, though. OP being economically sub-literate is really pissing my shorts.
Daniel Bennett
>If you reduce the amount of money that people are allowed to have, you cripple GDP growth
Right but suppose I just print off more money, that would also increase the GDP at least in nominal terms
Let me give you a story about why the US isn't Zimbabwe right now
In the year 2000 there was a real bad guy called Saddam Hussein who wanted to price Iraq's oil in a non-US currency. This would have destroyed the demand for US currency and caused inflation. So the US government printed off some money to pay its massive army went over their and killed him
Then Gaddafi tried the same thing and wanted his own currency. The US government printed off some money got some drones and we came, we saw, he died.
This stabilized the petro dollar and gives the US currency its value because other governments have to hold the US dollar in reserve if they want petroleum.
Mason Phillips
>in circulation
You have no idea what that term means economically. If a dollar is not in a Reserve account at the goddamn Fed, that dollar is in circulation. It could be in your congressman's hand or buried in your backyard, it's still in circulation. It could be tax revenue or a tax cut. It doesn't matter. Either way, it was always in circulation.
When you print money, you're adding into circulation. A tax cut moves money from one area to another, but it's always in circulation the whole time and does not change the money supply just because the government suddenly isn't taking it from you.
Just stop. You don't know what you're talking about.
Hudson Morales
It should be self explanatory..If you understood the concepts.
Pic either is bait or shows a lack of ignorance because it doesn't make any sense.
Hunter Kelly
>>I'm trying to show that the problem is inherent to the monetary system as it exists today.
No shit.
Trying to tack it onto tax cuts is the part where you're being a total fucking retard.
Tax cuts, regardless of fractional reserve banking, increases the share of the economy in the hands of the people rather than the government.
Which is always good. Even if the banking system allows for inflation from the private population. Because that inflation of the supply will still be in the hands of the people investing, instead of uncle sam. But that inflation still isn't a fucking effect of the tax cuts so stop trying to connect the two.
Noah Sanders
Yes, inflation does cause nominal GDP growth. But nominal GDP isn't real GDP. Real GDP is its own measure. Real GDP is what we want to increase. I don't see how you're helping yourself with a literary stumble about economic terms you heard a couple times then never bothered to study. I also don't get why suddenly the boogeyman is now America's hard-on for oil instead of the fractional reserve banks. You clearly don't understand basic micro or macro economic principles. It feels like you're just angrily shaking your fist at economics and ranting incoherently about "the bank, the money supply, the oil" without truly understanding any of those things.
Parker Russell
Right but we always were taxing people, and the currency was always inflating, which means the money supply (for whatever reason) was always growing
If you reduce taxes but keep all of the other machinery the same (the keyword is all of the other machinery), You will increase the money supply and this increase the aggregate money supply and thus the inflation.
The argument for reducing taxes is always about putting more money in people's pockets, this amounts to an argument for increasing the money supply.
Wyatt Smith
Tax breaks and other corporate welfare are how corporations shift the burden of federal revenue from the corporations and wealthy to the Middle Class.
>Why are tax breaks good for the economy while printing money is bad for the economy
Taxes are a form of behavior modification. Incentives are used to encourage market behavior that improves the economy in some way. Unfortunately they are abused by the corporate lobbyists who can afford the most Congressional bribery.
Evan Perez
>Trying to tack it onto tax cuts is the part where you're being a total fucking retard.
I'm not trying to tack it onto tax cuts I'm trying to say that fiddling around with the tax rate is like trying to use buckets to stop a boat from sinking.
> I also don't get why suddenly the boogeyman is now America's hard-on for oil instead of the fractional reserve banks.
They're related. America uses oil to give the money printed from the fractional reserve its value.
Sebastian Jones
That's why taxation is usually theft, glad we agree, and that's also why conservatives are against it, but printing money is a entirely different topic.
If you have a room with 14 people who get two dollars for daily work and there's a 15th person responsible to supply apple for two dollars, if and only if he gets the amount of work required for him to pay for the supply of apple, in that case there should no problem for the population to not starve themselves, since the supply will always meet the requirement to satisfy the demand.
Now, if 5 of those 14 people started getting one dollar magically per day they would eventually be able to buy without working for days. Which would crash the market since there isn't the required amount of work to comply with the supply.
Is that easy.
Asher Nelson
You don't have to increase the money supply to create inflation. If a burger cost a dollar last year, but this year costs a buck fifty, there was inflation.
>this amounts to an argument for increasing the money supply
No it doesn't. It really doesn't. The "money supply" does not equal "the money in the people's pockets." Shut up and read an economics book. You don't know what you're talking about. You just assume that you know what all these terms mean. You don't know what they mean.
Henry Nelson
Printing off money from thin air can cause real gdp growth as well. Perfect example of this are the wars conducted in Iraq and various other middle eastern shitholes which stabilized the petro-dollar.
If they hadn't done that and various middle eastern countries had stopped pricing their oil in dollars, the US economy would have been crippled by now.
Henry Ortiz
>a tax cut increases the aggregate money supply
At this point, I have to assume that you took and failed at least one macroeconomics course. I can't imagine somebody using this many legitimate terms incorrectly.
Bentley Bell
A. I probably understand the monetary system better than you
B. I didn't take any macroeconomics courses, my degree was in a quantitative STEM field. While you're arguing about semantics, which is all you can do, you haven't been able to refute any of my points.
Jaxon Gonzalez
>Perfect example of (printing off money from thin air causing real GDP growth) are the wars in the Middle East.
Yeah, no. This is just like the "tax cuts equal fractional reserve banking" shitshow. Except now it's "money printing/fractional reserve banking equals wartime economic stimulation."
You realize government expenditures to outfit the military also raise GDP, right? It's not the money printing that did it. It's the helicopters and the small arms and the missiles and the fighter jets and the tanks, all of them bought, that raised goods and services produced in our economy.
Why am I even wasting my time talking to you? Are you autistic?
Austin Flores
Tax cuts increase the amount of money "in people's pockets"
Ceteris paribus(did I use this term correctly? lol phag), this increases the amount of money in circulation and therefore causes inflation.
Aiden Cox
Sorry I'm talking on a completely different level here. I'm saying the entire economic system would have collapsed had they not invaded Iraq. Though yes that also increased GDP.
>It's not the money printing that did it.
The money printing allowed them to fund the war effort. Why do you think the national debt rose as a result of the war? Are you really being this daft.
I honestly think an economics education makes you ignorant of economics.
Isaac Robinson
Ian Hernandez
If you call a computer a television, you're wrong. If you call a house a tree, you're wrong. If you call a tax cut a change in the money supply, you're fucking wrong. Words have meanings, and you clearly don't know any of the meanings behind what you're saying which is why you keep saying things which are wrong.
And it isn't just the words that you're wrong about. It's the concepts. You obviously think that fractional reserve banking is caused by tax cuts. You've been conflating the two this whole time.
You simply can't admit that you that somebody who studied economics knows more about economics than you, a guy who has not studied economics.
Jose Hill
>different level
A lower level.
Luis King
>You obviously think that fractional reserve banking is caused by tax cuts.
I have never said that. Perhaps your reading comprehension is off. I said fiddling around with the tax rates is like trying to remove water using buckets out of a sinking ship.
> If you call a tax cut a change in the money supply
I did not call a tax cut a change in the money supply. I said it causes a change in the money supply - the key word is causes. Do you dispute this?
Nathaniel Sullivan
Tax breaks usually aren’t actually good for the economy and printing money usually leads to inflation.
Evan Martinez
Tax breaks free up money that would previously have gone to the govt. so it can be spent elsewhere.
Printing money, while it does increase the amount of money in circulation, by proxy devalues the money in circulation. Though, you also can't have too little money in circulation. It's complex, but also not.
Asher Myers
Semantics. You've been equating the outcome of tax cuts and increasing the money supply this entire time. It's just fundamentally wrong. Repeating the same incorrect idea doesn't make you less wrong.
sage goes in all fields
Jason Watson
OP, you're dumb as fuck. I think the tax cuts proposed in the Republican reform plan are fucking retarded, but if you cant figure out the difference between not taxing wealthy people and devaluing currency by printing more money and distributing it, just destroy your computer and don't go back on the internet.
Luis Brooks
Ok humor me. Explain how it's wrong in detail
My argument is if you reduce taxes, people have more money. If they have more money then there's an increase in the money supply (Ceteris paribus). Where's the error ?
"Although the Treasury can and does hold cash and a special deposit account at the Fed (fed funds), these assets do not count in any of the aggregates. So in essence, money paid in taxes paid to the Federal Government (Treasury) is excluded from the money supply. "
Leo Garcia
tax takes buying power (in this case raw money) and gives it to the government.
inflation (printing money) makes the money of those who saved worth less, while the government again gains more money and transfers again buying power from the citizen to the government and is nothing more but a hidden tax people are too stupid to realize
pic related explains the banking system
Dominic James
I don't have the patience left to put up with you. You keep repeating terms you don't understand. Terms like money supply. I've already explained why you're wrong. Everyone reading this thread knows you're wrong. I'm not going to sit here and pretend that were on equal terms in this conversation. We're not. And you're obviously not here to learn about economics, which you yourself have admitted you never studied.
Brayden Morris
Tax breaks are a way to move the countries wealth to the oligarchs.
Oliver Sanders
>And you're obviously not here to learn about economics, which you yourself have admitted you never studied.
Well I certainly wouldn't spend $25K getting an undergraduate degree in economics which means fuck all in the real world.
> I'm not going to sit here and pretend that were on equal terms in this conversation.
Ok just answer this question, how do you increase the amount of money in people's pockets (via reducing taxes) without increasing the money supply(Ceteris Paribus)? It's a simple question.
Owen Myers
The reason you can't is economics is like the priesthood. They're engaged in mentally fapping about terminology rather than engaging with the real world. Which is why they haven't been able to predict anything, ever.
"The OECD’s Economic Outlook, published in May 2007, stated that its “central forecast remains indeed quite benign” as it predicted “a strong and sustained recovery in Europe”. Some dashboard that turned out to be."
RIght before the economy crashed. Economists make weather men look good.
theconversation.com
Justin Jones
I'll say it just one more time:
The money supply is not the same as the money in the pockets of the people. The money supply includes all money in circulation. Money in circulation includes tax revenues which the government spends and the extra money in your pocket from a tax cut.
How about I phrase it this way:
You have a box with a five pound weight in the corner of it. You take that five pound weight and move it to a different corner. Does weight of the box change? No, it does not. All you did was move the weight around inside of it.
A tax cut moves one part of the already existing money supply from one hand to another hand. It does not change the money supply itself. You are not introducing new money to the economy. You're just moving it around.
If you still don't get it, then that's a problem with you, not the bank, nor the money, nor economics.
Cooper Ortiz
>fapping about terminology
>"So what if I say a cat is an alligator, it's just terminology"
If you were talking to meteorologists, you'd probably say that snow is rain and wind is sunshine.
You studied pubic hair in college and if you say I'm wrong it's because you're fapping over terminology.
Juan Richardson
If you take my money I have less. If you make more of something it will be worth less even to the IRS.
What exactly is so hard to understand about this?
Adrian Ross
Printing money increases debt
Reducing taxes increases the amount people are willing to pay
Luke Bennett
Tax dollars are used to pay (((interest))) or usury you fucking retard
Owen Murphy
Right but see here's the problem, the government uses the money collected via taxes to pay off the deficit. You mentioned that this is just money going to a different corner, well in a sense you're right if it were not the central bank being the major holder of these treasury bonds.
By paying off this debt to the central bank you're in effect destroying money. Money in our current system is created via debt via the banking system and by paying off debt you effectively destroy money and reduce the money supply.
Jaxson Hughes
"You can play the most spectacular game of chess in the world, but if you're playing against a pigeon, it's just going to knock over all the pieces, shit all over the board, and strut around like it was victorious no matter what you do."
Sage goes in all fields, anons :^)
Brody Lee
Hunter Powell
Yes, this is all basic stuff. Buying and selling bonds in large enough quantity will change interest rates which affects investment which affects how much people have in their bank accounts which affects the money supply because of fractional reserve banking. That's monetary policy.
Tax cuts have nothing to do with monetary policy. Tax cuts are fiscal policy. A tax cut grows real GDP and has nothing whatsoever to do with the money supply. If I get to keep more money because of a tax cut, I'm not going to put it all in the bank. It's not in any way guaranteed to increase the money supply which is what printing more money would do.
So, to answer your original question:
Tax cuts grow GDP. Printing money introduces inflation.
You still refuse to understand any of this, and will likely continue to wallow in autistic spluttering on this topic forever.
Josiah Richardson
You missed the major thesis of what he was saying: The BOE and commercial banks are creating money whenever they issue a loan.
youtube.com
>If I get to keep more money because of a tax cut, I'm not going to put it all in the bank. It's not in any way guaranteed to increase the money supply which is what printing more money would do.
So we both agree putting our money in a bank can increase the money supply via the fractional reserve. Paying off debt contracts the money supply. quora.com
So when that loan is paid off, the money is effectively destroyed. Taxes aren't so much a redistribution but are instead a way to pay off the government deficit to the banking system (which includes the central bank).
Liam Hernandez
No, paying off debt does not reduce the money supply. It can reduce inflation, but not the money supply. You're just making shit up. Just stop. Pick up an economics book and read about it if you want to opine about it.
Liam Morris
>paying off debt does not reduce the money supply
Ok let's take what the BOE guy said
"Banks issuing loans creates money"
If the bank created the money in the first place via the loan and you just removed the (principal + interest) from the money supply by paying off the loan, You have by definition reduced the Money supply. There is no way around this.
>Pick up an economics book and read about it if you want to opine about it.
So I'd understand as little about economics as someone who spent 25K on a worthless economics degree? No thanks.
Grayson Sanchez
>No, paying off debt does not reduce the money supply.
"Contraction of deposit currency, as bank loans are paid off, and to a slowing down of velocity of circulation. This contraction of deposits and of their velocity, precipitated by distress selling, causes"
-Irving Fisher (paraphrased)
en.wikipedia.org