Raise Taxes If You Don't Want Interest Rate Hikes

kingarthur65 · 2018-08-21T19:34:52.371Z

zantax:

Have any figures on how much you have to raise taxes to reduce inflation by a point? In the end what you are really saying is, we need to make the economy worse by raising taxes to stave off inflation. Yet Reagan managed to reduce inflation while improving the economy, increase GDP and lower unemployment so I would have to say, I’d rather have higher interest rates.

Reagan also increased taxes. When dealing with tax rates, inflation, interest rates… you should take a lot of factors into account. As I see it the current tax rates were just plucked out of the air. Any adjustments should be studied.

zantax · 2018-08-21T19:42:21.706Z

Sure like I said, he raised them when the spending cuts didn’t materialize, but it was still a tax cut in total.

dantes · 2018-08-21T19:43:39.801Z

I’m the wrong guy to ask for exact figures or estimations. But the principles seem fine.

A stricter money supply is harmful to the economy which is what caused the 1981 recession.

You don’t have to raise taxes. Cut spending would also harm the economy and reduce inflation.

zantax · 2018-08-21T19:45:47.043Z

dantes:

I’m the wrong guy to ask for exact figures or estimations. But the principles seem fine.

A stricter money supply is harmful to the economy which is what caused the 1981 recession.

You don’t have to raise taxes. Cut spending would also harm the economy and reduce inflation.

Or tighten credit and let old people make some money outside the stock market again.

Drs · 2018-08-21T19:50:56.874Z

Who are they going to make money off of if people can’t afford mortgages?

What about when the property they have loses value because home prices need to come down in order for people to afford mortgages with higher interest rates?

The same old people who wanted tax cuts and social security and the world’s largest military and got that by government funding by borrowing money from social security.

dantes · 2018-08-21T19:55:50.198Z

Yep. Best find a way to stick it to the younger generation while you still can.

Drs · 2018-08-21T20:12:29.676Z

You don’t burn it you pay off the debt. 1 percent vat tax on non food items would represent about 1 trillion dollars in tax revenue to be used to pay down the debt.

If consumer spending slows some you also can lower your trade deficit as you are not driving up the dollar with interest rates discouraging exports.

reflechissez · 2018-08-21T20:42:49.910Z

zantax:

dantes:

Since spending is completely disconnected from tax rates, I would say that increasing taxes necessarily decreases the deficit which results in lower inflation.

Have any figures on how much you have to raise taxes to reduce inflation by a point? In the end what you are really saying is, we need to make the economy worse by raising taxes to stave off inflation. Yet Reagan managed to reduce inflation while improving the economy, increase GDP and lower unemployment so I would have to say, I’d rather have higher interest rates.

Reagan did not do those things. He especially had nothing to do with reducing inflation. The economy, GDP and unemployment are functions of one another – not separate things.

reflechissez · 2018-08-21T20:44:24.106Z

Drs:

Who are they going to make money off of if people can’t afford mortgages?

What about when the property they have loses value because home prices need to come down in order for people to afford mortgages with higher interest rates?

The same old people who wanted tax cuts and social security and the world’s largest military and got that by government funding by borrowing money from social security.

Yeah. People want two sets of interest rates – one for borrowing and one for lending.

Drs · 2018-08-21T22:20:31.282Z

The opposite is true most times. Lending rates are higher than savings.

reflechissez · 2018-08-21T22:33:42.124Z

Drs:

The opposite is true most times. Lending rates are higher than savings.

I was actually referring to mortgages (borrowing) and CD/MMF (lending).

Drs · 2018-08-21T22:35:01.243Z

Ah ok gotcha

zantax · 2018-08-21T23:50:35.030Z

Drs:

You don’t burn it you pay off the debt. 1 percent vat tax on non food items would represent about 1 trillion dollars in tax revenue to be used to pay down the debt.

If consumer spending slows some you also can lower your trade deficit as you are not driving up the dollar with interest rates discouraging exports.

Uh huh, I believe it would be used for the debt and we wouldn’t ultimately end up with debt, the same or higher income tax plus a Vat tax. Because I am stupid.

Drs · 2018-08-22T00:16:09.369Z

Admitting is half the battle now try to fix it.

zantax · 2018-08-22T00:17:12.873Z

Drs:

Admitting is half the battle now try to fix it.

You can’t fix stupid, if you were smart, you would know that.

Samm · 2018-08-22T06:38:04.359Z

Drs:

I never understood why not use taxes to boost or slow down the economy as needed instead of a central bank.

Because taxes cannot be raised or lowered quickly, and it requires the consent of Congress. Also, frequently fluctuations of tax rates plays Hell with the private sector.

Samm · 2018-08-22T06:48:00.936Z

Tilly_jow:

Drs:

I never understood why not use taxes to boost or slow down the economy as needed instead of a central bank.

There was no way interest rates were going to stay at the low level they have been.

That is exactly right. Furthermore, when they are at such low levels they cannot be lowered further to assist the economy. That tool is useless when the money is nearly free.

Samm · 2018-08-22T06:54:51.843Z

JayJay:

The guy managed to go bankrupt with almost every venture he touched.

That’s a gross exaggeration.

Samm · 2018-08-22T07:00:35.723Z

SaysWho:

It does affect me. I have money.

If you have money (meaning you don’t need to borrow) raised interest rates is generally to your benefit, particularly when coupled with lower taxes.

Drs · 2018-08-22T10:15:15.785Z

As I stated use a vat tax. That can be used to slow down an over heated economy. It would have also been good to slow the trade gap by reducing consumption without starting trade wars.