Obama Tells Entrepreneurs “You Didn’t Build” Your Business

[mrbill]

These guys are just running out of ammo, and they know we'll have Obama for 4 more years. So, the Rove gang will have to come up with new and even more outlandish lies to try to persuade the GOP faithful.

Taxes are the lowest since Eisenhower, but why confuse the deer eyed with facts, when Glenn Beck lies will do?

 

[piezoe]

Quote from jem:

...
1. Tax cuts... which were followed by an increase in revenues.

Jem, We've been through this many times now. There are no examples of revenue increases following on the heels of tax cuts that were not also accompanied by increased government borrowing and spending. To put it in very plain English, it is either tax increases or government spending fueled by borrowing that increases revenues, not tax cuts. So what is your point?

Quote from jem:

...
2. Look at maps of countries influenced by the United Soviet Socialist Republics before and after Reagan.

You're once again on shaky ground, suggesting, I suppose, that Reagan had something to do with Soviet disintegration. Possibly he did, but there is no good evidence to support that view. Consider, however, that a number of Soviet experts predicted the Soviet fall long before Reagan was President. Moynihan, for example, predicted it when he was in Ford's Cabinet. In fact, Moynihan was so adamant in his view that he became somewhat of an embarrassment to the administration, and according to Moynihan, Ford fired him. (In truth, Moynihan, sensing that Ford was going to fire him, resigned.)

 

[Tsing Tao]

Quote from piezoe:

Jem, We've been through this many times now. There are no examples of revenue increases following on the heels of tax cuts that were not also accompanied by increased government borrowing and spending. To put it in very plain English, it is either tax increases or government spending fueled by borrowing that increases revenues, not tax cuts. So what is your point?

I guess I'm confused as to what your point is. Are you saying that revenue goes up, or down, from tax increases?

 

[failed_trad3r]

Quote from sledgeyum:

RR should have never compromised with the dems.

Socialists are eachothers friends. It's sounds like a compromise, but in reality is it true friendship.

 

[piezoe]

Quote from Tsing Tao:

I guess I'm confused as to what your point is. Are you saying that revenue goes up, or down, from tax increases?

Well not exactly. It does not go up or down from tax increases, it goes up!

Tax decreases not accompanied by commensurate decreases in spending cause deficits. Increased government spending increases revenues -- though there is a time lag between spending increases and the consequent revenue increases. Spending that exceeds revenues causes deficits.

I hope this is not too much nuance for you to handle. Probably not for you, but it is too much for Jem.

Seriously, this issue has been studied by economists ad nauseam and you can access many of the studies via the internet if you care to. It's also been discussed ad nauseam on ET, but it seems the myth that cutting taxes raises revenues, like a good cockroach, refuses to die.

It is only in the ideal world, where perpetual motion machines exist, and in the pea-sized brains of Republican politicians that cutting taxes increases productivity enough to result in a net increase in revenues.

Here is one of many links.
http://rricketts.ba.ttu.edu/Tax Rates and Revenues.htm

__________________________
For the benefit of the naive, I might add a practical observation. Cutting taxes while starting a 4 trillion dollar preemptive war, besides killing and maiming a lot of nice people you've never met, leads to financial disaster and big time inflation after you are out of office.

 

[Ricter]

Quote from piezoe:

Well not exactly. It does not go up or down from tax increases, it goes up!

Increased government spending increases revenues ...

Except where crowding out is occurring, right?

 

[jem]

1. You have not shown anything Piezoe. You have just made a bunch of qualifying statements. Big deal we already know every situation is unique.

I gave you links showing that after 4 different tax decreases including..... melon kennedy reagan... revenues went up.

There is always away to distinguish every success of conservative thought. Did Revenues go up after 4 different tax cuts...
Hell yes they did.

What were the reasons... that is debatable. It was probably a combination of investors seeing higher nets and a debased dollar because dems would not balance the budget. .

What we can not be doing is taxing more and spending more.
That debases the dollar (destroying the middle class - and most income taxes cause a decrease investment.




2. I was in college in d.c. to 1986. At GW. My professor wrote the books that briefed Congress. His name was on them... we read them. He predicted the collapse before it happened and cited the cause --- the USSR could not match the military buildup. They could not command any more of the economy as it was already over 1/3 going to weapons. Star Wars threatened the Generals and the Generals lost control.

With the Pope putting pressure on in Eastern Europe... the Soviets knew it was over.

Reagan and the Pope caused them to implode.

Quote from piezoe:

Jem, We've been through this many times now. There are no examples of revenue increases following on the heels of tax cuts that were not also accompanied by increased government borrowing and spending. To put it in very plain English, it is either tax increases or government spending fueled by borrowing that increases revenues, not tax cuts. So what is your point?


You're once again on shaky ground, suggesting, I suppose, that Reagan had something to do with Soviet disintegration. Possibly he did, but there is no good evidence to support that view. Consider, however, that a number of Soviet experts predicted the Soviet fall long before Reagan was President. Moynihan, for example, predicted it when he was in Ford's Cabinet. In fact, Moynihan was so adamant in his view that he became somewhat of an embarrassment to the administration, and according to Moynihan, Ford fired him. (In truth, Moynihan, sensing that Ford was going to fire him, resigned.)

 

[jem]

Quote from Ricter:

Except where crowding out is occurring, right?

exactly... eventually (and in some areas that event has passed) the marginal govt dollar has a less than 100% return. Same thing happens in private industry.

but that may be too nuanced for piezoe.

 

[jem]

Piezoe--

This is the most blantant lie I have ever read on economics. it can only come for a flamming commies.

It is only in the ideal world, where perpetual motion machines exist, and in the pea-sized brains of Republican politicians that cutting taxes increases productivity enough to result in a net increase in revenues.

--- Lets take this out to the edges.

100 % tax in an industry - goes to zero.
No taxes... industry can thrive and get full investment.
99 - 1 - tax has not much effect - revenues go up from zeor
98 - 2. "
50 -50 far fewer investors see the industry as worth the risk.
1-99 no investor sees industry as worth their time and money. No owner bothers showing up.
only a commie command economy works here.

Unfortunately to understand economics in the real world you have to be able to think in systems. People who can't think in systems gravitate to the left and the govt.

Thinking in systems requires at least a 120 IQ.

In summary... everybody who successfully invests in businesses and pays taxes

again... I know that thinking in curves is more than most on the left can handle. (ricter does - he is the only lefty on this site who exhibits the intellect to understand curves in real life. )

 

[jem]

Here is proof... from buffets own man Charlie Munger...

Now this takes a bit of brain power... so I will break it down.

Smart investors consider taxes before they invest....

In fact Munger says EBITDA is bullshit earnings.
If you understand the implication of buffetts own guy calling EBITDA bullshit earnings.

You will know buffett, obama ,and the left are full of shit on this subject of taxes.



-------------
http://buyingvalue.com/2009/05/munger-on-ebitda/


Charlie Munger though a pioneer in value investing and the four filters is a fairly raw character and has a way of getting to the point in a sometimes abrupt manner. Charlie did just this when he referred to EBITDA as “bullsh*t earnings” at the Berkshire Hathaway meetings in 2003.

EBITDA = Earnings before interest taxes depreciation, and amortisation.

What is the Problem with EBITDA?
Well let me give an example:

Company A earns $1M and pays $.75M in interest, taxes, & depreciation.
Company B earns $.5M and pays $.1M in interest, taxes, & depreciation.
Which company would you want to own? Right, that is the problem with EBITDA. EBITDA hides reality by concealing normal expenses a company will encounter, and gives a false sense of the profit potential of the business.


Valid Users of EBITDA

EBITDA exists in a world of fantasy where there are no taxes or other inclining of reality. The only way to make this measure useful then is to either change reality; or to find a way not to care about taxes and depreciation.

There are only two groups who are capable of this feat: a small group of flexible business buyers, and lenders/financiers. If an industrious individual is willing to buy the company and has the capacity to refinance the debit, and possibly move the company to a another region with a better tax plan, they may be able to unlock more of the earnings shown in EBITDA. The other group who can use EBITDA are lenders who can garner some use for this number as they can access earnings before taxes are paid out- and certainly before depreciated machines are replaced. I say “some use” as EBITDA gives no indication of what other lenders are already in finance arrangements with the company in question.