This is how the uniparty works:

1. Republicans get elected. Pass bills that cut taxes for businesses and ultra high net worth individuals. Maybe toss some crumbs to people.

2. Democrats get elected, notice budget deficit from previous cuts. Propose increasing taxes on W2 working class, including white collar. Businesses and UHNW people continue with their tax breaks and schemes.

3. Back to p.1

High taxes don't work, that's why Europe is stagnating badly, and declining in many areas.

When you directly compare the US to Europe, the gap is widening rapidly.

Pretty clear that the high tax model is a complete failure. Not to mention a European brain surgeon is paid like a slave compared to an American one, and you can make those comparisons across any industry.

A Senior Engineer in Stockholm makes less than a new grad in the US, for example. And pays higher taxes!

All the "social Democrats" of Europe will be downvoting this. Too bad they don't have their own HackerNews. Europe just can't come up with stuff like YCombinator.

Do low taxes in the US work for anyone other than the Epstein class? Ancient, crumbling infrastructure, rising cost of living & basic necessities, stagnate wages, shrinking middle class, massive transfer of wealth from the working class, worsening education and healthcare, corrupt government at all levels (corrupted by the benefactors of those tax cuts), market consolidation and collusion resulting in less choice, higher prices, and on and on. It's not all bad of course, for example some luxuries are cheap (such as phones or TVs.)

Sweden may have fewer billionaires flying child models to tropical paradises for coke and popper fueled orgies, but I'm guessing their senior engineers plans for long term unemployment or serious injury/illness don't often include choosing between suicide or homelessness so maybe they're doing something right? I'm sure a happy medium exists and we don't need to go back to our 'great' (1950s) era tax rates though

the epstein class has low effective tax rate, because they are able to write off a lot of their consumption.

large SUV? written off via accelerated depreciation.

hotel or travel or leisure? written off as a business expense.

W2 workers are taxed on wages (income), while capitalists are taxed on profits (so they are able to deduct a lot of stuff).

plus capital gain tax is 10%, while marginal income tax rate (fed+state) can be 50%+

10 million white people isn't remotely comparable to the US population, and government and will don't remotely equate.

We have to stop with these dumb extrapolations.

It's kinda like bitching about administrations for government spending when Congress controls it all.

>Do low taxes in the US work for anyone other than the Epstein class?

Yes, as long as you don't allow companies to flood the job market with low cost foreign labor.

the issue is not nominal tax rates (whats written in the tax code), the problem is effective tax rates (how much of actual cash is paid to IRS).

there is a huge gap between working class and capitalist class.

https://taxpolicycenter.org/taxvox/effective-income-tax-rate...

Again, the problem is a flooded labor market. When you get growth, the demand for labor increases. What should happen is the amount you can demand for your labor goes up, but if you have programs like H-1B and you effectively throw open the border, that won't happen.

you are too low IQ to discuss this topic.

I am here to discuss Tax policy, not your racist jingoism

That sort of crime-stop thinking is what keeps working class people just scraping by. I said nothing about race or tax policy. You're so busy looking for "code words" only you can read you've missed the point.

Tax policy is a red herring even if you don't realize it. Wealthy people never pay more than about 25% in tax. If you raise the actual tax rate more than that their tolerance for risk goes down and you gimp your economy.

why do you care about wealthy people's tolerance for risk ? nobody thinks of my tolerance for being overtaxed

I have far more in common with tech visa workers who are overtaxed on their W2 wages, than with big capitalist who never sells and never pays a dime to irs

We all care about tolerance for risk. Investing in a new venture is risky, and every calculation is a balance of risk and potential reward. If you tax away the reward, nobody will take a risk, and that will stifle job growth.

No new jobs means more competition for the jobs that exist, and that means lower pay.

I'd sooner see offshoring banned than programs that bring in potentially motivated/skilled workers here (though they should still have limits), and I think it'd be more impactful. Theres the obvious dev/IT impact, and we also have companies like Google and Tesla eliminating humans from the workforce with AI and farming out oversight of that AI overseas. When your Waymo or Cybercab makes an oopsie some guy in Manilla or Nairobi is going to be handling it while the out of work uber/taxi driver is shivering in a tent under a bridge.

Offshoring restrictions tend to founder on practicalities. Exactly what constitutes offshoring? If a company creates a subsidiary in another country and hires people to produce a product, is that offshoring? What about when it buys a product from an independent company in another country?

If I fire a bunch of people in the US and hire the same number of people in another country to work on the same project, that's clearly offshoring. But what if I don't fire anyone in the US? What if I fire them five years later?

The whole thing is a mess for regulation and I suspect if you wrote regulations that weren't easy to bypass you'd hamstring local producers.

Not to turn this too much into a political argument, but a lot of the things that have been discussed as the Democrat’s platform has been things that tend to increase government spending rather than reduce it, such as:

- Paid medical insurance for all

- Free child care

- Regulatory oversight which requires funding and committees etc

- Affordable housing (there are ways to solve this with gov spending and without, but likely we’ll need some form of gov incentives/spending)

I’m not commenting on the validity of these things individually, just that I don’t believe the Democrats since Clinton era have tried to reduce spending

Honestly I think it’s a fundamental hurdle with our political system. Charlie M’s quote of “show me the incentives and I’ll show you the outcome.”

The Democrats under Obama reduced the deficit meaningfully after the financial crisis recovery set in. The deficit went from $1.4T in 2009 to $0.6T by 2016. Part of that was the economic recovery, but there was also both legislation and executive orders that reduced spending and increased taxes.

The Budget Control Act of 2011 capped discretionary spending and cut $1 trillion over ten years, the administration further cut administrative spending by 20% via executive order in 2011. Subsequent actions reduced the deficit by $2 trillion, with 3/4 spending cuts and 1/4 tax increases (e.g. the 0.9% Medicare surcharge and capital gains taxes on earners of >$250k).

I agree with you, though, both parties seem to have stopped trying to reduce the deficit over the last decade, I think in part because it hasn't been rewarded politically at all.

I have some questions about this story. I ask genuinely out of confusion combined with some informed disagreement. If I glance at the deficit in [1], it seems the deficit was lowered a lot, after rising meteorically in 2009, so yes, _someone_ turned the heat down after turning it up super high. Not sure where you're getting a $2T deficit decrease though.

My confusion is augmented by the focus on the first derivative (the deficit) during this period while the national debt rose by more than $10T [2#Background]. It's not clear what matters more on an admins report card. Interest accruing is arguably less under your control, which might be relevant to this question.

Finally, I'm struggling to understand why the 2011 passage of the BCA (which cuts spending in exchange for raising the debt ceiling) is attributed to Democrats primarily. Reading [2], if I were to narrativize it, the story seems to be that the Republicans, spurred on especially by the Tea Party, forced Democrats to agree to spending cuts.

Quoth Wikipedia: "The Republican Party, which gained control of the House of Representatives in January 2011, demanded that President Obama negotiate over deficit reduction in exchange for an increase in the debt ceiling, the statutory maximum of money the Treasury is allowed to borrow. The debt ceiling had routinely been raised in the past without partisan debate ... </quote>

Furthermore, in the House, 72% of Republicans voted for the bill, while only half of Democrats did. In the 112th Senate the story was more mixed, with about 86% Dems and 60% Reps voting yes.

I have not read all this shit in great detail but I hope you can appreciate my confusion, and invite you to indicate what I might be missing. For example, I don't why the deficit was so high in 2009. In one universe of explanations, the conclusion: it's not very praiseworthy to decrease the deficit you skyrocketed yourself.

1: https://www.us-debt-clock.com/data/deficit-by-year

2: https://en.wikipedia.org/wiki/2011_United_States_debt-ceilin...

The 2009 deficit was high because of the 2008-2010 financial crisis. Deficits increase dramatically in economic downturns because tax collections decline (job losses, lower profits, bankruptcies) and increased spending (unemployment, bailouts).

Most mainstream economists think it's good for a government to increase deficit spending temporarily during a recession because it helps prevent deeper recessions that cause long-term impairment of the tax base. If you let half the auto industry fail, for example, it may take a long time for your tax base to recover and start generating taxable income again.

After the crisis, there was bipartisan agreement that the deficit needed to be reduced, but the disagreement was on how. Obama was willing to cut spending but also wanted to increase taxes on higher income households, while the Republicans in Congress drew a hard line against any tax increases and wanted deeper spending cuts. In the end, they reached bipartisan bills, including the American Taxpayer Relief Act of 2012.

The debt ceiling brinksmanship was political theater. Republicans used the threat of defaulting on US debt in order to extract concessions from Democrats without having to agree to any policy demands. Congress passed laws with required spending every year and no one has the legal authority to not spend it. If Congress really cared about reducing the deficit, they wouldn't pass spending bills that required deficit spending.

As for increasing debt in the 2010s, I think it was viewed as a potential long-term problem but sustainable because interest rates were quite low. When inflation was at 2% and interest is at 2%, the US government was able to borrow money at 0% in real terms. Government spending on roads, airports, and even marginally productive projects that increase economic growth could be viewed as rational.

I think the US and world got complacent during the low interest rate era, and eventually realized deficit-spending in a low-rate environment boosted economic growth more than expected. The US doubled down on this by passing the 2018 Tax Cut and Jobs Act, which reduced taxes significantly without cutting spending concurrently, which created large deficits even during periods of economic growth.

The problem now is interest rates have gone up substantially, so debt servicing is going to become a much bigger burden. I don't think it's politically possible to reduce the deficit through spending cuts alone. The annual deficit is greater than the entire US defense budget and Medicaid combined.

Unless we suddenly get a burst of growth from AI that will increase our tax base, (which I think a lot of politicians are counting on), a long-term fix will require increased taxes (which will slow economic growth at least somewhat) and reduced spending (in particular lowering healthcare expenses, which are still rising at an unsustainable rate).

We're on like a half dozen straight Republican administrations of tax cuts for the rich and massive deficit spending combined with unnecessary wars.

Everything you just described is an investment that has a substantial positive output economically, Even when implemented incompetently.

It's so funny to see economic "rationalism" always pop up as soon as Democratic political waves appear, while when Republicans have all the control of the purse strings: utterly unrestrained fiscal malfeasance.

And the disturbing trend with Republican administrations is that the corruption and incompetence gets worse every cycle.

There's no chance the Democrats will reduce the deficit. It's been growing almost unbounded since 2000 regardless of who was in power.

I'm not sure either party tries especially hard to reduce spending. Clinton was strong-armed into abandoning expensive social programs in his first term and had a hell of a good bubble economy paired with a pre-Norquist tax regime and a post-base-closure budget to reduce the deficit in his second term.

I would say "look at the numbers," but the 2008 housing crisis and the 2020 pandemic really don't make for easy comparisons.

But by a first order of approximation, I fear your statement is correct. Tax cuts sometimes goose the economy but always increase the deficit. Democrats sometimes advocate for tax cuts, but Republicans always do, regardless of the current macro-economic climate.

As someone else pointed out they will increase the deficit (over the baseline expectation) as they did before under Obama and Biden.

They might partially repeal tax cuts, but if they expand social security and medicare then the deficit will increase dramatically. Don't expect any of the recently elected senators to do the fiscally responsible thing when Social Security is insolvent in 2032.