"Tax cuts result in *increased* tax revenue for government at all levels."

Conservadunces still spew this kind of bullshit. What is it gonna take to convince them they are believing a lie?

:wtf:

The wingnuts around here are particularly pugnacious and stubborn.

He cut taxes, and the deficits went up so much that he had to raise them back up some to keep people from panicking. The only person to balance the budget was Clinton, and of course your wingnuts will be happy to agree that he raised taxes.

If that isn't enough, Bush II did the same thing without raising them back, and see where we are.

Far be it from St Ronnie to step on the toes of the precious "have mores".

Bewsh II keeping taxes low his whole term proved what a monumental dumb-ass he was about economics. There's ALWAYS gonna be a bill come due; he knew this and pretty much didn't care, since at that point, he'd be out of office and the upward looti . . . er . . . transfer of wealth would be completed.

Conversely, if the economy is booming during the tax cuts, more revenue can be achieved. But at the end of the day, the cuts may only correlate to the revenue increase, and not cause it

We both know what the wingnut reply to this data will be: "It's the out of control spending, stupid, not the tax rates."

Sometimes, I just want to tear their idiotic throats out...

The famous/infamous (depending on your political persuasion) Laffer Curve is based on simple logic.

If you assume a marginal tax rate of zero percent, your tax receipts are zero dollars.

A marginal tax rate of one per cent will bring in "X" dollars.

In theory then, a marginal tax rate of two per cent should bring in "2X" dollars.

A marginal tax rate of 100 per cent should then bring in "100X dollars, but we know that when you have a tax rate of 100 per cent, no body will pay any taxes because they won't make the effort to earn any money so your tax receipts go back to zero.

The result is a curve with the Y axis being total tax receipts and the X axis being marginal tax rate. The curve begins at zero with a zero percent tax rate, rises in proportion to the increase in taxes to a point where it flattens out, then dives back to zero.

There is then a "sweet spot" which would be a marginal tax rate which maximizes tax receipts.

Laffer (and Reganomics) held that we were working on the right side of the curve where reducing tax rates increased tax receipts.

Others believe that we are on the left side of the curve and that marginal tax rate increases will increase tax receipts.

I have never seen any good rigorous analysis from either side of the debate as to exactly where we are on the curve with 33% or 39.6% or 91%.

...they can make any assertions they want to, but can they back them up?

All the charts I've seen show just the opposite.

but in a system where I can invest 20 bucks in the deli down the street, I can invest 20 in gold, I can invest 20 at BofA, I can invest 20 in BP, or I can invest 20 in a small African textile cooperative, there's nothing to say that those 20 bucks are going towards job creation (or any other economic good) with 3/5 of those options.

Also, doesn't that statement just imply that payroll taxes will go up? Why are the republicans so focused on payroll taxes?

I had a conservative acquaintance try to convince me of the opposite. However, I used his own experience on him.

He owned some rental property and his accountant had just told him that he need to invest in improvements to the property to keep his taxes down.

I explained that if he wasn't faced with higher taxes, he probably wouldn't have made those improvements. He would have just put the money into CDs or something.

The same with businesses. Faced with the possibility of taxes, they will invest in new plants, new machinery, anything to keep the money out of the hands of the tax man. Faced with lower taxes, they will just stick the money into the corporate sock drawer.

Don't you just love their idiotic belief that taxing the wealthy will cause them not to hire people, or even more hilarious, pass the costs to us in the form of higher prices on goods?

Corporations aren't taxed like individuals are, and that's where the disconnect comes into play. These entities are taxed on profits, not expenses. The ONLY relationship between employee compensation and income taxes is that income taxes are reduced when a business pays more in employee compensation (and therefore has less taxable profits).

Any robust economy is driven by a middle/working class that's gainfully employed (like, for instance, the middle part of the Clinton years). When corporate tax rates are lower, businesses feel no great need to hire, thus creating large profits and cash stores but a "jobless recovery" in the process (like, for instance, the Bush years. Both of them).

Plus corporations can only charge what the public is willing to pay. DVD players aren't going to soar to $400 because corporate tax rates are raised slightly. The laws of supply and demand still figure in.

There are certain conditions under which it is essentially true. They are relatively rare, but none the less it can be true. We aren't anywhere near one of them right now. And in the US it is especially complicated because cutting taxes locally tends not to do anything. And yet the TOTAL tax rate is a function of taxes at several different levels, and several different types (income, property, consumption, etc.) Some will have different effects at different times than others.

As someone else said, probably the best time to cut taxes is when the economy is going to be expanding rapidly. People are going to be less tax sensitive and will tend to just keep churning money they have until it gets taxed sooner or later anyway. So the more money you have sloshing around in the economy, the more revenue you ultimately get. However, in anything like a stable economy, or a stagnant or shrinking economy, there's alot of capital/cash that is "sitting on the side lines" and relatively out of reach of taxation. Cutting taxes merely leaves more sitting.


There's little you can do to convince a closed mind of anything. About the best "retort" I can give is that Germany has historically done very well, industrially and economically. And they have taxes way higher than we do.

Do they really?

The top German income tax rate is 45%, compared to our 35% federal rate. BUT - we *also* have payroll taxes, and ALSO state income taxes on top of the federal taxes, and, in some cases, local income taxes as well. Also, their corporate taxes are much lower than U.S. taxes. Depending on what state you live in, I would guess that income taxes are often about the same or higher in the U.S.

Not to directly refute your point, but pick a better example.

Folks, especially right wingers, focus almost solely upon income taxes. There are all manner of taxes, including excise taxes, property taxes, VAT and other consumption taxes (Alcohol, fuel, etc.) Europes are very high, and they get alot of services for them. They also have a fairly healthy economy. A little not the other day mentioned their recession hasn't been nearly as deep as ours, which is why their goverment can actually cut spending right now without tanking their economy, not to mention bail out Greece.

n/t

"Read my Lips, No new taxes"........That cost him the election many Republicans say.

i mean, if lower tax rates means bigger government fed by increased tax revenue, that's a bad thing, right? right?

i'm so confused....

:rofl:

Give that (wo?)man a cigar!!!!

All the proof I need is in the fact that advocates of smaller government always also support lower rates.

This is the sort of classic childish, irresponsible thought that conservative love to paint Liberals.

Are they really claiming to be stupid enough to pay lobbyists millions and donate millions more to political candidates and parties so they they will advocate for policies that would leave Washington awash in tax receipts?

What should Washington do with all that money? Cut taxes some more?

Eventually rates will hit zero, receipts will become infinite, our debt will be gone and nobody has to work anymore because Government will be forced to issue refundable credits to all (former) taxpayers just get get rid of all the cash.

Why, its a perpetual motion machine!

Idiots.

The Big Con: Crackpot Economics and the Fleecing of America (Paperback)
~ Jonathan Chait
Jonathan Chait (Author)


http://www.amazon.com/Big-Con-Crackpot-Economics-Fleecing/dp/B003IWYL4S/ref=sr_1_2?ie=UTF8&s=books&qid=1276119965&sr=1-2

:crazy:

of this "claim" is that as taxes increase, the amount of money exposed to those taxes is hidden/salted away. (the much maligned "Leffler Curve")

For example capital gains tax: something that occurs when an item is sold for more than what it was purchased. IE shares of stock: bought @ $5/share, sold for $10/share, capital gains: $5 - subject to taxation.

If capital gains are increased (let's say doubled), the incentive to cash out is significantly lessened, lowering the number of transactions, lowering the amount of capital gains exposed to taxation, lowering the taxes collected.

Ditto for estate taxes: while people inevitably die, if they structure their estates "properly" (from their point of view), they will expose lesser amounts to the increased taxation, again, leading to less taxes being collected.

Great Britain had the same issue during the 1960s with "tax exiles" among the rich. Their concerns, especially among musical artists, appeared in pop songs like "Tax Man" by the Beatles (Let me tell you how it will be; There's one for you, nineteen for me. 'Cause I’m the taxman,Yeah, I’m the taxman) and "Sunny Afternoon" by the Kinks ("The taxman's taken all my dough and left me in my stately home lazing on a sunny afternoon. And I can't sail my yacht he's taken ev'rything I've got; all I've got's this sunny afternoon.). This dried up far more in tax revenue than was expected and created a series of issues.

Additionally, the world of the late 1940's and 1950s was significantly different than today: the USA, effectively, had the world's only undamaged industrial economy. All the open markets, foreign (who were unable to provide the necessary volume of "things" to rebuild their infrastructure) and domestic, allowed for significant economic growth and output, thus "covering up" the damages of extremely high, post WWII taxation. As the world was eventually rebuilt and the US economy began to slow (other countries were now able to fill their own needs), it was JFK who did the 1st of the tax cuts to which that Republicans/Conservatives point to bolster their argument.

Not to mention the fact that during this same time period, the USA, again being an undamaged economy, was not, unlike Great Britain who was under rationing (to one extent or another) until the mid 50's so any American "tax exile" really had no where to go to have the same creature comforts and amenities as he/she had in the USA. Fast forward to today: you can pretty much have the same, if not better, standard of living with most, if not all, of the creature comforts in multiple countries around the world.

As for Reagan, yes, tax revenues DID go up (faster than inflation would have dictated) BUT there was a concurrent increase in spending (again, faster than inflation) thus offsetting any potential gains.

Clinton had a similar but also different economic situation: the phenomenal growth of the economy of the late 90's generated far more revenue than was expected but spending did not mirror (or exceed) the same curve, so you ended up with a surplus.

again: please note that this is an intellectual exercise in an attempt to "understand" the Conservative mindset. excuse me now while I go and wash my hands, rinse out my mouth and flush out my eyes)

tax cuts led to a revenue boom — declarations that you see in highly respectable places — are based on nothing but a failure to make the most elementary corrections for inflation and population growth? Yes, it is. I know we’re supposed to pretend that we’re having a serious discussion in this country; but the truth is that we aren’t.

http://krugman.blogs.nytimes.com/2008/01/17/reagan-and-revenue/

economics is, to many, a black art. extremely complex, convoluted and chockfull of "why didn't I think of that?" moments/events/impacts.