The Economy

[AZXD]

Originally Posted by Etta Place

I don't think propaganda videos with scary music and scary voices are trustworthy.

[XDConvert9mm]

Originally Posted by Etta Place

I was responding to afmo! Are you blind?

And, who's to say that Arthur Laffer is right about anything?

As you are painfully aware, I was pointing out that you blew off my post to skip to one you thought you could better handle rebutting. My vision is fine. Is your comprehension OK?

If you dispute the Laffer Curve, please rebut it. It would be preferable to hear it in your own words but I'm aware that ineviatably several C&Ps will have to be mixed in.

[afmo]

Originally Posted by Etta Place

I don't think propaganda videos with scary music and scary voices are trustworthy.

but smooth talking politicians obviously are

[AZXD]

Originally Posted by Etta Place

I was responding to afmo! Are you blind?

And, who's to say that Arthur Laffer is right about anything?

[Etta Place]

Originally Posted by XDConvert9mm

As you are painfully aware, I was pointing out that you blew off my post to skip to one you thought you could better handle rebutting. My vision is fine. Is your comprehension OK?

Afmo's post was before yours.

[XDConvert9mm]

Originally Posted by Etta Place

Afmo's post was before yours.

I'll have to give up that one, by a matter of moments. Any rebuttals to what I've posted, now that we've established a proper timeline?

[Etta Place]

Originally Posted by XDConvert9mm

I'll have to give up that one, by a matter of moments. Any rebuttals to what I've posted, now that we've established a proper timeline?

I think Arthur Laffer is a decent guy. But I think his economic theories are faulty.

I don't expect anyone to actually read this article because the idea that tax cuts actually DON'T increase revenue challenges such a basic plank of conservative orthodoxy that to learn that they don't would throw them into a total tailspin.

Thursday, Dec. 06, 2007
Tax Cuts Don't Boost Revenues
By Justin Fox

If there's one thing that Republican politicians agree on, it's that slashing taxes brings the government more money. "You cut taxes, and the tax revenues increase," President Bush said in a speech last year. Keeping taxes low, Vice President **** Cheney explained in a recent interview, "does produce more revenue for the Federal Government." Presidential candidate John McCain declared in March that "tax cuts ... as we all know, increase revenues." His rival Rudy Giuliani couldn't agree more. "I know that reducing taxes produces more revenues," he intones in a new TV ad.

If there's one thing that economists agree on, it's that these claims are false. We're not talking just ivory-tower lefties. Virtually every economics Ph.D. who has worked in a prominent role in the Bush Administration acknowledges that the tax cuts enacted during the past six years have not paid for themselves--and were never intended to. Harvard professor Greg Mankiw, chairman of Bush's Council of Economic Advisers from 2003 to 2005, even devotes a section of his best-selling economics textbook to debunking the claim that tax cuts increase revenues.

The yawning chasm between Republican rhetoric on taxes and even informed conservative opinion is maddening to those of wonkish bent. Pointing it out has become an opinion-column staple. But none of these screeds seem to have altered the political debate. So rather than write yet another, I decided to find out what Arthur Laffer thought.

Laffer is a bona fide economist with a doctorate from Stanford. He's also largely responsible for the Republican belief that tax cuts pay for themselves. Now 67, Laffer runs economic-consulting and money-management firms in Nashville. About the best I could get out of him on the question of whether the Bush tax cuts have paid for themselves was "I don't know." But that's only part of the story.

It's a saga that began in a bar near the White House on a December afternoon in 1974. Huddled at a meeting arranged by Wall Street Journal editorial writer Jude Wanniski were Cheney, then the deputy chief of staff to Republican President Gerald Ford, and Laffer, who was teaching at the University of Chicago's business school after a stint in the Nixon White House. In trying to explain to Cheney why a tax hike mooted by the President might not be such a great idea, Laffer drew a chart on a napkin that showed government revenues increasing as the tax rate moved up from 0% but then turning around and heading back toward zero as it neared 100%.

The idea that high tax rates brought diminishing returns was not controversial or even new--Laffer traces it to 14th century Muslim philosopher Ibn Khaldun. But few economists in the 1970s even considered that real-world tax rates could be on the wrong side of the Laffer Curve. Laffer thought they might be, and Wanniski argued on the Journal's editorial page and elsewhere that they almost certainly were. The claim became a key plank of Ronald Reagan's successful 1980 campaign for President.

And how did things work out? Laffer is convinced that the reduction of the top tax rate from 70% to 28% during the Reagan years paid for itself--in part by encouraging the rich to stop finagling--and the evidence mostly backs him up. "You find these enormous responses in the upper brackets," Laffer says. "These guys fire their lawyers and accountants and actually pay their taxes. Yay! Isn't that what we want them to do?"

But Reagan's tax cuts for the nonrich were big money losers, and it took the fiscal discipline of Bill Clinton to mop up the resulting red ink. Laffer gushes with praise for Clinton, but he's also a fan of Clinton's successor. "What Clinton did was, he gave Bush the fiscal flexibility to do what was right," Laffer says. In the face of the recession and terrorist attacks of 2001, Bush "needed to stimulate the economy and spend for defense, and Clinton gave him the ability to do that."

In other words, the Bush tax cuts were meant to create big deficits. But Laffer's O.K. with that. "The Laffer Curve should not be the reason you raise or lower taxes," he says. Perhaps not, but it does make for great campaign promises.

Tax Cuts Don't Boost Revenues - TIME

[XDConvert9mm]

Originally Posted by Etta Place

I think Arthur Laffer is a decent guy. But I think his economic theories are faulty.

I don't expect anyone to actually read this article because the idea that tax cuts actually DON'T increase revenue challenges such a basic plank of conservative orthodoxy that to learn that they don't would throw them into a total tailspin.






Tax Cuts Don't Boost Revenues - TIME

What I see here is an opinion piece from a Leftist publication that is scarce on facts and long on supposition. Nice try.

[ChevyMan45]

Originally Posted by Etta Place

Are you saying that we should cut taxes and increase the deficit then?

No im for getting money back into the pockets of americans and money back to small businesses to make a profit and hire more americans. Lets keep corporations over here to save our jobs.

I see you aren't worried about small business growth and americans having money to spend but instead rather see the government giving bailouts and more nonsense stimulus bills to just collapse our economy.

[Palmguy]

Originally Posted by Etta Place

I think Arthur Laffer is a decent guy. But I think his economic theories are faulty.

I don't expect anyone to actually read this article because the idea that tax cuts actually DON'T increase revenue challenges such a basic plank of conservative orthodoxy that to learn that they don't would throw them into a total tailspin.






Tax Cuts Don't Boost Revenues - TIME

First of all, your postulation is mathematically false/impossible. At a tax rate of 0%, tax revenue is 0. At a theoretical tax rate of 100%, revenue would ultimately be 0 because there is no incentive to work for free. In that middle space, tax revenue is positive. As such, there has to be a range of values where a decrease in the tax rate results in an increase in tax revenue. And likewise there is a range where an increase in the tax rate results in an increase in tax revenue. There has to be.

But while "tax cuts equals an increase in tax revenue" is commonly heard, and is true within the domain of possible tax rates at least some of the time, it is missing the larger point. Much in the same way that people on our side often use the argument that "more guns means less crime" and people on the other side argue that "more guns means more crime", crime (or tax revenues) is not the issue. The issue is freedom. If tax revenues increased all the way from 0-100%, why not have a tax rate of 100% to maximize tax revenues? The government has a responsibility to think long and hard about every penny of mine that they spend, as it is a product of my work and their confiscation. The real "basic plank of conservatism" is that people's money belongs to them, and if it is going to be confiscated, there better be a damn good reason. The basic plank is freedom.