The Economy

[quazy50]

Originally Posted by Palmguy

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.

+1 Very well put

[ForTehNguyen]

Laffer curve - Wikipedia, the free encyclopedia

[Palmguy]

Also Etta, looking at your article by Justin Fox, he displays a fundamental misunderstanding of what a tax cut is. Depends on your perspective I guess, that is just my opinion; a statist would look at things differently.

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.

Tax cuts are not a line item on the expense side of the federal (or any other governmental) budget. A tax cut is a change in the rate of collection of income for the government. Using your theory that tax cuts reduce tax revenue, and making an analogy to my personal monthly budget, that would be equivalent to me getting a pay cut at work, and in my Excel spreadsheet that I use to track my monthly cash flow, instead of changing the value for what my paycheck is, I would leave it the same and enter a new line for a payment, that payment being equivalent to my reduction in income.


It doesn't make any sense, unless you view things from the perspective that we are all serfs that the benevolent government allows to keep scraps of their labor after the government gets it's slice.

Refundable tax credits and stimulus payments and the like are another story, as they often involve cash payments from the Treasury to people (many of whom did not pay taxes).

[Brickboy240]

What is there to understand?

We're broke. We could not afford the first stimulus. We cannot afford govt run healthcare. We canot afford to ramp up energy costs through cap and trade. We need to cut spending, period.

Some hard decisions need to be made...but they're not being made.

That is all there is to it.

Anyone that thinks we can spend or tax our way back to prosperity in not playing with a full deck.

- brickboy240

[Powerman]

Originally Posted by Brickboy240

Some hard decisions need to be made...but they're not being made.

- brickboy240

Case in point.... Obama PROMISED to go line by line and cut spending. He passes a $80 Billion pet project spending bill, turns around and spends another $450 omnibus spending bill with all the stuff thrown in that didn't make the Spending bill....

9000 PORK PROJECTS that were identified as PORK that cost an additional $18 BILLION......

He can't find the willingness to do what is right and stand up to his word and veto the bill......

But instead organizes a press conference and gathers his cabinet and directs them to "look" for $100 MILLION to cut from "somewhere"

How about the $18 BILLION in pork you just passed idiot!!!! Told me all I needed to know about this administration and "change". Business as usual in DC.

[AZXD]

[Tempest]

Originally Posted by Etta Place

Historically, the mulitiplier effect for stimulating the economy through spending is greater than that of lowering taxes.

If this is the case, then we should be borrowing 5,6,7,8 trillion as we will get back 1.5 times the amount!

Do you actually believe this? Japan had some 10 stimulus packages and it did jack squat for their economy. In fact, just as happened in the Great Depression, in made things worse.

Taking money from those that create jobs in the free market in order to give it to politically connected contractors to dig holes and fill them up DOES NOT help the economy. Government spending does not, and CANNOT generate real jobs in the economy.

The more time and money you take from the private job creators, the longer and deeper the depression will go. Adding on carbon taxes, health care taxes, additional payroll taxes and you have frozen businesses that will be dropping jobs (as is happening), not creating jobs.

What is being done is what you do if you WANT the economy to get worse. And that is the idea...

[Tempest]

In order to "stimulate" the economy, we are spending ~$100 million PER DAY on INTEREST on the already passed stimulus act. This is money being drained out of the economy on a daily basis.

How many jobs could be created with $100 million per day?

This is the fallacy of government spending to help the economy.

It will fail every time and has throughout history.

[ForTehNguyen]

Originally Posted by Tempest

In order to "stimulate" the economy, we are spending ~$100 million PER DAY on INTEREST on the already passed stimulus act. This is money being drained out of the economy on a daily basis.

How many jobs could be created with $100 million per day?

This is the fallacy of government spending to help the economy.

It will fail every time and has throughout history.

how dare you use logic

[Palmguy]

Originally Posted by Tempest

In order to "stimulate" the economy, we are spending ~$100 million PER DAY on INTEREST on the already passed stimulus act. This is money being drained out of the economy on a daily basis.

How many jobs could be created with $100 million per day?

This is the fallacy of government spending to help the economy.

It will fail every time and has throughout history.

Just spitballing here, but $36,500 annual salary --> $100/day

You could hire about a million people at a decent wage for that much money.