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Our budget deficit and deficit spending doesn't really matter to the majority. I think budget deficits and deficit spending are used as another reason for Dems and Reps to take shots at each other but they don't really care. Many people understand that we can't possibly pay off the debt but we are ok as long as we can make the interest payments. If we can't afford the interest then we are in big trouble. I would love to see us pay off our debt in my lifetime but it won't happen. I don't think our federal government is stupid enough to spend so much that we couldn't afford to pay the interest but I wouldn't be shocked if they they did.
And are increased productivity and economic growth considered as factors in that little pie chart of yours? It's pretty obvious to see how cutting taxes allows for greater growth in businesses, reinvestment in companies, and the hiring of new personnel.
Of course the answer is no.
Changes in the tax rate cause a revenue feedback. We've seen that over and over again in the US. We've also seen it very clearly demonstarted in the Celtic Tiger economy of Ireland, where a relatively backwater country in Europe reduced its tax burdens by 3.5 fold and ultimately tripled tax revenue by creating a much bigger pie.
While it's true that tax cuts generally lead to slightly lower levels of tax returns, they inevitably also lead to economic growth. If one chooses to measure tax revenues in terms of the size of the economy, naturally tax cuts are going to bury themselves in that regard, as they're creating a larger economy while at the same time not taxing it as heavily.
But one way to play with statistics....
I can add my own way. You speak of the federal government, but you're aware that state and local governments had their tax revenues increase in 2003, 2004, and 2005? As people began spending more, so sales tax revenues increased. Income taxes were to follow.
And are increased productivity and economic growth considered as factors in that little pie chart of yours? It's pretty obvious to see how cutting taxes allows for greater growth in businesses, reinvestment in companies, and the hiring of new personnel.
Of course the answer is no.
Changes in the tax rate cause a revenue feedback. We've seen that over and over again in the US. We've also seen it very clearly demonstarted in the Celtic Tiger economy of Ireland, where a relatively backwater country in Europe reduced its tax burdens by 3.5 fold and ultimately tripled tax revenue by creating a much bigger pie.
While it's true that tax cuts generally lead to slightly lower levels of tax returns, they inevitably also lead to economic growth. If one chooses to measure tax revenues in terms of the size of the economy, naturally tax cuts are going to bury themselves in that regard, as they're creating a larger economy while at the same time not taxing it as heavily.
But one way to play with statistics....
I can add my own way. You speak of the federal government, but you're aware that state and local governments had their tax revenues increase in 2003, 2004, and 2005? As people began spending more, so sales tax revenues increased. Income taxes were to follow.
Sorry, bub. Revenues increased after Bush's taxcuts in 2001. That tends to be the way things work when an economy is actually allowed to work things out on its own without forced government intervention and interruption of monetary supply.
Dude, the Bushie tax cuts were an EXAMPLE of government intervention, and they in fact left the government with much lower revenues than it would have received had the tax cuts never been enacted. Tax cuts cost money. They do not generate it. There is no serious person who doubts the fact. It is only the victims of disinformation who do.
What does happen is that tax cuts can stimulate new economic activity that generates new tax revenue. With respect to income taxes, that new revenue might offset as much as a third of the original losses generated by the tax cut itself, though in the Bushie case it was a little less than that. You can get a higher number -- up to the range of 50% -- with capital gains tax reductions, depending on the state of asset markets at the time. Either way, tax cuts are always a money-losing proposition for governments.
And are increased productivity and economic growth considered as factors in that little pie chart of yours? It's pretty obvious to see how cutting taxes allows for greater growth in businesses, reinvestment in companies, and the hiring of new personnel.
Of course the answer is no.
Changes in the tax rate cause a revenue feedback. We've seen that over and over again in the US. We've also seen it very clearly demonstarted in the Celtic Tiger economy of Ireland, where a relatively backwater country in Europe reduced its tax burdens by 3.5 fold and ultimately tripled tax revenue by creating a much bigger pie.
In theory is works miracles, but look at the economies of US and Ireland now. Both countries had to borrow money in order to cover for the cuts. It actually becomes a socialist move when you do it like that. They say they are capitalists, but their methods are socialist. Bush claimed to be a capitalist when he cut taxes, but anyone who redistributes public funds like that is actually a socialist. There is nothing wrong in cutting taxes as long as you can afford it, but I don't think there has ever been a time in US when we have we have done it without generating more debt.
In other words their method of cutting taxes is just another way to redistribute wealth. It's just that they are redistributing the wealth of future generations.
It's like peeing in your pants when you're standing outside and it's freezing cold. For a while it feels so nice and warm around your legs, but after a few minutes it turns cold. And later, when it freezes, it gets really, really cold, and you wish you had never done it in the first place.
Cutting taxes when you can't afford it = Socialism.
And are increased productivity and economic growth considered as factors in that little pie chart of yours? It's pretty obvious to see how cutting taxes allows for greater growth in businesses, reinvestment in companies, and the hiring of new personnel. Of course the answer is no.
Actually, the answer would be Yes, as your touted productivity gains and economic growth would have generated recepits that acted to decrease the size of the deficits being accounted for. Thus, the size of the deficit pie actually grew as the result of the tax cuts...you can only claim that it grew by less than what it would have otherwise due to the factors you mention. The size of the slice for tax cuts of course expands greatly no matter how you slice it. In the absence of the tax cuts after all, it would have been 0%.
Quote:
Originally Posted by CMartel2
Changes in the tax rate cause a revenue feedback. We've seen that over and over again in the US.
Yes, and that feedback effect is positive. It's just much smaller than the negative effect that the act of cutting tax rates itself brings about.
Quote:
Originally Posted by CMartel2
We've also seen it very clearly demonstarted in the Celtic Tiger economy of Ireland, where a relatively backwater country in Europe reduced its tax burdens by 3.5 fold and ultimately tripled tax revenue by creating a much bigger pie.
They simply leveraged themselves through foreign investment. The output of just three major US corporations accounted for 20% of Ireland's GDP. Today as the result, the only European economy that is in worse shape than Ireland's is Iceland's. But maybe the latest issue of the Celtic Tiger Fan Club Newsletter hasn't reached you yet...
You speak of the federal government, but you're aware that state and local governments had their tax revenues increase in 2003, 2004, and 2005? As people began spending more, so sales tax revenues increased. Income taxes were to follow.
Revenue increases are the expected state of affairs owing merely to inflation and population gains. The time periods you cite meanwhile comprise a weak recovery from a recession that tax cuts alone had failed to make a significant dent in. Ridiculously low interest rates that drove cheap credit secured by climbing asset prices are what spurred the increased economic activity of the period. These data do nothing to support your premise.
If the people had less of their own money we would not be in this predicament
As if congress was an idle entity....
No, you are not hearing it right.
And when you say this "If the people had less of their own money we would not be in this predicament" you are deliberately trying to twist my words into meaning something else. I specifically said tax cuts can work miracles, when they are done right. When they are done wrong as in case of Bush, the results can be disasterous.
The Republican wealthy were and are willing to pass along, via income tax cuts, the deficit onto middle class kids while the Democrats were willing to tax the rich and avoid the deficit in the first place. I do not have any problem with this arrangement. Avoiding generational debt with a zero deficit government supported by a progressive income tax is vastly superior to one that borrows the money instead of just taking it with taxes. After all you have to pay back loans while you just keep the taxes. That is much cheaper for most of us.
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. Both countries had to borrow money in order to cover for the cuts. It actually becomes a socialist move when you do it like that. They say they are capitalists, but their methods are socialist. Bush claimed to be a capitalist when he cut taxes, but anyone who redistributes public funds like that is actually a socialist. There is nothing wrong in cutting taxes as long as you can afford it, but I don't think there has ever been a time in US when we have we have done it without generating more debt. 
