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That is not true. Government revenue increases after a tax cut.
Not true. Collections increase up to a certain tax cut, decrease after that. Actually, this "curve" has a name - the economist who came up with this was on the Daily Show within the last 2 months or so. If what you say is true, every country would have zero or near-zero taxes. The party who reduces taxes to near zero would be assured of being re-elected at least a couple of times till crap actually hit the fan due to this flawed theory.
Why don't you include the other factors of an economy?
Tell me the inflation rate at the end of Carter's term and Reagan's term(s).
Tell me the interest rate at the end of Carter's term and Reagan's term(s).
Why?
Because they weren't what we were discussing.
The topic was unemployment, and I was specifically addressing the 9% Carter number you provided which was inaccurate.
Who is to blame really? did Bush do everything No! it is all of you who will not take responsibility for what you all have done taking out loans you cannot afford running up credit you cannot cover.
Who is to blame really? did Bush do everything No! it is all of you who will not take responsibility for what you all have done taking out loans you cannot afford running up credit you cannot cover.
You act as if Bush were an innocent bystander in the economic disaster we are facing...
On the contrary, his leadership was a potent 'enabler' for all the financial ruin we have seen over the past year - and counting.
Does anyone SERIOUSLY doubt that Dubya's 'deregulate EVERYTHING' style of government was a major factor in the financial crisis we are in???
If he had not put his incompetent picks into key positions, with instructions for 'no new regulations' and 'go easy on existing ones', this meltdown would have been averted.....
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Originally Posted by Fleet
That is not true. Government revenue increases after a tax cut.
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Not true. Collections increase up to a certain tax cut, decrease after that.
This is pretty elementary stuff, but thanks to disingenuous posters such as the one you respond to who insist on mindlessly posting inane and thoroughly discredited gobbledygook from supply-side Reaganomics over and over and over again, the need to explain what actually happens continues.
The initial (i.e., primary) effect of a tax cut is a reduction in government revenues. That's the definition of a tax cut. But in a dynamic world, the tax cut itself should spur additional economic growth over time, and that growth should result in a subsequent (i.e., secondary) effect of increasing government revenues. The question is whether that secondary effect can grow to overcome the primary effect. The answer is no. Empirically, much depends on other conditions, but you can expect about a 30% recovery from a cut in income taxes and a 40-50% recovery from a cut in capital gains taxes. You could not even approach 100% except under very unusual circumstances.
There is NO credible or sensible person who believes as the original poster does that government revenue in general increases after a tax cut. This is pure malarkey. Here in fact are comments on the matter from some sensible people who are credible despite being past or present Bush administration officials...
Edward Lazear, CEA Chairman...
I certainly would not claim that tax cuts pay for themselves.
Greg Mankiw, former CEA Chairman...
Most economists believe that taxes influence national income but doubt that the growth effects are large enough to make tax cuts self-financing.
Alan Viard, CEA Sr Economist...
Federal revenue is lower today than it would have been without the tax cuts. There's really no dispute among economists about that.
Robert Carroll, Treasury DAS for Tax Policy...
As a matter of principle, we do not think tax cuts pay for themselves.
Ben Bernanke, Federal Reserve Chairman...
I don't think that as a general rule tax cuts pay for themselves. What I have argued instead is that to the extent the tax cuts produce greater efficiency or greater growth, they will partially offset the losses in revenues.
Andrew Samwick, former CEA Chief Economist...
You know that the first order effect of cutting taxes is to lower tax revenues. We all agree that the ultimate reduction in tax revenues can be less than this first order effect, because lower tax rates encourage greater economic activity and thus expand the tax base. No thoughtful person believes that this possible offset more than compensated for the first effect for these tax cuts. Not a single one.
The topic was unemployment, and I was specifically addressing the 9% Carter number you provided which was inaccurate.
Yes...another Fleet-ism. Unemployment in January 1977 was 7.5%. Unemployment in January 1981 was 7.5%. Except for February 1977 (when it was 7.6%), the rate was below that level during every month of Carter's presidency, reaching a low of 5.6% in May of 1979.
Unemployment reached 9% in March of 1982. It finally fell back below 9% in October of 1983...19 months later. Within the 20th century, only the Great Depression brought us comparable periods of unemployment.
Unemployment in January 2001 was 4.2%. Except for February 2001 (when it was also 4.2%), the rate has been higher on every single day since.
Does anyone SERIOUSLY doubt that Dubya's 'deregulate EVERYTHING' style of government was a major factor in the financial crisis we are in???
No sensible person doubts it. What we experience today is simply the latest failure of laissez-faire free-market capitalism. This system simply doesn't work. It is a crash-and-burn scenario. Managed capitalism is all that has ever worked and all that ever will.
Then why hasn't Obama made it very clear when he enters office that taxes will rise so we can be fiscally responsible? And in fact he appears to be embracing voodoo economics....and also in turn the gobbledygook right along with it.
Volker and Goolsbee Reaganomics revisited? I had other impressions during the campaign than the steps he has taken so far.
A sensible person could even argue that Clinton himself was for free trade.
When someone says managed capitalism is that just another way of saying nationalization? Who is to manage these free enterprises and how did they all the sudden become the experts of the industry to guide it where they think it should go? Who elects them and who makes the judgment call of who has the knowledge to oversee all that. The same problems they are coming up with when thinking about a car czar.
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Who is to blame really? did Bush do everything No! it is all of you who will not take responsibility for what you all have done taking out loans you cannot afford running up credit you cannot cover.
