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Selling their followers this kind of crap is why the Republican party has come to be the party that loves morons so much that they elevate them to presidential candidates. Sarah Africa-is-a-country, Alaska's-proximity-to-Russia-gives-me-foreign-policy-bona-fides Palin, Michele I'm-gonna-shut-down-our-embassy-in-Iran, Gardasil-causes-retardation Bachmann, Herman We-must-prevent-China-from-going-nuclear, Uzbekibekibekistanstan Cain, Mitt I-support-a-woman's-right-to-choose, I-am-firmly-pro-life Romney, Newt We-can-afford-a-fairly-ignorant-presidency-now, Poor-children-have-no-concept-of-’I-do-this-and-you-give-me-cash,’-unless-it’s-illegal Gingrich. So naturally their followers buy into the garbage they sell. Indeed. I agree. It is a myth. If you only look at raw numbers and don't bother to learn how those numbers are generated, you are doomed to forever be snookered by people selling you a bill of goods.
The Congressional Budget Office, the Treasury Department, the Joint Committee on Taxation, the (Bush) White House’s Council of Economic Advisers and a former Bush administration economist all say that tax cuts lead to revenues that are lower than they otherwise would have been – even if they spur some economic growth. And federal revenues actually declined at the beginning of this decade before rebounding. The growth in the past three years that McCain refers to brings revenues back in line with the 40-year historical average as a percentage of gross domestic product.
...
Other Republicans and administration officials, including the president, have made similar statements about the power of the 2001 and 2003 tax cuts. But McCain and his colleagues are not accounting for the decrease in revenue that accompanied the cuts.
“Federal revenue is lower today than it would have been without the tax cuts,” Alan D. Viard of the conservative American Enterprise Institute told the WashingtonPost last October. Viard, who worked in the Treasury Department’s Office of Tax Analysis and the White House’s Council of Economic Advisers under President Bush, told FactCheck.org that “nobody can absolutely prove that.” Proof would require time travel and a reversal of tax policy. “But among economists, there’s no dispute.”
Tax cuts can be a sound economic move that spurs growth, says Viard. “But it doesn’t mean that [the cuts] gained revenue."
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Federal revenue normally increases every year. In fact, revenues have declined in only five years since 1962.
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But can the increase in receipts over the last three years — though not a net increase — be attributed to the tax cuts? Where has the growth in revenue come from? That is a tough question for economists to answer definitively, but the bulk of the growth in federal receipts has been in corporate tax revenue.
In 2006, according to the CBO, individual income tax revenue was 1,043.9 billion, an increase of 5 percent since 2001. Corporate tax revenue was 353.9 billion in 2006, a 134 percent rise from 2001. That’s a dramatic increase.
“It really is astonishing,” Viard says of those numbers. But he can’t point to major corporate tax cuts that would have spurred the growth. Corporate profits are doing very well and the economy is growing, but “I don’t know that there’s a single, clear cut reason for that.”
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The CBO analyzed data to uncover the causes of revenue growth since 2003 in response to a request from Sen. Kent Conrad, chair of the Senate budget committee. In a letter to Conrad, CBO Director Peter R. Orszag says that overall receipts increased by 1.9 percentage points as a share of GDP and that the increase “disproportionately” comes from a rise in corporate income tax revenues.
Orszag attributes two-thirds of the bump in corporate taxes to an increase in corporate profits. The rest he pins to tax policy. For instance, when provisions allowing partial expensing of investment in equipment expired, tax revenue increased. In other words, revenue declined when the provisions were enacted and bumped up again when they expired.
Orszag says there was growth in capital gains realizations in individual tax receipts, but measures such as lower rates on dividends and an increase in the child tax credit, as well as a drop in job wages, caused a reduction in revenues. A CBO chart in Orszag's letter shows that legislation (not counting an impact on capital gains) had a total negative effect on revenue growth.
The impact of the tax cuts on economic growth is a matter of debate among economists. We're not voicing a view on whether the tax cuts should have been enacted; that, too, is a separate discussion. But it is clear they did not "increase revenues."
These are the facts. Tax cuts do not increase revenues, even if revenues increase in the year immediately following a tax cut. Revenues were going to increase anyway, as they always do. Unfortunately for the fiscal health of this country, they're going to increase far, far less than what they would have increased without the tax cuts.
It has been noted that when Republicans held the Presidency and Congress, they increased federal spending. Only after Obama did they become the self-appointed guardians of the public treasury.
Okay seriously dude, what's the matter with you? You cannot possibly have read a single word of my referenced site or the link you think makes your point BUT DOESN'T.
That letter is discussed in the Politifact article I quoted at length.
I'm only going to do this one more time. After that, you're on your own to wallow in your chosen ignorance.
Federal revenue normally increases every year. In fact, revenues have declined in only five years since 1962.
Therefore, the fact that revenues increased between 2003 and 2006 TELLS US NOTHING ABOUT WHY REVENUES INCREASED, ONLY THAT THEY DID, LIKE THEY ALWAYS DO.
From the link you cited, right in the FIRST paragraph:
"This analysis shows that the overall increase in revenues as a share of gross domestic product (GDP) since 2003 is disproportionately accounted for by increases in corporate income tax revenues."
Do you understand what that means? That means that the bulk of the increase in revenues for that period came from corporate taxes and not from individual taxes, which are where the Bush tax cuts went.
Again from your own cite:
"That increase of 1.9 percentage point of GDP can be traced to changes in different types of revenues (see Table 2). The bulk of the revenue increase was associated with corporate income taxes."
Now, when we look to receipts from individuals, which is where the Bush tax cuts went, here is what your cite says:
"Individual Income Tax Receipts. The 0.6 percentage-point increase in individual income tax receipts was the combined result of some factors that acted to reduce those revenues relative to GDP and others that acted to raise them. The NIPA measures of income that constitute the underlying base of the individual income tax--principally wages and salaries--fell relative to GDP, reducing receipts relative to GDP by 0.4 percentage points. With any potential macroeconomic effects excluded, the impact of legislation enacted over the period--including increases in the child credit and reduced tax rates on dividends--reduced revenues by 0.5 percentage points relative to GDP.In the other direction, higher realizations of capital gains (including any effects associated with legislated reductions in tax rates) added 0.3 percentage points to the ratio of individual income tax revenues to GDP. The remainder of the increase in individual revenues relative to GDP, measuring 1.1 percentage points, resulted from "real bracket creep" and a variety of potential factors that cannot be evaluated fully until more complete data are available. Such potential factors include shifts in the share of aggregate taxable income accruing to households with higher marginal tax rates; changes in taxable incomes relative to the NIPAs' measures of personal incomes; and changes in retirement income, the alternative minimum tax, and tax deductions"
The only part of the revenue increase that is attributed in any way to the Bush tax cuts is the underlined portion above, and a bigger proportion of the effect of those cuts were reductions in revenues - a 0.9% reduction vs. only a 0.3% increase, the net effect being that the Bush tax cuts to individuals resulted in a 0.6% loss in revenues from individual income.
The Bush tax cuts did not increase revenues, even though revenues increased in the years immediately following them. Those increases were because of other factors having NOTHING to do with the cuts.
Kind of useless to debate with someone who refuses to accept facts. Tax cuts increase government revenue. John F. Kennedy knew it, Ronald Reagan knew and G.W. Bush knew it. Government revenue almost doubled under Reagan.
You are describing the runup to a catastrophic housing bubble. Jill's point was that revenues always increase when the economy is booming and shrink when it contracts. The boom in 2003-2006 has nothing to do with the tax cuts and much more to do with the show "Flip This House."
Kind of useless to debate with someone who refuses to accept facts. Tax cuts increase government revenue. John F. Kennedy knew it, Ronald Reagan knew and G.W. Bush knew it. Government revenue almost doubled under Reagan.
You, my friend, are a victim of the first fallacy of data analysis. Correlation is not causation. And besides, we have never seen a Republican who cut taxes and cut government spending. If you cut taxes and give every defense contractor with a pulse a no-big contract, the economy might jump, for a while....eventually the check comes due.
Sorry, you cannot beat basic arithmetic at the micro or macroeconomic level. Stop dishing out the Fox News swill.
You are describing the runup to a catastrophic housing bubble. Jill's point was that revenues always increase when the economy is booming and shrink when it contracts. The boom in 2003-2006 has nothing to do with the tax cuts and much more to do with the show "Flip This House."
We all know how that one turned out....
Actually, revenues pretty much always increase year-over-year; full stop.
Revenues have only gone down 5 out of the last 50 years. That's 45 years of increasing revenues, with or without tax cuts.
One literally has nothing to do with the other, which even Fleet's own cite says was the case in the years he's crowing about. It's one thing not to believe me. It's another thing entirely not to even believe your own cite!
Kind of useless to debate with someone who refuses to accept facts. Tax cuts increase government revenue.
Sorry bud, that's not a fact; that is a misunderstanding of what the laffer curve is and how it works.
revenues are driven by more than just the rate. When you're printing $1.5 trillion a year in bad mortgages, like we were at the beginning of the housing bubble, that sort of thing tends to generate tax revenue.
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