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I was referring to the relationship between tax cuts & tax revenue, & why tax cuts, based on neoliberal mythologies reduce revenues without boosting growth.
The legendary ‘Laffer Curve’ demonstrates if taxes are already low, then further cuts reduce revenues without boosting growth.
All taxes above the level of $0 are high, and all taxes above the level of 10% of GDP are too high. The Feds have another 7% to go.
There's no such thing as taxes that are "too low".
I was referring to the relationship between tax cuts & tax revenue, & why tax cuts, based on neoliberal mythologies reduce revenues without boosting growth.
The legendary ‘Laffer Curve’ demonstrates if taxes are already low, then further cuts reduce revenues without boosting growth.
Real wealth (that of the billionaires and large corporations) will never be taxed, since real wealth is what writes the tax laws.
Petty wealth (like individual 401k plans) might be taxed. And that would certainly help turn the middle and professional classes agains the lower classes. So that’s probably what will happen. Wouldn’t it be nice if there was a huge tax haven industry for the “little people” too?
How does that change the fact that tax revenue increases when taxes are cut, regardless of whether it's a Democrat or Republican doing the cutting?
You claimed “Discourse is also dedicated to promoting and defending time-tested liberal values with new and innovative thinking."
Neoliberal mythologies.
Dr. Laffer on the neoliberal Heritage site:
The Laffer Curve itself does not say whether a tax cut will raise or lower revenues.
Revenue responses to a tax rate change will depend upon the tax system in place, the time period being considered, the ease of movement into underground activities, the level of tax rates already in place, the prevalence of legal and accounting-driven tax loopholes, and the proclivities of the productive factors. If the existing tax rate is too high--in the "prohibitive range" shown above--then a tax-rate cut would result in increased tax revenues. The economic effect of the tax cut would outweigh the arithmetic effect of the tax cut.
I didn't claim that. They did. And true to their word, they examined the effects of JFK's tax cuts. Of course, tax revenue subsequently increased.
Most folks do not associate Hayek, President Reagan, Supply-side economics, Tea Partiers, et al with “liberal values”. Sophistry.
The Laffer Curve underpins supply-side economics, Reaganomics, & the Tea Party’s economic policies.
The 2001 and 2003 Bush tax cuts didn't offset their costs with increased job creation.3 The top 1% of households gained an after-tax income increase of 6.7%, while those in the lowest fifth made gains of just 1%.
Research shows no evidence that tax cuts have any impact on the spending habits of upper-income taxpayers.4 The Bush tax cuts only increased growth enough to make up 10% of their long-run cost. Maintaining the cuts has been estimated to cost $4.6 trillion from 2012 to 2021.5
The 2017 Tax Cuts and Jobs Act lowered the top individual tax rate from 39.6% to 37%.6 It cut the corporate tax rate from a maximum rate of 35% to a flat rate of 21%. The Act is estimated to increase the deficit by $1 trillion to $2 trillion from 2018 to 2025. It was projected to increase growth by 0.7% annually.7
Center on Budget and Policy Priorities. "Recent Studies Find Raising Taxes on High-Income Households Would Not Harm the Economy." June 8, 2020.
Congressional Budget Office. "The Budget and Economic Outlook: Fiscal Years 2011 to 2021," Page 24. Accessed June 9, 2020.
Congress.gov. “H.R.1 – An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018.” Accessed June 8, 2020.
Urban Institute & Brookings Institution Tax Policy Center. "How Did the TCJA Affect the Federal Budget Outlook?" Accessed June 8, 2020.
A Repatriation Tax Holiday Sounds Fun, but Comes with a Hangover
In 2004, Congress passed the Homeland Investment Act (HIA) of 2004 which allowed corporations to repatriate foreign-source income at a reduced tax rate of 5.25 percent during 2005 and 2006.
First, even though Congress intended all the repatriated money be used directly for job creation, capital investment, and other growth-producing expenditures, it has been found that an approximate “$1 increase in repatriations under the HIA spurred a $0.92 increase in payouts to shareholders,” which was explicitly not permitted.
Additionally, between 2004 and 2007 the top 15 repatriating corporations cut 20,931 jobs in the United States.
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