Liberty?

fast_eddie_72 wrote:

Strizzo wrote: i don't think that laffer states that people would choose not to work, they might also invest more into pre-tax options, or companies would find other ways to compensate their employees, like stock, or 401k matching

Well, it was always quite vague and never really said anything you could pin down, so it's appropriate to now change our understanding of it to fit whatever current poitn we're trying to make. Having said that, the commonly held understanding of it is pretty much what I said. From Wikipedia: "The curve is constructed by thought experiment. First, the amount of tax revenue raised at the extreme tax rates of 0% and 100% is considered. It is clear that a 0% tax rate raises no revenue, but the Laffer curve hypothesis is that a 100% tax rate will also generate no revenue because at such a rate there is no longer any incentive for a rational taxpayer to earn any income, thus the revenue raised will be 100% of nothing." NO incentive for rational taxpay to earn income means they chose not to work. As to your other point, could be. I wasn't speaking to that. Someone brought up Reagan as a justification for lowering taxes even more than we've already lowered them. I pointed out that Reagan's theoris would suggest taxes are too low. Personally, I'm sure you're right and there is an effect on the overall economy. But it's an argument that, much like the Laffer curve, offers no guidance. We are in debt and need to get out. If lowering taxes creates a robust economy, but does it at the expense of lower tax revenue, we have taken a step in the wrong direction. Great that we're all getting rich, but a moot point when our nation is bankrupt.

i think that, if at the current rates, the economy is slow, and revenues are down, it would seem that that "magic point" of peak tax revenue generation is either higher or lower than the current tax rate. also, one could argue that because raising taxes further would generally slow down the economy, that the prudent direction for the tax rate would be to either reduce tax rates or at least keep them the same.

the point i'm making is that there is no constant "magic point" for the tax rate, since the economy grows and shrinks, so the target is always moving depending on the strength of the economy. while 35% may have been lower than the peak tax revenue generating level when the economy was booming, it may now be too high for the current economy.

like you say, though, this is all pissin in the wind at this point as its not going to change that we need to spend less and take in more.

Strizzo wrote: i think that, if at the current rates, the economy is slow, and revenues are down, it would seem that that "magic point" of peak tax revenue generation is either higher or lower than the current tax rate. also, one could argue that because raising taxes further would generally slow down the economy, that the prudent direction for the tax rate would be to either reduce tax rates or at least keep them the same.

That would make more sense to me if we hadn't lowered taxes and watched the economy falter. The tax rates in place under the Clinton administration didn't seem to curtail economic growth and raised more revenue. It's hard for me to see a case against returning to them.

Furthermore, Alan Greenspan, who likely knows more about it than me, seems to agree with that assessment. So does David Stockman, Regan's budget director from 1981 to 1985.

So back to the statements several posts ago that lower taxes are justified by Reagan policy, I'd think Stockamn's words would carry some weight.

What if we lower taxes more and the economy continues to do poorly? Lower them even further? At what point do we say "that might be too low?" All indications seem to say we're there.

fast_eddie_72 wrote:

Strizzo wrote: i think that, if at the current rates, the economy is slow, and revenues are down, it would seem that that "magic point" of peak tax revenue generation is either higher or lower than the current tax rate. also, one could argue that because raising taxes further would generally slow down the economy, that the prudent direction for the tax rate would be to either reduce tax rates or at least keep them the same.

That would make more sense to me if we hadn't lowered taxes and watched the economy falter. The tax rates in place under the Clinton administration didn't seem to curtail economic growth and raised more revenue. It's hard for me to see a case against returning to them. Furthermore, Alan Greenspan, who likely knows more about it than me, seems to agree with that assessment. So does David Stockman, Regan's budget director from 1981 to 1985. So back to the statements several posts ago that lower taxes are justified by Reagan policy, I'd think Stockamn's words would carry some weight. What if we lower taxes more and the economy continues to do poorly? Lower them even further? At what point do we say "that might be too low?" All indications seem to say we're there.

Kinda like what happened with interest rates. How do you go lower than 0%? Pay us to take loans? Wait, I like that idea...dialing BofA now.

I'm hoping for that myself Cone_Junky. I still have good credit. I'd take out quite a loan under those conditions.

fast_eddie_72 wrote: That would make more sense to me if we hadn't lowered taxes and watched the economy falter.

Please provide proof of this? Once the Bush tax cuts were implemented, revenues to the Fed's AGAIN increased.

http://www.washingtontimes.com/news/2010/feb/3/bush-tax-cuts-boosted-federal-revenue/

How about this?

Instead of blaming Congress/Bush/Obama for the failing economy, let's blame OURSELVES. Yep, you know the ones who bought houses we couldn't afford, big screen TVs on credit, BMW's on leases so we could pretend to have money.

Let the American people take responsibility for the own actions for once.

Is it really "Joe Banker" down the street's fault, that people went out and bought $200,000 homes on a $40k/year salary? I don't care if the banks TOLD them they could afford it.

My wife and I are DINK's with a gross income a bit north of $120k/year, the bank was trying to push toward loans in the $225k-275k region. However, we have a modicum of common sense and enjoy having a travel/fun budget and knowing that we are still putting money in savings and for our retirement.

So we bought a house that cost less $100k.

We don't have cable TV, we buy generic medicine and dried goods. We cook at home and rarely eat out more than 2x a month.

Sorry for the rants today, I'm just really sick and tired of the American people not owning up for their own mistakes.

z31maniac wrote: Please provide proof of this?

Okay?

Everything I find shows the same thing. Tax revenue rose for two years (2004 and 2005) then fell each year thereafter (2006, 2006, 2008, 2009 and 2010). There is a graph in this article:

http://www.msnbc.msn.com/id/32275055/

Another, more difficult to read here:

http://leedsonfinance.com/2010/07/15/can-we-really-increase-tax-revenue/

But that is a fascinating article.

In reply to z31maniac: I agree with you completely.

I do a lot of driving every day, and listen to a lot of talk radio. I listen to both 'sides' for variety, and to consider other viewpoints. Listening to the leftists whining today about the tax cuts grew tiresome. I think it's mostly a bunch of hysteria to keep us from looking at the bigger picture. I feel about it the same way I feel about another liberal sacred cow: immigration reform. You close up the border, and I'll gladly discuss immigration. You trim the budget and get rid of the fat and obscene salaries and I'll cheerfully discuss tax rates. But I have a better idea...

"Tax cuts". "Tax incentives". "Tax deductions". I'm sick of it. The system is intentionally so confusing nobody knows where they stand in comparison to anyone else when it comes to paying a 'fair share'. The tax system is a failure. We should trash it. Fair Tax, Flat Tax...I don't care which. Let's get rid of this incomprehensible tax code.

ddavidv wrote: "Tax cuts". "Tax incentives". "Tax deductions". I'm sick of it. The system is intentionally so confusing nobody knows where they stand in comparison to anyone else when it comes to paying a 'fair share'.

I don't actually think it was intentianally confusing. I think it's the product of many years of very small and sometimes conflicting changes to the code that added up to some kinda beast....

z31maniac wrote: Please provide proof of this? Once the Bush tax cuts were implemented, revenues to the Fed's AGAIN increased.

Wait, why am I even trying to respond to this.

1. Bush tax cuts passed in 2003.
2. Bush tax cuts still in place.

Yes? Can we agree?

You tell me- what is better now than it was in 2003. Tax revenue? Unemployment? Trade deficit? National debt?

What has improved with the introduction of these tax levels lower than the leves during the Clinton administration?

I can see you didn't read the article.

"From 2004 to 2007, federal tax revenues increased by $785 billion, the largest four-year increase in American history."

Is your last post somehow hinting that if the income tax rate had been higher, the financial crisis wouldn't have happened?

Iggy, why did you change your name? The Tax Code is source of power, which is why it's so convulted. It's used to punish and reward.

Hell, look at McD's complaining about Obamacare and getting a special waiver.

z31maniac wrote: I can see you didn't read the article.

I did read the Washington Times Commentary you posted. Did you read the articles I posted? You asked me for information backing up my clam, I posted what I found.

z31maniac wrote: Is your last post somehow hinting that if the income tax rate had been higher, the financial crisis wouldn't have happened?

It is a pretty straightforward post. If you're telling me the solution to the economic crisis is to keep the tax cuts we have now, I have to wonder why we had a financial crisis at all with them in place. I'm not the one who suggested that the solution to the economic situation is linked to tax rates. I don't believe it is. I do think the solution to paying down the debt is linked to taxes.

Really, read the second article in the post I made above.

Don't start being condscending, I asked you an honest question to clarify your post. If you want to debate like an adult, I'm happy to.

If you want to put on a show and act superior, not interested.

Well, I have no idea what you're talking about, so have a nice day and I'll catch you down the road.

I've posted a lot of sources for my opinions. If that's condescending, well, not sure what to tell you.

The "pretty straightforward post" part. Like I said, I was asking for honest clarification.

I've posted sources as well.

EDIT: Sorry, I've been a bit irritable/pissed off today.

z31maniac wrote: EDIT: Sorry, I've been a bit irritable/pissed off today.

Eh, me too. No worries. I should stop this crap. Doesn't do anything but piss people off.

Thanks for the discussion. I'm feel quite wise having argued my point on an internet forum. That's what all us really influential people do. I'm going to find a cool thread about cars.

Take care,

Ed

fast_eddie_72 wrote: http://leedsonfinance.com/2010/07/15/can-we-really-increase-tax-revenue/ But *that* is a fascinating article.

That indeed is an interesting article.

But the author (and from what I can tell, those here...though I've not read every post on this thread carefully) seems to miss/ignore a key factor.

Government spending is counted as part of GDP. So when the Government spends more (even if the money doesn't exist) GDP goes up. So it makes sense that GDP wouldn't show as much growth as expected in times of lower taxes (and relatively lower spending) and also show higher than expected in periods of higher taxation combined with higher spending.

In other words, it's not necessary a good measure of what we're discussing here.

A better question to be asked of the article is "why" the Government should be maintaining a steady 18.5% claim on GDP... back before the New Deal I think it was significantly lower.

I do disagree with you on a key part though... you are of the opinion that higher taxes are key to paying down the debt... that has really never worked. Reducing spending would be much more effective at paying down debt (that's a fixed number unlike tax receipts which have a realtionship to rates but aren't "fixed")... but the only thing that has worked in practice to balance the budget was real private sector economic growth...

Bill

Could it be that this horse isn't dead yet?

Let's make sure!

http://news.yahoo.com/s/ap/20101119/ap_on_re_as/as_china_pollution

Quote: BEIJING – Pollution in Beijing was so bad Friday the U.S. Embassy, which has been independently monitoring air quality, ran out of conventional adjectives to describe it, at one point saying it was "crazy bad."