@okie,
Quote: Again your ignorance shows. Tax revenues are not directly proportional to tax rates, because tax rates affect the economy. This is elementary, so you need to brush up on this , cyclops. It is similar to a retailer that makes a decision about raising his prices, he cannot assume that he will sell the same number of units at a higher price, that is utterly ridiculous, but that is exactly what liberals like yourself do here all the time. Surely you must know that Sam Walton built the Walmart empire by not raising prices to increase gross sales, but he instead reduced prices to the bare bone and made a fortune by selling much higher quanitities. The same principle applies to tax rates to some extent, not entirely, but part of that principle is always part of the equation. We have argued the Laffer Curve numerous times, but you still have not caught on to the principle of it.
And to repeat, JFK and Reagan both increased tax revenues by lowering tax rates. This is history.
You are incorrect about your 'history' and your understanding of the economy and how it works. Cutting taxes NEVER leads to a rise in revenue, ever. It only depresses the levels of revenue collected, which then begin to rise from the previous point.
Here's Paul Krugman using actual facts and numbers to prove you wrong:
Quote: January 17, 2008, 7:03 pm
Reagan and revenue
Ah - commenter Tom says, in response to my post on taxes and revenues:
Quote:
Taxes were cut at the beginning of the Reagan administration.
Federal tax receipts increased by 50% by the end of the Reagan Administration.
Although correlation does not prove causation the tax cut must have accounted for some portion of this increase in federal tax receipts.
I couldn’t have asked for a better example of why it’s important to correct for inflation and population growth, both of which tend to make revenues grow regardless of tax policy.
Actually, federal revenues rose 80 percent in dollar terms from 1980 to 1988. And numbers like that (sometimes they play with the dates) are thrown around by Reagan hagiographers all the time.
But
real revenues per capita grew only 19 percent over the same period " better than the likely Bush performance, but still nothing exciting. In fact, it’s less than revenue growth in the period 1972-1980 (24 percent) and much less than the amazing 41 percent gain from 1992 to 2000.
Is it really possible that all the triumphant declarations that the Reagan tax cuts led to a revenue boom " declarations that you see in highly respectable places " are based on nothing but a failure to make the most elementary corrections for inflation and population growth? Yes, it is. I know we’re supposed to pretend that we’re having a serious discussion in this country; but the truth is that we aren’t.
Update: For the econowonks out there: business cycles are an issue here " revenue growth from trough to peak will look better than the reverse. Unfortunately, business cycles don’t correspond to administrations. But looking at revenue changes peak to peak is still revealing. So here’s the annual rate of growth of real revenue per capita over some cycles:
1973-1979: 2.7%
1979-1990: 1.8%
1990-2000: 3.2%
2000-2007 (probable peak): approximately zero
Do you see the revenue booms from the Reagan and Bush tax cuts? Me neither.
You are simply incorrect. There was no boom in revenue due to Reagan's tax cuts. In fact, Clinton's revenue boom by RAISING taxes dwarfed the rise during Reagan's term.
Tax rates do NOT affect the economy to the extent you think they do. Making small changes in tax rates does not provide for a gigantic boom in revenues. We can do some math experiments if you need proof of this.
Quote:
Perhaps not, for sure not in the case of all of them. But the Department of Education is one big one, it should go to local people, the people that care about their children, its time for the locals to pick up the slack, and besides, alot of waste occurs in Washington, and that can be eliminated by shortening the route of how the money finds its way into the schools. The cost of education is out of control, and it needs fixing.
This doesn't save you money - you will just be paying State taxes instead of Federal taxes. I also wonder how you plan on eliminating the 'waste' in education spending - do you really know any details about what you are talking about?
Quote:
No, not the reason. I am for it because the IRS is a total disaster, and with the retail sales tax, we suddenly collect tax from illegals, drug dealers, and other criminals that operate under the radar. Rich people still would pay alot more tax. We can also exempt food, and also housing under a certain threshold. It would be simpler and we already have the infrastructure to collect the tax, as almost every state operates by collecting retail sales tax already. By taxing purchases instead of productivity, we place foreign goods on the same playing field with domestic, plus it places alot more money into peoples pockets to begin with. By eliminating taxes on businesses and productivity, not only our economy booms, but our exports would skyrocket, thus providing more jobs and growing the economy, it would be a domino effect in a postivie way.
Sales taxes are inherently regressive. There would have to be quite a bit of progressive indexing in order to make this a good idea. I would also have to see some proof of concept, in which it was shown that the amount of real revenues garnered went UP, not SHRANK, because we will not be able to address our problems with less revenue.
Quote: That is the only way to get out of debt. You will not do it with a shrinking economy. No sane person solves his household budget by spending more and working less. You have to combine more work with less spending, this is simple common sense, which I guess Democrats do not have?
Raising taxes does not shrink the economy. There's no evidence that this is true at all. Under Clinton's term, taxes went up and the economy didn't shrink in the slightest. How do you account for this in your theories?
Cycloptichorn
