Why Obama's 'New Deal' will fail in California

@okie,

okie wrote:

Cyclops, have you ever run a business? Or take your own finances. Have you ever tried to spend your way out of a fiscal crisis? Businesses can't do it. We can't do it with our own personal finances. What makes you think California can? What did you say about idealogical and rational?

So when we're in a recession, and a fiscal crisis, you agree that we should raise taxes to help cover the deficit? Cutting taxes is the same thing as spending.

Cycloptichorn

2 Replies

@Cycloptichorn,

First and foremost, my first solution is to cut spending first.

Secondly, let us differentiate between cutting tax rates and cutting tax revenues, they might not be one and the same.

So I get back to the idea of cutting spending first, that is my first solution. After that, the debate can then take place, will cutting tax rates or raising tax rates do what to the tax revenue picture? If raising tax rates will in fact raise more revenues to pay for whatever bare bones state budget, then it must be done. But I do not believe for a minute that paying for the health care, welfare, and education of non-citizens of California makes any iota of sense whatsoever. So my reply to the state government of California, after you have eliminated waste, let me know, but until then please do not insult the citizens by asking them to pay for more spending that they should not be paying for.

1 Reply

@okie,

Quote:

Secondly, let us differentiate between cutting tax rates and cutting tax revenues, they might not be one and the same.

They are the same. Cutting taxes never raises revenues, no serious economist believes that it does, and you are doing nothing more than repeating a false ideology when you say this.

The citizens of CA consistently vote to keep those who want more taxes and more social programs in place. Your opinion about what 'should' be paid for by government is immaterial.

Cycloptichorn

1 Reply

@Cycloptichorn,

Cycloptichorn wrote:

Quote:

Secondly, let us differentiate between cutting tax rates and cutting tax revenues, they might not be one and the same.

They are the same. Cutting taxes never raises revenues, no serious economist believes that it does, and you are doing nothing more than repeating a false ideology when you say this.

There you go again, cyclops, enter the Laffer Curve. No serious economist believes tax rates and the resulting economy that produces tax revenues operate in a vacuum independent of each other. If you believe tax rates have no effect upon the economy, hence no effect upon tax revenues, then virtually every politician and their economist advisors are flat wrong. Even Obama disagrees with you on this, cyclops.

Quote:

The citizens of CA consistently vote to keep those who want more taxes and more social programs in place. Your opinion about what 'should' be paid for by government is immaterial.

But are those same citizens in favor of higher taxes? You cannot look at the issues by themselves. I have pointed this out to you, but you continue to ignore it. I have also pointed out the citizens have voted for stuff in California that have been struck down by your liberal courts, so do voters really matter?

Cycloptichorn

[/quote]

1 Reply

@Cycloptichorn,

Cycloptichorn wrote:

okie wrote:

Cyclops, have you ever run a business? Or take your own finances. Have you ever tried to spend your way out of a fiscal crisis? Businesses can't do it. We can't do it with our own personal finances. What makes you think California can? What did you say about idealogical and rational?

So when we're in a recession, and a fiscal crisis, you agree that we should raise taxes to help cover the deficit? Cutting taxes is the same thing as spending.

Cycloptichorn

Are you serious, cyclops? Are you sane?

0 Replies

@okie,

Quote:

There you go again, cyclops, enter the Laffer Curve.

So.. since you think that is so could you please provide the optimum tax rate for the Laffer Curve okie? Laffer didn't do it. It could well be 99% for all we know. The only thing we can speculate using the curve is that 100% taxation causes 0% revenues. We don't know anything beyond that with the curve.

1 Reply

@parados,

parados wrote:

Quote:
There you go again, cyclops, enter the Laffer Curve.

So.. since you think that is so could you please provide the optimum tax rate for the Laffer Curve okie? Laffer didn't do it. It could well be 99% for all we know. The only thing we can speculate using the curve is that 100% taxation causes 0% revenues. We don't know anything beyond that with the curve.

Actually, we do not know that 100% taxation produces 0% revenues. It seems logical that 100% taxation would resemble some kind of communist economy where all income goes to the government to then be doled back out to the society, so that people would do some work, mostly coerced or forced, but productivity would drop dramatically to only a very small fraction of a free market economy. If you need examples, compare communist economies to free markets, such as North Korea to South Korea, which reveals North Korea to be about 4% of that of South Korea. So perhaps 100% taxation returns about 4 % of what a free market economy will produce. So if the tax rate of the free market economy is 20%, just a guess for example purposes, tax revenues at the 20% rate would be more than 5 times the amount at 100%.

Now, to you Parados, you are challenging me to tell you at what point the peak is, which is a ridiculous question from a person that has denied the existence of a peak. The peak probably changes depending upon other economic and polticial conditions, but the inability to calculate the exact postion of the peak hardly disproves its existence, in fact the existence is proven by the evidence I have just cited, and by common sense. Also, simple logic tells you that 99% tax rate is not going to stimulate the motivation of ambition or ingenuity very much. My guess is that it is somewhere in the 50 to 60% range of taxation, but as I said, I don't think the peak is constant or easily established as to its exact position. There are other factors besides tax rates, as it is just one, but it is a biggee.

I am simply suggesting here that if politicians making public policy would use some actual common sense and acknowledge the obvious, we could actually govern the country far more efficiently. There are some economic factors that are simply a fact of life, no getting around it, and although politicians want us to believe there is a free lunch, there isn't one.

2 Replies

@okie,

Quote:

The peak probably changes depending upon other economic and polticial conditions, but the inability to calculate the exact postion of the peak hardly disproves its existence

Yes, it does. For a theory in which you cannot calculate various factors is not a workable theory.

Quote:

in fact the existence is proven by the evidence I have just cited

No, it is not proven by the 'evidence' you cited.

Quote:

and by common sense.

You wouldn't know much about this, apparently.

Cycloptichorn

1 Reply

@Cycloptichorn,

Cycloptichorn wrote:

Quote:
The peak probably changes depending upon other economic and polticial conditions, but the inability to calculate the exact postion of the peak hardly disproves its existence

Yes, it does. For a theory in which you cannot calculate various factors is not a workable theory.
....
Cycloptichorn

I cannot tell you at what exact minute and hour it will be the warmest temperature tomorrow, but I can tell you that it will be barely light at 7 am, not very warm, and it will be almost dark by 5 in the evening. I can draw you a curve without numbers assigned, and I can be pretty sure that there will be a peak somewhere in between, but I cannot tell you what the amplitude or the time will be. If we have more scientific information about the sun and the rotation of the earth, scientists can figure out an average or where it should occur under common circumstances. In economics, it is entirely logical by simple mathematics that there is a peak, and it may even be reasonable to estimate where the peak is in terms of a span, such as from 40 to 60% tax rates. I am not asserting those numbers, but I am asserting the curve does exist, it is real, and demonstrable, by the simple facts I have already cited.

So to say a theory does not exist simply because you do not have specific numbers is total and absolute nonsense. We do in fact have at least three points for the curve, 0% taxation is 0 revenues, and 100% taxation is several times less than somewhere in between.

1 Reply

@okie,

okie wrote:

In economics, it is entirely logical by simple mathematics that there is a peak, and it may even be reasonable to estimate where the peak is in terms of a span, such as from 40 to 60% tax rates. I am not asserting those numbers, but I am asserting the curve does exist, it is real, and demonstrable, by the simple facts I have already cited.

Great. So you have two points at 0% and 100%, and a peak somewhere in between. However, you have no idea where the peak is.

Therefore, in practical terms, all the Laffer curve tells you is: if you raise the level of taxation in California, tax revenues might go up or down. On the other hand, if you cut taxes, tax revenues might go up or down.

Not very helpful.

1 Reply

@old europe,

old europe wrote:

okie wrote:
In economics, it is entirely logical by simple mathematics that there is a peak, and it may even be reasonable to estimate where the peak is in terms of a span, such as from 40 to 60% tax rates. I am not asserting those numbers, but I am asserting the curve does exist, it is real, and demonstrable, by the simple facts I have already cited.

Great. So you have two points at 0% and 100%, and a peak somewhere in between. However, you have no idea where the peak is.

Therefore, in practical terms, all the Laffer curve tells you is: if you raise the level of taxation in California, tax revenues might go up or down. On the other hand, if you cut taxes, tax revenues might go up or down.

Not very helpful.

It is very helpful, because now you have at least an honest debate, to be addressed by the economists, as to what tax rates will do to the revenue, and the economy. Right now, you have idiots simply assuming raising taxes will solve all their problems. It is not a proportional equation, as there are more factors than one, that being tax rates, and all you have to do is raise the rates and just like magic, time after time, government can grow and there is an endless pot of money from which to provide the money for every imaginable program some bureaucrat can dream up. It doesn't work that way, and I think its about time all politicians admit it.

1 Reply

@okie,

okie wrote:

old europe wrote:

okie wrote:
In economics, it is entirely logical by simple mathematics that there is a peak, and it may even be reasonable to estimate where the peak is in terms of a span, such as from 40 to 60% tax rates. I am not asserting those numbers, but I am asserting the curve does exist, it is real, and demonstrable, by the simple facts I have already cited.

Great. So you have two points at 0% and 100%, and a peak somewhere in between. However, you have no idea where the peak is.

Therefore, in practical terms, all the Laffer curve tells you is: if you raise the level of taxation in California, tax revenues might go up or down. On the other hand, if you cut taxes, tax revenues might go up or down.

Not very helpful.

It is very helpful, because now you have at least an honest debate, to be addressed by the economists, as to what tax rates will do to the revenue, and the economy. Right now, you have idiots simply assuming raising taxes will solve all their problems. It is not a proportional equation, as there are more factors than one, that being tax rates, and all you have to do is raise the rates and just like magic, time after time, government can grow and there is an endless pot of money from which to provide the money for every imaginable program some bureaucrat can dream up. It doesn't work that way, and I think its about time all politicians admit it.

No, it is not helpful, Okie; for more than one factor affects tax revenues, and we don't even KNOW all the factors that affect it, nor do we know the effects of what our actions will be.

Your over-simplification does not lead to an 'honest debate.' It leads to a situation which has nothing to do with reality. That's not very helpful.

Cycloptichorn

1 Reply

@Cycloptichorn,

Okay then, grow government to whatever, promise anything and everything to your voters to get elected, all you have to do is raise taxes, all the way to 70%, 80%, 100%, whatever, cyclops, and I guess problem solved. Tax the bejeebers out of everyone, and you don't need to worry, they will not leave California. Pay for non-citizens health care, welfare, food stamps, education, whatever. Keep giving raises to all your teachers, administrators, college elites, you name it. Fund all of your politically correct stuff. Good luck. I'm glad I don't live in California.

Just a hint, alot of Californians have already moved out of the state, to Oregon, Washington, Arizona, all over, due to high cost of living, taxes, crime, you name it, I've talked to some of them, and they are glad they are out of there. Go to Durango, Colorado, and you will find quite a few of them. I have relatives that used to live in California, and a number of them have left the state. People move all the time, but people leaving California is a bit more than usual in my opinion. And they have caused problems elsewhere, they sold their homes out there at unearthly prices, go elsewhere and think some inflated price is a bargain, thus they drive up prices there.

The gravy train is about over, and if you don't start cutting costs in your state, the day of reckoning is drawing nearer.

1 Reply

@okie,

Quote:

Now, to you Parados, you are challenging me to tell you at what point the peak is, which is a ridiculous question from a person that has denied the existence of a peak.

When did I do that? You love to make claims okie but they aren't true most of the time.

North Korea vs South Korea has nothing to do with the Laffer curve since you haven't provided us with their taxation structures. Free markets can tax from zero to 100% and so can communist countries.

Quote:

My guess is that it is somewhere in the 50 to 60% range of taxation,

That is interesting since the US is not close to the 50-60 range. That would mean Cyclo is correct about the current taxation in the US. Lowering taxes in the US will lower revenues based on the laffer curve.

1 Reply

@okie,

okie wrote:

Okay then, grow government to whatever, promise anything and everything to your voters to get elected, all you have to do is raise taxes, all the way to 70%, 80%, 100%, whatever, cyclops, and I guess problem solved. Tax the bejeebers out of everyone, and you don't need to worry, they will not leave California. Pay for non-citizens health care, welfare, food stamps, education, whatever. Keep giving raises to all your teachers, administrators, college elites, you name it. Fund all of your politically correct stuff. Good luck. I'm glad I don't live in California.

Just a hint, alot of Californians have already moved out of the state, to Oregon, Washington, Arizona, all over, due to high cost of living, taxes, crime, you name it, I've talked to some of them, and they are glad they are out of there. Go to Durango, Colorado, and you will find quite a few of them. I have relatives that used to live in California, and a number of them have left the state. People move all the time, but people leaving California is a bit more than usual in my opinion. And they have caused problems elsewhere, they sold their homes out there at unearthly prices, go elsewhere and think some inflated price is a bargain, thus they drive up prices there.

The gravy train is about over, and if you don't start cutting costs in your state, the day of reckoning is drawing nearer.

I'll make you a deal, Okie: you keep spouting off about how we're going to wreck the place, and we'll keep right on being the largest economy in America, bigger than almost every other country in the world, by ourselves. In fact, as we only get in about 80 cents on the dollar for our federal taxes, and your shitty little state, the most conservative state in the country, Oklahoma, gets more than a dollar and a third for every one you put in, we'll keep right on paying for you.

As for all the people leaving CA, it doesn't seem to have slowed us down much. Our population growth is significantly higher than the national average. We have more youth than the national average and less folks over 65. It seems likely that we'll get along just fine without those who didn't want to get on board with the way we do things out here now.

Cycloptichorn

0 Replies

@parados,

I have said quite a few times during our Laffer curve debates that we are probably below the peak of the Laffer curve. However, as you near the peak, the steepness of the curve probably lessens because the rate of taxation increasingly harms economic productivity, but not quite to the point yet of causing declines in tax revenue. Right near the peak it would be possible to raise rates without seeing hardly any increase in tax revenues at all.

Aside from the peak of the curve, I believe the healthiest economy, or the most affluence is probably found well below the peak of the curve. I am guessing that some European economies are nearer the peak of the curve.

1 Reply

@okie,

ROFLMAO..

Quote:

I have said quite a few times during our Laffer curve debates that we are probably below the peak of the Laffer curve. However, as you near the peak, the steepness of the curve probably lessens because the rate of taxation increasingly harms economic productivity, but not quite to the point yet of causing declines in tax revenue. Right near the peak it would be possible to raise rates without seeing hardly any increase in tax revenues at all.

Does that mean you have said quite a few times that you don't have a clue about how the Laffer curve works? That's what your statement says to me.

1 Reply

@parados,

I know roughly how it works, from common sense. Not even Einstein could apply specific numbers at one specific point in time for a specific economy, unless you had enough data points to apply to the curve while holding all other factors equal. We know that is impossible because economies change too quickly and only happen once, thus we cannot obtain enough data points to do it precisely. But that does not disprove the obvious principle that is operating. In contrast, you even deny the existence of an obvious mathematical and economic principle.

If you don't believe its existence, then you need to disprove the 3 data points on the curve. I doubt you can disprove that 0% taxation of gdp equals 0. Try if you can. I doubt you can disprove that 100% taxation equals alot less than about 20% or 30% taxation of potential gdp outcomes. Try it if you so desire. I think my North Korea and South Korea examples pretty well prove that it does not, in fact far from it. If you take those 3 data points, a Laffer like curve is mathematically a virtual certainty.

0 Replies

Why Obama's 'New Deal' will fail in California

Related Topics

Quick Links

My Account

able2know