Cycloptichorn wrote:
Really? In the 90's we had higher taxes, and by the later years, no deficit at all and a shrinking debt. I think you are living in denial about a simple fact:
Raising taxes raises Federal revenues. Considerably. A combination of higher taxes and spending restraint will be necessary in order to continue to get on the path to fiscal responsibility. Closing tax loopholes which allow rich folks to hide monies tax-free, which allow corporations (such as everyone's favorite, Halliburton) to avoid paying taxes almost altogether, will go a long way towards balancing budgets, as well.
Cycloptichorn
I have posted time and again that I think we are still below the peak of the Laffer curve, so raising taxes will raise revenues, however, it is not a zero sum game, and it will burden the economy further. The point at which we are probably on right now is a flatter portion of the curve so that any tax hike will not raise as much revenue as desired even though it will probably raise some. The economy will suffer at some point, and of course all other factors that affect the economy are also factors as well, so it is sometimes difficult to calculate the exact effect right away. It could be short term or long term. I think the far safer, surer, and more fiscally responsible way is to slow the growth of spending drastically rather than raising taxes.
And I still think a tax cut sometimes jumpstarts an economy that is beginning to languish, but when other factors are going better, perhaps we can afford to pay a higher rate to raise revenue. One must remember also that GDP rates of growth are compounding, so that if it tanks for a year or two, the effect is lasting in terms of future tax revenues as well.
Another name for "tax loopholes" is "tax incentives," which your lovable representatives you send to Washington enact for a reason to stimulate various things, such as energy production, environmental projects, the list goes on.
And I still think Gingrich deserves as much or more of the credit as Clinton for the deficits being reduced in the 90's.