3
   

Is the Liberal Political Mind one dimensional?

 
 
plainoldme
 
  1  
Reply Tue 23 Jan, 2007 05:16 pm
BTW -- While this thread goes on and on about the Laffer curve, we all have to stop and admit that it is high on the Laugher curve. I've laughed out loud several times while reading it!
0 Replies
 
snood
 
  1  
Reply Tue 23 Jan, 2007 08:01 pm
I know, right? Jeez Louise.....
0 Replies
 
okie
 
  1  
Reply Tue 23 Jan, 2007 08:55 pm
joefromchicago wrote:
okie wrote:
Well, if you think Laffer isn't addressing a relationship and a curve is total bunk, it only shows your own mental capacity to understand simple laws of supply and demand, and human nature. If I am a seventh grader, you haven't even made it to kindergarten.

I never compared you with a seventh grader, okie, and I never will. After all, in my lifetime I've known some fairly intelligent seventh graders.


My apologies, Joe, for the seventh grader comment. I confused you with keltic concerning his 7th grader accusation thrown my way. I think you did, however, affirm that keltic explained your argument better than you could, and your just posted comment deserves a take back on the apology.

At least, you debate the points somewhat, which is better than most liberals.
0 Replies
 
okie
 
  1  
Reply Tue 23 Jan, 2007 09:08 pm
parados wrote:

Oh? Really OKIE. So then we can expect the same from you?

So, do you still stand by all those charts you posted from Heritage? They compare apples to oranges since they fail to account for the various changes in the tax law that changed exemptions. Try to be consistent okie.


How did the exemptions change tax revenues in a huge way? Perhaps the charts are more akin to comparing Golden Delicious to Jonathon apples rather than apples to oranges? If you can show that any change in exemptions was likely to cause the amplitude of shift in tax revenues shown in the graphs I linked, then that should be considered. Your example wherein you eliminated the "no tax" for the first million, while lowering the rate for the second million, was very bad logic, Parados, far worse than the curves I cited.
0 Replies
 
okie
 
  1  
Reply Tue 23 Jan, 2007 10:17 pm
Cycloptichorn wrote:

...
That's the whole point - merely changing the rate of taxation does not scale to increases or decreases in revenue with any reliability, given the vast majority of other factors involved.

You chose not to respond to KW's fine post, which sums up Joe and my and his and Parados' argument completely; so I'll repost it here -

Quote:
Ahem. Joe said that taxes affect the economy. That is all. Yet, you lambaste him for seeming to contradict himself, because you say he cannot-cannot-at the same time maintain that taxes affect the economy while denying the Laffer curve-because the Laffer curve is based on the idea that taxes affect the economy and that this relationship can be charted with a high degree of accuracy.

There is no contradiction at all in Joe's position. The Laffer curve depends on two things to be true.
A-Taxes affect the economy
B-How taxes affect the economy can be charted with a high degree of accuracy.

Joe agrees with A. Joe does NOT agree with B.

Okie, a seventh grader could see through your attempt to try to accuse Joe of contradicting himself when YOU are the one who maintains that if A is true, B must be true. You give no proof whatsoever of this. Things can affect each other but not be chartable.


This has been my point all along; you are committing a Tautology when you say that because taxes affect the economy somehow, the laffer curve must be true, because taxes affect the economy. You can't say that A is true because A = B and B is true because B = A. It doesn't follow, logically.

Just because taxes effect the economy doesn't mean that they can be charted - especially not with a simplistic and simplified curve - which is what Laffer tries to do, and then the rest of the supply-siders try to use as proof that taxes should be lowered.

Cycloptichorn


I deleted some of the post to simplify and shorten, keeping the main point of debate. I hope you don't mind me doing that, cyclops. I will try to address the main points. First of all, I did not interject the term, "Laffer Curve," somebody else did, I think Joeinchicago. I was simply arguing that excessive taxes affected the economy, which liberals do not seem to consider, by using an example in my very first post, saying

"If a man makes a hundred grand and pays 20% or 20 grand in taxes, they (liberals) assume if they raise taxes to 30%, the government will collect 30 grand."

My point was that the government would likely not collect 30 grand, but somewhat less than that, but I did not say by how much less I thought it would be. My recollection is that after some argument, I think it was Joeinchicago, anyway somebody, said my relationship of tax rates to the economy was the Laffer Curve. He then likened my argument to that, while clearly denying any existence of any curve, whether the Laffer curve or some other curve. Joe finally admitted a likely large effect at 100% tax rate as I recall. When asked about 99%, 90% and so on, I don't ever recall an answer, I think because he knew an honest answer shows the curve. He would not admit it, but a large effect at 100% strongly implies a curve, obviously.

Anyway, there is more to this. Take point A, as you describe the Laffer Curve.

A - Taxes affect the economy.
It appears we can agree on that, including Joe. At first, there was not full agreement when I started this thread, but now it appears that is the case. I hope so. Correct me if I am wrong here, with evidence, please.

B - How taxes affect the economy can be charted with a high degree of accuracy.

First of all, the premise that I started with does not prescribe a high degree of accuracy to a curve, although I think the curve has a general shape, similar to Laffers Curve. Furthermore, I don't think even Laffer's curve describes a requirement of a high degree of accuracy as you claim. I have never claimed that on this thread. I have only made the claim that there is a relationship and the probable shape of the curve that describes that relationship, which is defined by a curve approaching 0 tax revenues at both 0% and 100% tax rates, with an optimum peak somewhere in the middle.

So, I think your "B," as stated, is misleading, and that the Laffer curve instead illustrates approximately how tax rates affect the economy, and can be charted by a curve that approaches 0 tax revenues as the curve approaches 0% or 100% tax rates, with an optimum peak of revenues somewhere in between. This is such an elementary point, and so simple, that it is simply amazing that so-called intelligent people should argue over its existence.

Cyclops, consider the following 3 questions:

To establish one end of the graph,
1. Would the tax revenues from a 0% tax rate = $0 ?

To establish the other end of the graph,
2. Would tax revenues from a 100% tax rate = near $0 or very low revenues compared to lesser tax rates?

Before you answer this question, consider the following from this site:
http://www.worldfactsandfigures.com/gdp_country_desc.php.
Per capita GDP for South Korea was $17,700 estimated in 2003, as compared to an estimated $1,000 for North Korea. So if you consider North Korea as being near the same thing as 100% tax rate with the state owned economy, do the math and figure 100% tax rate on the $1,000 vs. whatever the overall tax rate of gdp is for South Korea, and then conclude which number is closer to 0. According to this site, government spending, and I would assume close to the tax rate as a percent of gdp in South Korea is about 28%.
http://www.heritage.org/research/features/index/country.cfm?id=KoreaSouth
Hence, which value is closer to 0, 28% of 17,700, or 5.6% of 17,700 (or 1,000/17,700)?

In this site, tax rates as a percentage of gdp is provided by country.
http://www.nationmaster.com/graph/tax_tot_tax_as_of_gdp-taxation-total-as-of-gdp

3. To establish the location of the curve in the approximate middle of the graph, is 28% of 17,700 several times higher than 5.6%? If you don't like the North Korea / South Korea comparison, feel free to use other comparisons of communist economies vs free market countries with relatively lower tax rates vs gdp.

Cyclops, answer the 3 questions with intellectually honest answers based on the information known applied to the certainty of mathematical equations.
And Joe, if you read this, be my guest as well. Parados, don't bother, because your lawyerly approach will take over and completely trump mathematical and simple economic logic.
0 Replies
 
Cycloptichorn
 
  1  
Reply Tue 23 Jan, 2007 10:46 pm
Here, this is faster:

Quote:

So, I think your "B," as stated, is misleading, and that the Laffer curve instead illustrates approximately how tax rates affect the economy, and can be charted by a curve that approaches 0 tax revenues as the curve approaches 0% or 100% tax rates, with an optimum peak of revenues somewhere in between. This is such an elementary point, and so simple, that it is simply amazing that so-called intelligent people should argue over its existence.


The problem is, raising taxes won't always make the amount of receipts go up, and lowering won't always make them go down - no matter what point on the curve you are. Economists understand that their best theoretical models are only somewhat better than useless when subjected to the varegations of real-world occurances, many of which can affect dramatic change upon both policy and the direction of markets.

The point is that the 'laffer curve' only represents a theoretical way of thinking about taxation, not an actual model which you can use to predict or explain behavior. As Joefromchicago has pointed out, every economist agrees that there is no real way to tell where on the laffer curve we are! Shouldn't that provide compelling evidence to you that this isn't perhaps the best model to use when formulating your assumptions?

Let me tell you something. If I was making 100 grand per year this year, and the gov't raised the tax rate so I paid 30 grand instead of 20 grand, what exactly is it you think I would do? Quit my job? Not ask for or take a raise?

You think people honestly don't keep trying to work, even when the taxes go up, to get ahead?

When the marginal tax rates were far higher than they were now, people were trying to get ahead.

We revolted from England in part because of high taxation; but the English citizens paid far more than we did, something to the tune of 60% of their income if I recal correctly. Did they (the english) stop striving to make money and succeed, to work, to feed their families?

Hell no!

It is purely obvious to me that a man will work as hard as he intends to work regardless of any reasonable level of taxation, with insane projections like 95+% and 5-0% thrown out because they don't have any place in the real world, which is what we are ostensibly discussing!

Cycloptichorn
0 Replies
 
DrewDad
 
  1  
Reply Tue 23 Jan, 2007 11:07 pm
plainoldme wrote:
Thomas wrote:

If your measure of progress is economic efficiency, the evidence seems to have been pretty good in the late 60s and early seventies, when the minimum wage was much higher in real terms than it is now. ($8-$9 in today's dollars) It seems to be pretty well established econometrically that the minimum wage in France (about $10) contributes to the high unemployment rate in this country.


Not to be pedantic, but the minimum wage in France has nothing to do with the state of the economy in the US which is the host country for this forum or with that of Germany, where you claim to be.

One might try to remember that a) not everyone is a native English speaker and b) sometimes people make typos. Thomas' meaning is clear, I believe.
0 Replies
 
DrewDad
 
  1  
Reply Tue 23 Jan, 2007 11:10 pm
FYI, Okie, you could choose to abandon your defense of the Laffer curve, and still make arguments regarding taxes and the economy.

Of course, we would still require you to provide evidence in support of your positions.
0 Replies
 
okie
 
  1  
Reply Tue 23 Jan, 2007 11:21 pm
Cycloptichorn wrote:

The problem is, raising taxes won't always make the amount of receipts go up, and lowering won't always make them go down - no matter what point on the curve you are. Economists understand that their best theoretical models are only somewhat better than useless when subjected to the varegations of real-world occurances, many of which can affect dramatic change upon both policy and the direction of markets.

The point is that the 'laffer curve' only represents a theoretical way of thinking about taxation, not an actual model which you can use to predict or explain behavior. As Joefromchicago has pointed out, every economist agrees that there is no real way to tell where on the laffer curve we are! Shouldn't that provide compelling evidence to you that this isn't perhaps the best model to use when formulating your assumptions?

Whew!!!! Finally. Yes, I agree we don't know exactly where we are on the curve, and agreed the point of the peak may change. I feel like shouting it from the housetop. But at least if politicians agreed that something this basic existed, the subject of taxation could be debated and enacted in Congress more intelligently. We do not need to use the model to plot exact points, but if can use the model to be aware of possible consequences. If we agree to the existence of a curve, we can at least debate where we might be on it, using the best projections of economists. At least, predictions of tax rates increasing or decreasing revenues can be more informed, instead of looking at tax rates as a one dimensional factor.

Quote:
Let me tell you something. If I was making 100 grand per year this year, and the gov't raised the tax rate so I paid 30 grand instead of 20 grand, what exactly is it you think I would do? Quit my job? Not ask for or take a raise?

You think people honestly don't keep trying to work, even when the taxes go up, to get ahead?

When the marginal tax rates were far higher than they were now, people were trying to get ahead.

We revolted from England in part because of high taxation; but the English citizens paid far more than we did, something to the tune of 60% of their income if I recal correctly. Did they (the english) stop striving to make money and succeed, to work, to feed their families?

Hell no!

It is purely obvious to me that a man will work as hard as he intends to work regardless of any reasonable level of taxation, with insane projections like 95+% and 5-0% thrown out because they don't have any place in the real world, which is what we are ostensibly discussing!

Cycloptichorn


Right to a point, but wrong in part. People will keep working as long as they need to work and see that their work is being rewarded. If the rewards decrease, it works just like supply and demand, people will tend to work less hard after they have enough to eat and provide for basics. If they have to work 50% harder to go out to eat twice a week, it will not be worth it to a percentage of people.

In your example of paying 30 grand in taxes, you may not quit your job, but you won't have as much money to buy goods and services, so the businesses you support will suffer, and their profits drop, they lay off employees, cut costs, quit upgrading equipment, and the effects become very real. What if you were barely making your house payment on a huge house, now you can't make the payment, and have to move to a smaller house, which all affects housing markets and other parts of the economy? This is simply basic economics, for crying out loud, where nothing happens in a vacuum, much less tax rates and taxes.

You are just plain wrong that "man will work as hard as he intends to work regardless of any reasonable level of taxation, with insane projections like 95+% and 5-0% thrown out because they don't have any place in the real world, which is what we are ostensibly discussing!" Man does not work the same, independant of the reward given for his work, and to say that he does is utter nonsense and ignorance of human nature, period. A few might, but most will not. We are talking about everybody on average. Also, 0% does have a place in the real world if Congress would simply do it with the stroke of a pen, but they will not, because the math is inescapable, it would generate no tax revenue. What is so difficult to fathom about this? Simple math. The 95% or 100% is also in the real world, witness communist systems where business is state owned wherein all revenues funnel through the government, same as if you taxed them 100%. Take a look at the economies of such countries and then try to tell me the people there are working just as hard and producing just as much.

To remind you that this discussion is very applicable in the world right now, certain countries with very high tax rates vs gdp may need to lower tax rates to get their economies going better, otherwise they will suffer further. And wait until Hugo Chavez nationalizes all business in Venezuela and runs the economy as it is now further into the ground.
0 Replies
 
parados
 
  1  
Reply Wed 24 Jan, 2007 06:10 am
okie wrote:
parados wrote:

Oh? Really OKIE. So then we can expect the same from you?

So, do you still stand by all those charts you posted from Heritage? They compare apples to oranges since they fail to account for the various changes in the tax law that changed exemptions. Try to be consistent okie.


How did the exemptions change tax revenues in a huge way? Perhaps the charts are more akin to comparing Golden Delicious to Jonathon apples rather than apples to oranges? If you can show that any change in exemptions was likely to cause the amplitude of shift in tax revenues shown in the graphs I linked, then that should be considered. Your example wherein you eliminated the "no tax" for the first million, while lowering the rate for the second million, was very bad logic, Parados, far worse than the curves I cited.


Oh, I see. So long as you can ignore the change in exemptions because they are not spelled out you are willing to accept them. Rolling Eyes My example points to the flaw in your logic. I just happened to spell out the exemption to make it clear to you.
0 Replies
 
Cycloptichorn
 
  1  
Reply Wed 24 Jan, 2007 10:45 am
Sigh, you're not going to want to hear this...

okie wrote:
Cycloptichorn wrote:

The problem is, raising taxes won't always make the amount of receipts go up, and lowering won't always make them go down - no matter what point on the curve you are. Economists understand that their best theoretical models are only somewhat better than useless when subjected to the varegations of real-world occurances, many of which can affect dramatic change upon both policy and the direction of markets.

The point is that the 'laffer curve' only represents a theoretical way of thinking about taxation, not an actual model which you can use to predict or explain behavior. As Joefromchicago has pointed out, every economist agrees that there is no real way to tell where on the laffer curve we are! Shouldn't that provide compelling evidence to you that this isn't perhaps the best model to use when formulating your assumptions?

Whew!!!! Finally. Yes, I agree we don't know exactly where we are on the curve, and agreed the point of the peak may change. I feel like shouting it from the housetop. But at least if politicians agreed that something this basic existed, the subject of taxation could be debated and enacted in Congress more intelligently. We do not need to use the model to plot exact points, but if can use the model to be aware of possible consequences. If we agree to the existence of a curve, we can at least debate where we might be on it, using the best projections of economists. At least, predictions of tax rates increasing or decreasing revenues can be more informed, instead of looking at tax rates as a one dimensional factor.


First, you are incorrect that I agree with you that the laffer curve exists. I do not agree that it exists. It is only a theory, and one that cannot be borne out by any real data given the complexities of the systems it purports to explain.

It is only a theory, not a fact which can be proved or disproven. All that can happen is that evidence can support the theory or not, and there isn't much evidence to support your theory.

When I said 'economists can't even agree where we would be on the curve,' I was trying to point out that the economists don't take such a thing seriously, because the basic tenets of the theory are murky and unclear. If the theory had any sort of application, then the changes it proposes should scale accurately across the board, and they do not.

My point was that tax raises can cause higher or lower revenues regardless of whether or not some theoretical 'optimum point' is at a higher or lower point than you currently are at. This makes the theory next to useless.

Quote:
Quote:
Let me tell you something. If I was making 100 grand per year this year, and the gov't raised the tax rate so I paid 30 grand instead of 20 grand, what exactly is it you think I would do? Quit my job? Not ask for or take a raise?

You think people honestly don't keep trying to work, even when the taxes go up, to get ahead?

When the marginal tax rates were far higher than they were now, people were trying to get ahead.

We revolted from England in part because of high taxation; but the English citizens paid far more than we did, something to the tune of 60% of their income if I recal correctly. Did they (the english) stop striving to make money and succeed, to work, to feed their families?

Hell no!

It is purely obvious to me that a man will work as hard as he intends to work regardless of any reasonable level of taxation, with insane projections like 95+% and 5-0% thrown out because they don't have any place in the real world, which is what we are ostensibly discussing!

Cycloptichorn


Right to a point, but wrong in part. People will keep working as long as they need to work and see that their work is being rewarded. If the rewards decrease, it works just like supply and demand, people will tend to work less hard after they have enough to eat and provide for basics. If they have to work 50% harder to go out to eat twice a week, it will not be worth it to a percentage of people.

In your example of paying 30 grand in taxes, you may not quit your job, but you won't have as much money to buy goods and services, so the businesses you support will suffer, and their profits drop, they lay off employees, cut costs, quit upgrading equipment, and the effects become very real. What if you were barely making your house payment on a huge house, now you can't make the payment, and have to move to a smaller house, which all affects housing markets and other parts of the economy? This is simply basic economics, for crying out loud, where nothing happens in a vacuum, much less tax rates and taxes.

You are just plain wrong that "man will work as hard as he intends to work regardless of any reasonable level of taxation, with insane projections like 95+% and 5-0% thrown out because they don't have any place in the real world, which is what we are ostensibly discussing!" Man does not work the same, independant of the reward given for his work, and to say that he does is utter nonsense and ignorance of human nature, period. A few might, but most will not. We are talking about everybody on average. Also, 0% does have a place in the real world if Congress would simply do it with the stroke of a pen, but they will not, because the math is inescapable, it would generate no tax revenue. What is so difficult to fathom about this? Simple math. The 95% or 100% is also in the real world, witness communist systems where business is state owned wherein all revenues funnel through the government, same as if you taxed them 100%. Take a look at the economies of such countries and then try to tell me the people there are working just as hard and producing just as much.

To remind you that this discussion is very applicable in the world right now, certain countries with very high tax rates vs gdp may need to lower tax rates to get their economies going better, otherwise they will suffer further. And wait until Hugo Chavez nationalizes all business in Venezuela and runs the economy as it is now further into the ground.
[/quote]

Wrong wrong wrong!

Quote:

Right to a point, but wrong in part. People will keep working as long as they need to work and see that their work is being rewarded. If the rewards decrease, it works just like supply and demand, people will tend to work less hard after they have enough to eat and provide for basics. If they have to work 50% harder to go out to eat twice a week, it will not be worth it to a percentage of people.


Once again you are forced to resort to extremes in order to prop up your theory. One would assume that the average person (making 35k a year) would not have to work 50% harder to afford a few more meals out.

I don't buy this for a second, and here's why: wealth is comparative. Even if the returns are diminishing as you move up the ladder, people still do it anyways. There is a wealth of historical data showing that this is true and very little showing that it isn't, for in times when the taxes were much higher than they are now - what you and I would consider ruinous - workers still took raises, they still tried to advance, new businesses were opened, new enterprises went forth. Plenty of rich people kept getting plenty rich.

A ten percent increase in my level of taxation will not stop me from accepting a promotion or raise. It is foolish to imagine that it would.

Quote:

In your example of paying 30 grand in taxes, you may not quit your job, but you won't have as much money to buy goods and services, so the businesses you support will suffer, and their profits drop, they lay off employees, cut costs, quit upgrading equipment, and the effects become very real. What if you were barely making your house payment on a huge house, now you can't make the payment, and have to move to a smaller house, which all affects housing markets and other parts of the economy? This is simply basic economics, for crying out loud, where nothing happens in a vacuum, much less tax rates and taxes.


This is a bullsh*t paragraph, just Voodoo economics. During the 90's, taxes were higher than they are today, and profits went up tremendously in all sorts of areas, including housing and small businesses. The effects you talk about are not tied to taxation but a whole host of factors.

You say, 'What if you were barely making your house payment on a huge house?' Well, then you are a damned fool for buying a house that you couldn't afford. That isn't the fault of the federal government and is a terrible basis for tax policy.

Quote:

You are just plain wrong that "man will work as hard as he intends to work regardless of any reasonable level of taxation, with insane projections like 95+% and 5-0% thrown out because they don't have any place in the real world, which is what we are ostensibly discussing!" Man does not work the same, independant of the reward given for his work, and to say that he does is utter nonsense and ignorance of human nature, period. A few might, but most will not. We are talking about everybody on average. Also, 0% does have a place in the real world if Congress would simply do it with the stroke of a pen, but they will not, because the math is inescapable, it would generate no tax revenue. What is so difficult to fathom about this? Simple math. The 95% or 100% is also in the real world, witness communist systems where business is state owned wherein all revenues funnel through the government, same as if you taxed them 100%. Take a look at the economies of such countries and then try to tell me the people there are working just as hard and producing just as much.


You're wrong here, because you forget that wealth is relative. People still attempt to make it to the highest levels regardless of level of taxation in their society. This is borne out by historical data.

Your 'communism = 100% taxation' is a false argument that you should really not use, because it is inaccurate. It compares to fundamentally different economic systems; apples and oranges, as you say.

You can not point at any capitalist society and find evidence that your theory is correct; that raising taxes lead to catastrophic problems for society and people not attempting to get ahead because of higher taxes. I think you would be hard pressed to find any examples of this, and Okie, that means your theory isn't very good. Theories need to work outside of one's own head if you want to base policy around them.

To sum it up:

- I don't believe the Laffer Curve is a valid theory.
- I don't agree that it is useful for tax policy at all.
- You haven't presented any historical or real-world data to support your theories (other than hyperbolic extremes).
- You seem to be rather one-dimensional on this issue.

Stubbornly insisting that because you have a theory inside your head, it must be true, is not a good way to convince others of your theory. Appealing to Extremes is not a good way to convince others of your theory.

Cycloptichorn
0 Replies
 
okie
 
  1  
Reply Wed 24 Jan, 2007 12:46 pm
Cycloptichorn wrote:

To sum it up:

- I don't believe the Laffer Curve is a valid theory.
- I don't agree that it is useful for tax policy at all.
- You haven't presented any historical or real-world data to support your theories (other than hyperbolic extremes).
- You seem to be rather one-dimensional on this issue.

Stubbornly insisting that because you have a theory inside your head, it must be true, is not a good way to convince others of your theory. Appealing to Extremes is not a good way to convince others of your theory.

Cycloptichorn


- Well, we will just have to disagree. I believe a curve exists similar to a Laffer Curve.
- I believe the effect of tax rates on the economy needs to be considered every time a tax rate is changed, and any economist worth his salt should agree. We are talking about the dreaded "curve" again, whether you want to call it that or an some kind of an "effect."
- I have presented real world examples, particularly at the upper end of the curve, where North Korea's per capita gdp is a mere 5.6% of South Korea's. Same country split into two parts decades ago, they went their separate ways in economic systems akin to what translates into a 100% tax rate vs. about a 30% tax rate, and now we have the results of a real world experiment. I think you are talking about the extremes of a "parabola." Also examine the economies of many countries and compare tax rates and their economies. Examine instances where tax rate cuts have stimulated tax revenues. They have occurred, not only here, but other countries.
- You are one dimensional if you fail to consider the certain effects of tax rates on the economy, as well as likely effects on the economy caused by tax rate changes, depending on how high the rates are, including marginal rates. Politicians that do not consider these factors are too one dimensional and do not consider all possibilities as they should.

The theory in my head is not my theory, but rather it is accepted theory by a large portion of professional economists, cyclops. I would encourage you to be more openminded toward the common sense concepts presented here. Very little occurs in a vacuum, much less tax rates as they affect the economy just like other expenses and monies also impact, as part of the economic pie. Certain laws of human nature and economics are fairly certain, one of which is Supply and Demand, and the Laffer Curve is really just a product of that law.

One last comment. A subject that has not been addressed. Optimum tax revenues is not necessarily the best point of tax rates or tax rate policy, as obviously the overall gdp or economy should be better as tax rates are lowered. If we can pay for all the government services we want and need with a lesser tax rate, why tax ourselves simply because we can? In other words, we don't need and hopefully do not want the biggest government that we can possibly attain.
0 Replies
 
Cycloptichorn
 
  1  
Reply Wed 24 Jan, 2007 01:04 pm
Quote:

The theory in my head is not my theory, but rather it is accepted theory by a large portion of professional economists, cyclops.


You are confusing Republican pundits with professional economists. Big difference.

Quote:
I believe the effect of tax rates on the economy needs to be considered every time a tax rate is changed, and any economist worth his salt should agree.


I understand that this is your belief, but that doesn't change the fact that the Laffer equation does not predict nor provide any useful information about the effect of raising or lowering taxes in the real world - only in a theoretical one. In the real world it is useless for a variety of reasons, not the smallest of which being the fact that it is impossible - even if you accept the theory, which I do not - to tell whether things are too high or too low. There are simply too many factors in play for this to have any real bearing.

It's like saying that the change from week to week in solar radiation effects our environment, and so measuring that change should allow us to predict the weather. Does it? Maybe, probably, but we don't have any theories which show us a consistent model. Of course you can extrapolate this to extremes (if the radiation doubles, we'll all die) but that's useless when it comes to deciding whether or not it will rain next week.

I ask you to provide real-world evidence that does not rely upon extremes such as North Korea.... sheesh.... and I also ask you to quit ignoring the evidence presented by myself and others that the opposite of what you predict is true in many cases; you say that

Quote:
as obviously the overall gdp or economy should be better as tax rates are lowered.


But this is the exact opposite of what happened in the 90's. So it is fair to say that tax policy did not lead to the effects that you supposed it would. What you have just stated as obvious, is not obvious at all when you think about the real world examples right here in America. I believe this is a large source of your problems in this thread.

Cycloptichorn
0 Replies
 
parados
 
  1  
Reply Wed 24 Jan, 2007 01:24 pm
Quote:

One last comment. A subject that has not been addressed. Optimum tax revenues is not necessarily the best point of tax rates or tax rate policy, as obviously the overall gdp or economy should be better as tax rates are lowered. If we can pay for all the government services we want and need with a lesser tax rate, why tax ourselves simply because we can? In other words, we don't need and hopefully do not want the biggest government that we can possibly attain.
Except real world numbers show that lower tax rates don't equate to a better economy. It's been a while since I ran the numbers but since 1947 the average GDP growth compared to the tax rate as % of GDP shows little statistical correlation. Probably even less now that we have Bush's and Clinton's GDP growth rates to consider.


I might have to find that old spreadsheet and see if I can still open it.
0 Replies
 
okie
 
  1  
Reply Wed 24 Jan, 2007 04:59 pm
parados wrote:

I might have to find that old spreadsheet and see if I can still open it.

I would like to see it. I would also like to see a graph of overall tax rate plotted together with tax revenues and gdp for the last 50 years or so. Haven't been able to find anything like that on web.
0 Replies
 
plainoldme
 
  1  
Reply Wed 24 Jan, 2007 05:31 pm
AMong the post-State of the Union comments was a remark (to the effect) that the economy would be in better shape if there had not been the bush tax cut.
0 Replies
 
okie
 
  1  
Reply Wed 24 Jan, 2007 11:25 pm
plainoldme wrote:
AMong the post-State of the Union comments was a remark (to the effect) that the economy would be in better shape if there had not been the bush tax cut.

And is there a very remote chance those comments just might have come from a Democrat? I know I would be surprised if it was, but just maybe it was?

pom, have you found any good stores to buy material to sew your garments lately, or are the stores just as crummy as ever?
0 Replies
 
kuvasz
 
  1  
Reply Thu 25 Jan, 2007 02:28 am
Reading this tread is akin to watching a retard explain quantum electrodynamics to Dick Feynman; you are riveted in curious fascination on how wrong the thesis maker is and how bizarrely convoluted his argument becomes over time when twisted to accommodate reality.

On base its just as the 20th century's best economist said.

Quote:
"The modern conservative is engaged in one of man's oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness."

John Kenneth Galbraith

god forbid, fella' just admit your greed is the bedrock foundation for your thesis so you don't continually make a fool of yourself. your lack of sophistication in these matters is so gross and your thesis so unsupportable by reality that your opponents actually feel sorry for you. its like we are watching you smack your lips while eating a dog turd and exclaiming it was the finest tootsie roll ever.

and don't forget what the thesis was either...." Is the liberal politcal mind one-dimensional?"

and page after awful page illustrates its antithesis and Galbraith's prescience.


okie wrote:
plainoldme wrote:
AMong the post-State of the Union comments was a remark (to the effect) that the economy would be in better shape if there had not been the bush tax cut.



And is there a very remote chance those comments just might have come from a Democrat? I know I would be surprised if it was, but just maybe it was?


btw,
Quote:



http://www.nytimes.com/2007/01/25/washington/25budget.html?ei=5094&en=fb17e1d11b52463f&hp=&ex=1169787600&adxnnl=1&partner=homepage&adxnnlx=1169712114-6RXA9taXrm4+mMrPhwTgXQ

so perhaps you could spit out your canine tootsie roll and agree that having the US goverment actually pay its bills instead of borrowing money from China, Japan, and the Arabian Gulf Sheiks would be benefical for the US economy.
0 Replies
 
okie
 
  1  
Reply Thu 25 Jan, 2007 09:47 am
kuvasz, you obviously have not read this thread carefully, or you would know that I have not asserted to know which side of the peak of the Laffer curve we are on, and in fact I think we can still raise average tax rates and increase revenues if it is structured correctly, although I believe higher tax rates would dampen growth as compared to what it would do without it. Other factors in growth, one huge one being technological advancement, is another upward curve or line that can be graphed, which if superimposed on the Laffer Curve, especially at the upper portion of the Curve where change is more subtle, then the true effects of tax rates become masked, but that does not mean the effects do not exist or are not a factor in the grand scheme of things.

And your quote by Galbraith, which I think cyclops uses as a byline, is one of the stupidist and naive statements ever made by anyone, so it doesn't say much for his economic prowess.

"The modern conservative is engaged in one of man's oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness."

Kuvasz, what do you think the typical leftist is these days, if it isn't taxing everyone to the nubbins so that they can give everyone elses money to people so that they can be the ones in power? True greed is wanting something that is somebody else's that they worked for and which you do not deserve simply by wanting it for yourself. If you work hard and earn everything you have, within reason, it is not true greed.
0 Replies
 
plainoldme
 
  1  
Reply Thu 25 Jan, 2007 05:46 pm
okie wrote:
plainoldme wrote:
AMong the post-State of the Union comments was a remark (to the effect) that the economy would be in better shape if there had not been the bush tax cut.

And is there a very remote chance those comments just might have come from a Democrat? I know I would be surprised if it was, but just maybe it was?

pom, have you found any good stores to buy material to sew your garments lately, or are the stores just as crummy as ever?


Ah, mature as ever! Talk about one track mind! Or is that superior to being single-minded?
0 Replies
 
 

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