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| quote: | Originally posted by The17sss
This thread has taken an interesting turn. I want to back some of the points Shakka is making here. I especially want to make the distinction on all this "tax cut" lingo that may help those who don't get it, especially Lebezniatnakov who keeps parroting Democrat talking point nonsense about "tax cuts costing us $700 billion" and how we can't afford tax cuts. Thank about that for a minute! What does that really mean... we can't afford them? Who is "we"? That whole line of thinking that tax cuts are not paid for is rooted in the premise that government revenue must always increase no matter what. You don't "pay" for tax cuts... like Shakka mentioned, what you earn is your money- your private property- until the government taxes it and takes it from you. How is leaving more money in individuals' hands to spend as they see fit costing "us"? Following Bush's tax cuts in 2003, a record $2 trillion went to the treasury. Again in 2007 after another cut, another record of $2.5 trillion went to the treasury. We're not "paying" for cuts, cuts create wealth. |
1- IF the government is going to spend THEN they will need tax revenue. since much of the government's spending is already baked into the cake, be it entitlements or defence or what have you- then tax cuts cost the government revenue in comparison to its spending.
2- even shakka has admitted that cutting taxes causes lower taxation revenues in the short term. your assertion (again) that bush's tax cuts were an instrument that drove any higher revenues is absurd, and contrary to every piece of economic data posted in this thread.
it has already been demonstrated by myself and opus just how much bush's tax cuts cost the bottom line. cuts, in the short term would "pay back" barely 10% of what was lost in revenue.
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Myth 1: Tax cuts “pay for themselves.”
“You cut taxes and the tax revenues increase.” — President Bush, February 8, 2006
“You have to pay for these tax cuts twice under these pay-go rules if you apply them, because these tax cuts pay for themselves.” — Senator Judd Gregg, then Chair of the Senate Budget Committee, March 9, 2006
Reality: A study by the President’s own Treasury Department confirmed the common-sense view shared by economists across the political spectrum: cutting taxes decreases revenues.
Proponents of tax cuts often claim that “dynamic scoring” — that is, considering tax cuts’ economic effects when calculating their costs — would substantially lower the estimated cost of tax reductions, or even shrink it to zero. The argument is that tax cuts dramatically boost economic growth, which in turn boosts revenues by enough to offset the revenue loss from the tax cuts.
But when Treasury Department staff simulated the economic effects of extending the President’s tax cuts, they found that, at best, the tax cuts would have modest positive effects on the economy; these economic gains would pay for at most 10 percent of the tax cuts’ total cost. Under other assumptions, Treasury found that the tax cuts could slightly decrease long-run economic growth, in which case they would cost modestly more than otherwise expected. (http://www.cbpp.org/7-27-06tax.htm)
The claim that tax cuts pay for themselves also is contradicted by the historical record. In 1981, Congress substantially lowered marginal income-tax rates on the well off, while in 1990 and 1993, Congress raised marginal rates on the well off. The economy grew at virtually the same rate in the 1990s as in the 1980s (adjusted for inflation and population growth), but revenues grew about twice as fast in the 1990s, when tax rates were increased, as in the 1980s, when tax rates were cut. Similarly, since the 2001 tax cuts, the economy has grown at about the same pace as during the equivalent period of the 1990s business cycle, but revenues have grown far more slowly. (http://www.cbpp.org/3-8-06tax.htm)
Some argue that, even if most tax cuts do not pay for themselves, capital gains tax cuts do. But, in reality, capital gains tax cuts cost money as well. After reviewing numerous studies of how investors respond to capital gains tax cuts, the Congressional Budget Office concluded that “the best estimates of taxpayers’ response to changes in the capital gains rate do not suggest a large revenue increase from additional realizations of capital gains — and certainly not an increase large enough to offset the losses from a lower rate.” That’s why CBO, the Joint Committee on Taxation, and the White House Office of Management and Budget all project that making the 2003 capital gains tax cut permanent would cost about $100 billion over the next ten years. (http://www.cbpp.org/policy-points4-18-08.htm) |
now, i am open to shakka's argument that in the (really fucking) long term that tax cuts can provide higher rates of revenue. but i am unconvinced that this relationship is anything but a bell-curve, and there is a very real limit to what tax cutting can do to actually raise taxation revenues.
cutting taxes will never enable the US to pay off its debt burden, because the short term deficits will be far too large to ever pull back.
i think people that disagree with this statement have screws loose. cutting taxes and continuing to spend is insane. (yes, i know nobody here is advocating heaps of spending, but we can't forget about the cake.)
Last edited by pkcRAISTLIN on Sep-29-2010 at 09:09
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fair call.
