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Old 04-18-2010, 03:17 PM   #586
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That's a popular simplification of the Laffer curve, where people are saying a tax reduction always equals higher revenues.


It doesn't. As you can see on the graph, the highest revenues are to be found if the tax rate is at the equilibrium point. Lower it further, and revenues decrease again.

Fair enough - a tax rate of zero would yield zero revenue.
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Old 04-18-2010, 07:04 PM   #587
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Historically, this has a better chance of increasing government revenue than raising taxes - it sounds off but less taxes actually increases productivity and spending - therefore tax revenue.
Sorry, but flat out false.

This is not true by any objective measurement.

Of course, some taxes would be better off being cut and would help the economy- I am thinking the Kennedy tax cuts in 1963 and the 1978 Capital Gains Tax cut, which restored a meaningful differential between ordinary and capital income taxation. However, the idea that tax cuts directly cause increased revenue has been proven time and again to be complete b.s. It is just in the early 60s, income taxes were too high and 1978 cap gains taxes were too high, so we cut them and said the benefits out weigh the revenue loss here.

This can work, but it does not work when you just cut taxes across the board regardless of how high they are, or where the incentives are targeted(investment for example) as the supply siders claim! Reagan did supply side tax cuts, revenues fell, Bush II did the same thing, revenues fell, Clinton raised taxes in 1993, revenues increased......

Take my word for it or get a page full of statistics and charts!

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As far as Obama’s policies up to the present, I can’t say he’s done a great or poor job until the mess is officially behind us. Remember, the Great Depression didn’t hit the day after the crash – it took years to develop. Obama’s best chance of success from here on out is to take on an attitude fiscal restraint similar to Clinton’s Welfare Reform days.
Obama does not lack a commitment to fiscal responsibility anymore than the next person does. He has supported pay as you go, convened a bipartisan deficit cutting commission over the objections of Republicans in Congress, has reformed health care to finally get the cost of entitlements, the biggest driver of our deficit, under control and has gone line by line through the budget looking for waste and inefficiency.

You are contrasting him to Clinton in the welfare reform days?? First off, reforming welfare actually entailed spending money, on balance, because we were laying out money for child care, health care and work and training programs to get people employed, and rightfully so! Welfare reform worked.

Clinton came in and immediately went to work- the 1993 budget bill raised the top rate, cut capital gains taxes for small businesses and start ups to provide investment incentives, and then cut $255 billion in spending over 10 years. In 1994, he introduced a welfare reform bill like the one that eventually passed in 1996- the Republicans distracted everyone with their unrealistic proposals while calling Clinton, the intellectual father of welfare reform, soft on welfare throughout 1995!

Obama inherited something completely different. Instead of a very sluggish recovery that had to take a back seat to getting the deficit under control(1992) Obama inherited an economy spiraling downward at breakneck speed toward a depression after the entire financial system collapsed. It was easily the worst situation a President has inherited in modern times- remember FDR did not have 2 wars to deal with as well! In fact, you probably have to go as far back as Lincoln to get something similar!!

So Obama, inheriting a completely different situation, did what all economists, liberal, moderate, conservative, suggested he do and passed a HUGE stimulus to pump in the money that the private sector was incapable of pumping in at the time.

Obama has said and done more to address the deficit since 2005 when he became a Senator than Bush or the Republicans ever did. Bush never even mentioned the deficit- Cheney said himself "Reagan proved deficits don't matter" and that was the prevailing Republican philosophy until Obama was elected. Obama on the other hand, introduced the "google for government" feature that allows you to see exactly who is spending your money where, has long been a critic of the idea that we solve problems just by throwing money at them, was a co sponsor of earmark reform that has cut earmarks in half since 2007 and is a long time supporter of pay as you go, which is socialism according to Republicans.

Watch his speeches and press conferences- he has made clear the entire time that he did not come in amped up to spend $787 billion we did not have, and has shown that he grasps the economic consequences of failing to control the deficit better off the top of his head than Bush did reading from a script! Obama has said as far back as the debates that we will get whiplash turning around from stimulating the economy to controlling the deficit so fast. He is not perfect by any means, nor does he have a magical touch nor is he the messiah or anything like that, but rest assured, he grasps the issue.

You are right, the jury is still out for damm sure, but one thing is undeniable, Obama has pulled us back from the brink and turned this recession around to a recovery much faster than similar collapses in the past!

Also, Irvine, great posts in here!
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Old 04-18-2010, 07:15 PM   #588
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Originally Posted by Vincent Vega View Post
That's a popular simplification of the Laffer curve, where people are saying a tax reduction always equals higher revenues.


It doesn't. As you can see on the graph, the highest revenues are to be found if the tax rate is at the equilibrium point. Lower it further, and revenues decrease again. You need to take into account, among other factors, the elasticities concerned (income, demand and cross-price). Sometimes, a tax increase may be profitable, sometimes a decrease would be profitable.
But the revenues are not the only function of taxes. It's also an instrument to set incentives or disincentives for certain economical behaviour.
EXACTLY!!

Its not that some tax cuts may not be advisable, it is just as you say. Different incentives to behavior, demand, etc.

The Laffer curve may not exist exactly as the trickle down people claim it does, in fact it doesn't, but it does exist.

The point is not that raising taxes by infinity produces infinity revenue and is always advisable, the point is that taxation is not the only factor that affects economic performance or the level of revenues.

Jonathan Chait of the moderate to liberal New Republic explains this very well in his book "The Big Con," a fascinating, easy and quick read on the topic.

Conservatives, this guy is no anti wealth socialist nor is he a proponent of 90% tax rates, he just shows the folly in simplifying the laffer curve to the extent it has been simplified since the infamous Judd Wanniski/Dick Cheney lunch date days!
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Old 04-18-2010, 07:31 PM   #589
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Originally Posted by Moonlit_Angel View Post
U2387 hit the nail on the head. People are just not informed enough about things, and so the simplest thing can get them all clawing and screaming and shouting. I wonder, when I watch these rallies, if half the people there even know what the hell happened at the original Boston Tea Party, or what exactly it was about.

In regards to a new direction for the GOP, well, I've seen Megan McCain on TV and she actually seems to have some reasonable views. More open on societal issues, criticizes the extreme far-right, does support fiscal responsiblity (and believe me, I don't argue that. I certainly don't want our government to abuse money, and there's still a lot of wasteful spending that needs to be stopped. No disagreement there at all. I just wish these same people yelling at Obama had been bitching when the Bush administration blew money on never-ending wars, or keeping their oil buddies rich, or paying off people for scandals, or so on and so on...). So if I were going to run the GOP, I'd probably go talk to her.

Not to mention, the citizens of this country themselves can certainly share in the blame with their "keeping up with the Joneses" mentality. EVERYONE, from the government down to the average citizen, has spent money on things they couldn't afford. We're all to blame for the current financial situation. And if anyone honestly thinks one party has a monopoly on fiscal responsiblity, they're dreaming. The Republicans can say they want that 'till they're blue in the face, but you know and I know that that's not even close to being true. Same for the Democrats. Seeing people constantly fall for that old line just never ceases to amaze me.

There are plenty of legitimate debates to be had over the country's finances. Shouting "SOCIALIST" or "COMMUNIST" or painting a Hitler moustache isn't one of those legitimate debates. It just makes you look and sound like a moron.
Moonlit Angel, I do not know you, have not seen you here in my 2 years, but obviously, you were around before and popular and have now returned!

Thank you very much for your compliments, and we think alike, as you are hitting the nail on the head as well!

I especially like what you said about the fact that no party can claim to have a monopoly on fiscal responsibility and that anyone trusting the Republicans in this area is delusional! I also agree, fiscal responsibility, accountability and a vigorous effort against waste and inefficiency is vital.

I think we can have effective government involvement in promoting equality of opportunity(not outcome, for those who are ready to attack me as a socialist!) through education, technology, infrastructure, etc and through effective programs like Social Security and Medicare. That is important. No country leads the world economically without a general, goal oriented role for government in ensuring opportunity and prosperity. Equally important is ensuring the money is spent wisely for these purposes and not wasted.

I agree on Megan McCain. She has a lot of what her Dad used to be in her, and I am saddened when I read her blog and then watch Dad standing next to Palin. It was not always this way-2000-early 2008, McCain kept his distance and was openly hostile to the right wing fringe, he loved attacking fakes like Romney and moralizers like Falwell, Huckabee, etc.

I was so happy when it looked like he would win the Republican Primary and Obama the Democratic Primary. I remember telling my best friend at school:

"Good, we both support Obama, but we can also both be happy that it is him and Mccain. This pretty much ensures a grown up, discussion on the issues that are so important this election more than ever that will not be dragged into the mud by either candidate." He agreed. Then McCain changed his position on the Bush tax cuts. Warning #1, but oh, well, Obama will bring it up in a good natured, fair way and McCain will respond in kind!

Then we went home for the summer and McCain was still his old self, though starting to harp more on the "raise your taxes, let the terrorists" win Karl Rove line. Then as we returned to school, he picked Palin, started palling around with the right wing fringe, using their arguments and absurdities as his own and the rest is history! By that time, my friend(no hard core pacifist/socialist, he is now an Air Force Officer) and I had agreed unequivocally and wholeheartedly that McCain had lost it. Both of us had always been moderate Democrats, so we did not support him, but we always respected him and thought he would be classy and honest above all else.

Too bad, Arizona had some decent people regardless of party or views. Barry Goldwater, Sandra Day O'Connor, Bruce Babbitt, Dennis DeConcini, Janet Napolitano, the list goes on. I always saw McCain as another classy, get the job done Arizonan until the fall of 2008.

It sucks to know the real John McCain is still there, but feels the need to hide himself to win favor with the increasingly extreme Republican base. In 2004, he would have told the same people where to stick it and dare them to try and unseat him!

Megan is reasonable, but then again, her Dad is by nature reasonable as well, so no surprise!
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Old 04-18-2010, 08:31 PM   #590
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Originally Posted by U2387 View Post
fiscal responsibility, accountability and a vigorous effort against waste and inefficiency is vital.
A common ground upon which to build.
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Old 04-18-2010, 08:56 PM   #591
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Originally Posted by U2387 View Post


This can work, but it does not work when you just cut taxes across the board regardless of how high they are, or where the incentives are targeted(investment for example) as the supply siders claim! Reagan did supply side tax cuts, revenues fell...

Take my word for it or get a page full of statistics and charts!
I did the latter. You're trying to rewrite history and the 80's.

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Old 04-18-2010, 09:00 PM   #592
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Reagan tax cuts! How'd that deficit go then?
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Old 04-18-2010, 09:02 PM   #593
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Poll: 78 percent don't trust big government -

beverage of preference is ....
tea - not liberal-ade
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Old 04-18-2010, 09:13 PM   #594
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...



you seem to spend a lot of thime thinking about and analizing politics

how do you think these November elections will turn out in the Congress and Senate?
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Old 04-18-2010, 09:46 PM   #595
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Reagan tax cuts! How'd that deficit go then?
How'd Tip O'Neal's House spend?
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Old 04-18-2010, 10:01 PM   #596
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Reagan tax cuts! How'd that deficit go then?
I think the point was that the tax cuts did in fact increase revenue.
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Old 04-18-2010, 11:22 PM   #597
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Originally Posted by U2387 View Post
Moonlit Angel, I do not know you, have not seen you here in my 2 years, but obviously, you were around before and popular and have now returned!

Thank you very much for your compliments, and we think alike, as you are hitting the nail on the head as well!
Thanks . It's nice to meet you, and I think that's the first time I've ever been associated with the word "popular" . I'm returning regularly for a short time right now, but I'll try and keep coming back when possible after that.

And yay for similar lines of thinking!

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Originally Posted by U2387 View Post
I especially like what you said about the fact that no party can claim to have a monopoly on fiscal responsibility and that anyone trusting the Republicans in this area is delusional! I also agree, fiscal responsibility, accountability and a vigorous effort against waste and inefficiency is vital.

I think we can have effective government involvement in promoting equality of opportunity(not outcome, for those who are ready to attack me as a socialist!) through education, technology, infrastructure, etc and through effective programs like Social Security and Medicare. That is important. No country leads the world economically without a general, goal oriented role for government in ensuring opportunity and prosperity. Equally important is ensuring the money is spent wisely for these purposes and not wasted.
Fully agreed on all of this. Not to mention, if the citizens are complaining about the failed government, well, they only get into power because of us. So maybe the nation needs to rethink the way it votes a little (i.e., more of, "Ooh, I like so-and-so's national defense strategy, it seems sound and can solve x problems this way" and less of "Ooh, they drive a truck! Just like me! Naturally this means we're simpatico and they're a good leader and I'm gonna vote for him/her!").

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I agree on Megan McCain. She has a lot of what her Dad used to be in her, and I am saddened when I read her blog and then watch Dad standing next to Palin. It was not always this way-2000-early 2008, McCain kept his distance and was openly hostile to the right wing fringe, he loved attacking fakes like Romney and moralizers like Falwell, Huckabee, etc.
This is what I've heard (I was only 16 in 2000 and couldn't vote, and so I was not as familiar with McCain then as I've become in recent years. I just mainly remember the Bush vs. Gore debacle).

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I was so happy when it looked like he would win the Republican Primary and Obama the Democratic Primary. I remember telling my best friend at school:

"Good, we both support Obama, but we can also both be happy that it is him and Mccain. This pretty much ensures a grown up, discussion on the issues that are so important this election more than ever that will not be dragged into the mud by either candidate." He agreed. Then McCain changed his position on the Bush tax cuts. Warning #1, but oh, well, Obama will bring it up in a good natured, fair way and McCain will respond in kind!

Then we went home for the summer and McCain was still his old self, though starting to harp more on the "raise your taxes, let the terrorists" win Karl Rove line. Then as we returned to school, he picked Palin, started palling around with the right wing fringe, using their arguments and absurdities as his own and the rest is history! By that time, my friend(no hard core pacifist/socialist, he is now an Air Force Officer) and I had agreed unequivocally and wholeheartedly that McCain had lost it. Both of us had always been moderate Democrats, so we did not support him, but we always respected him and thought he would be classy and honest above all else.
*Nods* Mmhm. Unfortunately he had to start appealing to "the far-right base", so moderation went right out the window as a result. What he forgot is that if you narrow your support down to just those people, that's not enough people to help you, you know, win.

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Too bad, Arizona had some decent people regardless of party or views. Barry Goldwater, Sandra Day O'Connor, Bruce Babbitt, Dennis DeConcini, Janet Napolitano, the list goes on. I always saw McCain as another classy, get the job done Arizonan until the fall of 2008.

It sucks to know the real John McCain is still there, but feels the need to hide himself to win favor with the increasingly extreme Republican base. In 2004, he would have told the same people where to stick it and dare them to try and unseat him!

Megan is reasonable, but then again, her Dad is by nature reasonable as well, so no surprise!
Too true. Well, hopefully his daughter will continue what he is abandoning and maybe some sanity can finally return.

Angela
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Old 04-18-2010, 11:28 PM   #598
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How'd Tip O'Neal's House spend?

A LOT on Ronnie's defense budget!
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Old 04-19-2010, 12:46 AM   #599
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I did the latter. You're trying to rewrite history and the 80's.




My Friend, Indy!! How are you?

He is back, with statistics from the HERITAGE FOUNDATION! They do not have a bias or anything!

First, those are meaningless numbers calculated from meaningless "bases" and done only to deceive.

Note, Indy has been a critic of other people using sites with a "liberal"bias, like the mainstream media.

I hate to sound like an arrogant jerk, but please stop throwing things around when you have no concept of them!

Of course, revenues always increase due to inflation and population growth, regardless of tax policy.

The question is, was the revenue increase under Reagan anything spectacular or really noteworthy at all, or any more than lukewarm?

People who point out that tax cuts do not increase revenues are NOT saying that REVENUES FELL, they are pointing out that they did not increase them above a baseline number as was claimed. Tax cuts decrease, that is, lead to LESS revenue than would otherwise be the case. That is what is commonly meant by saying "revenues fell." The only time nominal revenues would fall would be in an economic collapse like Iceland or Greece has recently been through.

Also, Reagan significantly raised Social Security, Gas, excise, corporate and capital gains taxes throughout his Presidency. The income tax cuts as well were a lot more shifting as opposed to cutting than people would like to believe. He signed 2 of the biggest tax increases in history- that does not account for some of the increase in revenue? Note also how your Heritage bogus numbers use the early 1990s as well, after the G HW Bush tax increase that the right wing wanted his head over!! Indy, is that tax increase somehow an example of tax cuts increasing revenues?

Please. And you accuse me of rewriting history!

Here is how it really went:

1980-1988 Growth in real revenues per capita: 19%

1972-1980 Growth in real revenues per capita: 24%

1992-2000 Growth in real revenues per capita: 41%(after the Clinton tax increase)

Growth in real revenues before breaking out to per capita:

1980s: 1.7%

1990s: 3.5%

(US office of Budget and Management: http://www.whitehouse.gov/omb/budget...esentation.pdf

Error links to valid budget sources- take away point- revenues per person went up 2 times as fast under Clinton as under Reagan!)

http://www.cbpp.org/cms/?fa=view&id=165

FactCheck.org: Supply-side Spin
Now, for this little thing called the economy and business cycles that affect the rate of growth in revenues:

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%(If U2387 recalls correctly, Nixon/Ford/Carter)
1979-1990: 1.8%(If U2387 recalls correctly, Carter/Reagan/41Bush)
1990-2000: 3.2%(If U2387 recalls correctly, 41Bush/Clinton)
2000-2007 (probable peak): approximately zero(I think it was 43 Bush)

Do you see the revenue booms from the Reagan and Bush tax cuts? Me neither.

This is good as well:
Look at the record: Tax cuts did not boost revenue - TwinCities.com
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Old 04-19-2010, 12:55 AM   #600
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How'd Tip O'Neal's House spend?
Indy, before you lose on the numbers yet again, some common sense.

Who controls our federal government?

1980 Reagan elected, 1981 Reagan taxes office.

1981 President: Republican

Senate:Republican

House-Democratic with a significant amount of them going for Reagan's agenda. Dan Rostenkowski, liberal from Illinois and Clinton's friend actually introduced the Reagan tax cuts! Dick Gephardt bragged about supporting them for a very long time!(up until about 2004).

So from 1981-1987, most of Reagan's Presidency, the Republicans have the executive branch and the US Senate. The Democrats in the House, are led by Tip, who gets along with Reagan and loves him personally and they make a lot of deals. A lot of Democrats in the House support Reagan because he is so popular and has won 2 landslides.

The Democrats take the Senate in 1987, and a funny thing happens! Spending and the deficit start to drop for a little bit!

You are making the claim that Reagan did not get his agenda passed, which is laughable! He got just about everything he wanted because of his personal popularity. Most of the loophole, give aways that everyone, including Stockmann were later embarrassed by were written by Democrats!

Reagan's Budget Proposals

The whole article is an interesting read, but the gist is that people claiming Tip overspent all of Reagan's nice, lean budgets is based on the rosy scenario overly optimistic initial Reagan projections of spending, not on his actual concrete proposals. Every administration makes these projections based on what the economy will look like, outlays for automatic counter cyclical programs, etc.

Such proposals mean, let me find the word, and not to put too fine a point on it, NOTHING!!

Key line right here:

As reported on the previous page, the House Appropriations Committee conducted a study that compared Reagan's concrete proposals to what Congress actually passed, not what was spent afterwards. And it found that Reagan asked for $29.4 billion more than Congress passed.
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