Lower taxes boost economic growth

[M14 Shooter]

Hmm. Where have I heard that before?

The report showed that slim governments have significantly higher average growth rates - with GDP increasing by 5.4% on average between 1999 and 2008 - compared to 2.1% for "bigger" governments during the same time-frame.

In addition, average employment growth rates tends to be higher for slimmer governments.

Mr Marsden says: "This evidence firmly rejects the widely held view that lower taxes inevitably result in cuts in public services, or at best their slower growth, and wide income disparities."

http://news.bbc.co.uk/2/hi/business/7333749.stm

 

[ReillyT]

Hmm. Where have I heard that before?


http://news.bbc.co.uk/2/hi/business/7333749.stm

What is the frame of reference? What is a high tax government? What is a low tax government? Does it take into account levels of debt? Are we talking about only fully developed countries, or are we also comparing low tax Botswana versus high tax Venezuela versus high tax France? Are we talking about corporate taxes? Income taxes? VAT? All taxes in any form? How are public services measured? Quality? Level of expenditure? Does the study control for different regulatory mechanisms?

Just a couple of questions off the top of my head.

Also, since we are talking about a World Bank/IMF study, is the focus on (or does it take into account) countries under structural adjustment?

 

[M14 Shooter]

What is the frame of reference? What is a high tax government? What is a low tax government? Does it take into account levels of debt? Are we talking about only fully developed countries, or are we also comparing low tax Botswana versus high tax Venezuela versus high tax France? Are we talking about corporate taxes? Income taxes? VAT? All taxes in any form? How are public services measured? Quality? Level of expenditure? Does the study control for different regulatory mechanisms?

Just a couple of questions off the top of my head.

Also, since we are talking about a World Bank/IMF study, is the focus on (or does it take into account) countries under structural adjustment?

Did you read the article?
I'm sure that if you want more info, you can look it up.

 

[Ravi]

I read it. It was very vague. Probably purposely vague.

 

[ReillyT]

One other question - does the study include countries that have high nationally-owned natural resource wealth? For instance, over half of Botswana's government's total revenues derive from profits on diamond mines which it owns. As a result, it has a level of government expenditure comparable to Norway, but which is obtained without meaningful taxation. I can imagine the same is true for lots of resource rich countries (e.g., Nigeria, Venezuela, Saudia Arabia, Iran, Angola, etc). Are they included in the study?

 

[ReillyT]

Did you read the article?
I'm sure that if you want more info, you can look it up.

I read the article, but it didn't provide any useful information. Without the more detailed information contained in the study, the article is meaningless. You posted it so I was hoping you had looked at the study itself. I don't have the time to read it.

 

[Gunny]

What is the frame of reference? What is a high tax government? What is a low tax government? Does it take into account levels of debt? Are we talking about only fully developed countries, or are we also comparing low tax Botswana versus high tax Venezuela versus high tax France? Are we talking about corporate taxes? Income taxes? VAT? All taxes in any form? How are public services measured? Quality? Level of expenditure? Does the study control for different regulatory mechanisms?

Just a couple of questions off the top of my head.

Also, since we are talking about a World Bank/IMF study, is the focus on (or does it take into account) countries under structural adjustment?

Le me rephrase it for ya, Reilly. Representative Republics that tax the Hell out of its citzens while fattening up the government makes the middle class go "bye-bye."

That would be us, us and us. Doesn't really matter a damn what or who it compares to.

 

[Dr Grump]

Le me rephrase it for ya, Reilly. Representative Republics that tax the Hell out of its citzens while fattening up the government makes the middle class go "bye-bye."

That would be us, us and us. Doesn't really matter a damn what or who it compares to.

Of course it matters because you need terms of reference. And taxing the hell out of citizens is relative...;I)

 

[Gunny]

Of course it matters because you need terms of reference. And taxing the hell out of citizens is relative...;I)

It isn't relative ... it's factual. I'm a US citizen and it is the US government with its sticky fingers in my wallet, so I speak relative to THAT and THEM. If you or some Chinaman pays more, feel free to move or bitch about it.

But let's be honest. If there is a conservative belief in you somewhere, I'm quite sure it isn't in having qualms with wealth redistribution, taking from those who excel and earn it and giving it to prop up those who won't or don't.

I'm also sure you don't give a damn about the fat, bloated pig that is the US government and its committees that investigate committees that investigate committees -- or steroids in MLB -- that is funded out of my pocket. This nation used to function just fine on a government half that size. That of course was when the Fed wasn't micromanaging the states and usurping their authority.

So let's just speak relative to the fact that I work roughly 10 hours of a 40 hour week for free. That's an entire work week per month just being removed from my wallet. That's 12 weeks a year -- 3 months -- I'm busting my ass and earning money that is just flat taken from me. I've worked for 32 years. I've busted my ass for 32 years and been paid for 24 of them.

And THAT is just tax on my income. That doesn't even count the taxes I pay on just about everything in existence but bread and milk.

I earn good money. On paper. Because it isn't good money by the time I see it.

But don't pay your tax and see what happens. The US government sends it very own terrorist organization out to take everything you own because by God no matter what, Uncle Sam's going to get his.

In the meantime, some slug is sitting around doing nothing but selling dope for a living while being propped up well enough by the Govt to get fed, have cable tv and high speed internet.

It's absolute bullshit, and I for one and tired of footing the bill for a corrupt, lazy, do-nothing government -- and that's Republicans and Democrats alike --that can't even get a f-ing budget done on time each year even though it's due on the same f-ing day evey year.

It can investigate steroids in baseball and who's filming who in the NFL tho.

 

[ReillyT]

It isn't relative ... it's factual. I'm a US citizen and it is the US government with its sticky fingers in my wallet, so I speak relative to THAT and THEM. If you or some Chinaman pays more, feel free to move or bitch about it.

But let's be honest. If there is a conservative belief in you somewhere, I'm quite sure it isn't in having qualms with wealth redistribution, taking from those who excel and earn it and giving it to prop up those who won't or don't.

I'm also sure you don't give a damn about the fat, bloated pig that is the US government and its committees that investigate committees that investigate committees -- or steroids in MLB -- that is funded out of my pocket. This nation used to function just fine on a government half that size. That of course was when the Fed wasn't micromanaging the states and usurping their authority.

So let's just speak relative to the fact that I work roughly 10 hours of a 40 hour week for free. That's an entire work week per month just being removed from my wallet. That's 12 weeks a year -- 3 months -- I'm busting my ass and earning money that is just flat taken from me. I've worked for 32 years. I've busted my ass for 32 years and been paid for 24 of them.

And THAT is just tax on my income. That doesn't even count the taxes I pay on just about everything in existence but bread and milk.

I earn good money. On paper. Because it isn't good money by the time I see it.

But don't pay your tax and see what happens. The US government sends it very own terrorist organization out to take everything you own because by God no matter what, Uncle Sam's going to get his.

In the meantime, some slug is sitting around doing nothing but selling dope for a living while being propped up well enough by the Govt to get fed, have cable tv and high speed internet.

It's absolute bullshit, and I for one and tired of footing the bill for a corrupt, lazy, do-nothing government -- and that's Republicans and Democrats alike --that can't even get a f-ing budget done on time each year even though it's due on the same f-ing day evey year.

It can investigate steroids in baseball and who's filming who in the NFL tho.

The terms of reference are needed to understand the study. How can we discuss high tax versus low tax systems (in the context of the findings of the study) when we don't know what the study found to be "high tax" or "low tax." Is the US "high tax," "low tax," "middle tax?" We also need although those other questions that I asked to be answered before we can intelligently discuss the results of the study.

 

[Gunny]

The terms of reference are needed to understand the study. How can we discuss high tax versus low tax systems (in the context of the findings of the study) when we don't know what the study found to be "high tax" or "low tax." Is the US "high tax," "low tax," "middle tax?" We also need although those other questions that I asked to be answered before we can intelligently discuss the results of the study.

My point: discussing hight tax systems versus low tax systems is not discussing the issue as it pertains to us. It's obfuscating the issue by attempting to gloss over "X's" taxes by saying "Y" pays more.

We live in US, not "Y". I don't care where the US falls in relation X, Y and Z. I care where my tax dollars fall relative to my income. How can we presume to "save the world" when we can't even address our own issues?

Republicans want to "save the world by force of arms" and Democrats want to "save the world" by giving away our money and resources that could better be used HERE.

I'll be more than happy to address the "rest of the world's" problems AFTER ours are addressed and fixed.

 

[ReillyT]

My point: discussing hight tax systems versus low tax systems is not discussing the issue as it pertains to us.

No, but it is discussing the study that was posted to start the thread.

 

[midcan5]

Let me see if I can get this right: we have a surplus so we lower taxes, we have a deficit so we lower taxes, we have a war so we lower taxes. Do I have it?


"There is no historical evidence that tax cuts spur economic growth. The highest period of growth in U.S. history (1933-1973) also saw its highest tax rates on the rich: 70 to 91 percent. During this period, the general tax rate climbed as well, but it reached a plateau in 1969, and growth slowed down five years later. Almost all rich nations have higher general taxes than the U.S., and they are growing faster as well."

http://www.huppi.com/kangaroo/L-taxgrowth.htm

 

[LordBrownTrout]

Our govt should NEVER have a surplus. This is just excess taxing on us and should be returned to us.

 

[manifold]

Just think about how kick-ass the economy would be if we eliminated taxes altogether. Wouldn't that be fantastic!!

 

[TopGunna]

Well, I went to the website, which offered me this nugget:

"During World War II (from 1940 to 1945), the size of the U.S. economy roughly doubled -- the fastest period of growth in U.S. history. And during this era, the top tax rate soared to 91 percent, and the bottom rate to 18 percent -- again, the highest in U.S. history. In 1944, federal taxes reached 21.7 percent of the GDP -- again, the highest in U.S. history.

The U.S. emerged from World War II as the world's only economic superpower. From 1947 to 1973, it experienced phenomenally high growth; the GDP grew at an average of 3.4 percent a year. The top tax rate remained between 88 and 91 percent until 1964; afterwards, the rate was reduced to 70 percent, still stratospheric by today's standards.

The economy slowed down after 1973, for reasons that economists are still debating. But what is not debatable is that taxes started falling for the rich in 1978 (with a capital gains tax cut)."

Interesting... so apparently, the two inflection points in the trend should have occurred in 1944 and 1978 - at least according to the author. Funny, if we use those dates as the baseline, we only see average growth of 1.4 percent a year. So why did the author use to focus on a smaller subset of the data?

That's the fun with statistics, you can usually manipulate your data to show whatever artificial conclusion you feel like drawing.

 

[KungFusion]

"Just think about how kick-ass the economy would be if we eliminated taxes altogether. Wouldn't that be fantastic!!"

Totally. But even better, think about how kick-ass the economy would be if we eliminated GOVERNMENT altogether! Imagine: free trade unfettered by such bureaucratic tax-funded obstacles to economic growth as highways, currency, police, laws, etc. At last, what's mine would be mine! (until someone with more firepower comes along, anyway . . . )

 

[AllieBaba]

A.k.a., anarchy.

Works great in desolate, sparsely populated areas.

Little more of a problem in the cities and around water sources.