No, Gov. Pawlenty, Tax Cuts Don't Pay for Themselves

Discussion in 'Politics' started by Susan45, Jun 20, 2011.

  1. Susan45
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    Susan45 Member

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    No, Gov. Pawlenty, Tax Cuts Don't Pay for Themselves

    Republicans claim to be deeply concerned about the budget deficit and the national debt, yet repeatedly demand additional large tax cuts. For example, former Minnesota Gov. Tim Pawlenty, a candidate for the Republican presidential nomination, supports a balanced budget amendment to the Constitution but also wants an $8 trillion tax cut. He rationalizes this contradiction by asserting that his tax cut will not actually lose any revenue. As Pawlenty told Slate reporter Dave Weigel on June 13:

    “When Ronald Reagan cut taxes in a significant way, revenues actually increased by almost 100 percent during his eight years as president. So this idea that significant, big tax cuts necessarily result in lower revenues – history does not [bear] that out.”

    In point of fact, this assertion is completely untrue. Federal revenues were $599.3 billion in fiscal year 1981 and were $991.1 billion in fiscal year 1989. That’s an increase of just 65 percent. But of course a lot of that represented inflation. If 1981 revenues had only risen by the rate of inflation, they would have been $798 billion by 1989. Thus the real revenue increase was just 24 percent. However, the population also grew. Looking at real revenues per capita, we see that they rose from $3,470 in 1981 to $4,006 in 1989, an increase of just 15 percent. Finally, it is important to remember that Ronald Reagan raised taxes 11 times, increasing revenues by $133 billion per year as of 1988 – about a third of the nominal revenue increase during Reagan’s presidency.

    No, Gov. Pawlenty, Tax Cuts Don't Pay for Themselves | Capital Gains and Games

    The bolding is mine. But somehow we need to try and destroy the myth that Reagan cut taxes and revenue increased. It's just a myth and keeps hanging on. Zombie economics.
     
  2. Susan45
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    Susan45 Member

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    MR. GREENSPAN: Look, I'm very much in favor of tax cuts, but not with borrowed money. And the problem that we've gotten into in recent years is spending programs with borrowed money, tax cuts with borrowed money, and at the end of the day, that proves disastrous. And my view is I don't think we can play subtle policy here on it.

    MR. GREGORY: You don't agree with Republican leaders who say tax cuts pay for themselves?
    Advertise | AdChoices

    MR. GREENSPAN: They do not.

    Aug. 1: Mullen, Bloomberg, Greenspan, Rendell - Meet the Press - Transcripts - msnbc.com

    Meet The Press, Aug 2010
     
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  3. auditor0007
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    auditor0007 Gold Member

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    There is another issue to this. In 1980, when Reagan started pushing for tax cuts, the top marginal rate was 70%. Today it is only 35%. Pawlenty wants to cut that to 25%, but he also wants to cut corporate taxes to 15%. The net result would be much lower revenues than we have currently, which aren't enough. This guy is beyond cookoo.

    Pawlenty Plan Would Quadruple Tax Cuts For Richest Americans: CBPP
     
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  4. Susan45
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    Susan45 Member

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    Good article and terrific graph, thanks.

    [​IMG]
     
  5. theal3
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    theal3 Rookie

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    Yepper, if tax cuts created jobs and increased revenue..... we should be rolling in cash since 2001, and have shortage of workers. imho. Our great American citizens who do have jobs are worker harder, with productivity increased (heard on a show today) 80% since 1979, but workers making less, but CEO making 240% more.

    Workers create the wealth, and the top skims it off the top and keeps it. imho
     
  6. editec
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    editec Mr. Forgot-it-All

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    Yoiu people speak about the economy as though it operated like MAGIC.

    Tax breaks might increase revenues if the SUPPLY side was lacking enough capital to invest.

    Then if they took that extra dough they now have an reinvest it wisely, and if their investments create more economic avtivity, hence more taxes will be paid, THEN one can say that the tax creaks raised revenue.

    God! what is wrong with some of you people?


    MACRO ECONOMICS is not magic.

    There is no single incantation or magic formula that will always give one the same effect on the macroeconomy because the e macroconomy is an ever changing circumstance.
     
  7. Skull Pilot
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    Skull Pilot Platinum Member

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    Tax cuts do not cost anything so by definition they do not need to be paid for.
     
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  8. Rozman
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    Rozman Gold Member Supporting Member

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    To speak of tax cuts as needing to be paid for implies that the government is giving away something that was theirs first.Something that belonged to them so now they need to find a way to make up the difference....Yeh cut spending.The money is not the governments first.It belongs to the person who earned it then the Governments gets some of it.
     
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  9. NYcarbineer
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    NYcarbineer Diamond Member

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    Paying for tax cuts means cutting government spending by the amount of the tax cuts in order to keep the budget balanced.

    You're saying that doesn't need to be done?
     
  10. Anachronism
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    Anachronism BANNED

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    Of course they don't. That's why the Tax Cuts should be partnered with a COMPLETE AND TOTAL removal of ALL UnConstitutional programs, funding, and expenditures from the US Budget.
     

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