The ultimate vindication of Republican supply-side economics

[itfitzme]

Our economy would boom if BO eliminated the corporate tax altogether as Ireland proved by just lowering it. Its the ultimate vindication of supply-side economics.

And think of the boon to the economy if America just eliminated all taxes, well not the people-taxes but all corporate and business taxes. That could become a new economic law. Lower taxes and get out of the way, the money will pour into the coffers.

...and what many do not understand is that lowering taxes on corporations lowers the price of the corporate goods and services. The money it takes to cover the corporate tax payment is included in the price of the corporate product.

CORPORATIONS DO NOT PAY TAXES! PEOPLE THAT BUY FROM CORPORATIONS PAY TAXES FOR THEM!!

Many do not understand that there is not a direct or absolute relationship.

Lowering corporate taxes does not guarantee lower prices. It is not a direct one to one relationship.

Lowering corporate taxes can simply result in increased profit with no other change.

Raising taxes can simply result in lower profit with no other change.

Prices are primarily a function of the consumers willingness to pay. Prices rise to consume all available income. When prices include cost plus profit and are at the level that consumes all consumer income, an increase in taxes will not raise the price of the product because consumers cannot pay a higher price and are already consuming as little as possible.

If there is no excess or unfilled demand, lowering corporate taxes will not result in lower prices.

Taxes and prices are not a direct one to one relationship. The effect of corporate taxes depends on other factors including demand.

TYPING IN CAPITAL LETTERS DOES NOT MAKE SOMETHING MORE TRUE. TYPING IN CAPITAL LETTERS JUST DEMONSTRATES THAT THE PERSON BLINDLY REJECTS ANY OTHER INFORMATION. EXTERNAL FEEDBACK IS REQUIRED TO UNDERSTAND REALITY. THE REFUSAL TO ACCEPT EXTERNAL FEEDBACK IS A PRIMARY CAUSE OF INSANITY.

LOWERING TAXES IS NOT GUARANTEED TO BE PASSED ON TO THE CONSUMER. IT ALSO DOES NOT INCREASE DEMAND.

IT DEPENDS!!!

CORPORATIONS PAY CORPORATE TAXES. INDIVIDUALS PAY INDIVIDUAL INCOME TAX. AND CONSUMERS PAY FOR PRODUCTS AT A PRICE THAT IS THE EQUILIBRIUM POINT OF SUPPLY AND DEMAND.

IF IT WERE OTHERWISE THEN THERE WOULDN'T BE WORDS LIKE "EQUILIBRIUM POINT", "SUPPLY", "DEMAND", "INCOME TAX", "WILLINGNESS TO PAY", "PROFIT", "PRICES", "SALES TAX" AND "CORPORATE TAX". THESE ARE WORDS BECAUSE THEY LABEL DIFFERENT REAL THINGS. IF THESE THINGS DIDN'T EXIST WE COULD JUST ELIMINATE THE WORDS ENTIRELY.

 

[EdwardBaiamonte]

CORPORATIONS PAY CORPORATE TAXES. INDIVIDUALS PAY INDIVIDUAL INCOME TAX. AND CONSUMERS PAY FOR PRODUCTS AT A PRICE THAT IS THE EQUILIBRIUM POINT OF SUPPLY AND DEMAND.

higher costs lead to higher prices and lower costs lead to lower prices. This is why a car always sells for more than an apple.

 

[Toro]

Our economy would boom if BO eliminated the corporate tax altogether as Ireland proved by just lowering it. Its the ultimate vindication of supply-side economics.

No it is not.

There is empirical evidence that cutting corporate taxes increases tax revenues but the empirical evidence in the US is that cutting income taxes reduces revenues.

empiricism > ideology

 

[EdwardBaiamonte]

the empirical evidence in the US is that cutting income taxes reduces revenues.

the objective is not to raise money for liberal fools to waste but to keep money in the hands of those who earned and can invest it wisely and sustainabley to boost the economy. Yes, not all income tax cuts are supply side income tax cuts . Bush's 2003 supply side tax are, for example, the ones that worked. Cap gains works, etc.

 

[uscitizen]

Ireland just eliminated the tax?

Well lets wait and see how that works out shall we?

Or are we certain where the WMD's are?

 

[Toro]

the empirical evidence in the US is that cutting income taxes reduces revenues.

the objective is not to raise money for liberal fools to waste but to keep money in the hands of those who earned and can invest it wisely and sustainabley to boost the economy. Yes, not all income tax cuts are supply side income tax cuts . Bush's 2003 supply side tax are, for example, the ones that worked. Cap gains works, etc.

Supply side economics says that cutting taxes increases revenues. That is generally true for cutting taxes on corporate profits, capital gains to some extent and natural resource royalties. In the US, it is not true for income taxes, except for perhaps extremely high rates. Thus, supply side dogma fails on the biggest revenue generator for the federal government.

Cutting taxes AND cutting spending generally but not always increases economic growth.

 

[Toro]

Ireland just eliminated the tax?

Well lets wait and see how that works out shall we?

Or are we certain where the WMD's are?

Ireland cut corporate taxes years ago.

Leftist economists such as Joseph Stiglitz have argued that cutting capital gains taxes led to both the tech and housing bubbles. He might also argue that cutting corporate taxes led to an unsustainable boom then bubble in Ireland.

 

[itfitzme]

CORPORATIONS PAY CORPORATE TAXES. INDIVIDUALS PAY INDIVIDUAL INCOME TAX. AND CONSUMERS PAY FOR PRODUCTS AT A PRICE THAT IS THE EQUILIBRIUM POINT OF SUPPLY AND DEMAND.

higher costs lead to higher prices and lower costs lead to lower prices. This is why a car always sells for more than an apple.

Comparing apples to cars makes less sense then comparing apples to oranges.

If Ford paid no corporate taxes, a Focus would still cost more than Motts Apple Sauce with a 100% corporate tax. That is why taxes don't guarantee that frozen orange juice will cost more than a banana split at Foster Freeze.

 

[itfitzme]

the empirical evidence in the US is that cutting income taxes reduces revenues.

the objective is not to raise money for liberal fools to waste but to keep money in the hands of those who earned and can invest it wisely and sustainabley to boost the economy. Yes, not all income tax cuts are supply side income tax cuts . Bush's 2003 supply side tax are, for example, the ones that worked. Cap gains works, etc.

Except that they didn't do anything. He did create three years of the historically largest budget deficits in the history of the US government.

Year Deficit (millions)
2003 $377585
2004 $412727
2005 $318346

 

[The Rabbi]

the empirical evidence in the US is that cutting income taxes reduces revenues.

the objective is not to raise money for liberal fools to waste but to keep money in the hands of those who earned and can invest it wisely and sustainabley to boost the economy. Yes, not all income tax cuts are supply side income tax cuts . Bush's 2003 supply side tax are, for example, the ones that worked. Cap gains works, etc.

Supply side economics says that cutting taxes increases revenues.

No, that is not supply side economics. Supply side posits that there is an optimal percentage the gov't can take from the economy, perhaps 17% I cant remember the exact number. Less, it loses revenue, more it depresses the economy and loses revenue.
We are way over that number, whatever it is.

People understand that if you fine an activity you will get less of it. If you fine wealth creation, i.e. a tax, then you will get less of it.
Edward is exactly right that the current tax code creates gross distortions as companies spend more time trying to figure out ways around taxes than figuring out ways to make better and cheaper products.
The corporate tax code is riddled with exceptions, carve outs etc. Obama wants to add more of these, not less.

 

[The Rabbi]

the empirical evidence in the US is that cutting income taxes reduces revenues.

the objective is not to raise money for liberal fools to waste but to keep money in the hands of those who earned and can invest it wisely and sustainabley to boost the economy. Yes, not all income tax cuts are supply side income tax cuts . Bush's 2003 supply side tax are, for example, the ones that worked. Cap gains works, etc.

Except that they didn't do anything. He did create three years of the historically largest budget deficits in the history of the US government.

Year Deficit (millions)
2003 $377585
2004 $412727
2005 $318346

They raised GDP and brought us out of recession. Using Obamabot logic, Bush's tax cuts saved us from another Great Depression.
United States GDP Growth Rate

 

[editec]

Our economy would boom if BO eliminated the corporate tax altogether as Ireland proved by just lowering it. Its the ultimate vindication of supply-side economics.

Ireland ALREADY had the lowest corporate tax in the EU.

Their economy was exactly what the GOP proposes for our economy BEFORE their economy went into the crapper.

 

[The Rabbi]

Our economy would boom if BO eliminated the corporate tax altogether as Ireland proved by just lowering it. Its the ultimate vindication of supply-side economics.

Ireland ALREADY had the lowest corporate tax in the EU.

Their economy was exactly what the GOP proposes for our economy BEFORE their economy went into the crapper.

You mean rising productivity, rising employment, and a rising standard of living? Because that's what happened when Ireland began cutting their rates.

 

[stans]

You mean rising productivity, rising employment, and a rising standard of living? Because that's what happened when Ireland began cutting their rates.

One instance proves ABSOLUTELY nothing in economics. A much stronger economic process might generate the alleged improvement in Ireland's economy negating your argument. You need multiple instances which you can either average out or compare the number of times events resulted as you hypothesized.

 

[EdwardBaiamonte]

Our economy would boom if BO eliminated the corporate tax altogether as Ireland proved by just lowering it. Its the ultimate vindication of supply-side economics.

Ireland ALREADY had the lowest corporate tax in the EU.

Their economy was exactly what the GOP proposes for our economy BEFORE their economy went into the crapper.

of course as a liberal you will never be able to understand:

Wiki:The French government has over the past decade, most particularly during the premiership of Lionel Jospin, consistently condemned and criticised the Irish corporation tax system. This criticism is based on the belief that the low corporation tax rates enabled Ireland to compete unfairly in attracting international investment.

 

[The Rabbi]

You mean rising productivity, rising employment, and a rising standard of living? Because that's what happened when Ireland began cutting their rates.

One instance proves ABSOLUTELY nothing in economics. A much stronger economic process might generate the alleged improvement in Ireland's economy negating your argument. You need multiple instances which you can either average out or compare the number of times events resulted as you hypothesized.

How many instances would you like?

Ireland's economy was a shambles from WW2 to the 1990s when they started cutting taxes. The economy bloomed when they did so.
Slovenia was another ex-commie country until they simplified the tax code and reduced regulation. They became a very fast growing country.
Ditto with Latvia.

Germany post war had relatively low taxes until the 1970s, when they went up to pay for generous social spending. After that time their economic growth slowed.
We could go on and on with example after example. If you penalize something, you get less of it. If you tax profit you get less profit. This is pretty obvious.

 

[stans]

One instance proves ABSOLUTELY nothing in economics. A much stronger economic process might generate the alleged improvement in Ireland's economy negating your argument. You need multiple instances which you can either average out or compare the number of times events resulted as you hypothesized.

How many instances would you like?

Ireland's economy was a shambles from WW2 to the 1990s when they started cutting taxes. The economy bloomed when they did so.
Slovenia was another ex-commie country until they simplified the tax code and reduced regulation. They became a very fast growing country.
Ditto with Latvia.

Germany post war had relatively low taxes until the 1970s, when they went up to pay for generous social spending. After that time their economic growth slowed.
We could go on and on with example after example. If you penalize something, you get less of it. If you tax profit you get less profit. This is pretty obvious.

At least 5 or 6 instances. And numbers like GDP before and after tax cut, and some references to back it up. If you want to prove a point, do some work to back it up. Don't expect your audience to do the work. Common knowledge is meaningless and often incorrect in economics. As far as I'm concerned you've given no instances to me since I'm not familiar with the instances that you've alluded to. You can go to my site to see how it should be done if you want to. Reduce Unemployment with Little Price Increase
What made Slovenia more efficient? Tax cutting OR reduced regulation or both. Don't be sloppy. Stick to the point that you want to prove.

If you tax profit you get less profit is far from obvious and could easily be wrong as far as I'm concerned. If the taxes were used to benefit the taxpayers then the payers could come out ahead.

 

[rdean]

Our economy would boom if BO eliminated the corporate tax altogether as Ireland proved by just lowering it. Its the ultimate vindication of supply-side economics.

You say "if". You mean you don't know? Everyone is paying the lowest taxes in decades. Many of the largest US corporations don't pay a cent in taxes and get subsidies. How do you explain that?

 

[itfitzme]

One instance proves ABSOLUTELY nothing in economics. A much stronger economic process might generate the alleged improvement in Ireland's economy negating your argument. You need multiple instances which you can either average out or compare the number of times events resulted as you hypothesized.

How many instances would you like?

Ireland's economy was a shambles from WW2 to the 1990s when they started cutting taxes. The economy bloomed when they did so.
Slovenia was another ex-commie country until they simplified the tax code and reduced regulation. They became a very fast growing country.
Ditto with Latvia.

Germany post war had relatively low taxes until the 1970s, when they went up to pay for generous social spending. After that time their economic growth slowed.
We could go on and on with example after example. If you penalize something, you get less of it. If you tax profit you get less profit. This is pretty obvious.

Don't forget child labor laws that are choking off our ability to compete.

 

[Toddsterpatriot]

Our economy would boom if BO eliminated the corporate tax altogether as Ireland proved by just lowering it. Its the ultimate vindication of supply-side economics.

Ireland currenly has 15% unemployment and a economy that is 15% below its peak and its still in recession, not to menion America already has one fo the lowers corporate taxes sin the world.
But dont let facts get in the way of conservative stupidity

We have the 2nd highest corporate tax rate in the world.

You don't blame Ireland's unemployment on the low corporate tax, do you?