US Income Inequality: Top !% Take Home 24% of US Income

[Secularist]

A national sales tax would shift the tax burden to those in the lower income and impoverished classes.
For example: A middleclass person making 100K ,paying an income tax of 25%, would instead now pay lets say a 25% sales tax. If he spends as much as 75k out of the 100k, the tax 25%(75k)= about 18k. And that is the high side. Most middleclass will probably spend no more than 50k out of the 100k per year and be taxed only 12.5k. Many more may spend only about 25k and save the rest.

Meanwhile, the low income and especially poor, paying little or no income tax, would now be hit with a 25% tax hike. A poor individual, making about 6k per year, 100% of which is spent just to survive, would now have to pay an additional 25%(6k) = a shattering $1500 loss which could make the difference between having a place to stay or becoming homeless.

So if a national sales tax replaces income tax, there must be some exceptions, or modifications for the lower income and poor, since they are already struggling just to survive, much more so than those in the upper income classes, especially the upper 20%.

 

[asterism]

A national sales tax would shift the tax burden to those in the lower income and impoverished classes.

False.

Americans For Fair Taxation: Frequently Asked Questions Answers

For example: A middleclass person making 100K ,paying an income tax of 25%, would instead now pay lets say a 25% sales tax. If he spends as much as 75k out of the 100k, the tax 25%(75k)= about 18k. And that is the high side. Most middleclass will probably spend no more than 50k out of the 100k per year and be taxed only 12.5k. Many more may spend only about 25k and save the rest.

Do you honestly think that?

Meanwhile, the low income and especially poor, paying little or no income tax, would now be hit with a 25% tax hike. A poor individual, making about 6k per year, 100% of which is spent just to survive, would now have to pay an additional 25%(6k) = a shattering $1500 loss which could make the difference between having a place to stay or becoming homeless.

Actually, since there is a prebate the working poor would receive a reduction in taxes.

So if a national sales tax replaces income tax, there must be some exceptions, or modifications for the lower income and poor, since they are already struggling just to survive, much more so than those in the upper income classes, especially the upper 20%.

They exist.

H.R. 25: Fair Tax Act of 2009 (GovTrack.us)

 

[thereisnospoon]

A national sales tax would shift the tax burden to those in the lower income and impoverished classes.
For example: A middleclass person making 100K ,paying an income tax of 25%, would instead now pay lets say a 25% sales tax. If he spends as much as 75k out of the 100k, the tax 25%(75k)= about 18k. And that is the high side. Most middleclass will probably spend no more than 50k out of the 100k per year and be taxed only 12.5k. Many more may spend only about 25k and save the rest.

Meanwhile, the low income and especially poor, paying little or no income tax, would now be hit with a 25% tax hike. A poor individual, making about 6k per year, 100% of which is spent just to survive, would now have to pay an additional 25%(6k) = a shattering $1500 loss which could make the difference between having a place to stay or becoming homeless.

So if a national sales tax replaces income tax, there must be some exceptions, or modifications for the lower income and poor, since they are already struggling just to survive, much more so than those in the upper income classes, especially the upper 20%.

That's true but not accurate. People on the lower rungs of the economic ladder spend less. Having said that, those with less to spend would pay less in taxes.
A national sales tax would be confiscatory in that those who have disposable income would pay the vast majority of the tax.
One problem with national sales taxes is the "underground economy"...This is all cash transactions, barter systems, etc...
For example. Instread of paying my friend who owns a lanscaping business I can use a connection I have at 7 local golf courses to get him comp rounds of golf. In this case, no money changes hands although the value of the service and the round of golf might exceed $100. The feds don't get their $24( or whatever the pct is) in revenue.
Small potatoes? Yep. But it adds up.
The most fair and simple way to proper taxation where no one gets screwed is a flat tax.
Everyone pays 15% of their gross income with the first $30k or $40 exempt.....No deductions. No allowances. No need for the gargantuan bureaucracy known as the IRS.

 

[Toro]

Could you define "unwarranted tax breaks" in a way that doesn't make me think you're a Stalinist?

A hardworking Doctor ends up paying 36% of his income for FEDeral taxs,

But if you make 4 Billion a year (the averge income of the Top 10 derivative trading companies CEOs) trading derivatives you pay FEDERAL TAxes at a rate of 15%.

Who is getting screwed by FEDERAL taxation??

The hardest working, most productive people in the USA, that's who.

Not the superwealthy, not the poor, not the blue collar workers, either.

The UPPER MIDDLE and LOWER-UPPER CLASSES are the people paying the lions share of the taxes.

The top two tiers MINUS the SUPERWEALTHY are being screwed most badly, folks.

That's the stupidest example you could come up with.
No one makes $4B trading for his own account. CEOs get paid on a combination of salary and bonus. Those are taxed at the typical rates for salary and bonus.
The top 5% pay 80% of taxes. They also create the most wealth. Why would you want to kill the goose that lays the golden egg? You are right: Top income earners are getting screwed.
Flat tax now!

What he means is that if you are a hedge fund manager - or were, anyways - is that your carried interest was taxed as capital gains, which was about the biggest bunch of bullshit going in the tax code.

Carried interest is the money a private equity or hedge manager earns managing other people's money. The investment industry was able to lobby Congress to consider carried interest as capital gains, i.e. it was their own money. That is not capital gains. That is a fee.

For example, John Paulson reportedly made $2 billion betting against subprime loans. He did that using other people's money. He would have been taxed at 15% on that. Why should John Paulson be taxed at a lower rate than a doctor who also charges fees and pays a 35% rate of tax? Why should there be special exemptions for speculators? Why is speculation deemed a more worthy occupation than being a doctor? That's fucked, in my opinion, and I say that as someone who gets most of his income as a speculator.

 

[Toro]

And this:

There was no year of the Bush administration in which one year's budget was less than the year before, yet the deficits were steadily coming down and, if the housing bubble had not burst in mid 2008, that trend would have balanced the budget within a year or two.

The Bush tax cuts INCREASED revenues dramatically as any even cursory glance over of the treasury revenues will show.

What makes deficits and increases the national debt is spending more than we take in, and not the amount of taxes that we collect.

That is simply incorrect. Estimates of the Bush tax cuts cost the Treasury ~$1.5 billion, i.e. the debt would have been lower by $1.5 billion had the tax cuts not occurred.

As for the graph, the year 2009 is fiscal 2009, which begins in calendar year 2008. The fiscal year of the US government begins in October. It represents the last budget passed under President Bush. Six months had passed before the stimulus was passed in March 2009, which tacked on $100 billion in deficit funding for the next six months fo the year, i.e. the budget deficit had little to do with the stimulus in FY2009. It is also important to note that the Congress of 2007-08 passed no new significant spending laws signed by President Bush. So if we're ascribing what happened under which President, that biggest deficit bar falls to the previous administration, and revenues did indeed fall under Bush.

BTW, the deficit in FY09 wound up being $1.3 trillion.

Also, you cannot say "if the housing bubble hadn't burst." Well, if the housing bubble hadn't been created, we would have been in much worse shape from 2003-07, and all those tax revenues would have been much lower, and thus the deficits much bigger. Bubbles are artificial, and much of the economic growth during that time was artificial.

 

[Toro]

Can you actually read or do you just search for terms like "tax cut failure" and post whatever dreck you find?
Not every tax cut produces more revenue. Only those that affect behavior at the margin, like cap gains, do so. Obama's giveaways to car buyers and home buyers did nothing.

I hate to burst your bubble but I agree with "Obama's giveaways to car buyers and home buyers did nothing". I'm not exactly a liberal, but I'm also not a conservative who uses unfounded talking points.
My posts declaring the tax cuts don't pay for themselves use a GOP Administration numbers and data. Bush Administration economists agree, tax cuts don't generate revenue. All I get back are opinions.

You have gotten back facts and arguments. That you choose to ignore them is your problem.
Saying "tax cuts don't generate revenue" is like saying "medicine doesn't cure illness." In some cases it does, in some it doesn't.

And since you quote Greg Mankiw, here he is saying virtually the opposite of what you say:
Greg Mankiw's Blog: The Growth Effects of Tax Policy

Random Observations for Students of Economics
Wednesday, July 26, 2006
The Growth Effects of Tax Policy
From today's Wall Street Journal:

Dynamic Analysis
By Robert Carroll and N. Gregory Mankiw

Does tax relief mean more economic growth? Many people believe the answer is yes, and now they get strong support from the staff of the U.S. Treasury.

Most press reports on the Mid-Session Review of the federal budget, released by the Bush administration a couple of weeks ago, focused on the good news about expanding tax revenues and the shrinking budget deficit. But for tax-policy geeks, the most intriguing part of the report was an easily overlooked box on page 3: "A Dynamic Analysis of Permanent Extension of the President's Tax Relief." Over the past six months, the Treasury Department staff has been studying the dynamic effects of tax cuts on the economy. The results of this analysis, previewed in this box, were released yesterday in more complete form (available at U.S. Treasury - Office of Tax Policy).

A bit of background: Most official analysis of tax policy is based on what economists call "static assumptions." While many microeconomic behavioral responses are included, the future path of macroeconomic variables such as the capital stock and GNP are assumed to stay the same, regardless of tax policy. This approach is not realistic, but it has been the tradition in tax analysis mainly because it is simple and convenient.

In his 2007 budget, President Bush directed the Treasury staff to develop a dynamic analysis of tax policy, and we are now reaping the fruits of those efforts. The staff uses a model that does not consider the short-run effects of tax policy on the business cycle, but instead focuses on its longer run effects on economic growth through the incentives to work, save and invest, and to allocate capital among competing uses.

The Treasury report describes what will happen to the economy if the tax relief of the past few years is made permanent, compared to the alternative scenario of reverting back to the tax code as it was in 2000. Specifically, the report analyzes the effects of lower taxes on dividends and capital gains, the effects of lower taxes on ordinary income, and the extension of other tax cuts, including the new 10% bracket, the expanded child credit and marriage-penalty relief. Here are three main lessons.

Lesson No. 1: Lower tax rates lead to a more prosperous economy.

According to the Treasury analysis, a permanent extension of the recent tax cuts leads to a long-run increase in the capital stock of 2.3%, and a long-run increase in GNP of 0.7%. In today's economy, such a GNP expansion would mean an extra $90 billion a year that the nation can spend on consumer goods to raise living standards, or capital goods to maintain prosperity. More than two-thirds of this expansion occurs within 10 year

The argument isn't what tax cuts do to the economy. The argument is what tax cuts do to the deficit. Mankiw's own work concluded that every $1 decrease in taxes decreases fiscal revenues by 83 cents. That is very consistent with what he says about economic growth since the marginal level of taxes generated given a unit of GDP is higher when taxes are lower, but the absolute level of tax revenues are lower.

http://www.usmessageboard.com/economy/51527-tax-cuts-dont-pay-for-themselves-gop-economists.html

 

[asterism]

A national sales tax would shift the tax burden to those in the lower income and impoverished classes.
For example: A middleclass person making 100K ,paying an income tax of 25%, would instead now pay lets say a 25% sales tax. If he spends as much as 75k out of the 100k, the tax 25%(75k)= about 18k. And that is the high side. Most middleclass will probably spend no more than 50k out of the 100k per year and be taxed only 12.5k. Many more may spend only about 25k and save the rest.

Meanwhile, the low income and especially poor, paying little or no income tax, would now be hit with a 25% tax hike. A poor individual, making about 6k per year, 100% of which is spent just to survive, would now have to pay an additional 25%(6k) = a shattering $1500 loss which could make the difference between having a place to stay or becoming homeless.

So if a national sales tax replaces income tax, there must be some exceptions, or modifications for the lower income and poor, since they are already struggling just to survive, much more so than those in the upper income classes, especially the upper 20%.

That's true but not accurate. People on the lower rungs of the economic ladder spend less. Having said that, those with less to spend would pay less in taxes.
A national sales tax would be confiscatory in that those who have disposable income would pay the vast majority of the tax.
One problem with national sales taxes is the "underground economy"...This is all cash transactions, barter systems, etc...
For example. Instread of paying my friend who owns a lanscaping business I can use a connection I have at 7 local golf courses to get him comp rounds of golf. In this case, no money changes hands although the value of the service and the round of golf might exceed $100. The feds don't get their $24( or whatever the pct is) in revenue.
Small potatoes? Yep. But it adds up.
The most fair and simple way to proper taxation where no one gets screwed is a flat tax.
Everyone pays 15% of their gross income with the first $30k or $40 exempt.....No deductions. No allowances. No need for the gargantuan bureaucracy known as the IRS.

No deductions and no allowances means that S-Corporations are taxed on their top line of gross profit not their bottom line of actual profit.

 

[Foxfyre]

I hate to burst your bubble but I agree with "Obama's giveaways to car buyers and home buyers did nothing". I'm not exactly a liberal, but I'm also not a conservative who uses unfounded talking points.
My posts declaring the tax cuts don't pay for themselves use a GOP Administration numbers and data. Bush Administration economists agree, tax cuts don't generate revenue. All I get back are opinions.

You have gotten back facts and arguments. That you choose to ignore them is your problem.
Saying "tax cuts don't generate revenue" is like saying "medicine doesn't cure illness." In some cases it does, in some it doesn't.

And since you quote Greg Mankiw, here he is saying virtually the opposite of what you say:
Greg Mankiw's Blog: The Growth Effects of Tax Policy

Random Observations for Students of Economics
Wednesday, July 26, 2006
The Growth Effects of Tax Policy
From today's Wall Street Journal:

Dynamic Analysis
By Robert Carroll and N. Gregory Mankiw

Does tax relief mean more economic growth? Many people believe the answer is yes, and now they get strong support from the staff of the U.S. Treasury.

Most press reports on the Mid-Session Review of the federal budget, released by the Bush administration a couple of weeks ago, focused on the good news about expanding tax revenues and the shrinking budget deficit. But for tax-policy geeks, the most intriguing part of the report was an easily overlooked box on page 3: "A Dynamic Analysis of Permanent Extension of the President's Tax Relief." Over the past six months, the Treasury Department staff has been studying the dynamic effects of tax cuts on the economy. The results of this analysis, previewed in this box, were released yesterday in more complete form (available at U.S. Treasury - Office of Tax Policy).

A bit of background: Most official analysis of tax policy is based on what economists call "static assumptions." While many microeconomic behavioral responses are included, the future path of macroeconomic variables such as the capital stock and GNP are assumed to stay the same, regardless of tax policy. This approach is not realistic, but it has been the tradition in tax analysis mainly because it is simple and convenient.

In his 2007 budget, President Bush directed the Treasury staff to develop a dynamic analysis of tax policy, and we are now reaping the fruits of those efforts. The staff uses a model that does not consider the short-run effects of tax policy on the business cycle, but instead focuses on its longer run effects on economic growth through the incentives to work, save and invest, and to allocate capital among competing uses.

The Treasury report describes what will happen to the economy if the tax relief of the past few years is made permanent, compared to the alternative scenario of reverting back to the tax code as it was in 2000. Specifically, the report analyzes the effects of lower taxes on dividends and capital gains, the effects of lower taxes on ordinary income, and the extension of other tax cuts, including the new 10% bracket, the expanded child credit and marriage-penalty relief. Here are three main lessons.

Lesson No. 1: Lower tax rates lead to a more prosperous economy.

According to the Treasury analysis, a permanent extension of the recent tax cuts leads to a long-run increase in the capital stock of 2.3%, and a long-run increase in GNP of 0.7%. In today's economy, such a GNP expansion would mean an extra $90 billion a year that the nation can spend on consumer goods to raise living standards, or capital goods to maintain prosperity. More than two-thirds of this expansion occurs within 10 year

The argument isn't what tax cuts do to the economy. The argument is what tax cuts do to the deficit. Mankiw's own work concluded that every $1 decrease in taxes decreases fiscal revenues by 83 cents. That is very consistent with what he says about economic growth since the marginal level of taxes generated given a unit of GDP is higher when taxes are lower, but the absolute level of tax revenues are lower.

http://www.usmessageboard.com/economy/51527-tax-cuts-dont-pay-for-themselves-gop-economists.html

And I posted rebuttal for Mankiw's view yesterday.

This morning on Bears and Bulls we heard the analysis that when taxes are raised on business, there has been about $1.10 reduction in revenues generated for every $1.00 in tax hikes. More importantly there is about $3 in productivity generated for every $1 in tax cuts.

But really people. . . .

Don't you see? Isn't it so blatantly obvious? Congress will not use tax revenues to reduce deficits or pay down the debt. They WILL use additional revenues for new spending that will mostly produce benefits for their cronies and special interests that enhance their own power, prestige, influence, and personal wealth.

We do not want to find ways to get more money to the government. We want to find ways to put the government on a strict diet.

 

[Toro]

And I posted rebuttal for Mankiw's view yesterday.

Where?

This morning on Bears and Bulls we heard the analysis that when taxes are raised on business, there has been about $1.10 reduction in revenues generated for every $1.00 in tax hikes. More importantly there is about $3 in productivity generated for every $1 in tax cuts.

The debate is generally around income taxes, not business taxes. There is no empirical evidence that cutting income taxes increases revenues. There is a fair amount of empirical evidence that cutting other taxes, such as corporate taxes and royalties does increase the overall tax take.

 

[boedicca]

You have gotten back facts and arguments. That you choose to ignore them is your problem.
Saying "tax cuts don't generate revenue" is like saying "medicine doesn't cure illness." In some cases it does, in some it doesn't.

And since you quote Greg Mankiw, here he is saying virtually the opposite of what you say:
Greg Mankiw's Blog: The Growth Effects of Tax Policy

The argument isn't what tax cuts do to the economy. The argument is what tax cuts do to the deficit. Mankiw's own work concluded that every $1 decrease in taxes decreases fiscal revenues by 83 cents. That is very consistent with what he says about economic growth since the marginal level of taxes generated given a unit of GDP is higher when taxes are lower, but the absolute level of tax revenues are lower.

http://www.usmessageboard.com/economy/51527-tax-cuts-dont-pay-for-themselves-gop-economists.html

And I posted rebuttal for Mankiw's view yesterday.

This morning on Bears and Bulls we heard the analysis that when taxes are raised on business, there has been about $1.10 reduction in revenues generated for every $1.00 in tax hikes. More importantly there is about $3 in productivity generated for every $1 in tax cuts.

But really people. . . .

Don't you see? Isn't it so blatantly obvious? Congress will not use tax revenues to reduce deficits or pay down the debt. They WILL use additional revenues for new spending that will mostly produce benefits for their cronies and special interests that enhance their own power, prestige, influence, and personal wealth.

We do not want to find ways to get more money to the government. We want to find ways to put the government on a strict diet.

One thing that is blatantly obvious is that taxes being for The Rich is a big con job.

In 1913, The Rich were defined as making over $11 MILLION per year in income; now, it's someone making $250K.

In 10-20 years, it will be anyone making over $100K.

It's not about taxing The Rich; the real agenda is to enslave workers under The State.

 

[asterism]

The argument isn't what tax cuts do to the economy. The argument is what tax cuts do to the deficit. Mankiw's own work concluded that every $1 decrease in taxes decreases fiscal revenues by 83 cents. That is very consistent with what he says about economic growth since the marginal level of taxes generated given a unit of GDP is higher when taxes are lower, but the absolute level of tax revenues are lower.

http://www.usmessageboard.com/economy/51527-tax-cuts-dont-pay-for-themselves-gop-economists.html

And I posted rebuttal for Mankiw's view yesterday.

This morning on Bears and Bulls we heard the analysis that when taxes are raised on business, there has been about $1.10 reduction in revenues generated for every $1.00 in tax hikes. More importantly there is about $3 in productivity generated for every $1 in tax cuts.

But really people. . . .

Don't you see? Isn't it so blatantly obvious? Congress will not use tax revenues to reduce deficits or pay down the debt. They WILL use additional revenues for new spending that will mostly produce benefits for their cronies and special interests that enhance their own power, prestige, influence, and personal wealth.

We do not want to find ways to get more money to the government. We want to find ways to put the government on a strict diet.

One thing that is blatantly obvious is that taxes being for The Rich is a big con job.

In 1913, The Rich were defined as making over $11 MILLION per year in income; now, it's someone making $250K.

In 10-20 years, it will be anyone making over $100K.

It's not about taxing The Rich; the real agenda is to enslave workers under The State.

I don't know if that's the complete agenda and I don't think it's the agenda of everyone who thinks higher taxes on $250K+ incomes is a solution. I am aware that there are plenty of well-to-do people secure in their positions in life that absolutely do advocate this exact thing. They are called Progressives and they think people need to be saved from their own faults.

 

[boedicca]

And such Progressives are incredibly misguided and/or hypocritical.

Most of them are in Academia or "Public Service" - with large pensions which mean that they don't have to save for their own retirement. It's easy to scold that others making $250K per year should have their taxes increased when one has taxpayer funded benefits lined up to protect oneself from the consequences of such a policy.

 

[asterism]

And such Progressives are incredibly misguided and/or hypocritical.

Most of them are in Academia or "Public Service" - with large pensions which mean that they don't have to save for their own retirement. It's easy to scold that others making $250K per year should have their taxes increased when one has taxpayer funded benefits lined up to protect oneself from the consequences of such a policy.

True, and it's done by them expecting everyone else to make sacrifices they won't and/or haven't made. Most of the time these high earners say they are going to pay more themselves they are lying, they've got some way around it. Notice how the national debt is very important to people, so important that they want to pay something towards it and force you to do it too - while never actually having done it on their own.

Warren Buffett is a good example of how to know what he *really* thinks we should do with our money, do what he did.

 

[Foxfyre]

And I posted rebuttal for Mankiw's view yesterday.

This morning on Bears and Bulls we heard the analysis that when taxes are raised on business, there has been about $1.10 reduction in revenues generated for every $1.00 in tax hikes. More importantly there is about $3 in productivity generated for every $1 in tax cuts.

But really people. . . .

Don't you see? Isn't it so blatantly obvious? Congress will not use tax revenues to reduce deficits or pay down the debt. They WILL use additional revenues for new spending that will mostly produce benefits for their cronies and special interests that enhance their own power, prestige, influence, and personal wealth.

We do not want to find ways to get more money to the government. We want to find ways to put the government on a strict diet.

One thing that is blatantly obvious is that taxes being for The Rich is a big con job.

In 1913, The Rich were defined as making over $11 MILLION per year in income; now, it's someone making $250K.

In 10-20 years, it will be anyone making over $100K.

It's not about taxing The Rich; the real agenda is to enslave workers under The State.

I don't know if that's the complete agenda and I don't think it's the agenda of everyone who thinks higher taxes on $250K+ incomes is a solution. I am aware that there are plenty of well-to-do people secure in their positions in life that absolutely do advocate this exact thing. They are called Progressives and they think people need to be saved from their own faults.

One doesn't have to search too long to find somebody who has been abducted by aliens, who have seen Big Foot, or who have conversed with shadow people. So sure, you can find people who will believe any damn fool thing about the economy or government or history or tax policy or just about anything you can think of.

I can assure you that it is a whole lot easier to find people running businesses who don't advocate higher taxes, more expansion of government, or more government spending than it is to find people who do.

 

[The Rabbi]

I hate to burst your bubble but I agree with "Obama's giveaways to car buyers and home buyers did nothing". I'm not exactly a liberal, but I'm also not a conservative who uses unfounded talking points.
My posts declaring the tax cuts don't pay for themselves use a GOP Administration numbers and data. Bush Administration economists agree, tax cuts don't generate revenue. All I get back are opinions.

You have gotten back facts and arguments. That you choose to ignore them is your problem.
Saying "tax cuts don't generate revenue" is like saying "medicine doesn't cure illness." In some cases it does, in some it doesn't.

And since you quote Greg Mankiw, here he is saying virtually the opposite of what you say:
Greg Mankiw's Blog: The Growth Effects of Tax Policy

Random Observations for Students of Economics
Wednesday, July 26, 2006
The Growth Effects of Tax Policy
From today's Wall Street Journal:

Dynamic Analysis
By Robert Carroll and N. Gregory Mankiw

Does tax relief mean more economic growth? Many people believe the answer is yes, and now they get strong support from the staff of the U.S. Treasury.

Most press reports on the Mid-Session Review of the federal budget, released by the Bush administration a couple of weeks ago, focused on the good news about expanding tax revenues and the shrinking budget deficit. But for tax-policy geeks, the most intriguing part of the report was an easily overlooked box on page 3: "A Dynamic Analysis of Permanent Extension of the President's Tax Relief." Over the past six months, the Treasury Department staff has been studying the dynamic effects of tax cuts on the economy. The results of this analysis, previewed in this box, were released yesterday in more complete form (available at U.S. Treasury - Office of Tax Policy).

A bit of background: Most official analysis of tax policy is based on what economists call "static assumptions." While many microeconomic behavioral responses are included, the future path of macroeconomic variables such as the capital stock and GNP are assumed to stay the same, regardless of tax policy. This approach is not realistic, but it has been the tradition in tax analysis mainly because it is simple and convenient.

In his 2007 budget, President Bush directed the Treasury staff to develop a dynamic analysis of tax policy, and we are now reaping the fruits of those efforts. The staff uses a model that does not consider the short-run effects of tax policy on the business cycle, but instead focuses on its longer run effects on economic growth through the incentives to work, save and invest, and to allocate capital among competing uses.

The Treasury report describes what will happen to the economy if the tax relief of the past few years is made permanent, compared to the alternative scenario of reverting back to the tax code as it was in 2000. Specifically, the report analyzes the effects of lower taxes on dividends and capital gains, the effects of lower taxes on ordinary income, and the extension of other tax cuts, including the new 10% bracket, the expanded child credit and marriage-penalty relief. Here are three main lessons.

Lesson No. 1: Lower tax rates lead to a more prosperous economy.

According to the Treasury analysis, a permanent extension of the recent tax cuts leads to a long-run increase in the capital stock of 2.3%, and a long-run increase in GNP of 0.7%. In today's economy, such a GNP expansion would mean an extra $90 billion a year that the nation can spend on consumer goods to raise living standards, or capital goods to maintain prosperity. More than two-thirds of this expansion occurs within 10 year

The argument isn't what tax cuts do to the economy. The argument is what tax cuts do to the deficit. Mankiw's own work concluded that every $1 decrease in taxes decreases fiscal revenues by 83 cents. That is very consistent with what he says about economic growth since the marginal level of taxes generated given a unit of GDP is higher when taxes are lower, but the absolute level of tax revenues are lower.

http://www.usmessageboard.com/economy/51527-tax-cuts-dont-pay-for-themselves-gop-economists.html

This was disproven by the Kennedy tax cuts, the Reagan tax cuts, and the Bush tax cut on cap gain/dividends. All of those produced more revenue to the gov't than the higher rate would have.

 

[Toro]

This was disproven by the Kennedy tax cuts, the Reagan tax cuts, and the Bush tax cut on cap gain/dividends. All of those produced more revenue to the gov't than the higher rate would have.

Please post an empirical econometric study demonstrating a causal link between income tax cuts and higher revenues. Arthur Laffer, the intellectual father of supply side economics never did. Several economists such as Greg Mankiw in fact empirically disproved it.

Correlation is not causality.

 

[boedicca]

How about you providing empirical evidence that government spending has a multiplier effect over 1.0?

IOW, that it actually stimulates the economy more than it costs the private sector due to the transfer of capital.

 

[The Rabbi]

This was disproven by the Kennedy tax cuts, the Reagan tax cuts, and the Bush tax cut on cap gain/dividends. All of those produced more revenue to the gov't than the higher rate would have.

Please post an empirical econometric study demonstrating a causal link between income tax cuts and higher revenues. Arthur Laffer, the intellectual father of supply side economics never did. Several economists such as Greg Mankiw in fact empirically disproved it.

Correlation is not causality.

The facts are as stated. Sorry.

 

[Toro]

This was disproven by the Kennedy tax cuts, the Reagan tax cuts, and the Bush tax cut on cap gain/dividends. All of those produced more revenue to the gov't than the higher rate would have.

Please post an empirical econometric study demonstrating a causal link between income tax cuts and higher revenues. Arthur Laffer, the intellectual father of supply side economics never did. Several economists such as Greg Mankiw in fact empirically disproved it.

Correlation is not causality.

The facts are as stated. Sorry.

Nope.

In a recent article in Grant's Interest Rate Observer, Jim Grant noted there have been 11 major tax increases since WWII. In every case, GDP was higher in a year or two. By our logic, tax increases cause the economy to grow.

 

[loosecannon]

This was disproven by the Kennedy tax cuts, the Reagan tax cuts, and the Bush tax cut on cap gain/dividends. All of those produced more revenue to the gov't than the higher rate would have.

Please post an empirical econometric study demonstrating a causal link between income tax cuts and higher revenues. Arthur Laffer, the intellectual father of supply side economics never did. Several economists such as Greg Mankiw in fact empirically disproved it.

Correlation is not causality.

The facts are as stated. Sorry.

You don't have a clue in the world what causality means. You assume that because tax revenues increase after a tax is lowered that the tax rate change is the cause of the increase in revenue.

Meanwhile the real causes of revenue increases are inflation, growth and industrial progress.

Even if there was a causal relationship between lowering taxes and increased revenues it MUST have a point of diminishing returns. And it also MUST have a cumulative long term effect likely to be wildly different from it's short term effect.

IOW you have no more evidence for your claim than global warming alarmists have that the earth is warming based on a scant 40 year climate record.

Yet your believe your BS as if God himself proved it in a 3000 year study.

You are a bot. And no amount of reason, fact or logic will interrupt your preordained dogmatic adherence to your nonsense ideologies.