Why is it so hard to understand that TAX cuts INCREASES tax revenues?

[healthmyths]

It seems that many people primarily uninformed people don't see HOW the correlation between reducing taxes can increase revenue.
The primary reason they don't understand is fundamentally they don't know:
1) simple arithmetic.
2) that don't know what happens to money.

Do Tax Cuts Increase Government Revenue?

Why according to the above chart does receipts increase as marginal tax decreases?
1) Simple arithmetic.
If taxable income grows tax receipts increase. Simple.
$1,000 taxable income 90% tax $900.
But if taxable income grows to $2,000 and tax is 70% $1,400 versus $900. Simple.
Now some people say "well if the tax was still at 90% it would be $1,800! WRONG!
Because there was NO reason for the taxable income to grow if all it did was pay more taxes!
2) Don't know what happens to money.
Most naive and uninformed people I honestly believe think that people that have excess money:
a) put the money in a mattress or bury it in the backyard. Seriously! They don't seem to comprehend
b)the excess money is
1) spent on consumer goods, more cars, more clothes, more housing, more food.
2) or save putting into the bank which by the way then the bank lends to people to spend..
3) or invest in business to hire more people, spend more money

It is that simple.
The economic multiplier states for every $1 million spent, IT is multiplied by 1.18 or the economy grows with that $1 trillion to $1.2 trillion.
• $1.188 million in total economic activity takes place for every $1 million spent..
• Each $1 million spent provides $205,829 in labor incomes
• Each $1 million represents 7.7 workers and assuming 35% (payroll taxes, FICA, FUTA, Medicare, SS)
http://www2.econ.iastate.edu/research/webpapers/paper_13143.pdf

 

[Weatherman2020]

It seems that many people primarily uninformed people don't see HOW the correlation between reducing taxes can increase revenue.
The primary reason they don't understand is fundamentally they don't know:
1) simple arithmetic.
2) that don't know what happens to money.
View attachment 149122

Do Tax Cuts Increase Government Revenue?

Why according to the above chart does receipts increase as marginal tax decreases?
1) Simple arithmetic.
If taxable income grows tax receipts increase. Simple.
$1,000 taxable income 90% tax $900.
But if taxable income grows to $2,000 and tax is 70% $1,400 versus $900. Simple.
Now some people say "well if the tax was still at 90% it would be $1,800! WRONG!
Because there was NO reason for the taxable income to grow if all it did was pay more taxes!
2) Don't know what happens to money.
Most naive and uninformed people I honestly believe think that people that have excess money:
a) put the money in a mattress or bury it in the backyard. Seriously! They don't seem to comprehend
b)the excess money is
1) spent on consumer goods, more cars, more clothes, more housing, more food.
2) or save putting into the bank which by the way then the bank lends to people to spend..
3) or invest in business to hire more people, spend more money

It is that simple.
The economic multiplier states for every $1 million spent, IT is multiplied by 1.18 or the economy grows with that $1 trillion to $1.2 trillion.
• $1.188 million in total economic activity takes place for every $1 million spent..
• Each $1 million spent provides $205,829 in labor incomes
• Each $1 million represents 7.7 workers and assuming 35% (payroll taxes, FICA, FUTA, Medicare, SS)
http://www2.econ.iastate.edu/research/webpapers/paper_13143.pdf

The left know. They simply want everyone to be poor and wearing brown jumpsuits riding bikes.

 

[danielpalos]

Just more right wing fantasy? Why not show the debt correlation to lowering taxes.

 

[Darkwind]

Just more right wing fantasy? Why not show the debt correlation to lowering taxes.

Because the debt correlation is directly attributable to spending, not income.

However, healthmyths isn't doing his argument any favors with that chart. I am a believer in tax cuts to stimulate growth, provided that equal cuts in spending happen. But the chart shows an increase in revenue BEFORE the tax cuts happened. The ability to read a chart is crucial. The growth in revenue can be more easily attributed to population growth.

 

[Weatherman2020]

Just more right wing fantasy? Why not show the debt correlation to lowering taxes.

Dufus calls JFK a right winger!

 

[Slade3200]

It seems that many people primarily uninformed people don't see HOW the correlation between reducing taxes can increase revenue.
The primary reason they don't understand is fundamentally they don't know:
1) simple arithmetic.
2) that don't know what happens to money.
View attachment 149122

Do Tax Cuts Increase Government Revenue?

Why according to the above chart does receipts increase as marginal tax decreases?
1) Simple arithmetic.
If taxable income grows tax receipts increase. Simple.
$1,000 taxable income 90% tax $900.
But if taxable income grows to $2,000 and tax is 70% $1,400 versus $900. Simple.
Now some people say "well if the tax was still at 90% it would be $1,800! WRONG!
Because there was NO reason for the taxable income to grow if all it did was pay more taxes!
2) Don't know what happens to money.
Most naive and uninformed people I honestly believe think that people that have excess money:
a) put the money in a mattress or bury it in the backyard. Seriously! They don't seem to comprehend
b)the excess money is
1) spent on consumer goods, more cars, more clothes, more housing, more food.
2) or save putting into the bank which by the way then the bank lends to people to spend..
3) or invest in business to hire more people, spend more money

It is that simple.
The economic multiplier states for every $1 million spent, IT is multiplied by 1.18 or the economy grows with that $1 trillion to $1.2 trillion.
• $1.188 million in total economic activity takes place for every $1 million spent..
• Each $1 million spent provides $205,829 in labor incomes
• Each $1 million represents 7.7 workers and assuming 35% (payroll taxes, FICA, FUTA, Medicare, SS)
http://www2.econ.iastate.edu/research/webpapers/paper_13143.pdf

So what's your prediction? Use your simple arithmetic model with real numbers. What is our current revenue and tax rate... what do you think revenue will grow to at which lower tax rates? For that to happen what kind of wage and GDP growth are we talking about?

 

[healthmyths]

Just more right wing fantasy? Why not show the debt correlation to lowering taxes.

Because the debt correlation is directly attributable to spending, not income.

However, healthmyths isn't doing his argument any favors with that chart. I am a believer in tax cuts to stimulate growth, provided that equal cuts in spending happen. But the chart shows an increase in revenue BEFORE the tax cuts happened. The ability to read a chart is crucial. The growth in revenue can be more easily attributed to population growth.

OK... growth revenue population growth. So all those people don't spend any money which grew the economy which increased revenues. Wow... what a concept! population growth spent everything on taxes. That's the only attribution. Of course spending increased and I for one totally decry federal government spending on non-defense of country issues! I mean that is a given! The point is even Arthur Laffer says there is a point where taxes must be paid... but not 90%!

 

[Darkwind]

Just more right wing fantasy? Why not show the debt correlation to lowering taxes.

Because the debt correlation is directly attributable to spending, not income.

However, healthmyths isn't doing his argument any favors with that chart. I am a believer in tax cuts to stimulate growth, provided that equal cuts in spending happen. But the chart shows an increase in revenue BEFORE the tax cuts happened. The ability to read a chart is crucial. The growth in revenue can be more easily attributed to population growth.

OK... growth revenue population growth. So all those people don't spend any money which grew the economy which increased revenues. Wow... what a concept! population growth spent everything on taxes. That's the only attribution. Of course spending increased and I for one totally decry federal government spending on non-defense of country issues! I mean that is a given! The point is even Arthur Laffer says there is a point where taxes must be paid... but not 90%!

I agree. I'm just saying that the chart you provided doesn't help you make your argument.

 

[healthmyths]

Just more right wing fantasy? Why not show the debt correlation to lowering taxes.

Because the debt correlation is directly attributable to spending, not income.

However, healthmyths isn't doing his argument any favors with that chart. I am a believer in tax cuts to stimulate growth, provided that equal cuts in spending happen. But the chart shows an increase in revenue BEFORE the tax cuts happened. The ability to read a chart is crucial. The growth in revenue can be more easily attributed to population growth.

OK... growth revenue population growth. So all those people don't spend any money which grew the economy which increased revenues. Wow... what a concept! population growth spent everything on taxes. That's the only attribution. Of course spending increased and I for one totally decry federal government spending on non-defense of country issues! I mean that is a given! The point is even Arthur Laffer says there is a point where taxes must be paid... but not 90%!

I agree. I'm just saying that the chart you provided doesn't help you make your argument.

Ok whatever MAKES you feel superior! At least I provided some validation. Why don't you dig up some substantiation? It's easy to criticize.

 

[Darkwind]

Just more right wing fantasy? Why not show the debt correlation to lowering taxes.

Because the debt correlation is directly attributable to spending, not income.

However, healthmyths isn't doing his argument any favors with that chart. I am a believer in tax cuts to stimulate growth, provided that equal cuts in spending happen. But the chart shows an increase in revenue BEFORE the tax cuts happened. The ability to read a chart is crucial. The growth in revenue can be more easily attributed to population growth.

OK... growth revenue population growth. So all those people don't spend any money which grew the economy which increased revenues. Wow... what a concept! population growth spent everything on taxes. That's the only attribution. Of course spending increased and I for one totally decry federal government spending on non-defense of country issues! I mean that is a given! The point is even Arthur Laffer says there is a point where taxes must be paid... but not 90%!

I agree. I'm just saying that the chart you provided doesn't help you make your argument.

Ok whatever MAKES you feel superior! At least I provided some validation. Why don't you dig up some substantiation? It's easy to criticize.

I don't do this to make Myself feel superior, but to keep those who think that we can tax and spend our way to prosperity from locking onto a single point of reference. When they do, they become dumb monkeys, unable to even consider any other information. That leads to an end of any rational thought on their part.

My sources for the information I use are books, and they are not so easily linked. But you could try Thomas Sowell as a starter.

 

[danielpalos]

Just more right wing fantasy? Why not show the debt correlation to lowering taxes.

Because the debt correlation is directly attributable to spending, not income.

However, healthmyths isn't doing his argument any favors with that chart. I am a believer in tax cuts to stimulate growth, provided that equal cuts in spending happen. But the chart shows an increase in revenue BEFORE the tax cuts happened. The ability to read a chart is crucial. The growth in revenue can be more easily attributed to population growth.

You mean, fiscal responsibility. Since, you agree that spending and revenue should be in the same "ball park".

 

[danielpalos]

Just more right wing fantasy? Why not show the debt correlation to lowering taxes.

Dufus calls JFK a right winger!

Are we in real times of War, or not, right wingers.

In consideration of the monstrous sacrifice in property and blood that each war demands of the people, personal enrichment through a war must be designated as a crime against the people. Therefore, we demand the total confiscation of all war profits.

 

[danielpalos]

It seems that many people primarily uninformed people don't see HOW the correlation between reducing taxes can increase revenue.
The primary reason they don't understand is fundamentally they don't know:
1) simple arithmetic.
2) that don't know what happens to money.
View attachment 149122

Do Tax Cuts Increase Government Revenue?

Why according to the above chart does receipts increase as marginal tax decreases?
1) Simple arithmetic.
If taxable income grows tax receipts increase. Simple.
$1,000 taxable income 90% tax $900.
But if taxable income grows to $2,000 and tax is 70% $1,400 versus $900. Simple.
Now some people say "well if the tax was still at 90% it would be $1,800! WRONG!
Because there was NO reason for the taxable income to grow if all it did was pay more taxes!
2) Don't know what happens to money.
Most naive and uninformed people I honestly believe think that people that have excess money:
a) put the money in a mattress or bury it in the backyard. Seriously! They don't seem to comprehend
b)the excess money is
1) spent on consumer goods, more cars, more clothes, more housing, more food.
2) or save putting into the bank which by the way then the bank lends to people to spend..
3) or invest in business to hire more people, spend more money

It is that simple.
The economic multiplier states for every $1 million spent, IT is multiplied by 1.18 or the economy grows with that $1 trillion to $1.2 trillion.
• $1.188 million in total economic activity takes place for every $1 million spent..
• Each $1 million spent provides $205,829 in labor incomes
• Each $1 million represents 7.7 workers and assuming 35% (payroll taxes, FICA, FUTA, Medicare, SS)
http://www2.econ.iastate.edu/research/webpapers/paper_13143.pdf

So what's your prediction? Use your simple arithmetic model with real numbers. What is our current revenue and tax rate... what do you think revenue will grow to at which lower tax rates? For that to happen what kind of wage and GDP growth are we talking about?

Conservatives should assume a one percent growth rate.

Neo-conservatives just make it up as they go along.

 

[danielpalos]

Just more right wing fantasy? Why not show the debt correlation to lowering taxes.

Because the debt correlation is directly attributable to spending, not income.

However, healthmyths isn't doing his argument any favors with that chart. I am a believer in tax cuts to stimulate growth, provided that equal cuts in spending happen. But the chart shows an increase in revenue BEFORE the tax cuts happened. The ability to read a chart is crucial. The growth in revenue can be more easily attributed to population growth.

OK... growth revenue population growth. So all those people don't spend any money which grew the economy which increased revenues. Wow... what a concept! population growth spent everything on taxes. That's the only attribution. Of course spending increased and I for one totally decry federal government spending on non-defense of country issues! I mean that is a given! The point is even Arthur Laffer says there is a point where taxes must be paid... but not 90%!

both terms, to promote and to provide are used in reference to the general welfare, but not the common defense.

Any authorization for the use of our exorbitantly expensive super power, should come with its own funding source, and not, from funds meant for the general welfare and common defense.

 

[SavannahMann]

Well then, we should lower the taxes to zero, then the money would flow into the Treasury so fast it would pour out the windows. We would need snow plows to keep the streets clear of the money threatening to bury Washington.

Kansas cut taxes, and expected an explosion of growth, and the explosion did not materialize. Cuts, and more cuts, and then finally the legislature overrode the Governor's Veto to get rid of the tax cuts. Spending in the state did not increase.

There are a number of reasons, but supply side economics counts on one thing that does not happen anymore. People with more money no longer spend it locally, they spend it online buying the items they want from the cheapest supplier. Not something close to what they want, but what they really want. Amazon and eBay and the rest are able to meet customer demand all over the nation.

So stores were not opening, employment did not increase, and payroll taxes did not take up the slack on lost tax revenue and then drown Kansas in money.

Everyone shops online now. I do. You can even purchase a weapon online, providing that you go to the Federally Licensed Firearms Dealer to pick it up and fill out the forms. But let's talk about that. Most FFL people will do the transfer. They charge a small fee. $25 or $50. That is much less than they would make if they sold the weapon through their own sources. That probably covers their costs and a tiny bit more to maintain the paperwork for eternity.

But we have a lot of other examples to look at. Instead of heading to the local electronics store to buy a TV, you just order one online. Instead of buying a new pair of pants at the store, a lot of people buy online.

Online sales is the hole in the theory that did not exist when Reagan fired up the tax cut to stimulate growth idea. That's why the tax cut experiment in Kansas failed, and that's why it will fail at any State Level. Federal, you have income tax from the online sellers, so you can argue that you'll do better in the long run that way, but I'm not convinced.

 

[Darkwind]

Just more right wing fantasy? Why not show the debt correlation to lowering taxes.

Because the debt correlation is directly attributable to spending, not income.

However, healthmyths isn't doing his argument any favors with that chart. I am a believer in tax cuts to stimulate growth, provided that equal cuts in spending happen. But the chart shows an increase in revenue BEFORE the tax cuts happened. The ability to read a chart is crucial. The growth in revenue can be more easily attributed to population growth.

You mean, fiscal responsibility. Since, you agree that spending and revenue should be in the same "ball park".

No, but I agree that there should be no talk of taxation until real progress is made on defining 'legitimate' spending by the Federal government and their abuse of the States.

It simply cannot be argued with any rationality that tax cuts do not create stimulus. However, it also cannot be stated that tax cuts without a corresponding level of spending cutes will create a stimulus. What it (spending) does is burden future generations with unimaginable taxation to cover the lack of responsible spending and mature priorities of government.

Excuse Me, but today I'm making a batch of watermelon wine and I can't spend all day discussing economics 101. Have a nice day.

 

[Darkwind]

Well then, we should lower the taxes to zero, then the money would flow into the Treasury so fast it would pour out the windows. We would need snow plows to keep the streets clear of the money threatening to bury Washington.

Kansas cut taxes, and expected an explosion of growth, and the explosion did not materialize. Cuts, and more cuts, and then finally the legislature overrode the Governor's Veto to get rid of the tax cuts. Spending in the state did not increase.

There are a number of reasons, but supply side economics counts on one thing that does not happen anymore. People with more money no longer spend it locally, they spend it online buying the items they want from the cheapest supplier. Not something close to what they want, but what they really want. Amazon and eBay and the rest are able to meet customer demand all over the nation.

So stores were not opening, employment did not increase, and payroll taxes did not take up the slack on lost tax revenue and then drown Kansas in money.

Everyone shops online now. I do. You can even purchase a weapon online, providing that you go to the Federally Licensed Firearms Dealer to pick it up and fill out the forms. But let's talk about that. Most FFL people will do the transfer. They charge a small fee. $25 or $50. That is much less than they would make if they sold the weapon through their own sources. That probably covers their costs and a tiny bit more to maintain the paperwork for eternity.

But we have a lot of other examples to look at. Instead of heading to the local electronics store to buy a TV, you just order one online. Instead of buying a new pair of pants at the store, a lot of people buy online.

Online sales is the hole in the theory that did not exist when Reagan fired up the tax cut to stimulate growth idea. That's why the tax cut experiment in Kansas failed, and that's why it will fail at any State Level. Federal, you have income tax from the online sellers, so you can argue that you'll do better in the long run that way, but I'm not convinced.

^^ none rational fearmongering.

 

[SavannahMann]

Well then, we should lower the taxes to zero, then the money would flow into the Treasury so fast it would pour out the windows. We would need snow plows to keep the streets clear of the money threatening to bury Washington.

Kansas cut taxes, and expected an explosion of growth, and the explosion did not materialize. Cuts, and more cuts, and then finally the legislature overrode the Governor's Veto to get rid of the tax cuts. Spending in the state did not increase.

There are a number of reasons, but supply side economics counts on one thing that does not happen anymore. People with more money no longer spend it locally, they spend it online buying the items they want from the cheapest supplier. Not something close to what they want, but what they really want. Amazon and eBay and the rest are able to meet customer demand all over the nation.

So stores were not opening, employment did not increase, and payroll taxes did not take up the slack on lost tax revenue and then drown Kansas in money.

Everyone shops online now. I do. You can even purchase a weapon online, providing that you go to the Federally Licensed Firearms Dealer to pick it up and fill out the forms. But let's talk about that. Most FFL people will do the transfer. They charge a small fee. $25 or $50. That is much less than they would make if they sold the weapon through their own sources. That probably covers their costs and a tiny bit more to maintain the paperwork for eternity.

But we have a lot of other examples to look at. Instead of heading to the local electronics store to buy a TV, you just order one online. Instead of buying a new pair of pants at the store, a lot of people buy online.

Online sales is the hole in the theory that did not exist when Reagan fired up the tax cut to stimulate growth idea. That's why the tax cut experiment in Kansas failed, and that's why it will fail at any State Level. Federal, you have income tax from the online sellers, so you can argue that you'll do better in the long run that way, but I'm not convinced.

^^ none rational fearmongering.

So the Tax Cuts in Kansas were a huge success? Wow, I guess Forbes, the Wall Street Journal, and the rest were actually Fake News. Oh dear, who do I get my information from now?

 

[danielpalos]

Just more right wing fantasy? Why not show the debt correlation to lowering taxes.

Because the debt correlation is directly attributable to spending, not income.

However, healthmyths isn't doing his argument any favors with that chart. I am a believer in tax cuts to stimulate growth, provided that equal cuts in spending happen. But the chart shows an increase in revenue BEFORE the tax cuts happened. The ability to read a chart is crucial. The growth in revenue can be more easily attributed to population growth.

You mean, fiscal responsibility. Since, you agree that spending and revenue should be in the same "ball park".

No, but I agree that there should be no talk of taxation until real progress is made on defining 'legitimate' spending by the Federal government and their abuse of the States.

It simply cannot be argued with any voracity that tax cuts do not create stimulus. However, it also cannot be stated that tax cuts without a corresponding level of spending cutes will create a stimulus. What it (spending) does is burden future generations with unimaginable taxation to cover the lack of responsible spending and mature priorities of government.

Excuse Me, but today I'm making a batch of watermelon wine and I can't spend all day discussing economics 101. Have a nice day.

We have a general welfare clause and a common defense clause. It seems simple, to any federalist.

 

[Weatherman2020]

Just more right wing fantasy? Why not show the debt correlation to lowering taxes.

Dufus calls JFK a right winger!

Are we in real times of War, or not, right wingers.

In consideration of the monstrous sacrifice in property and blood that each war demands of the people, personal enrichment through a war must be designated as a crime against the people. Therefore, we demand the total confiscation of all war profits.

Shitforbrains thinks America faced no threats and had a peace time military in 1963. My God how they are so ignorant.