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

[xsited1]

Totally lame analysis that was destroyed in the comments section by a poster named 'Brooks'. I don't know who Bruce Bartlett is, but by posting nonsense he deserves to be ridiculed.

If the analysis is so lame you should have no problem coming up with something that isn't lame. Right?

No need. Just read the responses by the poster named 'Brooks'. (It's like I just repeated myself...)

 

[Polk]

The top 5% includes what you consider the middle class.

It doesn't include what I consider the middle class, though it does include people who are often consider middle class by politicians, showing they have no idea what the word "middle" means.

Really?

What do you consider middle class? Because the top 5% is around $150,000 a year, well below Obama's magical numbers.

Just look at your measuring stick. If the 95th percentile of the income distribution is "middle class", than by definition the 5th percentile is as well. The 5th percentile makes about $2,500 a year. Is $2,500 a year middle class? Certainly not.

 

[Polk]

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

They said the same thing in 1980, yet the net result was more revenue for the government.

The top tax rate in 1980 was 70%, so there was some sense to the madness at the time. We are now talking about cutting taxes when they are already at their lowest levels in over 60 years. Sorry, but if the Dems paint this picture the way it really is, voters are not going to buy into cutting taxes even more.

On some level, it doesn't matter what reality is. It matters what people think reality is. Obama has cut taxes even further than George W. Bush, and most Americans still believe he raised them.

 

[auditor0007]

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.

Well, since you found an INTERNET BLOG to say so, that just settles it all, doesn't it?

Yea, and if you do an Internet search, you'll find articles confirming it in the Washington Post and many other sources. What a twit you are.

 

[auditor0007]

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.

Your source's info is creative math.
Cutting taxes or placing money back into the private sector increases revenues and stimulates economic growth.
It is the private sector and not government that moves the economic meter.
Government takes it does not produce. Government left to it's own devices would gobble up chunks of GDP.
The current Presidential administration views itself as a entity with limitless power. It views itself as a savior. It views itself as all knowing. Centralized planning for the masses is it's goal. This administration does not govern. It rules.

First of all, cutting taxes does not always increase revenue. If it always did, then we could cut taxes to zero and it would increase revenue, but I don't think even you are stupid enough to believe that. Well, maybe...

Secondly, if cutting taxes always works so well, why are we taking in 30% less revenue compared to GDP today versus 2000? Please explain this. We aren't even in the same ball park. There is no doubt that spending is higher than it should be, but we knew this was coming once the baby boomers began retiring. The excess revenues are no longer there to borrow from the SS surplus because there is no more SS surplus. So top the loss of those dollars with the actual loss in revenue from the tax cuts, and we are in deep shit.

In 2010 tax revenues were only 14.4% of GDP, over 4% points below the average for the last 60 years. That's around $600 billion. Add $200 billion from the loss of surplus SS funds, and then we have $800 billion. Add to that unfunded increases in military spending of an additional $300 to $400 billion, and we're close to $1.2 trillion.

And you idiots think the answer is to cut taxes more. Keep it up and continue to keep making the wealthy wealthier while depleting the middle class, and the US will become the biggest socialist country in the world.

 

[auditor0007]

They said the same thing in 1980, yet the net result was more revenue for the government.

The top tax rate in 1980 was 70%, so there was some sense to the madness at the time. We are now talking about cutting taxes when they are already at their lowest levels in over 60 years. Sorry, but if the Dems paint this picture the way it really is, voters are not going to buy into cutting taxes even more.

On some level, it doesn't matter what reality is. It matters what people think reality is. Obama has cut taxes even further than George W. Bush, and most Americans still believe he raised them.

Probably his biggest mistake to date.

 

[Polk]

The top tax rate in 1980 was 70%, so there was some sense to the madness at the time. We are now talking about cutting taxes when they are already at their lowest levels in over 60 years. Sorry, but if the Dems paint this picture the way it really is, voters are not going to buy into cutting taxes even more.

On some level, it doesn't matter what reality is. It matters what people think reality is. Obama has cut taxes even further than George W. Bush, and most Americans still believe he raised them.

Probably his biggest mistake to date.

It was the correct policy, but yeah, as a political matter, he'd have been much better off to send out checks directly.

 

[Quantum Windbag]

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

They said the same thing in 1980, yet the net result was more revenue for the government.

The top tax rate in 1980 was 70%, so there was some sense to the madness at the time. We are now talking about cutting taxes when they are already at their lowest levels in over 60 years. Sorry, but if the Dems paint this picture the way it really is, voters are not going to buy into cutting taxes even more.

Can you explain the massive Republican gains in the midterms using the theory that voters oppose tax cuts?

 

[Quantum Windbag]

Funny, it worked in Indiana.

By the way, there is no need to pay for tax cuts, we only have to pay for spending.

Indiana’s General Assembly passed a budget in the evening of June 30, 2009. It took a special session, and the pressure of an end-of-fiscal-year deadline that had not been missed for more than a century, for legislators to agree on a spending plan for 2010 and 2011. The problem was revenues.

Indiana's state budget experienced some of its worst years ever in fiscal years 2009, 2010 and 2011 (fiscal years run from July to June). The economy plunged into recession. Revenues fell short of appropriations by almost $5 billion. Appropriations were flat-lined, then spending was cut below those levels. Balances were reduced to the bare minimum.

Indiana Local Government Information Website: State Budget Outlook

It sounds like Indiana is just like the rest of the country to me.

Only if you think the rest of the country is adding jobs at a record pace.

Indiana leads nation in job growth - 13 WTHR

Want to try again?

 

[Quantum Windbag]

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

They said the same thing in 1980, yet the net result was more revenue for the government.

I think you are misinformed. The author of this was actually in the Reagan administration.

Reagan's Forgotten Tax Record | Capital Gains and Games

In case you aren't familiar with Bruce Bartlett

Bruce Bartlett - Wikipedia, the free encyclopedia

I never said Reagan did not raise taxes. He did cut the highest rate paid though, and spread the tax burden around. That, in case you missed it, is exactly what Ryan proposed.

 

[Quantum Windbag]

Did anyone answer the question?

At what point would federal income taxes be too low?

When they cannot cover the programs the federal government is obligated to cover, which does not include toad crossings in Florida.

 

[Quantum Windbag]

A couple of weeks ago, I discussed the low level of federal taxes as a share of the gross domestic product in the United States, both historically and in comparison with other developed economies. I noted that total federal revenue — income, corporate and payroll taxes combined –– has been below 15 percent of gross domestic product for three years in a row, its lowest level since 1950 and well below the postwar average of about 18.5 percent of G.D.P.

Bruce Bartlett: Are Taxes High or Low? A Further Look - NYTimes.com

In case anyone is interested here is another op-ed by Bartlett on the same subject. BTW it was written for the NYT so I'm sure that some conservatives will turn up their noses at it. But it's very good.

I will let Brooks show you just how stupid this is.

From your link in the OP.

Bruce -- With all due respect, are you kidding???
So, just hypothetically, if a tax rate cut generated a great degree of incremental growth such that GDP ended up much larger than it otherwise would, even if it generated so much GDP growth that revenues increased (in real terms or even in real and per capita terms), you'd call it a reduction in revenues per "the only metric that really matters". In other words, the more effective and beneficial in terms of GDP impact, the worse it is per your "only metric that really matters" (and yes, I'm saying that you are clearly implying a that reduction in revenues per that metric counts against the merits of that policy).
Let me be clear about something. I think it's ridiculous and harmful that the "tax cuts increase revenues" myth persists among conservatives. A few years ago I even went to the trouble of compiling this list No, the Bush Tax Cuts Have NOT Generated Higher Revenues | Swords Crossed to provide to the analytically-challenged conservative ditto-heads who buy into that silliness (a belief which shows an utter lack of understanding of the basic concept of correlation, let alone causation).
And I favor higher taxes, not lower, as part of an overall package to address our long-term fiscal imbalance, along with substantial cuts in projected spending (both explicit expenditures and subsidies via the tax code).
So I'm not making a partisan point. I'm just saying your "only metric that really matters" seems nonsensical if the point is to downplay benefits and/or even cast in negative terms the effects of a tax cut. If I'm missing something, please let me know how it makes sense to claim that the revenue benefit (or harm) -- and in turn, to a large extent, the overall net benefit/harm -- of a tax cut should be measured solely by a metric whose magnitude (and positive vs. negative condition) declines as the benefits of the policy increase.
To further illustrate, if (again just hypothetically) a tax increase devastated GDP, leading to deep recession and/or much lower growth on an ongoing basis than would otherwise occur, your "only metric that really matters" could show a substantial increase (in revenues as a % of GDP), even if revenues actually declined (in real terms). Would you suggest that such a dynamic be held out as a positive effect of that policy?

You should read more than just the things you like to hear.

 

[auditor0007]

They said the same thing in 1980, yet the net result was more revenue for the government.

The top tax rate in 1980 was 70%, so there was some sense to the madness at the time. We are now talking about cutting taxes when they are already at their lowest levels in over 60 years. Sorry, but if the Dems paint this picture the way it really is, voters are not going to buy into cutting taxes even more.

Can you explain the massive Republican gains in the midterms using the theory that voters oppose tax cuts?

Everyone loves a tax cut; it's an easy sell. However, if those cuts don't actually turn into gains in revenue, eventually people will figure it out. Then they will have to decide which government services they want to keep versus cutting. For those of you who believe spending is the entire problem, you are going to be in for a reality check very soon. I understand that we need to make cuts, and most Americans do. But to actually cut what would have to be cut to balance the budget while cutting taxes further would require cutting 50% of federal spending. It means basically dismantling SS and Medicare along with many social programs that the vast majority of Americans support.

The real problem is that we can't get anyone (politicians) to sit down and actually figure out what we need to do to increase revenues while making cuts at the same time. This idea that cutting taxes further will increase revenue is not going to work because we have bottomed out. You can only cut taxes so far and turn that into increased revenue. Eventually, it just means more lost revenue. Secondly, the idea that the "wealthy" will invest all their money into businesses that create new jobs is not going to work either. People do not invest money into businesses when there are no consumers to buy their potential products or services. And since we live in a consumer economy where 70% of our GDP is based on the sale of consumer goods and services, those at the bottom have to have the money to spur growth in the economy. Those wealthy investors are not going to invest until they are certain there is going to be demand for their products. Instead what they have been doing is taking a big chunk of that money and investing it into high growth markets where they know they will get a return. Since our economy is nowhere near high growth, all this does is send more of our dollars out of our economy and into developing economies.

I don't care how much we cut or raise taxes, it's not going to have a significant impact on our economy in the short term, so we better find a realistic way to cut a decent percentage of our spending while increasing revenue to at least get us close to having a balanced budget. If you look at our last two growth cycles, both of them led to busts. First we had the dot.com bust, then the housing bust. In neither case should the economy been growing as fast as it did. At the same time, we should never have had the major busts that have truly hurt us.

At the bottom of all this, what we see is that despite the vast majority of Americans having seen their wealth and earnings remain stagnant or drop, the super rich have increased their wealth dramatically. Now if that had come about because the rest of America was doing so well, I wouldn't have a problem with it. But that is not what has happened, and supporting the same policies that got us here in the first place just don't hold water.

 

[Quantum Windbag]

It doesn't include what I consider the middle class, though it does include people who are often consider middle class by politicians, showing they have no idea what the word "middle" means.

Really?

What do you consider middle class? Because the top 5% is around $150,000 a year, well below Obama's magical numbers.

Just look at your measuring stick. If the 95th percentile of the income distribution is "middle class", than by definition the 5th percentile is as well. The 5th percentile makes about $2,500 a year. Is $2,500 a year middle class? Certainly not.

So your position on the middle class is it doesn't exist?

Federal poverty guidelines classify a family of 4 as below the poverty level if they earn less than $30,000. If we apply your standard, that puts poor people as the middle class because they earn more than 25% of the other people who earn money.

If you cannot supply an actual number you have no business talking about this at all. What is the middle class as far as earnings go? Give me a number or ignore my question, your choice.

 

[Quantum Windbag]

They said the same thing in 1980, yet the net result was more revenue for the government.

The top tax rate in 1980 was 70%, so there was some sense to the madness at the time. We are now talking about cutting taxes when they are already at their lowest levels in over 60 years. Sorry, but if the Dems paint this picture the way it really is, voters are not going to buy into cutting taxes even more.

On some level, it doesn't matter what reality is. It matters what people think reality is. Obama has cut taxes even further than George W. Bush, and most Americans still believe he raised them.

He did. He also cut them. Does him doing the latter make up for him lying about the former?

 

[Quantum Windbag]

Everyone loves a tax cut; it's an easy sell. However, if those cuts don't actually turn into gains in revenue, eventually people will figure it out. Then they will have to decide which government services they want to keep versus cutting. For those of you who believe spending is the entire problem, you are going to be in for a reality check very soon. I understand that we need to make cuts, and most Americans do. But to actually cut what would have to be cut to balance the budget while cutting taxes further would require cutting 50% of federal spending. It means basically dismantling SS and Medicare along with many social programs that the vast majority of Americans support.

When do you think they will figure out that more government spending ≠ more jobs?

Obama's budget for next year is almost $4 trillion dollars. That is twice what it was 10 years ago, why has it grown so fast? Until someone can justify that talking to me about the consequences of reducing spending by 50% is not going to scare me. I think we need to do at least that.

Yes, I support cuts to the defense budget, and everything else. We need to cut spending across the board.

The real problem is that we can't get anyone (politicians) to sit down and actually figure out what we need to do to increase revenues while making cuts at the same time. This idea that cutting taxes further will increase revenue is not going to work because we have bottomed out. You can only cut taxes so far and turn that into increased revenue. Eventually, it just means more lost revenue. Secondly, the idea that the "wealthy" will invest all their money into businesses that create new jobs is not going to work either. People do not invest money into businesses when there are no consumers to buy their potential products or services. And since we live in a consumer economy where 70% of our GDP is based on the sale of consumer goods and services, those at the bottom have to have the money to spur growth in the economy. Those wealthy investors are not going to invest until they are certain there is going to be demand for their products. Instead what they have been doing is taking a big chunk of that money and investing it into high growth markets where they know they will get a return. Since our economy is nowhere near high growth, all this does is send more of our dollars out of our economy and into developing economies.

I also support reforming the tax code so that loopholes are closed off, and taxes actually go up. this should increase revenue significantly. We also need to broaden the tax base so that more people share the pain. Someone has to stand up and make the hard choices, and tell people the truth. That person is not currently occupying the White House.

I don't care how much we cut or raise taxes, it's not going to have a significant impact on our economy in the short term, so we better find a realistic way to cut a decent percentage of our spending while increasing revenue to at least get us close to having a balanced budget. If you look at our last two growth cycles, both of them led to busts. First we had the dot.com bust, then the housing bust. In neither case should the economy been growing as fast as it did. At the same time, we should never have had the major busts that have truly hurt us.

I agree, in theory. I do not know enough about economics to actually argue the merits of any one thing over another, I just understand what I see happen in the real world. The economic impact of taxation takes a few years to make itself felt, which usually means that the next president gets the credit/blame for what happens.

There are other things that the government can do to stifle economic recovery, and this is demonstrated again and again throughout history. Currently we are doing almost everything wrong. IMO

At the bottom of all this, what we see is that despite the vast majority of Americans having seen their wealth and earnings remain stagnant or drop, the super rich have increased their wealth dramatically. Now if that had come about because the rest of America was doing so well, I wouldn't have a problem with it. But that is not what has happened, and supporting the same policies that got us here in the first place just don't hold water.

The rich will always get richer, it is the nature of being rich. I will point out that most of the increase in wealth over the past half century has come about because everyone got richer, so worrying about the fact that some people are getting richer in an economic downturn is class warfare. You need to stop worrying about this imaginary cabal of super rich that are out to won everything, there is way too much competition in the world today for them to do that.

 

[The Rabbi]

The rich will always get richer, it is the nature of being rich. I will point out that most of the increase in wealth over the past half century has come about because everyone got richer, so worrying about the fact that some people are getting richer in an economic downturn is class warfare. You need to stop worrying about this imaginary cabal of super rich that are out to won everything, there is way too much competition in the world today for them to do that.

Frequently forgotten is that "the rich" are not a static group. Look at the Fortune 400 list today and compare it to 30 years ago. Not a lot of the same people and plenty of newcomers.
The rich get richer faster than the poor get richer, is what we've seen.

 

[thereisnospoon]

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.

Your source's info is creative math.
Cutting taxes or placing money back into the private sector increases revenues and stimulates economic growth.
It is the private sector and not government that moves the economic meter.
Government takes it does not produce. Government left to it's own devices would gobble up chunks of GDP.
The current Presidential administration views itself as a entity with limitless power. It views itself as a savior. It views itself as all knowing. Centralized planning for the masses is it's goal. This administration does not govern. It rules.

First of all, cutting taxes does not always increase revenue. If it always did, then we could cut taxes to zero and it would increase revenue, but I don't think even you are stupid enough to believe that. Well, maybe...

Secondly, if cutting taxes always works so well, why are we taking in 30% less revenue compared to GDP today versus 2000? Please explain this. We aren't even in the same ball park. There is no doubt that spending is higher than it should be, but we knew this was coming once the baby boomers began retiring. The excess revenues are no longer there to borrow from the SS surplus because there is no more SS surplus. So top the loss of those dollars with the actual loss in revenue from the tax cuts, and we are in deep shit.

In 2010 tax revenues were only 14.4% of GDP, over 4% points below the average for the last 60 years. That's around $600 billion. Add $200 billion from the loss of surplus SS funds, and then we have $800 billion. Add to that unfunded increases in military spending of an additional $300 to $400 billion, and we're close to $1.2 trillion.

And you idiots think the answer is to cut taxes more. Keep it up and continue to keep making the wealthy wealthier while depleting the middle class, and the US will become the biggest socialist country in the world.

Cutting taxes to zero....Yeah ok..How about a return from LA LA land.
All government entities whether they cut taxes or increased them are taking in less revenue. That has been the issue since 2006 when the economy began to slide downward.
At the end of the day with all the excuses, all the stats, data and political rhetoric from the Left regarding taxation, there is one question no one of the Left will answer in a direct and concise manner...That question is what is your interest in seeing higher taxation?
The pre qualifier is if it's "so that government can function and provide needed services", that is not an acceptable response. The reason I state this is because government CAN function. It just refuses to do so in a fiscally sound and disciplined manner.
Politicians who are of the tax ands spend camp, believe their spending policies should never be affected by economic downturns. They always think in terms of " we can always get more from the people".
In conclusion, I will ask what is it you people like so much about high taxation?

 

[thereisnospoon]

The top tax rate in 1980 was 70%, so there was some sense to the madness at the time. We are now talking about cutting taxes when they are already at their lowest levels in over 60 years. Sorry, but if the Dems paint this picture the way it really is, voters are not going to buy into cutting taxes even more.

Can you explain the massive Republican gains in the midterms using the theory that voters oppose tax cuts?

Everyone loves a tax cut; it's an easy sell. However, if those cuts don't actually turn into gains in revenue, eventually people will figure it out. Then they will have to decide which government services they want to keep versus cutting. For those of you who believe spending is the entire problem, you are going to be in for a reality check very soon. I understand that we need to make cuts, and most Americans do. But to actually cut what would have to be cut to balance the budget while cutting taxes further would require cutting 50% of federal spending. It means basically dismantling SS and Medicare along with many social programs that the vast majority of Americans support.

The real problem is that we can't get anyone (politicians) to sit down and actually figure out what we need to do to increase revenues while making cuts at the same time. This idea that cutting taxes further will increase revenue is not going to work because we have bottomed out. You can only cut taxes so far and turn that into increased revenue. Eventually, it just means more lost revenue. Secondly, the idea that the "wealthy" will invest all their money into businesses that create new jobs is not going to work either. People do not invest money into businesses when there are no consumers to buy their potential products or services. And since we live in a consumer economy where 70% of our GDP is based on the sale of consumer goods and services, those at the bottom have to have the money to spur growth in the economy. Those wealthy investors are not going to invest until they are certain there is going to be demand for their products. Instead what they have been doing is taking a big chunk of that money and investing it into high growth markets where they know they will get a return. Since our economy is nowhere near high growth, all this does is send more of our dollars out of our economy and into developing economies.

I don't care how much we cut or raise taxes, it's not going to have a significant impact on our economy in the short term, so we better find a realistic way to cut a decent percentage of our spending while increasing revenue to at least get us close to having a balanced budget. If you look at our last two growth cycles, both of them led to busts. First we had the dot.com bust, then the housing bust. In neither case should the economy been growing as fast as it did. At the same time, we should never have had the major busts that have truly hurt us.

At the bottom of all this, what we see is that despite the vast majority of Americans having seen their wealth and earnings remain stagnant or drop, the super rich have increased their wealth dramatically. Now if that had come about because the rest of America was doing so well, I wouldn't have a problem with it. But that is not what has happened, and supporting the same policies that got us here in the first place just don't hold water.

Here's the deal. Read carefully.
The vast majority of Americans DO NOT support the rampant growth in social spending. They oppose the waste, fraud and bureaucracy. Those are just some of the reasons for this debate. If as you say, "the majority of Americans" supported social spending, there would have been no GOP victory last November because the country would have been happy with the status quo.
You also stated that in your opinion government spending would have to be cut by 50%....That's not true and if it is, please, by all means show the data.
You went on to state that SS and Medicare would have to be dismantled. Also not true .Not even close.
Whether you like to believe or not ,both of these programs are in dire trouble and no amount of tax increases are going to save them. What needs to be done is the method by which these are funded must be radically changed to insure their solvency. Not only that, legislation MUST be passed that absolutely prohibits the funds collected from being touched for anything but their intended purpose. We're having this particular debate because for decades the federal government has been taking Social Security, Disability, Medicare and Medicaid funds and using them for other purposes. The money was taken with the idea that there would always be a certain number of workers putting money into the system for every one person taking out. IN a effect these programs are funded based on Ponzi scheme type methods.
No one is claiming these programs must be ended. The general consensus is that they need to be reworked in such a way that there will never be these concerns again.
On investment in business. First, stop using the word "wealthy". People of all income levels invest in business.
People do not invest in business on the premise that it will sell a product. They invest with reasonable assurance they will realize a positive return on investment.
Lastly. The act of reducing tax rates does not magically create increases in revenue.
The purpose of lowering tax rates is to leave more of the private sector's money in the private sector. Private sector economic activity is what grows the economy.

 

[NYcarbineer]

Did anyone answer the question?

At what point would federal income taxes be too low?

We can't answer that til every American pays Federal Income Tax.. Come back with that question when it isn't so stupid and unfair. Thanks.

You weren't saying that I'll bet when Bush and the Republicans were passing the tax policy that created that situation.