JFK got it right. And under reagan and Clinton (with the Republican controlled congress) when they decreased taxes, their revenue increased. As it did with Bush as you can see by these charts. Obama and the Dems are Flat out wrong on this! Just listen to JFK!
Virtually every economics Ph.D. who has worked in the Bush Administration acknowledges that the tax cuts of the past six years haven't paid for themselves.
If there's one thing that Republican politicians agree on, it's that slashing taxes brings the government more money. "You cut taxes, and the tax revenues increase," President Bush said in a speech last year. Keeping taxes low, Vice President Dick Cheney explained in a recent interview, "does produce more revenue for the Federal Government." Presidential candidate John McCain declared in March that "tax cuts ... as we all know, increase revenues." His rival Rudy Giuliani couldn't agree more. "I know that reducing taxes produces more revenues," he intones in a new TV ad.
If there's one thing that economists agree on, it's that these claims are false. We're not talking just ivory-tower lefties. Virtually every economics Ph.D. who has worked in a prominent role in the Bush Administration acknowledges that the tax cuts enacted during the past six years have not paid for themselves--and were never intended to. Harvard professor Greg Mankiw, chairman of Bush's Council of Economic Advisers from 2003 to 2005, even devotes a section of his best-selling economics textbook to debunking the claim that tax cuts increase revenues.
The yawning chasm between Republican rhetoric on taxes and even informed conservative opinion is maddening to those of wonkish bent. Pointing it out has become an opinion-column staple. But none of these screeds seem to have altered the political debate. So rather than write yet another, I decided to find out what Arthur Laffer thought.
No, Gov. Pawlenty, Tax Cuts Don’t Pay for Themselves By BRUCE BARTLETT, The Fiscal Times
June 17, 2011
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.
The fact is that the only metric that really matters is revenues as a share of the gross domestic product. By this measure, total federal revenues fell from 19.6 percent of GDP in 1981 to 18.4 percent of GDP by 1989. This suggests that revenues were $66 billion lower in 1989 as a result of Reagan’s policies.
MR. GREGORY: All right. Well, Dr. Greenspan, it’s not often that you hear Democrats and liberals quoting you. But, in this case, they did when it come to–came to tax cuts because of an interview you gave recently with Judy Woodruff on Bloomberg television. Here was the question: “Tax cuts [that] are due to expire at the end of this year. Should they be extended? What should Congress do?” You said, “I should say they should follow the law and then let them lapse.” Question: “So to those interests who say but wait a minute, if you let these taxes go my taxes go up, it’s going to depress growth?” You said, “Yes, it probably will, but I think we have no choice in doing that, because we have to recognize there are no solutions which are optimum. These are choices between bad and worse.” You’re saying let them all go, let them all lapse?
MR. GREENSPAN: Look, I’m very much in favor of tax cuts, but not with borrowed money. And the problem that we’ve gotten into in recent years is spending programs with borrowed money, tax cuts with borrowed money, and at the end of the day, that proves disastrous. And my view is I don’t think we can play subtle policy here on it.
And on what has become an article of faith in many sectors of the conservative movement:
MR. GREGORY: You don’t agree with Republican leaders who say tax cuts pay for themselves?
MR. GREENSPAN: They do not.
Repeating it over and over doesn't make it true...
Both of you, it is all about margins on whether tax increases increase revenue.
If your income is taxed at 15% and it rises to 16%, you will most likely see increased revenue. If your income tax rate goes from 50% to 90%, you will see increased revenue initially, but eventually you are likely to see decreased revenue as job creators choose tax shelters and safe low tax investments over risky, high reward job creating ventures.
Personally I am not too worried about the White House trying to raise our taxes, they seem to be content to push for symbolic "soak the rich" taxes like corporate jets.
And LJ, if you really do think Americans aren't paying enough, the Treasury will let you pay extra. You could increase your tax rate to 80% like the good old days of Ike. Since you are much wealthier than 90% of the world.
Thomas Sowell: There are no solutions, just trade-offs.
President Obama has been using the debt-ceiling debate and bipartisan calls for deficit reduction to demand higher taxes. With unemployment stuck at 9.2% and a vigorous economic "recovery" appearing more and more elusive, his timing couldn't be worse.
Two problems arise when marginal tax rates are raised. First, as college students learn in Econ 101, higher marginal rates cause real economic harm. The combined marginal rate from all taxes is a vital metric, since it heavily influences incentives in the economy—workers and employers, savers and investors base decisions on after-tax returns. Thus tax rates need to be kept as low as possible, on the broadest possible base, consistent with financing necessary government spending.
It's not just one form of tax but the collective total we pay for taxes as Stanford's professor of Echonomics points out and illustrates in the article above. The current battle for a balanced budget is critical to our future or lack thereof. Unchecked government spending spending is at the root of the problems together with hikes in taxes to cover the cost. Based on calculations, your marginal tax rate is about to hit 70% if Obama gets his irresponsible way. Those who can will look to move their income and businesses elsewhere. It does not take a rocket scientist to figure out this country is going downhill fast and Obama's perception and drive to force his will against prudent advice will depress the accelerator to the metal. Read. It's an enlightening article.
President Obama has been using the debt-ceiling debate and bipartisan calls for deficit reduction to demand higher taxes. With unemployment stuck at 9.2% and a vigorous economic "recovery" appearing more and more elusive, his timing couldn't be worse.
Two problems arise when marginal tax rates are raised. First, as college students learn in Econ 101, higher marginal rates cause real economic harm. The combined marginal rate from all taxes is a vital metric, since it heavily influences incentives in the economy—workers and employers, savers and investors base decisions on after-tax returns. Thus tax rates need to be kept as low as possible, on the broadest possible base, consistent with financing necessary government spending.
It's not just one form of tax but the collective total we pay for taxes as Stanford's professor of Echonomics points out and illustrates in the article above. The current battle for a balanced budget is critical to our future or lack thereof. Unchecked government spending spending is at the root of the problems together with hikes in taxes to cover the cost. Based on calculations, your marginal tax rate is about to hit 70% if Obama gets his irresponsible way. Those who can will look to move their income and businesses elsewhere. It does not take a rocket scientist to figure out this country is going downhill fast and Obama's perception and drive to force his will against prudent advice will depress the accelerator to the metal. Read. It's an enlightening article.
Obama sees himself as the great equalizer, even though he has no experience in economics .I'd like to see if he ever took any courses in economics but those records are sealed for some reason.
The left is angry because they are now being judged by the content of their character and not by the color of their skin.
And while the Dems like to trot out the talking point that Federal income taxes are lower than they have ever been, they neglect to point out that sales taxes keep rising along with property taxes, and other fees. Ever see a sales tax decrease?
Thomas Sowell: There are no solutions, just trade-offs.
Sales taxes go up, and my accessed commercial property value increased 10% two years ago even though market property values here in Denver are falling. I guess the government doesn't think we know any better. So now property owners have to get together and protest the increases and the government basically says "oops, sorry about that" and lowers it again. We can do something at the local level (sometimes), but it's nearly impossible for a private citizen to have a voice at the federal level.
So the point is, they can raise revenue in the short run by increasing taxes, but if that hurts the businesses bottom line, the government gets nothing in sales tax revenue if they eventually help drive that company out of business (along with all the personal income taxes from out of work employees).
The left is angry because they are now being judged by the content of their character and not by the color of their skin.
First thing Clinton did upon taking office was to raise taxes which lead to the greatest economy growth in modern history.
Reagan during the recession in 1982 also raised taxes which lead to improvement in the economy. The economy after both presidents raised taxes added 40 million new jobs.
"Remember to always be yourself. Unless you can be batman. Then always be batman." Unknown
Something the Dog Said wrote: First thing Clinton did upon taking office was to raise taxes which lead to the greatest economy growth in modern history.
Reagan during the recession in 1982 also raised taxes which lead to improvement in the economy. The economy after both presidents raised taxes added 40 million new jobs.
The Dems theory of reviving the economy: If you keep income taxes high, people have to work harder than ever before just to have money leftover to live on. Amirite? Right now you have to work until May to feed the tax man, they want to make it so you have to work until August before you can collect money for yourself.
Thomas Sowell: There are no solutions, just trade-offs.
Obama sees himself as the great equalizer, even though he has no experience in economics .I'd like to see if he ever took any courses in economics but those records are sealed for some reason.
