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Thadius -> RE: Obama: Recession could delay rescinding of tax cuts (9/7/2008 7:06:27 PM)
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ORIGINAL: MistressNew
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ORIGINAL: Thadius
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ORIGINAL: MistressNew
I wonder if this topic might be just an eensy bit more complicated than CL and Thadius are making it seem. Sometimes, it is a good idea to raise taxes. For instance, the largest tax increase in history was instituted by... Ronald Reagan. Perhaps republicans don't like Reagan anymore, or perhaps this is another political thread about nothing....
Why did Reagan raise taxes? I seem to remember a compromise, that involved cutting spending. Yes the Dems, have always prefered to raise taxes. He was promised $3 in spending cuts for every $1 in tax increase... which never seemed to come around.
I know apples and oranges... If you would care to get more detailed, feel free. Explain to me why revenues go up when taxes are decreased. Or where you believe the economy would be if those tax cuts were not in place. I look forward to reading it. Especially in the complicated manner in which you believe it deserves to be discussed.
Cutting spending, huh? Would closing tax loopholes to the tune of 80 billion dollars count there?
And, while I'm not expert economist, I do know that putting all your faith into the Laffer curve is misguided at best. So when you ask me to "Explain to me why revenues go up when taxes are decreased," you're starting at a false assumption. That's only true given certain parameters. Who gets the tax cut, for instance, or what the tax rate is to begin with are both huge factors.
Of course, that would make the most sense. In the 1950's, corporations shouldered over 30% of our nation's tax burden. Now they're down below 10%. From 1996-2000, 61% of companies didn't pay any taxes. The point being, of course, that taxes aren't always a bad thing. Sometimes, they're a necessary evil to pay for roads and schools and levees and bridges. The notions that raising taxes is always bad and cutting taxes always raises revenue are worthy of contempt. It's intellectually lazy.
Oh, and as long as I'm giving you a talking to, it's time that somebody tells you that "alot" is not a word. You mean "a lot."
You have never made a typo? Good to know, I shall keep an eye out.
The only false assumption is that revenues went down with the current tax cuts. Revenues did go up. End of story.
I am all for closing loopholes, and some subsidization (namely to sectors that don't need it).
However, if you are going to compare historical data to the tax cuts, at least do so properly. http://www.taxfoundation.org/news/show/323.html I suggest you look at the shift in tax burden post tax cuts.
Your claim that I am depending on the Laffer curve too much, is laughable. The curve does not say whether a tax cut or tax increase will raise or lower revenues. One must take into account if the current tax burden is sustainable and or prohibitive. At least the way it was taught to me.
How about looking at the tax burden as it is, then comparing the current market, interest rates, and regulations. Your man Obama, has already suggested that the economy would be injured by his tax increases, which suggests to me that the tax burden is already seen as too high to be sustainable for the economy.
So what is the reasoning behind revenues going up again? As that is the heart of the question I asked.
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