TrekkieLP
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quote:
ORIGINAL: lovmuffin
Ok.....I'll bite. In the past, particularly under Reagan and before that JFK, when tax rates were lowered economic activity increased to the point where business was making more and there were more jobs thus more tax payers, the government took in more money.
I'm well aware that many people who support the GOP like to make that claim. I suspect that amny of them actually believe it.
Unfortunately, it doesn't work that way, in reality.
In reality, the statement that's true is that "revenues eventually go up (if you don't adjust for inflation, population, of, even worse, index revenues to GDP)"
Link to an interesting source for all kinds of financial data about the US Government, which you can choose to display pretty much any way you want.
Here's a chart showing total federal revenue. I started it in 1970 because I wanted to show the Reagan and Bush tax cuts, and I wanted to include the period before Reagan, to show how things were going, pre-Reagan.
The data is shown in dollars which have been inflation-adjusted to 2005 dollars. And are per capita, so that it accounts for population growth. (The last two columns on the chart are red, to indicate that they are forecast. All of the rest of the chart are actual historical numbers.)
(OK, attempting to embed charts doesn't seem to work. Instead, here's a link to the chart.)
I'll also point out that the data are shown in federal fiscal years. The current FY2012 began on, I think, October 1, 2011. This means that, say, when Reagan took office, in Feb of 1981, that FY81 was already nearly half over.
I will now point out that when Reagan passed his tax cuts, in 81, and When Bush passed his tax cut, in 2001, that the immediate result was that federal revenues went down.
(I will hasten to point out that, IMO, no, the drop in revenues when the Bush tax cuts were passed certainly wasn't solely due to the tax cuts. We were in a small recession at the time, and recessions do cause federal tax revenues to drop. In short, IMO, a big part of the revenue drop in '02 and '03 wasn't due to Bush's tax cuts, or, frankly, to anything else Bush did.)
(I will also point out, though, that that doesn't mean that none of the drop was due to the tax cuts.)
Now, what that chart shows was that, when Reagan and Bush cut taxes, that federal revenues immediately dropped.
A few years later, revenues went up. And a few years after that, they made it up to where that had been, before the cut. (In both cases, it took five years for revenues to make it back to where they were, before the cut.)
However, what that chart also shows, is that revenues almost always go up. (When they're displayed that way: After adjusting for inflation and population, but nor for GDP growth.)
In short, it's really tough to look at that chart, and to claim that the tax cuts of 81 caused revenues to go up in 84-87. Since revenues go up like 90% of the time.
The statement that "every time the Republicans have cut taxes, there's been a sunrise" is a true statement. But it doesn't even imply that the tax cut caused the sunrise, since the sunrise occurs when there isn't a tax cut, too.
In fact, I'll point out that, looking at that chart, I only see three times where federal revenues went down by very much at all. One of them was when we ad the worst economic collapse since the Great Depression. A collapse so large that GDP actually dropped by 4%.
And the other two times were when a big tax cut was passed.
"Revenue eventually going up" doesn't really say much, because it almost always goes up.
"Revenue going down"? Now that's something that doesn't happen very often.
quote:
It also should force government to make cuts and spend less, supposedly, but we all know government is addicted to squandering our money. It didn't seem to workout too well under big spending republican Bush 2.
I will now make some observations about these statements.
Yes, people often try to justify tax cuts by claiming that the tax cut will force somebody else to cut spending. This is often referred to with the phrase "starve the beast".
(I will now observe that the first thing the "fiscally conservative" Tea Party-boosted Republican Party did, upon taking control of the House was to repeal the House's rule saying that tax cuts had to be matched by spending cuts, to be considered by the House. I will then not speculate on what this says about the Republican Party's belief that tax cuts go well with spending cuts.)
I will observe that, at least from what I can tell, way out here on the cheap seats, that the Republican Party's real agenda is, is:
Cut taxes (without bothering to cut spending)
When the deficit explodes, act surprised. (This especially works if you can arrange to say "gee, where did that come from?", when the other Party is in power.
Yell loudly that somebody else needs to do something about this deficit that mysteriously appeared.
Block, through any means available, any attempt to reduce the deficit other than by cutting SS, Medicare, and Medicaid.
In short, it would appear that the Republican objective is to intentionally create a crisis, as a means of forcing somebody else to cut the things that the Republicans want cut, but don't have the integrity to actually admit to, let alone go on record as voting for.
I will now address the oft-made claim that W somehow wasn't a "real Republican", and that "real Republicans" don't increase spending. (Part of this oft-claimed myth is the belief that W somehow single-handedly forced the entire Republican delegation to Congress to go against their sacred beliefs against increasing spending.)
I will now present a chart, showing Federal spending (same scale as used previously: Inflation-adjusted dollars, per capita), for W's Presidency (he took office halfway through FY01), and the decade previous (so you can compare W's spending against what came before.)
Yep, looks like the rate of increase took a turn upwards, there.
But now, let's do the same thing for Reagan:
Gee, spending went up under Reagan, too. Looks like an even faster rate.
In short, this attempt to claim that W is somehow an exception to what "real Republicans" do, doesn't seem to hold up.
< Message edited by TrekkieLP -- 5/6/2012 3:28:58 PM >
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RE: The greater good of the Republican agenda - 
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