July 21, 2011 - 1:10 pm
Apparently the pre-Bush tax levels were “normal,” so any future tax raises would not be tax raises, they would be … not tax raises. They would not exist in space-time.
The question that should occur to the people like us who … question things:
As tax rates have changed countless times in this country’s history, how do you decide which era was “normal?” Can I go back to 1874? I think that would be a cool year for a “baseline.”
Mika Brzezinski isn’t the only person continually employing this argument either, and I would Google the others, but I assume you are already bored.
Is that “Raise Taxes,” “Original Raise Taxes,” “Famous Raise Taxes,” “Original Famous Raise Taxes,” or “Famous Original Raise Taxes?”
/a little New York humor for those familiar with the battles between the various “Ray’s Pizza” establishments
Defending the indefensible. They want to hike taxes. How do they go about selling it? Just incredibly stupid politics.
“Mika Brzezinski isn’t the only person continually employing this argument”
…your fault for listening to that [expletive deleted].
If reduced tax rates is the magic pill…..can’t Laffer and his curve tell us what the rates should be during any given econoimic environment? Do we have to vote first to find out what it is?
Seriously folks, what are the rates behind all the rhetoric? Anybody? Maybe a flat 3% for individual incomes and a .05% for commerce income? What?
I suspect nobody knows because nobody has a plan that is anymore than arbitrary and political gesturing. So far all the ‘plans’ increase the national debt over a period of time when we’re already facing a debt downgrade and annouced today, five additional states are being evaluated for debt downgrading.
You’re either flaunting your ignorance or you are being disengenuous. Google ‘flat tax’ or similar words and you will find references complete with proposed rates. Examples:
http://www.heritage.org/research/reports/2005/07/a-brief-guide-to-the-flat-tax
http://www.freedomworks.org/issues/flat-tax
Or did you pick 3%, which is much smaller than proposed, so you could do the straw man and justify your derogating the topic and author?
Laffer? A “theoretical representation of the relationship between government revenue raised by taxation and all possible rates of taxation…”
http://en.wikipedia.org/wiki/Laffer_curve
Note the adjective “theoretical”? If this theory is so great, why are so many western governments going bankrupt?
I’m shocked at you Howie! All that went right over your head and you fell in the trap!
So many on here think Reagan and his boy genius Laffer is Mr. Tax Expert and surely, he would have the magic rates on his charts….but he seems missing in action these days….right along with all the tea party’s tax experts.
Next, I was asking folks what magic ‘rate’ should be since there are so many elluding to tax cuts around here….["Seriously folks, what are the rates behind all the rhetoric?"]……NOT WHAT TAX REFORMS SHOULD REPLACE THE CURRENT GRADUATED SYSTEM! I seem to have missed Boner and his two snake oil salesmen taking up any air or print space evangelizing for a flat tax reform if that was your inference!
Actually, an individual consumption tax is the most fair and ‘snares’ at least some of the gazillion dollar criminal enterprise economy that escapes the current system. The only exemptions would be for food (groceries), basic clothing as defined, and pharmacy prescriptions including OTC. OTC health care goods would become eligible for prescription including hardware and prescribed corrective shoes. For large as defined and international corpporate tax I suggest your flat rate….a [low rate] on ‘gross’ income with NO deduction exemptions. A Graduating scale on gross income would be established for each of the several small business classifcations of the SBA system exempting ‘sole proprietorships’.
Whats unfair with that tax system?
A fair amount of work has been done in this area. The reason there is no definitive answer is that it depends what one is optimizing for. The optimal tax rate for maximizing federal revenue is different from one to maximize GDP growth or economic freedom.
Okay, I understand the difference between tax revenues and GDP growth… but, what are they…especially the GDP growth one?
“can’t Laffer and his curve tell us what the rates should be during any given econoimic environment?”
It does, and it says lower. Revenues have so far always risen in response to lowering taxes, so we are over the peak of the Laffer curve on the high end. The concept of the Laffer curve describes something which is intuitively and obviously true. 0% taxes raise no revenue. 100% taxes are an utter disincentive. Something in the middle maximizes tax revenue–yet it isn’t the government’s job to maximize tax revenue.
Now coming from you–who thought either that non-binding death panels (oh that’s right, you said arbitration panel, like that’s different) could do some good, or thought binding “arbitration panels” weren’t death panels–you never were specific which–you probably can’t see that the Laffer Curve also describes an aspect of a dynamic equilibrium, one where the ideal tax rate can never be calculated, only approximated.
But the answer is lower.
You have to calculate both income and substitution effects to figure out what happens to tax revenue when you change tax rates. The change in tax rates will cause taxpayers to change their portfolios to maximize their income but at the same time the change in tax rates changes disposable income and therefore spending. A tax cut may lower federal revenues in the very short run but the increased GDP may cause total revenue to increase. You can still cut taxes below below the maximum revenue raising tax rates and still see increased revenues.
The response of the deficit to increased taxation is something different because of the automatic expenditures made when economic activity slows. If you take the Romer and Romer study as a guide where for every $1 in tax change you get $3 change in GDP you can give rough order of magnitude of the expected change in the deficit. If we accept Obama’s $1 trillion tax increase we can expect $3 trillion in lost GDP over the next 10 years. If the marginal effective tax rate is 20% (a guess) then the actual revenue increase will be only $400 billion. But we are not done yet. The lost economic activity means fewer jobs and more people on welfare so expenditures would rise. More then likely the tax increase demanded by the President is likely to have no impact on the deficit even if he froze controlable spending. This has been experience of states like California, New York or Illinois where taxes continually go up with little impact on the deficit.
tdiinva….you have to ignore Tommy when he’s responding to me! He’s generally is off his med’s when he comes around.
But…["It does, and it says lower."] was a great definitive answer to my Laffer question, was it not?
Save your fingers next time.