Interesting. Revenues didn't start going up until we got capital gains and dividend tax cuts, which GWB strongly opposed until he saw his reelection chances slipping away.
Posted on 12/31/2005 8:45:33 AM PST by george76
Ronald Reagan once said an economist is someone who sees something that works in practice and wonders if it would work in theory.
So why is it that when confronted with a concept that works in both practice and theory, so many people refuse to believe it?
The Laffer Curve, popularized by economist Arthur Laffer, says the government can maximize tax revenue by setting the tax rate at ...
The logic is obvious on the ends of the spectrum: if the tax rate is 0%, the government collects no money.
If it is 100%, people have no reason to earn, and the government still collects no money.
Federal tax receipts for October and November (the first two months of fiscal 2006) were $288 billion. This is up from the first two months of fiscal 2005 ...
Despite cutting tax rates in May 2003, tax receipts for this two-month period have risen for three consecutive years.
We were on the wrong side of the curve (and may still be):
Tax rates were too high.
(Excerpt) Read more at humaneventsonline.com ...
No need to shout, we're right here. The idea is not only practical, but it's also what's practiced.
This procedure for taxing booms and spending on slumps is what's written into the tax code so nobody has to wait for the new budget to kick in. The idea of income tax brakets is to up the tax rate automatically with increasing incomes. "Luxury" taxes is another angle. It's the standard model that works pretty well.
The doom'n'gloom press makes it look like the end of the world when some goofy factory lays off a dozen workers, but I guess since the press gets paid to wet their pants any chance they get then they'll keep it up until we stop reading their drivel.
If we can get a DUmmie to "if," and then to the second step...he will no longer be a full, 100 percent DUmmie.
I say we err on the side of less taxes.
True. It's worth the effort!
Interesting. Revenues didn't start going up until we got capital gains and dividend tax cuts, which GWB strongly opposed until he saw his reelection chances slipping away.
But we also got a series of tax cuts before 2003, yet revenues still went down. Those tax cuts were designed to "put money in the hands of the consumer" as the president repeated several hundred times (and I cringed every time). Does that mean there was something wrong with the Laffer Curve or was there something wrong with the president's Keynesian tax cuts?
--and he was a 'selected' not 'elected' and bushitler lied and people died--
Wait a second --that can't be what you're saying. Revenues stopped falling in 2003. The election was a year later. I can find links to Bush's call for cap/gains & div tax cuts. It's the Dims that keep harping about 'tax cuts for the rich' not the Reps.
this is how i had to splain it to my RAT friend... say Wigit.inc owes $1000 in taxes. so like any good company it pays a CPA $500 to get their Tax Bill down to $200 for a Total out lay of $700 saving them $300 while the Govt. only gets $200.
now... if the tax bill was $500 with no loopholes... Wigit.inc would DUMP the CPA and pay the damn $500 TaxBill therefore saving ANOTHER $200.
but wait there's more... the Govt GETS THAT EXTRA $300 the CPA didn't get!!!
THE GOVT MORE THAN DOUBLED IT's TAKE BY CUTTING THE TAX IN HALF. and closing the loopholes
Mmmmmmm, you're going to be in trouble with the free traitors. Better get your silver suit and face shield on.
Your "splain" is excellent.
Plus trust funders like Teresa Heinz Kerry would have one less reason to not hide so much of her trust fund money (from her first husband) "off shore" in secret bank accounts.
In Africa a few years ago, mercs were hired to wipe out warlords, genocidal maniacs, restore order, etc...Very highly effective. When the UN found out that they were mostly white South Africans they had their contract pulled. The butchery resumed.
The big trouble with the Laffer curve is not in the curve itself but in the politicians and bureaus that would implement it. It sounds great, lower taxes to increase the economy raise to slow down. However, when politicians raise taxes they won't lower them. We need to eleminate the income tax, find an alternative system that works(fair tax? maybe, maybe simply tarrifs) and set the tax rate at a low rate(20 percent total, fed, state and local? perhaps) and leave it there. Make a constitutional amendment against raising the tax rate above that amount except in times of war. Even then someone would probably find a way to game the system. Never under estimate a politicians ability to steal your money. They always find a way.
For Bowyer, a chart with five data points, each showing just the first two months of a fiscal year, rates as an exhaustive analysis. I've seen him publish charts with as few as two data points. In addition, he rarely corrects his figures for inflation. In any case, the following graph shows the inflation-adjusted revenues for every fiscal year since 1981:
The actual numbers and sources are at http://home.att.net/~rdavis2/mts.html. As can be seen, the recent increase in revenues is just a partial recovery from a very deep drop in revenues.
Prior to 2003, when the previous tax cuts were being crafted I can recall GWB sending out Ari Fleischer twice to state that he adamantly opposed capital gains tax cuts.
Flat is fine by me, but 20% is too high. Cut that in half and you're getting much warmer, IMHO.
Here’s a great interview with Art Laffer, the “Father of Supply-Side Economics”. An excerpt:
If you tax people who work and you pay people who don’t work, do not be surprised if you find a lot of people choosing not to work.
http://pittsburghlive.com/x/tribune-review/opinion/columnists/steigerwald/s_300457.html
Gonna have to disagree with you here.
When the economy is going nuts, raise taxes...not a lot, but enough to slow it down and increase revenues like the dickens. When the economy starts to slow, lower taxes.
People make long term business and investment decisions based on current tax rates. Raising taxes just because the economy is doing well can ruin those plans. And who decides what taxes to raise and by how much? By the time Congress got its head out of its butt the economy will have slowed on its own. That's why it's better to raise or lower interest rates. The Fed can act very quickly.
Tax rates should decline in a good economy, because the amount of money collected should be minimized at all times. In a good economy, the demands on government should be less, so revenue collected should correspondingly decline.
There is no reason the government should be interested in maximizing revenue. The government should collect the minimum amount necessary to carry out necessary government functions in a way that does as little damage to the economy as possible.
Thus endeth the lesson.
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