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Economists agree: Tax cuts don't create revenue
Pioneer Press ^ | 3-14-10 | Ed Lotterman

Posted on 03/14/2010 9:06:14 AM PDT by WOBBLY BOB

Self-paying tax cuts are a popular delusion, except among economists.

University of Michigan economist Joel Slemrod is adamant on one of the key economic issues of our day: 'Tax cuts don't pay for themselves! Period!'

Hardly any economist would disagree. This is true for Republicans as well as Democrats. It is also true regardless of whether they describe themselves as NeoClassical, New Classical, Rational Expectations, Monetarist, Keynesian, Austrian or New Institutional economists.

Yet, for a substantial portion of the general public, the idea that cutting tax rates will increase tax revenues has become an article of faith. The following anonymous comment to an online Associated Press story is typical: "The only way our government can create jobs is to cut taxes. It's been proven over and over again. Cutting taxes also increases government revenue."

(Excerpt) Read more at twincities.com ...


TOPICS: Business/Economy; Government
KEYWORDS: cuts; economists; revenue; tax
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Minnesota's own Ed LottoBS at it again.
1 posted on 03/14/2010 9:06:14 AM PDT by WOBBLY BOB
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To: WOBBLY BOB

Sigh.

2 posted on 03/14/2010 9:08:39 AM PDT by martin_fierro (< |:)~)
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To: WOBBLY BOB
Please disregard the empirical data, academic opinion is all that matters.
3 posted on 03/14/2010 9:09:06 AM PDT by Natural Law
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To: WOBBLY BOB

How ‘bout this, Ed?

Cut taxes. So what if it cuts government revenue, that’s a GOOD THING!

Cut government revenue means less unconstitutional spending and funding of junk that is ruining our country.

I say cut all fedgov spending except what is enumerated in the Constitution.


4 posted on 03/14/2010 9:12:06 AM PDT by little jeremiah (Asato Ma Sad Gamaya Tamaso Ma Jyotir Gamaya)
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To: WOBBLY BOB

These clowns in academia often suffer from confusing words and phrases. A tax rate isn’t the same as a tax. A tax rate cut isn’t the same as a tax cut.


5 posted on 03/14/2010 9:13:11 AM PDT by Oklahoma
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To: martin_fierro

That’s what I was going to say: “it all depends on the shape of the Laffer curve and where you are currently situated on the curve.


6 posted on 03/14/2010 9:15:13 AM PDT by Paladin2
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To: martin_fierro
It is amazing, isn't it, how Arthur Laffer discovers a quadratic equation and that's still too difficult a concept for economists.

You know what else economists know? How to predict unemployment:

But seriously, this author is just an imbecile who is speaking out of his lowest oriface.

7 posted on 03/14/2010 9:16:19 AM PDT by AmishDude (It doesn't matter whom you vote for, it matters who takes office.)
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To: WOBBLY BOB

As someone who was an economics major I can say this article is total BS.


8 posted on 03/14/2010 9:16:22 AM PDT by big'ol_freeper ("Anyone pushing Romney must love socialism...Piss on Romney and his enablers!!" ~ Jim Robinson)
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To: martin_fierro

I’m not sure the peak of your curve is an equilibrium point. It looks unstable to me.


9 posted on 03/14/2010 9:17:19 AM PDT by Paladin2
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To: WOBBLY BOB
Then why did tax revenue double in the 1980s after substantial tax cuts?

Tax cuts result in economic growth. Citizens make more money and, even though they are paying at a lower rate, pay more total dollars to the government.

10 posted on 03/14/2010 9:18:23 AM PDT by Ol' Sparky (Liberal Republicans are the greater of two evils)
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To: WOBBLY BOB

Sometimes thinking can elevate you to the heights of our maker and sometimes it can bury you in a rat hole. This guys digging for China.


11 posted on 03/14/2010 9:18:28 AM PDT by Track9 (A good education is knowing what truly sets you free.. and then crushing liberals with it)
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To: WOBBLY BOB

Bush Tax Cuts of 2003, federal revenue was $1.7 trillion, by 2006 federal revenue was $2.5 trillion.

That author is full of it!


12 posted on 03/14/2010 9:19:44 AM PDT by avacado
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To: big'ol_freeper

As an economics major in undergrad from a ridiculously liberal school, the thought range of my professors ranged from Keynsian to Marxist. They only brought in other professors who agreed. I went to school during the late ‘80’s and they could not bring themselves to understand that tax rates affect behavior of people. The problem is that any economics professor who supported a tax rate cut would be participating in the economy more directly - with a real job, not as a professor of economics.


13 posted on 03/14/2010 9:21:00 AM PDT by Blue Devil Reaganite (A Professor is someone educated far beyond his or her own intelligence)
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To: Blue Devil Reaganite

Bunch of idiot liberal economists who don’t understand the velocity of money or shifting curves.


14 posted on 03/14/2010 9:23:37 AM PDT by big'ol_freeper ("Anyone pushing Romney must love socialism...Piss on Romney and his enablers!!" ~ Jim Robinson)
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To: WOBBLY BOB

Pioneer Press!? Should be the Young Pioneer press. Commie rag.

The professor was from U of M. “Nuff said.


15 posted on 03/14/2010 9:25:01 AM PDT by OldMissileer (Atlas, Titan, Minuteman, PK. Winners of the Cold War)
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To: WOBBLY BOB
"Economists agree: Tax cuts don't create revenue, "

This is very reminiscent of the typical headline "SCIENTISTS AGREE: GLOBAL WARMING WILL KILL US ALL"

These "economists" obviously graduated from the algore school of manipulated facts.

They can tweak adn squeak the figures all they want, but at some point common sense enters the room and shows them to be frauds as big as the "warmers".

More jobs = more tax revenue; taxes that prohibit profit to employers - less jobs; less jobs = less revenue.

Every salesman worth his salt knows it is better to have 25 smaller clients than only one, big client. If the big client goes under, there goes 100% of your income; if one of the small ones goes bust, you only lost 1/25th of your income.

The problem with socialism is, it gobbles up all 25 of the smaller clients, putting them out of business with exhorbitant taxes and regulations, if each has 10 employees, 250 people are out of work,(no tax revenue); if they turn to the big guy to make up the tax loss, he just picks up and moves overseas...1000 more Americans out of work, no tax revenue.

While these "economists" may be whizzes at working a spreadsheet, few have ever really run a business, and like most college geeks, rely solely on theory taught to them by hard left professors who hate capitalism.

So put this theory into the "global warming trash can" and continue on with your day.
16 posted on 03/14/2010 9:26:17 AM PDT by FrankR (Those of us who love AMERICA far outnumber those who love obama - your choice.)
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To: WOBBLY BOB
Lotterman, prove it! Where is your data?

Check the data. Whenever taxes are cut people have more to spend. Is that so hard to understand! Forget Keynesian BS. When people have more to spend that circulates more money in the economy. This results in job and wealth creation. It has been shown over and over again.

EDWARD LOTTERMAN




Lotterman, you are blinded by your socialist ideology!
17 posted on 03/14/2010 9:27:47 AM PDT by orinoco
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To: big'ol_freeper

That’s why he’s “Ed LottaBS”!

comments can be made here:

http://www.topix.net/forum/source/twincities-pioneer-press/TFCETREQ2PN4S6LJE#lastPost


18 posted on 03/14/2010 9:31:13 AM PDT by WOBBLY BOB (ACORN:American Corruption for Obama Right Now)
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To: orinoco
Lotterman, prove it! Where is your data?

How does he explain JFK's economy?

And Ronald Reagan's?

And the Bush tax cuts?

Does he have any examples -- even one -- of how tax increases have improved an economy? What does he think will happen when the Bush tax cuts expire?

19 posted on 03/14/2010 9:32:21 AM PDT by okie01 (THE MAINSTREAM MEDIA: Ignorance on Parade)
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To: WOBBLY BOB

“Tax cuts don’t pay for themselves! Period!’ Hardly any economist would disagree.”

“Hardly Any” - translation; “Hardly any whom the author selectively chose to speak or refer to.”


20 posted on 03/14/2010 9:35:53 AM PDT by Wuli
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To: WOBBLY BOB
A liberal economist is like a push poll, you get whatever result you want in how you frame the questions.
21 posted on 03/14/2010 9:41:29 AM PDT by Beagle8U (Free Republic -- One stop shopping ....... It's the Conservative Super WalMart for news .)
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To: WOBBLY BOB
Many in the general public and many Republican elected officials believe lowering tax rates would help reduce the deficit. Virtually all economists disagree,

Maybe the government should cut taxes and CUT SPENDING TOO, to balance the budget. sheesh

22 posted on 03/14/2010 9:41:50 AM PDT by mjp (pro-{God, reality, reason, egoism, individualism, independence, limited government, capitalism})
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To: WOBBLY BOB

Oh yes, raising taxes and “spreading the wealth” are proven remedies for economic growth. That’s why we have 10% unemployment and rising.


23 posted on 03/14/2010 9:42:56 AM PDT by Reaganwuzthebest
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To: Natural Law; WOBBLY BOB; little jeremiah
The fact that tax cuts have worked in the past to stimulate the economy, and thereby increased overall government revenues, means nothing. Statisical blips on a confusing radar screen of the economy, which we, not being economists paid by state-supported instutions, are simply not equipped to interpret.

In similar fashion, a few decades of colder temperatures, increasing ice packs in the Arctic and Antarctic Regions are scientific anomalies; optical illusions, that mislead many members of the public to doubt the words of publicly supported experts, who are feverishly trying to save us from AGW, despite ourselves.

If the learned were to take advice from the ordinary, it could lead to chaos. E.G., Doctors might start using willow bark, and foxglove, among other superstitious remedies for fevers and heart problems. Just imagine that!

What next? Ordinary citizens reading the Constitution? Folly! .

24 posted on 03/14/2010 9:43:16 AM PDT by Kenny Bunk (Obama? Definitely eligible to be Prime Minister of the UK.)
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To: martin_fierro

Laffer curve tells it all. Revenue will increase when tax rate decrease.


25 posted on 03/14/2010 9:45:00 AM PDT by rbosque (11 year Freeper! Combat Economist.)
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To: WOBBLY BOB
Economists agree: Tax cuts don't create revenue

And in other news, using sales commissions to reward salesmen does not increase sales.

/s

26 posted on 03/14/2010 9:52:04 AM PDT by SonOfDarkSkies (I never saw a wild thing sorry for itself... - D.H. Lawrence)
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To: mjp
You don't even have to cut spending, just freeze spending.

And I mean freeze it to a dollar amount. If you are spending one billion on welfare, next year it will be exactly one billion again. After a few years they will have to cut out the waste and fraud.

27 posted on 03/14/2010 9:52:15 AM PDT by Beagle8U (Free Republic -- One stop shopping ....... It's the Conservative Super WalMart for news .)
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To: little jeremiah

Add to your list: Cut all government pay by 10% for every three months that the Federal budget is not balanced. Cut federal pay to match the average of the American people. Get rid of all pork and earmarks. Cut the number of federal and state employees by 30%.


28 posted on 03/14/2010 9:52:18 AM PDT by RC2
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To: WOBBLY BOB

29 posted on 03/14/2010 9:53:13 AM PDT by Nateman (If liberals aren't screaming you're doing it wrong.)
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To: Natural Law

Yep, I guess those record tax proceeds thaat eminated from the tax cuts never happened either. Life is so easy when morality, reality, truth and facts are trumped by ideology.


30 posted on 03/14/2010 9:54:18 AM PDT by dools007
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To: WOBBLY BOB
NeoClassical, New Classical, Rational Expectations, Monetarist, Keynesian, Austrian or New Institutional economists.

So no Supply side economist or Friedman or any non-Marxist. When only poll Keynesian flavored economist you get poop flavored outcome.

31 posted on 03/14/2010 9:58:28 AM PDT by techcor (I hope Obama succeeds... in becoming a one term president.)
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To: WOBBLY BOB

Well it’s good that we’re following this guy’s advice right now then. :)


32 posted on 03/14/2010 9:59:49 AM PDT by Tzimisce (No thanks. We have enough government already. - The Tick)
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To: FrankR
While these "economists" may be whizzes at working a spreadsheet, few have ever really run a business, and like most college geeks, rely solely on theory taught to them by hard left professors who hate capitalism.

"...few have ever really run a business,..." Oh brother, you can say that again. Go to youtube and look up the clip from Back To School with Rodney Dangerfield, the one in economics class. It is a classic.

33 posted on 03/14/2010 10:02:08 AM PDT by mc5cents
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To: WOBBLY BOB
So-called economists who say things like tax cuts/tax rates do not generate revenue are making the back case for raising same. The are then followed by some politician who duly raises those rates, and the public nods....

When lower taxes bring in more revenue, these economists point out that there isn't enough money to supply some essential service... that the politicians have spent it all on their projects doesn't count, and the cycle repeats while the public nods (off)...

34 posted on 03/14/2010 10:03:08 AM PDT by PIF
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To: Blue Devil Reaganite

I had an excellent econ prof. Sadly, just had the one course with him. He was an austrian so we got along!


35 posted on 03/14/2010 10:10:18 AM PDT by BenKenobi (And into this Ring he poured his cruelty, his malice and his will to dominate all life.)
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To: Nateman

The particularly wonderful thing abou the Laffer Curve is how many regular Joe 6-Packs “get it”.


36 posted on 03/14/2010 10:10:54 AM PDT by StAnDeliver (\)
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To: AmishDude
"...his lowest oriface

At first, I thought that Amish Dude needed SpellCheck. But then I said to the dog, "Clever!" (Came to scoff, stayed to praise).

37 posted on 03/14/2010 10:12:23 AM PDT by Mr Ducklips
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To: Ol' Sparky
Tax cuts result in economic growth. Citizens make more money and, even though they are paying at a lower rate, pay more total dollars to the government.

EXACTLY. It's one of the fundamental things I have to drum into some clients new to my industry. Ignore the profit margin, ignore the number of units sold. The ONLY thing that matters is the number of dollars in your pocket at the end of the day.

Tax rates should be considered fluid and variable, and if cutting the tax rate (margin) by a factor of 3 results in a net increase in dollars at the end of the day then it was the right move to make.

38 posted on 03/14/2010 10:19:43 AM PDT by PugetSoundSoldier (Indignation over the Sting of Truth is the defense of the indefensible)
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To: WOBBLY BOB

The data is there. Even Laffer stated that a flat tax of 12.5% will result in an increase in tax revenue. The problem the left has with this is that they can’t use it as a political issue for class warfare.

The left does not understand free markets, and sensible low tax rates. Everything is driven by short-term political gain.


39 posted on 03/14/2010 10:20:35 AM PDT by rbosque (11 year Freeper! Combat Economist.)
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To: BenKenobi

Lucky. Most of my Econ professors were ex-hippies or ex-full time students with no practical economic experience.


40 posted on 03/14/2010 10:22:32 AM PDT by rbosque (11 year Freeper! Combat Economist.)
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To: martin_fierro

The argument is BOGUS as your Laffer curve diagram indicates.
If tax rate is at point A a tax increase will increase Revenue. At “Equilibrium?” or any tax rate higher an increase in rates will DECREASE total tax Revenue. This means it’s STUPID even for Big Govt Supporters to have a rate higher than this, UNLESS they wish themselves and US ILL.
However, the objective is NOT to Maximize Government revenue but to Maximize Personal Freedom so rates should be Much Lower than “Equilibrium?”.


41 posted on 03/14/2010 10:22:55 AM PDT by noah (noah)
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To: WOBBLY BOB

This is like saying gun free zone signs reduce the occurance of gun violence. Raising taxes just causing money to find a more efficient venue other than expansion. Federal coffers do not fill faster with more money, it’s a lose-lose situation. Taxes on income are a tax on productivity.

If you want less of something tax it, if you want more of something subsidize it, if you want to kill it regulate it out of existence.


42 posted on 03/14/2010 10:25:45 AM PDT by RockyMtnMan
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To: WOBBLY BOB
In that case, there is absolutely no reason for anything less than a 100% tax rate for everyone.
43 posted on 03/14/2010 10:34:28 AM PDT by E. Pluribus Unum (Islam is a religion of peace, and Muslims reserve the right to kill anyone who says otherwise.)
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To: WOBBLY BOB

Slemrod? Is he related to Axlerod?


44 posted on 03/14/2010 10:40:15 AM PDT by tiki (True Christians will not deliberately slander or misrepresent others or their beliefs)
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To: WOBBLY BOB

No doubt that Lotterman is an advocate of Keynesian economics.....


45 posted on 03/14/2010 10:40:59 AM PDT by cranked
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To: WOBBLY BOB

Less money to the government means more in my pocket which means more of my money in the pocket of businessmen which means more money to the government because of more spending.


46 posted on 03/14/2010 10:41:51 AM PDT by tiki (True Christians will not deliberately slander or misrepresent others or their beliefs)
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To: WOBBLY BOB

Dropping prices doesn’t increase sales either. Just ask Walmart. Seriously. Well maybe not.


47 posted on 03/14/2010 10:43:16 AM PDT by Raycpa
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To: martin_fierro

I have seen numerous people sneer at the Laffer Curve. I have never heard one of them attempt to demonstrate why it is not true.

Of course, one can claim that we are presently on the left side of the curve. If so, cutting rates will indeed result in a decrease in revenue.

I’ve also never seen any logical explanation of how to determine where we are on the curve.


48 posted on 03/14/2010 10:45:27 AM PDT by Sherman Logan ( .)
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To: WOBBLY BOB

First of all who would listen to any economist from Michigan? If they were right then their state wouldn’t be 50th out of 50 in unemployment. DUH


49 posted on 03/14/2010 10:50:37 AM PDT by chris_bdba
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To: WOBBLY BOB

Are these the same economist that predicted the financial debacle we are entrenched in?


50 posted on 03/14/2010 10:51:57 AM PDT by Altura Ct.
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