Skip to comments.Economists agree: Tax cuts don't create revenue
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 ...
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.
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.
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.
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.
As someone who was an economics major I can say this article is total BS.
I’m not sure the peak of your curve is an equilibrium point. It looks unstable to me.
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.
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.
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!
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.
Bunch of idiot liberal economists who don’t understand the velocity of money or shifting curves.
Pioneer Press!? Should be the Young Pioneer press. Commie rag.
The professor was from U of M. “Nuff said.
That’s why he’s “Ed LottaBS”!
comments can be made here:
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?
“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.”
Maybe the government should cut taxes and CUT SPENDING TOO, to balance the budget. sheesh
Oh yes, raising taxes and “spreading the wealth” are proven remedies for economic growth. That’s why we have 10% unemployment and rising.
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! .
Laffer curve tells it all. Revenue will increase when tax rate decrease.
And in other news, using sales commissions to reward salesmen does not increase sales.
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.
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%.
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.
So no Supply side economist or Friedman or any non-Marxist. When only poll Keynesian flavored economist you get poop flavored outcome.
Well it’s good that we’re following this guy’s advice right now then. :)
"...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.
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)...
I had an excellent econ prof. Sadly, just had the one course with him. He was an austrian so we got along!
The particularly wonderful thing abou the Laffer Curve is how many regular Joe 6-Packs “get it”.
At first, I thought that Amish Dude needed SpellCheck. But then I said to the dog, "Clever!" (Came to scoff, stayed to praise).
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.
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.
Lucky. Most of my Econ professors were ex-hippies or ex-full time students with no practical economic experience.
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?”.
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.
Slemrod? Is he related to Axlerod?
No doubt that Lotterman is an advocate of Keynesian economics.....
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.
Dropping prices doesn’t increase sales either. Just ask Walmart. Seriously. Well maybe not.
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.
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
Are these the same economist that predicted the financial debacle we are entrenched in?