Posted on 03/14/2010 9:06:14 AM PDT by WOBBLY BOB
I'm not sure that you understand what I'm saying.
Tell you what: Howzabout I completely grant the proposition that a 30% Tax would bring in more Tax Revenue than a 20% Tax for Fiscal Year 2010. Okay, fine -- given just those two choices, for the purpose of maximizing Tax Revenues we could say that a 30% Tax Rate would be "more optimal" for 2010 than 20% Tax Rate. But if GDP growth would be substantially higher over, say, the next twenty-five years with a 20% Tax, resulting in a larger total haul in tax revenues, then wouldn't the optimum rate over 25 years be 20%? And the same argument could be made for even lower rates over even longer time frames.
To wit:
I just ran a spreadsheet over 25 years, based on a starting GDP of $100, a tax rate of 30%, and a growth rate of 3% annual -- versus a spreadsheet over 25 years, based on a starting GDP of $100, a tax rate of 20%, and a growth rate of 6% annual.
For the first 15 or so years, Tax Revenue was higher with the 30% Tax/3% Growth rate; but by the end of the 25 years, GDP was so much higher on the 20% Tax/6% Growth that more total Tax Revenue had been collected over the full 25 years.
So, in that scenario, what's the "optimum" tax over 25 years? 20%, or 30%? And the numbers keep changing in favor of lower tax rates and higher total growth, the longer a time frame you consider. So what's "optimal" for tax-gathering depends to a great extent on what time-frame you want to consider.
Or, as I said before -- you could just throw out econometric pragmatism, go back to the Bible, and just say that God defines any Taxation over 10% as Tyranny.
If we take old testament law further we would have to make other adjustments to make a fair comparison. First, only 1 out of 12 tribes (about 8% not productive) were the priestly class and this class was forbidden to own property. Contrast that with about 15% public sector jobs and governments holding vast amounts of land, real estate, pensions and other property.
“I say cut all fedgov spending except what is enumerated in the Constitution.”
Can’t do that, then we would not need an income tax. The IRS would not have anything to do. /s
It is true, though that we would not need a personal income tax. And there would be enough income to start paying down debt.
That's an excellent point. Theoretically, if one took the Biblical "Division of Labor" between Public (priestly/courtly) functions and Private (everybody else) functions as being an exemplary standard of governance -- and have no less than 11 Tax-Producing Earners for every 1 Tax-Eating Administrator -- then that's another argument for tax rates no higher than about 9.1%. (i.e., if 11 people have $100 each, and you take $9.1 from each of them, you can afford to pay an administrator $100).
Nice argument. Thanks!!
Not only is this needed financially and economically, but in every way. The only reason leftist crap is killing our country is because the gov spends money on evil programs, agencies and so on. With no money spent on the myriad crap that is killing us, the bitter fruit will wither on the vine.
Cutting spending back to what is Constitutionally authorized is the only thing that will save the US.
I want the gov to have less money to spend, not more. They are destroying the entire country with hateful fascist laws, agendas and programs that we the people pay for.
We are paying for the poison that is killing us.
Freeze spending? Cut it to the root, and then dig out the root.
30%?
Cut all fed employees except the military including Coast Guard, Border Patrol, Weights and Measures and a few other things.
Constitutional duties and responsiblities only.
You are right on the ‘money’!
Don’t need to cap spending. Just cap borrowing so that it cannot exceed a 7 year payback or the lender doesn’t get repaid. No rollovers to new loans. The rest will take care of itself.
I want spending surgically removed to Constitutional duties only.
Now.
Of course, I may have to wait a little while.
Your method is way too slow.
The phrase “spending cap” makes me want to puke.
CUT is the right word. Surgical amputation.
As a rule of thumb, 50% of any wealth that passes through the government's hands is destroyed. That's because governments make political decisions, not business decisions. Total wealth increases the less government is involved. That is why socialized health care is such a bad thing. We will get 50% less health care for the same cost, which will be have to be rationed. But to leftists, reducing total wealth, the source of their intense feelings of envy, is the objective, so they are happy with that result.
Our County revenues came in $450,000 short of what was expected this year. It was because tax revenue came up short. It was not property taxes. It was mostly sales taxes. That would seem to be related to the amount of disposable income available to the consumer for spending and business for growth, and their confidence in the future economy to encourage spending rather than saving. It seems rational that the fewer the taxes, the more money available to buy things and hire people.
Because revenues for Counties got diverted to State budgetary needs, the County had to increase fees on services it provides such as licensing, planning and permitting (health, building, etc.) It was not fair to use General fund money to support services for particular individuals at the loss of general services such as law enforcement, so more costs to support the staffing were shifted to service fees. This caused the cost of doing business or building to increase. The more money that goes into overhead, including the cost of regulation, the less that is available as profit - thus reducing the income taxes that come back in.
It is a vicious death spiral. You just have to look at California to see it happening. Or look at your monthly bills and watch them climb as the cost of doing business climbs.
No, my way would stop excess spending immediately because the spending they are doing is from borrowed money. If a lender knew he could only get repaid in 7 years then that lender would only provide funds that they were certain they would get repaid.
Think of it this way. If applied to you, the bank would not lend you more money than it could absolutely recover from you in 7 years. No mortgage, no refinancing, and virtually no risky loans because 7 years is very short.
Applied to our government, they would be forced to demonstrate to the lenders that they had a plan of cash flow that could repay them in 7 years. This would force a deep cut in real spending so that funds are there. The lenders would disappear if they did not get repaid and this would mean the government could play all the off the books games they want and all the emergency spending but the money would still have to be there.
Tax cuts increase the tax base, thus improving the private sector, which Obama promised 90% of the Stimulus jobs would be private sector...
However, there's still the minor problem of Federal Reserve monetization. The Government can promise to repay all the seven-year Treasury Notes it wants to, if the Federal Reserve just prints up the money to pay off the Notes.
End the Fed?
What are your thoughts?
To the government, cash is just another debt. It would be part of the debt limits.
How so?
Are you saying that the Federal Reserve Monetary Aggregates should be somehow included in the aggregates of US Government Treasury Debt? Um... how?
(Honestly not following you here, asking for education).
Do these same economists agree that lower taxes reduce revenue to the treasury?
Do these same economists agree that tax increases increase revenue?
Do these same economists agree that reduced spending reduce deficits?
Do these same economists agree that reduced deficits reduce debt?
Do these same economists agree that reduced debt reduce revenue needs
Do these same economists agree that government subsidies create demand?
Do these same economists agree that you cannot create wealth?
Do these same economists agree that redistribution of wealth is a solution to anything?
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