Free Republic
Browse · Search
News/Activism
Topics · Post Article

Skip to comments.

Obama’s money misunderstanding: Raising revenue by raising taxes doesn’t work
Washington Times ^ | 12/18/2012 | Richard Rahn

Posted on 12/18/2012 5:25:22 AM PST by SeekAndFind

In times past, political leaders would lay out their domestic and foreign policies in clear, coherent terms. President Obama talks about getting our fiscal house in order but fails to propose any meaningful spending cuts. His proposals to increase the tax rate on the top 2 percent of taxpayers would fund the government for eight days, assuming no behavioral change by those whose feathers are being plucked.

In the real world, we know people will spend a great deal of time and effort to avoid paying high marginal tax rates. In high tax states such as California and New York, high earners will be expected to pay marginal tax rates well over 50 percent.

We only need to look at what happened in Britain after the former Labor government of Gordon Brown increased the top rate to 50 percent. In the tax year 2009-10, more than 16,000 people declared an annual income of more than 1 million British pounds. This number fell to 6,000 after the tax rate was increased, partially because two-thirds of those who earned 1 million pounds or more left Britain to avoid the top rate. George Osborne, the current finance minister, just announced that the Conservative government will reduce the rate in order to obtain more revenue.

Mr. Obama seems to have forgotten that Christina Romer, his first chairman of the Council of Economic Advisers, and her husband, economist Paul Romer, had done studies showing that income tax rates above 33 percent bring in no extra revenue because people adjust their behavior to avoid the high taxes. Other credible researchers have shown the revenue-maximizing rate to be even lower — in the 20 percent to 30 percent range.

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


TOPICS: Business/Economy; Culture/Society; Government; News/Current Events
KEYWORDS: obama; revenue; taxes

1 posted on 12/18/2012 5:25:30 AM PST by SeekAndFind
[ Post Reply | Private Reply | View Replies]

To: SeekAndFind
By Obama’s own admission, he only has a seventh grade grasp of math........
2 posted on 12/18/2012 5:38:47 AM PST by Coldwater Creek (He who dwells in the shelter of the Most High will rest in the shadows of the Almighty Psalm 91:)
[ Post Reply | Private Reply | To 1 | View Replies]

To: SeekAndFind

For crying out loud, it’s not about revenue and balancing the budget. It’s about punishing and dragging down the successful. It’s about spreading misery equally among everybody. Leftists aren’t happy if a single person has more than another person...except themselves, of course.


3 posted on 12/18/2012 5:38:47 AM PST by ProtectOurFreedom
[ Post Reply | Private Reply | To 1 | View Replies]

To: SeekAndFind

I don’t think Obama’s main goal in this is to raise revenue. He knows it’s a pittance. He wants to further create hate and a feeling of “justice” in his base toward the successful, those who wish to aspire. Achievers are a threat to communism and it’s vital to turn the masses against them.


4 posted on 12/18/2012 5:39:47 AM PST by ryan71 (Water, food and ammo.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: SeekAndFind
It's Barky’s view of “fairness.”
5 posted on 12/18/2012 5:40:57 AM PST by Eric in the Ozarks (In the game of life, there are no betting limits)
[ Post Reply | Private Reply | To 1 | View Replies]

To: SeekAndFind

6 posted on 12/18/2012 5:42:24 AM PST by timestax (AMERICAN MEDIA DOMESTIC ENEMY)
[ Post Reply | Private Reply | To 1 | View Replies]

To: SeekAndFind
It's not about raising revenue.

It's about:

  1. Overwhelming the system
  2. Punishing successful white people

7 posted on 12/18/2012 5:42:36 AM PST by E. Pluribus Unum ("The more numerous the laws, the more corrupt the state." - Cornelius Tacitus, Roman Senator)
[ Post Reply | Private Reply | To 1 | View Replies]

To: SeekAndFind
The work by Romer, Laffer, and a host of others all show that lowering tax rates usually increases tax receipts. The only exception I am aware of was when the max marginal rate was cut from 92% to 78% during the early Kennedy tax cut years. Evidently, at 78% it still pays to avoid taxes...duh. I think there are two points I don't get about the current tax debate and why the GOP is so friggin stupid not to exploit them.

First, Obozo says the rich should "pay their fair share". Given that the top 10% of income earners pay 71% of the federal tax bill, seems to me the rich deserve a tax break. But the GOP sits there with its thumb you-know-where and says nothing.

Second, when Obozo complains about all the tax loop holes, who does he think put them there? You clowns wrote the tax code and you know damn well why you put those loop holes in it...to get you donations to keep your stinking butt in office.

The democrats have controlled both the House and Senate for all but 9 years since 1950. If you really believed they are out to help you poor people, don't you think they could have gotten it right on the past 60 years? Instead, they buy your soul with a free cell phone and you blindly follow their economic policies over the cliff.

Personally, I think there should be a flat tax of 17% (Friedman's rate), no exemptions. And if you pay no federal income taxes, you don't get to vote. Nothing in the game, no reason for you to vote.

I'd be a horrible President, but a great dictator.

8 posted on 12/18/2012 5:42:43 AM PST by econjack (Some people are as dumb as soup.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: SeekAndFind
The top tax rate and revenue have very little relationship to one another.


9 posted on 12/18/2012 5:47:46 AM PST by Straight Vermonter (Posting from deep behind the Maple Curtain)
[ Post Reply | Private Reply | To 1 | View Replies]

To: SeekAndFind
He hasn't forgotten. It was never about balancing the budget.

From presidential primary debate on 4/16/08:

Charles Gibson: "...And in each instance, when the rate dropped, revenues from the tax increased. The government took in more money. And in the 1980s, when the tax was increased to 28%, the revenues went down. So why raise it at all, especially given the fact that 100 million people in this country own stock and would be affected"?

Obama: "Well. Charlie, what I've said is that I would look at raising the capital gain tax for purposes of fairness".

If it was ever about the budget, we would have a budget. We haven't had one, despite what the law says, for the past 4 years.

10 posted on 12/18/2012 5:49:03 AM PST by SunTzuWu
[ Post Reply | Private Reply | To 1 | View Replies]

To: SunTzuWu

It pains me to see “our side” still accepting the premises that the left puts forth as the reason behind their policies.

This president doesn’t want “more revenue”, nor a “balanced budget”, and much less a “recovering economy”.

He WANTS envy, strife, misery, and economic collapse.

Dammit, folks! SAY IT! SAY IT! SAY IT!
/Sam Kinnison


11 posted on 12/18/2012 5:52:04 AM PST by MrB (The difference between a Humanist and a Satanist - the latter admits whom he's working for)
[ Post Reply | Private Reply | To 10 | View Replies]

To: Straight Vermonter

I would think this is easy to calculate. Unfortunately my grasp of advanced economics is minimal.

GWB was elected in 2000. At one point he lowered tax rated and eliminated taxes for those earning a certain dollar figure.

So how did GWB fare when tax rates were lowered? Did revenue go up? I think it is a simple answer. Then we should calculate what happened when the Democrats took over the house in 2007.

Thoughts?


12 posted on 12/18/2012 5:54:45 AM PST by EQAndyBuzz (You cant bring something to its knees that refuses to stand on its own)
[ Post Reply | Private Reply | To 9 | View Replies]

To: SeekAndFind; ding_dong_daddy_from_dumas; DoughtyOne; Gilbo_3; Impy; stephenjohnbanker; NFHale
I think this is the GOPs misunderstanding not Os. That is why he always beats them.

O is not calling for (those) higher taxes because he thinks it will generate significant deficit reduction.
He is calling for those increases because he knows its the most popular of all the other options, (meaning cutting spending).
And he knows the GOP will oppose it trapping them again. (in fact demanding cuts to future entitlements instead.)

O demands higher taxes on over $200/250K of income. Is this enough to slow the economy noticeably? If so then what if Obama gets it? If not then the GOP is in trouble anyway.

Taxes go up automatically so House Republicans need to vote for NO tax increases, unless they are stupid. Extend the tax cuts below that, then go home.

13 posted on 12/18/2012 6:05:44 AM PST by sickoflibs (Dems know how to win. Rs know how to whine.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: ryan71
I don’t think Obama’s main goal in this is to raise revenue. He knows it’s a pittance. He wants to further create hate and a feeling of “justice” in his base toward the successful, those who wish to aspire. Achievers are a threat to communism and it’s vital to turn the masses against them.

I agree, but believe that Zer0 actually DOES know the math.

I see his goal as the complete destruction of America by continually escalating class warfare between the producing class and the non producing class.

Simply legalize, empower, entitle and validate the (non producing) Taking class, and they will TAKE and destroy.

The closet Communists have convinced the Useful Idiots that there will ALWAYS be more to take.

This is where the math comes in, eventually, there will NOT be any more to take, modern Communists know this, it has been proved in every case, Communism is the easiest and best way to completely kill a society and culture.

That is the Zero's goal.

14 posted on 12/18/2012 6:07:21 AM PST by Navy Patriot (Join the Democrats, it's not Fascism when WE do it, and the Constitution and law mean what WE say.)
[ Post Reply | Private Reply | To 4 | View Replies]

To: SeekAndFind
Obama’s money misunderstanding: Raising revenue by raising taxes doesn’t work

I should probably read the article, but I can see a problem in just this headline. Obama doesn't want to raise taxes to raise revenue. He wants to raise taxes to penalize those who make money.

15 posted on 12/18/2012 6:14:09 AM PST by ArGee (Reality - what a concept.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: sickoflibs

One thing they both agree on is stopping the cost of living increase for SS recipients. Why stop there? They should extend that to the entire fedgov. NO cost of living increases for anyone who is in elected office or works for the federal government in any capacity whatsoever. Period.


16 posted on 12/18/2012 6:18:01 AM PST by MestaMachine (It's the !!!!TREASON!!!!, stupid!)
[ Post Reply | Private Reply | To 13 | View Replies]

To: MestaMachine
RE :”One thing they both agree on is stopping the cost of living increase for SS recipients. Why stop there? They should extend that to the entire fedgov. NO cost of living increases for anyone who is in elected office or works for the federal government in any capacity whatsoever. Period.”

I live in Maryland so I know what you mean.
(direct) Federal gov employees get automatic cost of living increases in pay, and that is on top of the merit raises if they actually do anything, add to that about 8 weeks vacation.

The serfs who pay taxes get nothing close to that.

17 posted on 12/18/2012 6:26:07 AM PST by sickoflibs (Dems know how to win. Rs know how to whine.)
[ Post Reply | Private Reply | To 16 | View Replies]

To: MestaMachine
RE :”One thing they both agree on is stopping the cost of living increase for SS recipients. Why stop there? They should extend that to the entire fedgov. NO cost of living increases for anyone who is in elected office or works for the federal government in any capacity whatsoever. Period.”

I live in Maryland so I know what you mean.
(direct) Federal gov employees get automatic cost of living increases in pay, and that is on top of the merit raises if they actually do anything, add to that about 8 weeks vacation.

The serfs who pay taxes get nothing close to that.

18 posted on 12/18/2012 6:27:36 AM PST by sickoflibs (Dems know how to win. Rs know how to whine.)
[ Post Reply | Private Reply | To 16 | View Replies]

To: MestaMachine

And no automatic, built-in, year over year increases in spending for ANY program.

IE, no baseline budgeting.


19 posted on 12/18/2012 6:28:44 AM PST by MrB (The difference between a Humanist and a Satanist - the latter admits whom he's working for)
[ Post Reply | Private Reply | To 16 | View Replies]

To: econjack

“I’d be a horrible President, but a great dictator. “

I’d vote for ya.


20 posted on 12/18/2012 7:10:16 AM PST by READINABLUESTATE ("We must hang together, gentlemen...else, we shall most assuredly hang separately." - Franklin)
[ Post Reply | Private Reply | To 8 | View Replies]

To: SeekAndFind

I think Obama understands everything he is doing, because by design he has set out from the beginning to destroy this country in every way possible.


21 posted on 12/18/2012 8:14:32 AM PST by crosshairs (Open season on feral governments.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: MrB

Kinnison LOL


22 posted on 12/18/2012 8:15:51 AM PST by crosshairs (Open season on feral governments.)
[ Post Reply | Private Reply | To 11 | View Replies]

To: READINABLUESTATE

:>)


23 posted on 12/18/2012 12:18:43 PM PST by econjack (Some people are as dumb as soup.)
[ Post Reply | Private Reply | To 20 | View Replies]

To: timestax

bttt


24 posted on 12/18/2012 2:44:22 PM PST by timestax (AMERICAN MEDIA= DOMESTIC ENEMY)
[ Post Reply | Private Reply | To 6 | View Replies]

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
News/Activism
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson