Tax Cuts and Revenue

[Tsing Tao]

Jem, I can explain 'across the board inflation' as you put it, but I'm not inclined to. I'm sure you also understand what can cause it, and in particular that deficits can be an indirect cause of inflation.

Most of us here understand the link between deficits and inflation, even if the typical voter doesn't. That's why, of course, politicians endlessly promise not to raise our taxes, while endlessly raising them indirectly through deficits and inflation -- they know their constituents won't make the connection between a three trillion dollar war in Iraq and the price of groceries in 2014.

I don't know how I can make myself more clear than I already have. Reagan should not be held accountable for the mistaken economic theories of the 1980's. He was a skilled baseball announcer and a competent actor, but not an economist.

Name me a President who was an economist.

 

[jem]

1. I noticed you did not answer the question.
Its funny that you say the system is too complicated to analyze the success of tax cuts... but you seem to believe that it is not too complicated to determine tax cuts don't work?
You see how leftist of you that is? I freely admit other factors could be at work. Models and regressions do not mirror reality because (this is simplified) in real life you don't hold everything constant.
But... and this is the real reason... historically tax cuts are followed by increases in revenue... so why not cut taxes.

Please answer the question I posed...

If the money supply is kept constant... and
if the government borrows the money it overspends.
Should there be inflation. why? what kind of inflation?

2. Another mental block you manifest is your refusal to understand that that tax and revenues are on a curve.
if you have 99% income tax and reduce it to 50% income tax... would you expect the economy to expand? Would you expect tax revenues to go up eventually?
If you can not understand that lowering taxes could result in an increase in revenue on at least some parts of the curve you should not be writing or thinking about anything requiring real thought and understanding. This is a test for whether you have an IQ high enough to think in systems.

3. Prediction.. .since I know you were just spewing leftist b.s. instead of thinking before... you will be willing to admit you understand the idea of curve. So now you will write "clearly" we are the part of the curve where tax cuts are damaging. Of course you will not be able to prove this... because in real life revenues went up. So the best you can do is resort to fantasy models where where you can always grow the economy even as you increase taxes.

In summary... its very hard to argue with a leftist because they don't baseline to reality.

Jem, I can explain 'across the board inflation' as you put it, but I'm not inclined to. I'm sure you also understand what can cause it, and in particular that deficits can be an indirect cause of inflation.

Most of us here understand the link between deficits and inflation, even if the typical voter doesn't. That's why, of course, politicians endlessly promise not to raise our taxes, while endlessly raising them indirectly through deficits and inflation -- they know their constituents won't make the connection between a three trillion dollar war in Iraq and the price of groceries in 2014.

You really do understand than that tax cuts in the face of increased spending can lead to inflation, and whether you blame the tax cuts or the spending for the inflation is strictly a matter of perspective. Your continued insistence that tax cuts raise revenues is absurd in the face of the mountains of economic evidence to the contrary. Revenues generally rise with time regardless of whether taxes are cut or increased. Typically, they only drop during the early phase of recessions. Your going to make a fool of yourself if you continue to believe that you can just assume that tax cuts were responsible for any subsequent rise in revenue. Neither is it valid to assume that tax cuts on the wealthy were responsible for a subsequent increase in revenue from that same bracket. The entire tax structure, including changes in deductions credits and depreciation has to be considered, as well as other important factors..

I don't know how I can make myself more clear than I already have. Reagan should not be held accountable for the mistaken economic theories of the 1980's. He was a skilled baseball announcer and a competent actor, but not an economist.

 

[jem]

Reagan listened to Keynes and Laffer when they stated that in a recession sometimes the correct answer is to cut taxes and grow your way out.
On the flip side... Obama's own economist Christine Romer... wrote a paper explaining that the type of tax increases he would consider destroy GDP and Obama went and did it anyway.

Massive inflation can mask the true damage of raising taxes.
But... the lousy workforce participation number really shows you how weak our economy has become since the fed has been encouraging bubbles and Obama has been destroying the economy with taxes and regulations.

Name me a President who was an economist.

 

[Tsing Tao]

Reagan listened to Keynes and Laffer when they stated that sometimes when the economy sucks you should lower taxes.

Obama's own economist Christine Romer... wrote a paper explaining that the type of tax increases he would consider destroy GDP and Obama went and did it anyway.

Massive inflation can mask the true damage of raising taxes.
But... the lousy workforce participation number really shows you how weak our economy has become since the fed has been encouraging bubbles and Obama has been destroying the economy with taxes and regulations.

I didn't say "name me a President who listened to economists". They all listen to them. Who they listen to is another story.

 

[jem]

I wrote this before on this thread.
how can you be arguing with Keynes?
The curve is right there... plain as day to those who think.

that is odd advice considering real life experience. When Bush Reagan Kennedy and Mellon cut taxes the treasury reported an increase in revenue. I presented the link to show that a few pages back.

its also odd that you are seemingly contradicting Keynes on the subject:

“Nor should the argument seem strange that taxation may be so high as to defeat its object, and that, given sufficient time to gather the fruits, a reduction of taxation will run a better chance, than an increase, of balancing the budget.”