No, this has nothing to do with the Laffer curve. Money which is not taxed fuels exansion of the economy more than any money which is taxed, and provides more goods and services along the way. The Laffer Curve is hardly “bulshit” as so ineloquently put it, but it is oversimplified. That is not the same thing as false.
This does mean lean times for a certain period, but I believe in planning for the future.
That (1) is not true in all circumstances (just ask Keynes) and (2) is the premise of the Laffer Curve anyway.
First of all, you haven’t shown that the expansion of the economy that you so fearlessly predict offsets the loss in revenue due to the lower tax rate. Second of all, you have ignored the fact that money that the government gets from taxes does not disappear off the face of the earth. Even if it isn’t used to build infrastructure but is instead given to “undeserving poor people” (a la conservatives worse nightmare), these people will spend the money and this will fuel economic expansion too.
You haven’t come close to mathematically proving diddly-squat!
There is some validity to the “starve it so that it gets small enough for me to choke it in the bathtub” idea- the problem is that most tax-cutting pols have shown no enthusiasm for the actual choking in the bathtub part of it. People like being told that they will pay less, but they don’t like being told that they will get less.
In fact, the current idea of “cutting taxes and then keeping spending about the same” seems just as flagrantly irresponsible as the dreaded “raising taxes and creating waste”.
If you really wanted to control spending, you would tie the tax rate to the federal budget- when the budget goes up, taxpayers pay more. We’d see some program cuts then, I guarantee you.
“We can continue the war in Iraq, but it will cost you a grand next year.”
There is no real commitment to conservatism behind the tax cutting- it is all to get votes and increase the personal take of the guys at the top.
Why? If the organizations get what they want they lose support because the issue is a dead one. Then when the decision is later under attack they no longer have the support or the clout to fight it.
Winning means institutional death, and they know it. Which is why the NRA fought to keep DC v. Heller away from the Supreme Court. If they won the victory they claimed to be seeking they lose support because the winners lose interest. If they lose they lose support because they are seen as ineffective. In the latter case, though, there is still motivation from the people with common interests to continue to fight. Thus, winning hurts much worse than losing.
We’ll likely not agree on the specifics, but it’s nice to see that we agree in principle, anyway.
[QUOTE=smiling bandit]
Actuall, no, we can prove mathematically that virtually any tax cut will result in more money taken in receipts given a sufficient span of time. We may still be in the phase where we can garner rewards within a year, but if not, we would still probably garner them within several years.
[/quotes]
Cites for both the proof and that this has happened from the 2002 cuts? Growth in revenue from the natural growth of the economy doesn’t count, unless you can prove the growth came directly from the tax cuts.
Economics works on models, and you can “prove” anything given what you assign to the parameters that drive the model. Calling this a proof like a real mathematics proof is misleading at best.
So, raising taxes to pay for a war for our survival (like WW II) is still bad? But thanks for answering my question. No one is saying that everything the government does is good. I believe there were some high rise housing projects in Chicago that were famously bad, and maybe even more of a disaster than your example.
Has he said that these cuts would be temporary? Is there any reason they are more needed than the ones he was against? Except for the AMT proposal (which most people agree needs to be handled in some way) I haven’t read the details. Increasing tax rates at the high end and cutting at the low to expand consumption would be a responsible position. Somehow I doubt that’s it.
I’m worrying more about the philosophy than the details. Given a level of funding for legitimate functions of government - defense and Iraq would count for most Republicans, and the funding that is absolutely required by the public - roads and parks, for instance, we can ask what level of taxation is needed to pay for them. It appears that the level of necessary funding is totally decoupled from the need for taxation in a lot of people’s minds. Either they are stupid - unlikely - believe in economic hogwash or are doing a starve the beast deal. I’m sure that lots do believe in economic fairy tales, despite the evidence that it doesn’t work. I’m going for starve the beast myself, which at least doesn’t require me to believe that the American public elected a bunch of nitwits.
Including the federal money that funded research on the Arpanet? Versus an equal amount of money spent buying fancy furniture for dot coms, or advertising male enhancement products?
In the last five years we’ve cut taxes and increased waste. There is plenty of waste in Iraq that would have to be agreed to by both pro and anti-war people.
(1) Keynes is hardly the first or last word in economics. (2), you don’t seem have the slightest clue what the Laffer curve says. It’s about a single revenue “event,” more or less. I’m talking about potential economic growth.
There’s no lackof investment opportunities, only a lack of capital available to lend. The more allowed to remain in the economy, the better is grows. Even if spent on consumption, that consumption will enrich people’s lives directly and encourage more investment over time through higher profits.
Now, some people think that just bcause the money doesn’t vanish, taxes are fine. This is an extremely facile reading of the economy. Whenever the government takes wealth, it tends to put it into value-destroying propositions. That is, the govenrment has no idea what people really value. It quite deliberately is set up to balance political factors and actors, not to deliver value. And it wastes disgusting amounts of wealth. it builds roads which no one needs or services which are not worth the money spent. Bureaucratic inertia builds.
Some noted that even with a 100% tax rate, the government gets some money. This is pretty obviously false. No matter what the theory, if people were actually left with nothing they could not work. The government would have to still leave something. And in practice, Communist nations never were able to totally get rid of the market, only kneecap it and starve themselves. Even if it didn’t pay you in money, you’re still paid in goods and services.
This is possibly the single most blatant strawman I have ever personally been subject to. Unfortunately, it’s not particularly interesting or original. What people buy for themselves with their own money is no concern of yours or mine.
Actually, I think that certain investments by government can be quite good and very useful. That does not make them morally right, only necessary. Y’know, I’ve acutally rather amused by the ridiculously poor level of reading ability on the Dope. No one actually seems to be able to understand what I do not say unless I list it (that’s is a rather long list, so i don’t often do it).
You do what you must to get what you need. You do no more than what you need. What irritates me is when government defines “need” as “feels like it.” Which is most of the time. I think infrastructure, for axample, is often a legitimate government service (where a natural and aunavoidable monopoly would exist anyway). Thus, you can hardly have two road networks, and there’re few ways to charge people by road usage, and people never really know what roads they will need to use and can’t predict it. Thus, I consider road nets a neccessary public good.
But I didn’t previously mention the case of necessities, only practicalities. Arpanet eventually bore very valuable fruit, but we cannot likewise ignore all that could have been done with the money otherwise, nor that the concept of linking networks was hardly originated with Arpanet alone. In any case, the military research, and kater straight military, networks I consider necessities.
Perhaps not, but the most fundamental insight of Keynesian economics –
– has never, on those terms, been discredited.
smiling bandit: So, in other words, your claim that “we can prove mathematically that virtually any tax cut will result in more money taken in receipts given a sufficient span of time” was just meaningless bluster that you have no way to back up other than going on tangents about how bad government is?
Is this one of those brain-teaser logic puzzles? Like the person who kicks a ball half-way to the goal line each minute and therefore never actually gets to the line?
You’d think that the law of diminishing returns would kick in somewhere in real life, where the theoretical “mathematical proofs” tend to break down.
Who is “we”?
If you can prove it mathematically, by all means, please post the proof in this thread.
Hmm. Fight my ignorance, but I thought economies “grew” because of increased productivity, not because of an increased amount of capital. Just having more money around doesn’t necessarily result in more investment and investment doesn’t necessarily result in increased productivity. So going from “more money present to invest” to “economy grows” seems like several leaps using some rather humongous assumptions.
we can prove mathematically that virtually any tax cut will result in more money taken in receipts given a sufficient span of time.
“And that my liege, is how we know the earth to be banana shaped”
“This new learning astonishes me Sire Bedivere. Explain again how sheeps bladders may be employed to prevent earthquakes.”
Oh, you must stick around; not only for your wit, but for that lilting moniker.
You made a statement of fact.
In my example, money from which a tax is extracted to pay for a productive government investment does more for the economy than the same money used totally for a nonproductive investment. Yes, the owners of the money are perfectly free to flush it down the toilet if they wish, but don’t claim that is more productive than any possible government use of it.
The moral correctness of taxation is another matter entirely. I’m talking pure economic benefit. It is possible that an immoral act is economically beneficial, is it not?
Bridges to nowhere are infrastructure also.
I used the Arpanet in 1974, and some of my software got sent to BBN for use on one of the early IMPs. I doubt if industry would have done it so quickly, even back then when Bell Labs might have been able to. Today there is no way. Even if industry did do it, it would have taken a lot longer which represents lost revenue.
But the real issue is who determines need. Your view is not gospel, and neither is mine. That’s what elected representatives are for. That the job they do is far from perfect doesn’t refute the general principle. I’m not going to argue morality, since I’ve found it unproductive. I think taxes, so long as they are structured to equalize the pain, are perfectly moral.
I’m going to focus on this particular statement, because it’s emblematic of the larger problem. You say that “That the job they do is far from perfect doesn’t refute the general principle.” Yes, fine. I already said that myself. Bu the fact that some things are necessary doesn’t mean that anything they decide is a good idea.
Moreover, tossing money at the government in the blind hope that they’ll make something useful out of it is a rather improbable stance to me. Yes, they might. Playing the wild longshot isn’t a good bet, however. And there’s nothing which prevents us fom funding pure research in other ways.
Why don’t you try focussing on the statement, “we can prove mathematically that virtually any tax cut will result in more money taken in receipts given a sufficient span of time”?
We’d be happy to accept an alternative like, “I have a religious belief, based on no evidence whatsoever, that virtually any tax cut will result in more money taken in receipts given a sufficient span of time.”