Sear,
It’s the vacuum cleaner principal: politicians suck all the money into their pockets - government is just the hose .
Crane
C #21
I just LOVE these electrical appliance metaphors!
Q: What’s the difference between a Harley and a Hoover?
A: The position of the dirt-bag.
So he IS able to use the quote function…
So wish the progressives, but you are only stating 1/2 the facts and leaving out an important point.
While it is correct the tax rates were much higher in the 1950’s so were the deductions much higher. A fact that is always left out. Therefore the effective tax rate was much lower than you think.
#24
The Laffer Curve.
I submit that the “straight dope,” is that the bulk of the advocates of lowering the upper crust’s and business taxes, simply don’t understand anything about economics or business.
All you really need to do, is think through the basics.
I like to liken it to any problem solving situation involving a mechanism. The economy is often likened to an engine, as an example. If you think of what will make an engine run faster or more powerfully, simply saying that “adding more fuel” will do it is obvious idiocy. At least it is obvious to anyone who knows how engines run. An engine requires fuel, air, oil, properly coordinated pistons and so on.
So. If your engine is not running well, will adding more oil fix it? Well, yes, but only if the reason for it not running well, is lack of enough oil.
The economy is very similar. IF the reason why the economy is sluggish, is that businesses haven’t got enough cash on hand to expand, then lowering their costs (including taxes) can help rev them up.
The problem with the modern Republican “thinking” about this is, that they are doing much worse than IGNORING the fact that engines need more than oil, they are outright denying it. “Supply side economics” is based on the idea that an engine will run better and faster, despite having no fuel or air, if you just add more oil.
Translating that into economic factors, it mean that they think that if they add more investment capital to the mix, by lowering taxes on businesses and on investors, that despite the fact that they are also actively working to REDUCE the amount of purchasing power of the CUSTOMER CLASSES, that intelligent business people will use their tax reduction windfall, by expanding their businesses, hiring more people, and giving raises to them, all in order to increase production, even as they see their customer base shrinking.
WTF are you talking about? Every fucking economist in the world thinks that taxes are a drag on the economy. Every last fucking one.
That doesn’t mean that government spending can’t result in economic benefits.
One of the reasons why deficit spending is such a good short term accelerant for the economy is that it accelerates the economy without creating a tax drag. Paying it back might be a bitch but it works for the short term.
So when I say that taxes are a drag and government spending is an accelerant, you stopped reading after the word drag?
You need to read more carefully.
Much more carefully.
I mostly agree with you that adding lack of capital is not the bottleneck to economic growth. However taxes always crowd out marginal investments because it reduces return on investment. I don’t think any reasonable economist would say that corporate taxes are at an unhealthy level that creates this sort of crowding out. There may also be leakage to other lower tax jurisdictions that are trying to compete with us on tax but this sort of tax competition is a race to the bottom.
I’ve never read Paul Krugman assert that.
Not Paul Solmon either.
Are persons entirely opposed to government revenue not anarchists?
So you’re telling us “Every last %$#@ing” economist is an anarchist?
I didn’t know anarchies had economies.
I imagine Keynesian economic theory is quite familiar in this forum.
But in what way is the drag of paying back $money the feds borrowed different from any other loan payback?
Why is it different from a car loan, or a mortgage, or any other financial loan?
I advocate balanced budgets.
But many a pseudo-con simply advocate for tax cuts; they rarely if ever get around to corresponding spending cuts.
But the compulsive tax cutters, the deficit doves love to say:
“We can’t tax our way to prosperity.”
I repeat my challenge.
Name any anarchy that provided a better, more comfortable, safer standard of living than the ones enjoyed by U.S. $tax $payers.
Your challenge has no bearing on taxes being a drag on the economy.
Oh? What anarchy collects tax?
What’s the most prosperous, wealthy State in our Union?
Is there not some semblance of $balance in its budget there?
They can’t print $money the way “Uncle Sam” can. [Happy Birthday “Uncle Sam”]
Not all borrowing promotes prosperity.
But it can.
I’ll cite a personal example.
I needed a new car late last year, and had in the bank $ten $times the amount I needed to buy it.
But my portfolio is cooking along, and I got a 3 year car loan significantly under 3% interest.
I’ve been debt free for decades.
But as Janet Yellin will be announcing interest rate hikes, I figured $money that $cheap was too good a bargain to pass up.
And as I live over 10 miles from the nearest store, a 20+ mile stroll for an arm full of groceries once a week, in this climate (Northern New York State) didn’t seem that sensible an alternative, for a retiree collecting both pension and Social Security.
You are welcome to make an argument if you like. Just Asking Questions doesn’t get you there.
I thought I already had.
A reprise:
the standard of living is better in States that tax, compared to non-States that don’t.
And proving that wrong would be as simple as naming ONE example of any anarchy that collects no revenue, but somehow results in a higher standard of living than that in the U.S.
Thus my challenge, which I’ve now mentioned at least 3 times.
Governments are useful in that the allow businesses to spend less money on security and fewer public goods would be produced. So a government with no revenue would not be useful and businesses would be worse off. Once that threshold is passed excess government revenue is detrimental to businesses.
Is it your contention that we are currently on the inflection point and that any reduction in taxes would be harmful to business? Because no one in this thread has argued for anarchy.
Of course they do. Every economist acknowledges this. I think you may not be reading very carefully.
Who is opposed to government revenue?
No, I’m saying every last fucking economist thinks that taxes are a drag. The question isn’t whether or not taxes are a drag, the question is whether government can put the tax revenue to good enough use to outweigh that drag on society by enough to justify taxation.
Paying back fiscal debt is different than paying back bank debt because private borrowers do not have the power of taxation. The borrower has to produce something of value in order to raise the funds necessary to pay back the loan with interest. And with great regularity, society is better off as a result.
When you deficit spending, it may or may not make society better off than the cost of that spending. It frequently is but there is no guarantee that it will be.
As long as there is a pressure valve, sure, I can see a reasonable argument for balanced budgets
I will challenge you to cite where I have made that claim or anything that would lead to that claim.
I haven’t asserted that.
But the first sentence in the lead post is:
So I used the technique the ancients called: reductio ad absurdum
Just follow the premise to logical extreme.
If a 2% tax reduction is good, is a 4% tax reduction twice as good?
And if it’s a steady progression, why all the half-stepping? If cutting taxes is always good, then why not cut them out? Zero% $tax.
Right?
Some tax reductions are beneficial.
BUT !!
Deficit spending is except in sovereignty-threatening emergency, horrendous.
Anyone that wants to slash taxes, my answer to that is:
Excellent.
$Slash $Spending $Farther $First !!
I think you may be misreading what I said. Taxes are one side of the equation and they are a drag on the economy. Who you tax and how you tax them will affect how much of a drag it is.
Spending is the other side of the equation and depending on what you spend it on and how you spend it, the effect of that spending can overcome the negative effects of the taxation.
I don’t feel like we are participating in the same conversation. I don’t think I disagree with you as much as you seem to disagree with me. 
PS
Government revenue comes from taxes.
So those that assert:
Are out of touch with a fundamental reality.
Taxes are a means for government to derive revenue.
Reductio ad absurdum.
- Without government revenue, what government funding?
- Without government funding, what government?
- Without government, isn’t that anarchy, by definition?
Interesting. So, there have been substantial tax cuts in both the US and really all around the world that have happened in the last 50 years. Are you seriously suggesting that these cuts have ‘basically failed every other time that it has been tried too’? That there are no instances where a tax cut had a positive effect? That cutting effective taxes from 90% or 70% to 40% or 30% have had zero positive effect…ever?? :dubious:
What I THINK you actually mean is that cutting taxes is not a panacea for all ills. It CAN have a positive effect on growth under certain circumstance, while in others it can either have no effect at all or a negative effect. But making a blanket statement like yours is as wrong as folks who say that cutting taxes always has a positive effect. Which is pretty much the answer to the OP.