My post was in response to that. The article you posted stated that one could not espouse both views because one was predicated on an increase in revenue from cutting taxes, while the other theorized a forced reduction in spending due to falling tax revenues following tax cuts. I would respond that tax cuts are a good in and of themselves, and whether the receipts increase (the Laffer theory), stay the same (meaning tax rates have no effect on revenue, so you might as well cut taxes), or drop and force a reduction in spending (the starve the beast theory), the end result is good. First, I have never claimed to be a conservative, I see myself more as a liberal Republican, or perhaps a Libertarian. Second, I am not quite halfway through Atlas Shrugged (and thus far I find that I like it less than the Fountainhead, though it is still very good). Third, I have plenty of problems in the spending practices of both parties, I just have more problems with the Democrats. I would not suggest cutting funding for highways (roads, schools, and police are not really the province of the federal government, unless you mean the FBI). I do think the Department of Education could do with a good total elimination. I also think there are areas of our military that could be cut, though I wouldn't decrease the defense budget, just rearrange. Finally, just because most politicians to date have not managed to starve the beast, does not mean that it cannot or will not be done. Perhaps we just need the deficit to get more out of control first and have a major economic collapse that would force us to re-evaluate the tax and spend philosophy that the country has followed since oh, let's say FDR.
wrong on many levels - let's start at the beginning - are you asserting that the FBI is the only law enforcment body that is dependent on federal funding?
no, really, my dad is stronger than your dad. try proving me wrong with something written other than your own words. once you go look some things up, maybe you'll come back here and find that you're the embarrassed one. http://www.factcheck.org/taxes/supply-side_spin.html READING IS FUNDAMENTAL
that's only one side of the picture. a cheaper product is also a cheaper product. not saying i totally disagree with you though but it is more complicated. families save money when they can get stuff for cheaper. raising taxes on the "rich"? first of all, a lot of people definition of "rich" is skewed. a lot of "rich" people are actually middle class folks these days. when "rich" people have less money, they also have less $$ to put into investments which will increase the cost of money later on. that's why the Fed lowers interest rates when a recession looms. By your post - i take it you would prefer a closed, socialist economy? I don't think that would fly to high.
right, i might be overstating things, but that's a general direction i think is necessary if we want to re-establish a healthy economy. we need to revitalize the working, middle class and the nation's infrastructure. i don't prefer the fully closed socialist economy, but we could do well to help support our average folks (the 98% who aren't making $250,000)...
That statement doesn't mesh with what I posted. Take this quote: As it happens, there is abundant empirical evidence against both the Lafferite hypothesis and the Starve the Beast hypothesis. In other words, just because two propositions are diametrically opposed doesn’t mean they are not both wrong. So, in reality, tax receipts will drop and the beast will not be starved.
They are the closest equivalent of "police" in the federal government. There are of course other law enforcement bodies, but I wouldn't call them the police (DEA, ATF, Secret Service, US Marshals, etc.). In that case I direct you to the post I made in response to our resident splinter cell, who made the same argument you are making now. We are slowly working through his rebuttal.
I'm sorry, but which post are you directing me to? I can't tell. In any case, I'll be very surprised if you manage to make a solid case for either the Laffer hypothesis or "Starve the Beast".
You decried his assumed causal link and then assumed one yourself. Tax revenues have gone up in all but six years of the last 50. Tax revenues today are only marginally above (inflation adjusted) where they were when GWB took the reins. Correlation != Causation
And this is the biggest reason to rescind the Bush tax cuts that only affect people making tons of money already. They can better afford it.
I'm not going to start from first principles to explain economics to the young man. I do like how you've come out in this thread and cemented your pro-higher taxes stance.
Why don't you just post something from a reputable economist arguing that we are on the wrong side of the Laffer curve?
that's because you don't seem to grasp first principles of economics well enough to explain them. give reasons, give articles, give something tangible to support your cause, and i'll definitely listen. or at least, give some civil discourse instead of only bashing other ideas. as of now, you haven't moved past "troll." we're waiting.
OK, so you take exception to that post by saying that tax revenues have not gone up much, it shouldn't count, blah blah. You happened to fail to address the more salient notion that raising taxes during a recession is a bad idea.
seriously you are the one who knows little of economics. For example taxing luxury items: You tax the items, well a luxury item is by definition not mandatory. The rich will just not buy this item (meaning the demand will decrease for the item). The effect is: 1. Less total revenue. Depending on which side of the Laffer curve you are on you could quite possibly lose revenue. 2. The factories that make these items will drop the price, see reduced profits and need less labor. Labor is middle class. These middle class are now out of work or making less.
not sure i'm following you. you're talking about elasticity of luxury items. i'm trying to draw a distinction between overall growth and revenue. the article i linked a few pages back might help me get my point across.
ok, more reading: “[E]conomic analysis suggests that tax increases would not in general be more harmful to the economy than spending reductions. Indeed, in the short run (which is the period of concern during a downturn), the adverse impact of a tax increase on the economy may, if anything, be smaller than the adverse impact of a spending reduction, because some of the tax increase would result in reduced saving rather than reduced consumption. For example, if taxes increase by $1, consumption may fall by 90 cents and saving may fall by 10 cents. Since a tax increase does not reduce consumption on a dollar-for-dollar basis, its negative impact on the economy is attenuated in the short run. Some types of spending reductions, however, would reduce demand in the economy on a dollar-for-dollar basis and therefore would be more harmful to the economy than a tax increase…. “Basic economy theory suggests that direct spending reductions will generate more adverse consequences for the economy in the short run than either a tax increase or a transfer program reduction. The reason is that some of any tax increase or transfer payment reduction would reduce saving rather than consumption, lessening its impact on the economy in the short run, whereas the full amount of government spending on goods and services would directly reduce consumption…. “The more that the tax increases or transfer reductions are focused on those with lower propensities to consume (that is, on those who spend less and save more of each additional dollar of income), the less damage is done to the weakened economy. Since higher-income families tend to have lower propensities to consume than lower-income families, the least damaging approach in the short run involves tax increases concentrated on higher-income families. Reductions in transfer payments to lower-income families would generally be more harmful to the economy than increases in taxes on higher-income families, since lower-income families are more likely to spend any additional income than higher-income families. Indeed, since the recipients of transfer payments typically spend virtually their entire income, the negative impact of reductions in transfer payments is likely to be nearly as great as a reduction in direct government spending on goods and services. “For states interested in the impact only on their own economy rather than the national economy, the arguments made above are even stronger. In particular, the government spending that would be reduced if direct spending programs are cut is often concentrated among local businesses…. By contrast, the spending by individuals and businesses that would be affected by tax increases often is less concentrated among local producers — since part of the decline in purchases that would occur if taxes were raised would be a decline in the purchase of goods produced out of state. Thus, more of the reduction in purchases that results from tax increases than from government budget cuts falls on out-of-state goods (relative to in-state goods), lessening the adverse impact of a tax increase on the state economy. Reductions in direct government spending consequently could have a larger adverse impact on a state's economy than tax increases, which have a stronger adverse impact on out-of-state goods and services. “The conclusion is that, if anything, tax increases on higher-income families are the least damaging mechanism for closing state fiscal deficits in the short run. Reductions in government spending on goods and services, or reductions in transfer payments to lower-income families, are likely to be more damaging to the economy in the short run than tax increases focused on higher-income families. In any case, in terms of how counter-productive they are, there is no automatic preference for spending reductions rather than tax increases.”[2] [emphases added] from: http://www.cbpp.org/1-8-08sfp.htm written by CBO Director Orszag and Nobel Winner Joseph Stiglitz...
i see... sorry, my definition of luxury expenditures is pretty flimsy, i admit. if i could rephrase, i would talk about large assets (which i consider to be like savings against consumption, as money is tied up), and high-class savings vessels themselves.
