Nobody is getting it right when they refer to the “Bush tax cuts.”
They weren’t really “Bush tax cuts.” They were really Bush tax increases which were a result of rate cuts. The reduction in tax rates under the Bush administration resulted in an increase in revenue — because the economy actually expanded. Raising tax rates on the wealthy will have exactly the opposite effect: They will reduce, not increase revenue. When tax rates are increased on the wealthy, they move their money from taxable exposure to nontaxable exposure. The trouble is, when they do that, the economy shrinks, producing less revenue than the lower tax rates did. This “static analysis” method never works. The correct method is “dynamic analysis” which actually takes into account the change in behavior that the rate increases will produce. Dynamic analysis does not assume the wealthy will sit idly by and simply absorb the tax rate increase without reacting to it. That never happens. History proves this, and the facts prove this. Now some smart aleck will say, “Why don’t we reduce tax rates to zero to really increase revenue?” At some point reducing rates will reduce revenue but only when the rate gets low enough and current rates are much higher than that break even point
We have a spending problem, not a revenue problem.
Lower tax rates to increase revenue. Then cut out billions of waste in the federal budget. Only a fool believes we have no waste in the budget.
Steve Ball
Gilbert
Dale Whiting posted at 5:55 am on Fri, Aug 17, 2012.
Steve,
Care to refer to your position by it's classical name, "Trickle Down Economics?" Now when tax cuts trickle down to float the boats of the wealthy, the middle class and the poor, the harbour where the boats of the middle class and poor is moored is no longer in the same harbor as are those of the wealthly. They are still here but the tide rises over seas in China, India, etc.
Dale Whiting posted at 5:57 am on Fri, Aug 17, 2012.
P.S.
Domestic businesses have plenty of capital on hand to start producing domestic goods. They just lack confidence in demand for those goods. We need to stimulate middle class spending by giving the demand side some stimulus. Demand is so low that even China is hirting!
Mike McClellan posted at 9:02 am on Fri, Aug 17, 2012.
The letter writer has an interesting theory. But how does he explain the Clinton years, when tax rates were higher and the economy expanded faster than under the Bush tax cut years?
How does he explain the fact that during the Democratic Presidencies from the last 40 years, the economy expanded at an average rate of 4,1% per year, and under Republican administrations, the rate was 2.9%?
Or that under President Bush and his tax cuts, the economy expanded by an average of 2.3%?
Or explain how even under Carter the economy grew at a faster rate than under President Bush and his tax cuts?
Most importantly, how does he explain the facts that tax cuts have not produced the increased revenue he claims they have? You can read about that here --
http://www.sddt.com/Commentary/article.cfm?SourceCode=20110519tza&Commentary_ID=169&r=947
Cerulean posted at 10:35 am on Fri, Aug 17, 2012.
And after Ball explains all of Mikes post – explain how under the ‘Bush tax cuts’ , U.S. debt grew and grew and continues to grow and cost us more and more.
VofReason posted at 2:46 pm on Fri, Aug 17, 2012.
Oh see, there is no need to lower spending to try to reduce your deficit. How could anyone argue against that logic. Yup, so if I lose my job, I will just tell my wife that we need to keep spending at current or higher levels to spend our way out of debt. Heck, if it works at the Federal level, it has to work in the family budget- right. Or are we just talking theoretically it's a good idea? I am interested in Dale revealtion that he is a Republican. He supports President Obama at every turn. What Republican virtues do you hold to? You know, like the standards, lower taxes, more responsibility for individuals, pro life, etc etc. Careful with your answer.
Arizona Willie posted at 3:53 pm on Fri, Aug 17, 2012.
VofReason == spending cuts would only produce a very little bit.
And, as soon as a surplus showed up, the Republicans would scream that it was proof that taxes were too high and demand more tax cuts instead of applying the surplus to the debt.
The Republican Party obviously is not concerned with the debt or they would be raising taxes to pay down the debt as has been done previously when we had a war. We had income tax surcharges.
That worked rather well too.
But Republicans would rather see the country bankrupt than pay another 1$ in taxes.
Republican Party preaches " personal responsibility " and refuses to step up and pay up for the bills they created with Bush's wars.
Republican Party = Party of Deadbeats
Rodini posted at 6:12 pm on Fri, Aug 17, 2012.
Oh Please? We've had to listen to this garbage for 30 years now.!! Enough is enough!
If revenues actually went up when you cut taxes on the wealthy.... please explain again who we should blame rather than the last three Regressive Presidents, Reagan, Bush & Bush, for the 10 trillion increase in our national debt during their 20 years in office?? How is that possible??
Oh I forgot ...it was Obama who was responsible because he was probably community organizing in Chicago, which adversely affected our national economy, RIGHT??
PLEASE??
Dale Whiting posted at 8:11 pm on Fri, Aug 17, 2012.
If you are a rain barrell, trickle down economics works just fine!
chatmandu002 posted at 10:43 pm on Fri, Aug 17, 2012.
Congress finds a way to spend the trickle down effect by increasing entitlement and welfare programs.
Arizona Willie posted at 7:45 am on Sat, Aug 18, 2012.
chat .. trickle down is supposed to trickle on individuals in the form of more jobs.
Trickle down doesn't involve Congress.
But, if Congressional Republicans saw a surplus developing from spending cuts they would claim it was proof taxes were too high and demand more tax cuts instead of using the surplus to pay on the debt.
Congressional Republicans DON'T WANT to pay on the debt or they would be pushing for an income tax surcharge dedicated to debt payment.
Spending cuts ( unless you severely cut into the Defense Department ) would produce only a very little money comparatively. About the equivalent of paying an extra $10 on the minimum payment on a $10,000 credit card debt.
sockratties posted at 11:17 am on Sat, Aug 18, 2012.
We do have a spending problem. The problem is that 75% of our spending is committed for the long term. I we chose no new spending we could only reduce our spending a few percent. If we were to set each year's tax rate on an annual balanced budget (without all the smoke and mirrors) people would start to get an idea of how much we're wasting. Although our annual tax rate would be something like 60% the first year (assuming something like a flat tax) you could bet we'd be voting a lot differently come future elections. Might see some of that foreign aid go away and maybe we'd buy a few less F-35 strike fighters.
onerebel posted at 1:52 pm on Sat, Aug 18, 2012.
I'll agree to higher taxes when the government can prove they can be fiscally responsible with what we are giving them now. Surely now one on here is dumb enough to believe if we just let them raise more taxes they won't waste that too?
YeloSno posted at 9:17 am on Sun, Aug 19, 2012.
I agree with onerebel. "Government does not tax to get the money it needs; government always needs the money it gets. Now, your son can be extravagant with his allowance and you can lecture him day after day about saving money and not being extravagant, or you can solve the problem by cutting his allowance." --Ronald Reagan. We the people are in charge and need to treat the government as a wasteful son. Instead we give him carte blanche.
VofReason posted at 1:27 pm on Wed, Aug 22, 2012.
Willie, really "spending cuts would only produce a very little bit".
Please explain how you make up a trillion dollar a year spending deficit? Even if you took every dollar let alone income from every "1%er" you wouldn't get to a trillion dollars that is spent more then what is taken in taxes. I have to give it to you, you have an usually high ability of disbelief of actuallity. Again, If my family spends 10,000 a year more then we make, would my wife take "cutting our spending will only help a little bit?". Then why does it make sense (to you) for the Fed?