The Sequester

[astralis]

snapper,

So, in your view, by how much would taxes need to be cut for the laffer curve to apply? Seeing as you can now borrow at negative real rates anyway (thanks to the Fed) are you suggesting that taxes could have been cut further?

there's just so much economic misunderstanding here that my head hurts.

what i meant by the laffer curve statement is that at our current tax rates, a further reduction in taxes will NOT generate enough economic activity/economic efficiency to make up for the loss of revenue.

the reverse also applies; an increase in taxes will not diminish economic activity/efficiency enough to actually reduce revenue.

when the marginal tax rate is approximately 60%, then the laffer curve begins to apply-- reducing taxes will have a noticeable positive impact on economic activity/efficiency. at rates of 70-80%, further taxation will actually reduce revenue.

[astralis]

dale,

So, do you believe that my money is mine first or someone else's first??

ah yes, the ideological argument.

your money is yours first, of course, with the full realization that you, as a citizen of the Republic, have an obligation to the rest of the nation-- obligations which you and your fellow citizens decide upon through duly-elected representatives.

[astralis]

JAD,

If the dems were truly pragmatic when it comes to taxes, they would have let the Bush tax cuts lapse in 2010.

it's precisely that they -didn't- which shows they were pragmatic, both politically and economically. there's nothing like the GOP's base ideology of tax cuts uber alles-- no 'higher taxes, all the time please' equivalent.

and raising taxes in a recession is a bad idea. the deal made this year, while not all it could be, was better timing.

[dalem]

dale,



"will" is too strong; i'd affix "generally" in front of it, and add further qualifiers, "at the national level", "especially on the wealthy".

a lot of small exceptions; clinton raised marginal rates on the wealthy but also significantly enlarged tax credits/shelters for the middle class (the Roth IRA, for instance). truman cut taxes for low-income folks and reduced payroll taxes.

So, do you believe that my money is mine first or someone else's first?

-dale

[JAD_333]

dale,



no, i wouldn't agree. dems are flexible about when they want to lower taxes-- it's a pragmatic/situational issue for them, not an ideological one.

If the dems were truly pragmatic when it comes to taxes, they would have let the Bush tax cuts lapse in 2010.

[Bigfella]

Oh, go away, men are talking.

-dale

Yeah, because name calling someone who knows more about economics than you could ever hope to (and pretty much anyone else you dion't agree with for that matter) is definately a sign of manhood.

[snapper]

snapper,



note the range i gave. even if one was wildly optimistic about the amount of growth created by the tax cut, it still caused a huge 1.5 trillion dollar hole. the laffer curve is simply not applicable at current tax rates.

So, in your view, by how much would taxes need to be cut for the laffer curve to apply? Seeing as you can now borrow at negative real rates anyway (thanks to the Fed) are you suggesting that taxes could have been cut further?

[astralis]

dale,

So, barring a perceived economic crisis, Democrats will not lower tax rates?

"will" is too strong; i'd affix "generally" in front of it, and add further qualifiers, "at the national level", "especially on the wealthy".

a lot of small exceptions; clinton raised marginal rates on the wealthy but also significantly enlarged tax credits/shelters for the middle class (the Roth IRA, for instance). truman cut taxes for low-income folks and reduced payroll taxes.

[astralis]

snapper,

You neglect to mention how much wealth was created by not taxing people more. Every time a Government raises tax it takes money out of the private sector - money that could otherwise be used to create more wealth. Arguably if it had not been for these tax cuts the tax revenue collected today would be lower and therefore the need to borrow and the deficit higher.

note the range i gave. even if one was wildly optimistic about the amount of growth created by the tax cut, it still caused a huge 1.5 trillion dollar hole. the laffer curve is simply not applicable at current tax rates.

[dalem]

dale,



recessions, largely. JFK lowered taxes in the context of the 1958 and 1960-61 recession. obama did the same with the Great Recession-- the stimulus didn't just contain the payroll tax cut, but a variety of other tax cuts. during the stagflation years carter lowered capital gains taxes from 39% to 28%.

So, barring a perceived economic crisis, Democrats will not lower tax rates?

-dale

[dalem]

A: When it doesn't F**k up the economy.

For extra credit, the student is invited to compare and contrast with the GOPers.

Oh, go away, men are talking.

-dale

[snapper]

of the approximately 11.8 trillion/75% in GDP of debt we hold now, the bush tax cuts have been estimated to cost from 1.5 trillion-2.8 trillion, depending on how optimistic you are about the effect of the cuts on the overall economy.

You neglect to mention how much wealth was created by not taxing people more. Every time a Government raises tax it takes money out of the private sector - money that could otherwise be used to create more wealth. Arguably if it had not been for these tax cuts the tax revenue collected today would be lower and therefore the need to borrow and the deficit higher.

[DOR]

So when can they? What circumstance must exist for a Democrat to lower taxes?

-dale

A: When it doesn't F**k up the economy.

For extra credit, the student is invited to compare and contrast with the GOPers.

[astralis]

dale,

So when can they? What circumstance must exist for a Democrat to lower taxes?

recessions, largely. JFK lowered taxes in the context of the 1958 and 1960-61 recession. obama did the same with the Great Recession-- the stimulus didn't just contain the payroll tax cut, but a variety of other tax cuts. during the stagflation years carter lowered capital gains taxes from 39% to 28%.

[dalem]

dale,



no, i wouldn't agree. dems are flexible about when they want to lower taxes-- it's a pragmatic/situational issue for them, not an ideological one.

So when can they? What circumstance must exist for a Democrat to lower taxes?

-dale