Oh shit... The Republicans again.

[fromderinside]

How is that a better analogy, or better put, how is that even analgous? If you lower a price, the idea is that you can sell more and make up the difference.

Because taxes act as a cost on the economy.
It is certainly a much better analogy than the one you provided.

Yeah that business model works so well. Without taxes we have a society dependent on people actually taking others into account. No police, no military, no safety regulations, no product monitoring, no highways, no air routes, no harbors, nothing, just I trust you.

The next time that one works will be the first time it works.

 

[Derec]

Because taxes act as a cost on the economy.
It is certainly a much better analogy than the one you provided.

Yeah that business model works so well. Without taxes we have a society dependent on people actually taking others into account. No police, no military, no safety regulations, no product monitoring, no highways, no air routes, no harbors, nothing, just I trust you.

The next time that one works will be the first time it works.

Who is advocating no taxes here? This whole thread is about "dynamic scoring" which is about taking into account economic effects of a policy (such as an anticipated economic growth from a tax cut resulting in increased revenues).
If taxes were 0% tax revenue would be 0. Duh!
If taxes were 100% it would choke legal economic activity and tax revenue would be likewise 0. Obviously there must be at least one tax rate for which there is a maximum revenue that balances taxpayers (and their taxable income) with tax receipts per payer. If tax rate is higher than that rate a tax decrease would result in tax revenue increase.

Same for a business and prices.
If your price is 0 (you are giving stuff away) your revenue will be 0.
At some price nobody will come to your store and your revenue will be 0 again.
There must be at least one price that results in maximum revenue that balances number of customers (and number of items each is buying) with what each customer is paying for each item. If your price is above that price reducing prices will result in increased revenue.

Hence my analogy is actually pretty good.

Now what level and kind of taxation is optimal is a different and much more complex issue.

 

[Jimmy Higgins]

Yeah that business model works so well. Without taxes we have a society dependent on people actually taking others into account. No police, no military, no safety regulations, no product monitoring, no highways, no air routes, no harbors, nothing, just I trust you.

The next time that one works will be the first time it works.

Who is advocating no taxes here? This whole thread is about "dynamic scoring" which is about taking into account economic effects of a policy (such as an anticipated economic growth from a tax cut resulting in increased revenues).

And without dynamic scoring the Reagan and W Admin completely oversold the benefit of the tax cuts. With dynamic scoring, it'll be even worse!

If taxes were 0% tax revenue would be 0. Duh!
If taxes were 100% it would choke legal economic activity and tax revenue would be likewise 0.

Actually that isn't true. If the money was distributed in a fashion, it could work, but that would be an very hard affair.

Obviously there must be at least one tax rate for which there is a maximum revenue that balances taxpayers (and their taxable income) with tax receipts per payer. If tax rate is higher than that rate a tax decrease would result in tax revenue increase.

Laffer, is that you?

Same for a business and prices.
If your price is 0 (you are giving stuff away) your revenue will be 0.
At some price nobody will come to your store and your revenue will be 0 again.
There must be at least one price that results in maximum revenue that balances number of customers (and number of items each is buying) with what each customer is paying for each item. If your price is above that price reducing prices will result in increased revenue.

It is like reading a Metacrock post.

Hence my analogy is actually pretty good.

See!

 

[Togo]

How is 'dynamic scoring' different from what happens now? I mean, it's not like the US government simply plucks figures out of the air. They're doing economic modelling and predicting the effects of tax rises and falls on the overall tax take in any case. That's why growth figures are so closely watched.

So what does 'dynamic scoring' add to the process?

 

[Jimmy Higgins]

How is 'dynamic scoring' different from what happens now? I mean, it's not like the US government simply plucks figures out of the air. They're doing economic modelling and predicting the effects of tax rises and falls on the overall tax take in any case. That's why growth figures are so closely watched.

So what does 'dynamic scoring' add to the process?

More BS to fudge the numbers to show a massive blowout tax cut isn't fiscally irresponsible. The current system doesn't work accurately beyond a year or two. Not certain how this is supposed to be better by being more "accountingish" with the numbers.

 

[Rhea]

Shouldn't we be able to go back in time and apply dynamic scoring (i.e. the assumption that lowering tax rates increases economic activity by putting money into the pockets of the wealthy where they hoard it instead of the government which spends it as fast as it can) to previous taxing decisions, run the model and see if it matches reality?

Haven't the people who propose dynamic scoring already done this? Why are they not showing their data to prove the method they think is superior? Or have they, and their advocates just never present that useful evidence because it's too hard to understand?

 

[fromderinside]

Yeah that business model works so well. Without taxes we have a society dependent on people actually taking others into account. No police, no military, no safety regulations, no product monitoring, no highways, no air routes, no harbors, nothing, just I trust you.

The next time that one works will be the first time it works.

Who is advocating no taxes here? This whole thread is about "dynamic scoring" which is about taking into account economic effects of a policy (such as an anticipated economic growth from a tax cut resulting in increased revenues).
If taxes were 0% tax revenue would be 0. Duh!
If taxes were 100% it would choke legal economic activity and tax revenue would be likewise 0. Obviously there must be at least one tax rate for which there is a maximum revenue that balances taxpayers (and their taxable income) with tax receipts per payer. If tax rate is higher than that rate a tax decrease would result in tax revenue increase.

Same for a business and prices.
If your price is 0 (you are giving stuff away) your revenue will be 0.
At some price nobody will come to your store and your revenue will be 0 again.
There must be at least one price that results in maximum revenue that balances number of customers (and number of items each is buying) with what each customer is paying for each item. If your price is above that price reducing prices will result in increased revenue.

Hence my analogy is actually pretty good.

Now what level and kind of taxation is optimal is a different and much more complex issue.

Everybody else who've responded have covered the points wrong with your analogy already.

Rich people hoard so money is taken out of the market and conserved more than reinvested. On the other hand zero taxes produce zero services and regulations encouraging anarchy.

Your zero reference points demonstrate the differences between the two models. low prices increase demand and increase cash flow, but, do so at risk of the business going belly up except for the get out of jail free card called bankruptcy by reorganization.

They're not alike at all.

 

[braces_for_impact]

Zombie Economics again. Yay.