Tax and spend vs spend and spend

[ksen]

I've heard "starve the beast" republicans claim that tax cuts increase tax revenues.

Which begs the question that if you want to starve the beast wouldn't you want less tax revenue? And if tax cuts bring in more tax revenue then wouldn't that mean you should increase taxes in order to lower tax revenue?

 

[James Brown]

I've heard "starve the beast" republicans claim that tax cuts increase tax revenues.

Which begs the question that if you want to starve the beast wouldn't you want less tax revenue? And if tax cuts bring in more tax revenue then wouldn't that mean you should increase taxes in order to lower tax revenue?

Yes, the Laffer curve is a parabola, where a 0% tax rate and a 100% tax rate both result in zero revenues to the government. But nobody thinks the two rates are essentially equal in all outcomes.

 

[ksen]

The Laffer Curve is also not worth the stained cocktail napkin it was scribbled on.

 

[James Brown]

I don't know. I think it's illustrative enough. Tax rates of 0% and 100% generate equal amounts of revenue: zero. Tax rates of 1% and 99% also probably generate equal amounts, and so on.

The problem lies in execution, in my opinion. The Laffer curve is probably like The Enterprise's warp drive. It's fun to think about, it would be awesome if we could get it to work right, but it's too difficult to waste any resources on it.

 

[Jimmy Higgins]

I've heard "starve the beast" republicans claim that tax cuts increase tax revenues.

Yes, that is what they say. But based on the recent actions of Governors and Congress, clearly deficits are purposefully being sought in order to justify making "tough" cuts.

Which begs the question that if you want to starve the beast wouldn't you want less tax revenue? And if tax cuts bring in more tax revenue then wouldn't that mean you should increase taxes in order to lower tax revenue?

It is a much harder argument to make to the public.

 

[Loren Pechtel]

The Laffer Curve is also not worth the stained cocktail napkin it was scribbled on.

The problem is not the Laffer Curve--it's basically correct. The problem is the Republicans simply take on faith that we are somewhere on the right side of the curve--something that we have no evidence of.

 

[jonatha]

The Laffer Curve is also not worth the stained cocktail napkin it was scribbled on.

The problem is not the Laffer Curve--it's basically correct.

Not according to experimental observation.

 

[Loren Pechtel]

The problem is not the Laffer Curve--it's basically correct.

Not according to experimental observation.

And why do you think it's possible to make a comparison like that?

Is the tax take at 0% zero? Obviously.

Is the tax take at 100% zero? Assuming no fraud, yes.

Is the tax take in between above zero? In every observed case, yes.

At sufficiently low tax rates is it not obvious that raising the tax rate will increase revenue??

At sufficiently high tax rates isn't it obvious that raising the tax rate will provide more discouragement than revenue? (Note: If the tax take is 0 at 100% it's obvious this effect must happen at some point.)


Thus the only part of the Laffer curve we haven't proven is whether it's single-humped or a more complex shape--but there's no reason to think it's more complex. Thus the Laffer curve is almost certainly true.

Note, however, the lack of any dimensions on it--it provides no indication where that peak is or how to figure out which side of the peak we are. It's a simple description of reality, it does not support the arguments that are based on it.

 

[bilby]

I don't know. I think it's illustrative enough. Tax rates of 0% and 100% generate equal amounts of revenue: zero. Tax rates of 1% and 99% also probably generate equal amounts, and so on.

The problem lies in execution, in my opinion. The Laffer curve is probably like The Enterprise's warp drive. It's fun to think about, it would be awesome if we could get it to work right, but it's too difficult to waste any resources on it.

If it is as you describe, then it isn't difficult at all; Just set all tax rates at 50%, and revenue is maximised.

Sadly, I don't think it is as you describe; there is no reason to think that tax rates of 1% and 99% "also probably generate equal amounts", and every reason to think that revenue from a 1% tax rate could be very different indeed from that at a 99% rate.

 

[angelo]

The tax rate of many Scandinavian countries are much higher than most other Western world countries. But have a look at their cradle to the grave social system. Practically everything is free.

 

[Loren Pechtel]

I don't know. I think it's illustrative enough. Tax rates of 0% and 100% generate equal amounts of revenue: zero. Tax rates of 1% and 99% also probably generate equal amounts, and so on.

The problem lies in execution, in my opinion. The Laffer curve is probably like The Enterprise's warp drive. It's fun to think about, it would be awesome if we could get it to work right, but it's too difficult to waste any resources on it.

If it is as you describe, then it isn't difficult at all; Just set all tax rates at 50%, and revenue is maximised.

Sadly, I don't think it is as you describe; there is no reason to think that tax rates of 1% and 99% "also probably generate equal amounts", and every reason to think that revenue from a 1% tax rate could be very different indeed from that at a 99% rate.

There's no scale on the Laffer Curve, there's no reason to think the midpoint is at 50%.

 

[Jolly_Penguin]

quite simply, look at the last 40 years of budgetary history in this country.

democrats: balanced budgets, surpluses, strong economy.
republicans: huge deficits, massive debt, economic collapse.

i don't see how this is even possibly in question.

Yeah, Republicans purport to be more fiscally responsible but the facts in no way bear this out, do they?

I think this is because the US has such a strong alliance between fiscal and social conservatives.

Spending billions to war monger is not socially conservative.

I think that is how libertarians get their niche, no? True conservatives looking for minimal government and government spending (even to the detriment of the people).

 

[jonatha]

Thus the only part of the Laffer curve we haven't proven is whether it's single-humped or a more complex shape--but there's no reason to think it's more complex.

Except for experience.

Did you even look at the picture? There is essentially no correlation between marginal tax rates and total tax collected....

 

[Loren Pechtel]

Thus the only part of the Laffer curve we haven't proven is whether it's single-humped or a more complex shape--but there's no reason to think it's more complex.

Except for experience.

Did you even look at the picture? There is essentially no correlation between marginal tax rates and total tax collected....

The point is that you are comparing different systems.

 

[arkirk]

Except for experience.

Did you even look at the picture? There is essentially no correlation between marginal tax rates and total tax collected....

The point is that you are comparing different systems.

I would say with a multi trillion dollar debt, this Laugher Curve has nothing to do with what is best for the American People. We have a government that selectively buys from only a few corporate entrprises, contracts out its functions to this same band of thieves, and then assiduously labors to see this same band of corporate thieves don't pay taxes. Our government has become the LAUGHER ALLRIGHT.

The Laffer curve is in no way a measure of the health of an economy or of a social order. GDP, the currency of the scoring of the curve is immaterial to people who have no hand in its distribution. It also is no predictor of revenue collections. I am aware of the potential for a government to raise taxes to such a level that everybody becomes a tax evader. That is not our country however. Ours, by lowering taxes on the rich, seems to just open up new possibilities for cheating..I might add, cheating to far greater effect than any cheating the poor may do.

 

[Loren Pechtel]

The point is that you are comparing different systems.

I would say with a multi trillion dollar debt, this Laugher Curve has nothing to do with what is best for the American People. We have a government that selectively buys from only a few corporate entrprises, contracts out its functions to this same band of thieves, and then assiduously labors to see this same band of corporate thieves don't pay taxes. Our government has become the LAUGHER ALLRIGHT.

The Laffer curve is in no way a measure of the health of an economy or of a social order. GDP, the currency of the scoring of the curve is immaterial to people who have no hand in its distribution. It also is no predictor of revenue collections. I am aware of the potential for a government to raise taxes to such a level that everybody becomes a tax evader. That is not our country however. Ours, by lowering taxes on the rich, seems to just open up new possibilities for cheating..I might add, cheating to far greater effect than any cheating the poor may do.

No. The problem with the Laffer curve is that it doesn't have a value for the peak.

Thus, while true it has no predictive value, it's really just stating the obvious.

 

[angelo]

Politicians of all persuasions love nothing better than spending other peoples money, wherever it comes from!