Law School Discussion

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_BP_

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Re: Hey, let's reduce the deficit by giving away TAX CUTS!!!
« Reply #30 on: December 11, 2005, 07:45:15 PM »
I'll sum it up in the words of the most brilliant economist of our time, George Reisman:

(Speaking about high incomes) "The extremely high incomes...are overwhelmingly saved and invested. In this way, they bring about large-scale capital accumulation. Capital is the foundation both of the demand for labor and the supply of consumers’ goods. Its continuous accumulation is the foundation of high and rising real wages and a high and rising standard of living for everyone."

Now for specific examples.

You beleived that the increased revenues after the Reagan cuts were nonexistant if adjusted for inflation.
The following chart shows increased tax revenues adjusted for inflation for the decade following the cuts.

http://www.heritage.org/Research/Taxes/images/chart.gif

[img width= height=]http://www.heritage.org/Research/Taxes/images/chart.gif[/img]

A more modern example is occuring as we speak.  After the Bush tax cuts, the economy began improving, and surprise surprise, tax revenues are increasing.

It's a little something called the Laffer Curve.
[img width= height=]http://www.investopedia.com/images/terms/laffercurve.gif[/img]



You're making this too easy twelvehundred. A couple points:

1) My post used data from the U.S Budget Office, yours used data from a Conservative Think Tank.  Furthermore, 1981 should be the base year, not 1980.  The tax cuts were instituted in 1981.  The fact that they were retroactive to 1980, should not affect the analysis since 1980's receipts were already in (and I guarantee you, your conservative think tank did not adjust for that).

2)While I laughed at Fox for posting information using data that did not adjust for inflation (even a good middle school student would know to do this), inflation is not the only thing that must be taken into account to make sense of the data.

After Reagan's tax cuts took effect in 1982, real income tax collections took a fall, despite the fact our economy continued to grow. .  Let's use your numbers, though I question them based on where you got them from, but still, I'll play along.  Using your numbers:
In 1981, tax receipts were 1004.  So if nothing happened and the gov't took in receipts of 1004 over the next 8 years, we would expect a total of 8,036 received (1004*8 ) from 1981 to 1989. If you add up what was actually received (again from your chart) you get 8,346 for a measely 3% increase over the 8 year period following the tax cuts while Real GDP grew by 3.2% PER YEAR..

Using 1981 as the base year, (and using your data) tax revenues fell in the 3 years after the tax cut.  Revenues started to slowly grow after that for a few simple reasons:

A) Tax revenues grow at the rate of economic growth (usually around 18% of GDP)[/b]. There was no huge spike in GDP, but GDP did grow at around 3% per year over the period so tax revenues would naturally have to grow with it. Because tax revenues grow with GDP, a better way of isolating the effects of one on the other is to look at tax revenues as a percentage of GDP.  In the period after the tax cuts, tax revenues as a percentage of GDP, fell by close to 2%.


B) People tend to forget that while Reagan did cut INCOME taxes in 1981, he raised PAYROLL taxes in 1983 (Social Security Reform Act).  Actual corporate tax revenue fell during the period while the payroll component of tax revenues increased.

"The [1981 Reagan] tax cut did not cause tax revenue to rise... tax revenue fell... the government began a long period of deficit spending... the largest peacetime increase in the government debt in U.S. history. Fads can make experts seem less united than they actually are." N. Gregory Mankiw, now head of George W. Bush's Council of Economic Advisers, in his 1998 book Principles of Economics

Check out any economist worth his salt (and who isn't affiliated with a Conservative Think Tank) and you'll get a better understanding of the data.

skaiserbrown

Re: Hey, let's reduce the deficit by giving away TAX CUTS!!!
« Reply #31 on: December 11, 2005, 07:51:48 PM »
BP: it won't matter. they don't care about facts if it doesn't agree with them. thi is because they're silly.

_BP_

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Re: Hey, let's reduce the deficit by giving away TAX CUTS!!!
« Reply #32 on: December 11, 2005, 07:54:39 PM »
BP: it won't matter. they don't care about facts if it doesn't agree with them. thi is because they're silly.

LOL, you're probably right.. ;D

skaiserbrown

Re: Hey, let's reduce the deficit by giving away TAX CUTS!!!
« Reply #33 on: December 11, 2005, 07:59:54 PM »
it's tunnel vision. it's why i don't do anything other than flame :)

more fun and less annoying when they ignore what you write and go off on some strawman they're saying you support.

Freak

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Re: Hey, let's reduce the deficit by giving away TAX CUTS!!!
« Reply #34 on: December 11, 2005, 08:03:09 PM »
personally, i think presenting arguments is better.  even if the person with whom you are arguing refuses to acknowledge any of your points, there is generally an audience, some of whom might be more open-minded.

A sage!

skaiserbrown

Re: Hey, let's reduce the deficit by giving away TAX CUTS!!!
« Reply #35 on: December 11, 2005, 08:05:35 PM »
personally, i think presenting arguments is better.  even if the person with whom you are arguing refuses to acknowledge any of your points, there is generally an audience, some of whom might be more open-minded.

true, but i post for my own fun on political threads. and i really don't care much what other people think about me. :)

Freak

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Re: Hey, let's reduce the deficit by giving away TAX CUTS!!!
« Reply #36 on: December 11, 2005, 08:07:06 PM »
A sage!

scrub-brush?

heh, that's funny really funny in several ways. heh  :D ;D

Freak

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Re: Hey, let's reduce the deficit by giving away TAX CUTS!!!
« Reply #37 on: December 11, 2005, 08:12:58 PM »
heh, that's funny really funny in several ways. heh  :D ;D

i will laugh along with you so you don't realize that i have no idea what you mean.  :D

heh, heh! heh?  ::)

skaiserbrown

Re: Hey, let's reduce the deficit by giving away TAX CUTS!!!
« Reply #38 on: December 11, 2005, 08:14:30 PM »
true, but i post for my own fun on political threads. and i really don't care much what other people think about me. :)

yes but people might see you as indicative of the left in general. 

then they're dumb and i don't care about their opinion.

skaiserbrown

Re: Hey, let's reduce the deficit by giving away TAX CUTS!!!
« Reply #39 on: December 11, 2005, 08:16:10 PM »
most people don't  :D