Boutons if right on this one. All tax cuts are scheduled to expire, unless congress acts and reinstates them. The talk and talk, but do not act to reinstate them. Like I keep saying, they will use it as a carrot on a stick for elections, then take away the carrot after the elections.
I have a problem with this idea. Would slightly lower tax rates incline the rich to search for loopholes any less? I would think not. If I am able to legally hide 500k of my 1M income every year at 38%, I am going to hide 500K of my 1M at 35% too. Only difference is that I get to pay $15000 less in taxes, therefore, lower tax revenue.
This, it seems, would only work if the lowering of taxes is always accompanied by the closing of loopholes.
Edit: Admittedly, I could be missing something.
I believe the greater issue for "the rich" would be the change in rates that apply to investment income.
This should not be a "us against the rich." We are all in the together, poor and rich alike.
I agree, close all loopholes. Close all deductions. If anything is to be deducted, I say limit it to the standard deduction and personal exemptions.
I would simply prefer a strait percentage of all income. No deductions.
Only the rich who go that rout would be affected. The middle-class who invest for their retirement like me could also be affected with that. At least under current tax laws, I get taxed when I take it out. I'm OK with paying taxes before it's put in if I don't get taxed on it when I take it out.
The election. I suspect that if the GOP raises this issue as part of their campaign, the Dems will push forward with an extension.
If there was ever a time for a politician to break a campaign promise it is now. Otherwise, offering extended tax cuts or even more spending at this point is ridiculous.
It's politics. Never say never if it can buy you a vote.
maybe some of you should watch this:
Return to Prosperity
If only Reagan would have paid attention to this video...
Oh cool, video sharing time.
I.O.U.S.A.
I'm 1/3rd the way through so far. Mostly accurate. Good find.
Right, and you and I have already had this conversation, however I am (in this post) challenging the premise that lower taxes=higher revenue.
Lets start here, a simplified view:
If we tax at zero percent, we have zero revenue.
If we tax at 100%, after the initial confiscation of taxes, you have no farther revenue, because anyone with half a brain will not work for nothing.
As you go from 0% and up, tax revenue is generated. The more you tax, the more you make, but at some undetermined point, this tapers off and reverses.
Same thing going from 100% and lower. As people see they now have money, they start working. As they get taxed less, more are willing to work, invest in new endeavors, etc. revenues continue to increase as more people produce, until a point not easily determined, where revenue decreases.
Knowing the optimum point is hard. With so many other factors constantly changing, the optimum tax rate is impossible to pin down. With that said, I believe the bush tax cuts brought us closer to optimum, and that we are still on the high side of taxation, that we will get more with less tax rates.
Here is an old Laffer article:
The Laffer Curve: Past, Present, and Future; Published on June 1, 2004 by Arthur Laffer
Another, wiki: Laffer curve
You didn't watch it at the 12 minute+ mark, did you?
Did any of you get to where Laffer predicts that 2011 GDP will be far worse than 2010 GDP because of the tax cuts expiring? He says 2010 GDP will be better as the rich take their projected 2011 gains now, so they don't pay extra taxes in 2011.
He makes a great case about the Reagan tax cuts.
Mentions the failure of Cash for Clunkers. I still have 24 more minutes before I complete watching it.
Laffer is a snake oil seller, and you're buying all of it.
No, I looked at the federal deficit figures while he was president.
Fine.
Keep a closed mind. your loss at the truth.
I've read all of the hocus-pocus you're trying to pass for fact or truth, and more.
You can keep pretending that your supply side economics didn't contribute to the cluster debt we're into now, but numbers don't lie. Ultimately you're just making a fool of yourself.
Are you saying that the interest on the debt at double digits Reagan inherited wasn't a major cause of the deficits back then?
Do you know how compound interest works?
Near the end, Laffer says how he made Reagan realize a mistake of legislating a three year tax reduction plan, and equated it to "why would people buy before an advertised sale." It was at the third year of these tax cuts that the economy shot up fast.
And Reagan increased the debt, basically kicking the buck forward.
There's also a much simpler explanation for the deficit increase: tax cuts reduced revenue, while spending increased.
It's hard to try to cut debt when you're not trying.
It wasn't just the economy that shot up... the tab on the government credit card shot up with it. You can pretend that it didn't, but it did.
Keynesianism is when you leave taxes alone and raise spending such that the government has a fiscal deficit in order to stimulate economic growth.
Supply-Side economics is when you cut taxes (and perhaps raise spending) such that the government has a fiscal deficit in order to stimulate economic growth.
Some difference.
Tax and spend Dems; borrow and spend Republicans.
This is your best quote to date.
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