Record Tax Revenues For FY14 [W:346]

[JasperL]

Re: Record Tax Revenues For FY14

So it was the effects of the tax cuts on the economy that increased revenue ?

Tax rate cuts result in a drop in revenues.

How is that counter to the Conservative position that Tax cuts increase revenues ?

I'm missing your point. The 'conservative position' is wrong. When tax rates are cut, revenues drop. Put more accurately, revenues following a tax rate cut are lower than they would be if tax rates were unchanged. There is no free lunch, there is no Tax Santa Clause, there is no Tax Fairy, and if legislators want to lower tax rates, they need to offset the revenue losses with painful spending cuts, or tax rate increases elsewhere.

Do we ACTUALLY have to explain the exact mechanism EVERY time we state this axiomatic truth ?

Because I thought it was understood .

Clinton RAISED individual income tax rates, and income tax receipts increased, to record levels, both in real terms and as a percent of GDP. If the conservative position was self evidently true, then following the Clinton tax rate increases, the economy should have tanked, and tax receipts dropped below pre-tax increase levels. That didn't happen.

Bush cut individual income tax rates. Individual income tax collections dropped and stayed below pre-tax cut levels for several years. Nominal collections didn't reach pre-cut levels until the height of the real estate and debt bubble.

The only thing conservatives get right, which no one disputes, is tax cuts generally have a small stimulative effect and increase economic activity. But all that means is a nominal tax cut of $1 might only cost 70-85 cents, after accounting for increased economic growth. But, if the tax cuts aren't paid for with spending cuts, that $1 tax cut might cost $1.10 in the long term.

 

[jaeger19]

Re: Record Tax Revenues For FY14

1) Tax cuts stimulate the economy, they just don't pay for themselves.

Some do some don't

And since then we've had numerous tax increases.

And the only reason that was politically possible was because of the improving economy.. which was due in part to the tax cuts in the ARRA.

Sorry but you simply cannot get around these facts.

It's impossible to know, but sure, maybe we slide into a deflationary spiral without ARRA and into depression and collapse. But that's sort of a hail mary attempt to support the Laffer Curve, which has nothing to do with the response to the bursting of a once per 80 years credit bubble and the appropriate response to an imminent Great Depression II.

Jasper.. you don't understand what the laffer curve is and isn't. You need to do some more research.

And the ARRA was a big bunch of stuff, with lots of spending in addition to the tax cuts. The bottom line is what you're saying with ARRA is the $800 billion spent (spending plus tax cuts) paid for themselves. I don't think that's true

.

I think some of the tax cuts absolutely have paid for themselves and some of the tax cuts will pay for themselves in the future. The increase in economy has increased tax revenue as has the small increase in taxes.

 

[imagep]

Re: Record Tax Revenues For FY14

Some do some don't

...
I think some of the tax cuts absolutely have paid for themselves and some of the tax cuts will pay for themselves in the future. The increase in economy has increased tax revenue as has the small increase in taxes.

Specifically which ones? And will decreasing those taxes further have the same effect?

 

[jaeger19]

Re: Record Tax Revenues For FY14

I bet that if you list what you call "real" conservative ideas they'll be damn whackadoo.

I'd take that bet. Real conservatism plays well in this country.

 

[jaeger19]

Re: Record Tax Revenues For FY14

Specifically which ones? And will decreasing those taxes further have the same effect?

I'd say the tax cuts that mostly effected the lower class and the middle class most definitely and the tax cuts on small business probably helped quite a bit.

Would decreasing them further have the same effect? Great question but I'd say no because we are at a level where few in those categories end up paying much in tax anywhere.

 

[FaceofBachmann]

Re: Record Tax Revenues For FY14

I'd take that bet. Real conservatism plays well in this country.

Then list 'em.

Get ready for the absurd talking points.

 

[imagep]

Re: Record Tax Revenues For FY14

I'd say the tax cuts that mostly effected the lower class and the middle class most definitely and the tax cuts on small business probably helped quite a bit.

Would decreasing them further have the same effect? Great question but I'd say no because we are at a level where few in those categories end up paying much in tax anywhere.

I totally agree about tax cuts for the lower and middle income folks. Any time that we can leave money in the hands of the private sector people who are the most likely to spend it and keep it circulating in our economy, the better off our economy is.

I'm also glad to see that you didn't suggest that it was tax cuts for the rich - tax policy on the rich has the lowest amount of effect on our economy and the largest amount of effect on our deficit. Even many honest conservative economists, like Ben Stein on Fox News, agree with this.

What tax cuts have we had on small business?

Since income from most small business isn't subject to corporate taxes and passes through to the owners personal taxes, I would think that the only small business federal tax cut could be the personal income tax, but I might be wrong about that.

As far as further decreasing taxes on lower and middle class folks, I'm all for it even if it means that the 47% who don't pay federal income taxes increases. The way that I see it, if someone is paying little to begin with, it might not even be worth taxing that person at all because of the cost of the paperwork. The larger the 47% grows, the better off we are. I wouldn't mind the 47% becoming the 80% or the 90% or even the 99%.

This country existed for over a hundred years without anyone having to pay a tax on income earned from work, I really don't get people who complain that taxes are too high, then they complain about the 47% not paying federal income tax.

 

[JasperL]

Re: Record Tax Revenues For FY14

I'd say the tax cuts that mostly effected the lower class and the middle class most definitely and the tax cuts on small business probably helped quite a bit.

I don't know how to address that other than ask for the evidence. There just is none that I've ever seen that any broad based tax cuts pay for themselves.

Here's some (admittedly simplified) math. Most tax cut multipliers are estimated between 1-2, so a $1 in tax cuts generates at best (for this example) $2 in additional economic activity, or sales. Assume the profit margin is 40% (a HUGE profit margin), so that's 80 cents more in profit. Tax that at 50%, and you've got an additional 40 cents in taxes from a tax cut of $1. And so a tax cut of $1 only costs 60 cents in lost revenue. That's a long, long long way from tax cuts paying for themselves.

That's far higher than most estimates, which put the figure closer to 85 cent cost/dollar of tax cut, and those estimate assume we cut spending to 'pay' for the tax cut, when in reality we typically borrow the shortfall. In those cases, the cost is nearer or GREATER than $1.

And the thing is a tax cut is (and I know you'll reject it, but economists don't) is just government spending in another form. And so you could just as easily claim that safety net spending (which has the highest multiples of any stimulus program, far higher than tax cuts) pays for itself with higher taxes. No one makes that claim, but it's just as believable as the claim that tax cuts pay for themselves - i.e. not believable at all to any legitimate economist on either side of the liberal/conservative aisle.

Bottom line is these are empirical claims and need empirical support, and I've just never seen that empirical support. If anyone can provide it, that would be great.

 

[JasperL]

Re: Record Tax Revenues For FY14

Some do some don't

And the only reason that was politically possible was because of the improving economy.. which was due in part to the tax cuts in the ARRA.

But 'improvements in the economy' =/= tax cuts paying for themselves.

Jasper.. you don't understand what the laffer curve is and isn't. You need to do some more research.

I fully understand the Laffer Curve. I might not understand what you're using the Laffer curve to demonstrate, but that's because you're making (I think) two different claims. One is that (some) tax cuts pay for themselves, which is what the Laffer curve purports to show and what was the "A HA!" for the GOP. I reject that claim except in extraordinary conditions (extremely high marginal tax rates) not present in the U.S. economy since Reagan, at the latest.

The second, which is related to the first, is tax rate cuts (generally) stimulate economic activity, which no one disputes, and that's a claim that does not require the Laffer Curve to demonstrate. Essentially, the Laffer Curve is a kind of marginal response curve to tax rate cuts, and at some points, the marginal revenue response is large enough so that tax rate cuts 'pay for themselves.' Some of the revenue response is due to less tax avoidance (legal) and evasion (illegal), and some is due to increased economic growth and the revenue effects of that additional growth.

What am I missing?

 

[JasperL]

Re: Record Tax Revenues For FY14

BTW, here's an article summarizing some of the empirical research. A review of the economic research on the effects of raising ordinary income tax rates: Higher revenue, unchanged growth, and uncertain but potentially large reductions in the growth of inequality | Economic Policy Institute

A key point IMO:

Even the Bush administration Treasury Department’s own dynamic analysis of the Bush administration’s proposed permanent extension of the 2001 tax cuts implied they would recoup less than one-tenth their cost by raising national income, and that analysis assumed they would be fully financed with domestic spending cuts over the long run (Furman 2006). But prior to the Budget Control Act of 2011 (i.e., the debt ceiling deal, in which borrowing needs inflated by the tax cuts were conditioned on spending cuts), none of the Bush-era tax cuts had been paid for.

In other words, the Bush tax cuts, which McConnell said paid for themselves, were projected by Bush officials to only cost 90 cents per dollar of nominal tax cut. And that's IF the tax cuts were paid for, and they weren't - we borrowed the money.

You'll see dozens of papers referenced there that come to similar conclusions.

 

[jaeger19]

Re: Record Tax Revenues For FY14

Then list 'em.

Get ready for the absurd talking points.

Real conservatives believe in smaller more efficient government.

Conservatives also believe in personal responsibility

Which means.. to be a real conservative.. you should be pro choice. You may not like abortion for yourself.. but you don't want the government making those decisions.
A real conservative thinks the government should stay out of your bedroom... and what you want to do with another consenting adult.. including marry.. is up to you. We would have preferred tha the government stayed out of marriage in the first place.. but we can't put that genie back into the bottle.


Conservatives do not think that the US should be the worlds policeman. We think other countries should be responsible for their own security as well.
Conservatives believe in a free and fair market. Employees should be allowed to unionize and they should be able to work without a union. They should be able to vote a union out as easily as voting one in.

Conservatives believe that the government has a role in building infrastructure and that the money spent should be for the good of all and not for one or two special interests. We think government should be fiscally sound and should have to justify every cent of money it taxes and that waste and fraud should be prevented and punished.

Conservatives again believe in personal responsibility and think that blaming "guns" for murder is about as smart as blaming spoons for making people fat.

There.. start with that. Now tell me what is absurd about those points.

 

[jaeger19]

Re: Record Tax Revenues For FY14

I totally agree about tax cuts for the lower and middle income folks. Any time that we can leave money in the hands of the private sector people who are the most likely to spend it and keep it circulating in our economy, the better off our economy is.

I'm also glad to see that you didn't suggest that it was tax cuts for the rich - tax policy on the rich has the lowest amount of effect on our economy and the largest amount of effect on our deficit. Even many honest conservative economists, like Ben Stein on Fox News, agree with this.

What tax cuts have we had on small business?

Since income from most small business isn't subject to corporate taxes and passes through to the owners personal taxes, I would think that the only small business federal tax cut could be the personal income tax, but I might be wrong about that.

As far as further decreasing taxes on lower and middle class folks, I'm all for it even if it means that the 47% who don't pay federal income taxes increases. The way that I see it, if someone is paying little to begin with, it might not even be worth taxing that person at all because of the cost of the paperwork. The larger the 47% grows, the better off we are. I wouldn't mind the 47% becoming the 80% or the 90% or even the 99%.

This country existed for over a hundred years without anyone having to pay a tax on income earned from work, I really don't get people who complain that taxes are too high, then they complain about the 47% not paying federal income tax.

On small business tax cuts:

Small businesses drive 70% of all new jobs, so ARRA allocated $54 billion to help small businesses with tax deductions, credits and loan guarantees, including: •Increasing the deduction for machinery and equipment deduction, including SUVs, to $240,000
•Allowing a special depreciation deduction for 2008.
•A capital gains tax cut for small business investors who hold their stock for more than five years.
•Tax credits for small business that hire long-term unemployed veterans or students
•Increasing the SBA loan guarantee to 90% in the 7(a) loan program/
•Eliminate fees on 504 economic development loans.
•In the FY 2011 budget, an additional $64 billion in stimulus money was allocated to extend many of the ARRA programs, add tax credits for any new hires, and increase the Small Business Administration loan limits from $3 million to 5$ million

And that's not an exhaustive list.

And no offense, you don't want to see that 47% grow... you want to see that 47% shrink. The problem with the 47% not paying taxes means that they are not making enough money to be taxed, it means incomes are not increasing but stagnant or decreasing. The higher that number, the more unstable the economy.

 

[imagep]

Re: Record Tax Revenues For FY14

Real conservatives believe in smaller more efficient government.

Conservatives also believe in personal responsibility

Which means.. to be a real conservative.. you should be pro choice. You may not like abortion for yourself.. but you don't want the government making those decisions.
A real conservative thinks the government should stay out of your bedroom... and what you want to do with another consenting adult.. including marry.. is up to you. We would have preferred tha the government stayed out of marriage in the first place.. but we can't put that genie back into the bottle.


Conservatives do not think that the US should be the worlds policeman. We think other countries should be responsible for their own security as well.
Conservatives believe in a free and fair market. Employees should be allowed to unionize and they should be able to work without a union. They should be able to vote a union out as easily as voting one in.

Conservatives believe that the government has a role in building infrastructure and that the money spent should be for the good of all and not for one or two special interests. We think government should be fiscally sound and should have to justify every cent of money it taxes and that waste and fraud should be prevented and punished.

Conservatives again believe in personal responsibility and think that blaming "guns" for murder is about as smart as blaming spoons for making people fat.

There.. start with that. Now tell me what is absurd about those points.

Conservatives have all types of ideas, just like liberals do.

 

[imagep]

Re: Record Tax Revenues For FY14

On small business tax cuts:
And that's not an exhaustive list.

The expansion of the section 179 deduction wasn't really a tax cut, it was just speeding up of depreciation. (the first bullet point).

Most of the rest of the stuff didn't actually happen. I mean it was in the law, but the process of receiving those benefits was so complicated that few were able to take advantage of them. Like the loan programs were only obtainable through commercial banks, and in our area only one participated in the program, and even then you already had to be a customer of that bank for a minimum number of years before they would make the loans. Regardless, there was some special tax credits and cuts for special businesses. I doubt that anything listed on that list made much of a difference at all.

And no offense, you don't want to see that 47% grow... you want to see that 47% shrink. The problem with the 47% not paying taxes means that they are not making enough money to be taxed, it means incomes are not increasing but stagnant or decreasing. The higher that number, the more unstable the economy.

That's a good point, if you are looking at it from the standpoint of today's current tax scheme, and at times I have made the same point (essentially pay low income earners more and they will pay more in taxes). I was looking at it from the viewpoint of rolling back taxes though.

 

[FaceofBachmann]

Re: Record Tax Revenues For FY14

Real conservatives believe in smaller more efficient government.

Conservatives also believe in personal responsibility

Which means.. to be a real conservative.. you should be pro choice. You may not like abortion for yourself.. but you don't want the government making those decisions.
A real conservative thinks the government should stay out of your bedroom... and what you want to do with another consenting adult.. including marry.. is up to you. We would have preferred tha the government stayed out of marriage in the first place.. but we can't put that genie back into the bottle.


Conservatives do not think that the US should be the worlds policeman. We think other countries should be responsible for their own security as well.
Conservatives believe in a free and fair market. Employees should be allowed to unionize and they should be able to work without a union. They should be able to vote a union out as easily as voting one in.

Conservatives believe that the government has a role in building infrastructure and that the money spent should be for the good of all and not for one or two special interests. We think government should be fiscally sound and should have to justify every cent of money it taxes and that waste and fraud should be prevented and punished.

Conservatives again believe in personal responsibility and think that blaming "guns" for murder is about as smart as blaming spoons for making people fat.

There.. start with that. Now tell me what is absurd about those points.

First, you have a no true Scotsman problem -- there are millions of "real" conservatives who profoundly disagree with this. Conservatism has no core values, just ad hoc pandering to bad instincts. So Palin can say a real conservative has to be against abortion and against gay marriage, and you and she will have to take it outside.

Second, why should government be small? What does that even mean? Government should be as large as is necessary to function in a modern world with a modern economy. So this is whacko, or at least meaningless. Why would I want a government that is too small to protect our water, land, and air, our food supply, our kid's education. Especially in light of the power of global corporations who are very very big. I want a big powerful democracy to deal with big problems.

Third, personal responsibility is conservative code for pretending the rich are wonderful people and the poor are lazy. Again, except for your apparently counterfactual claim that conservatives are for reproductive choice and gay marriage (they clearly aren't in the main), what are you referring to? This panders to the rightwing notion that poor people are just sitting around getting free stuff, a total fabrication. Fabrications are whacko.

Fourth, invocations of fraud and abuse in government are a distraction and more code. Except for the military, the government has a very rigorous accounting system. Any entity that raises and spend trillions of dollars will have some fraud. So what does that go to? There is no evidence that the federal government suffers from any more fraud than any other large organization. Especially in light of the massive bank fraud in the last recession, it seems odd to bring this up, especially because it was the underfunding of government agencies that contributed to the private fraud going undetected.

Sixth, invocations of free markets are always suspect. The issue we face is income gaps and negotiating power, not "free markets". We need to make it easier for workers to unionize and harder for business to exploit workers. If conservatism doesn't commit to that, but instead uses shibboleths about free markets to justify anti-worker policies, then, yeah, that's whacko.

 

[Karl]

Re: Record Tax Revenues For FY14

Real conservatives believe in smaller more efficient government.

Conservatives also believe in personal responsibility

Which means.. to be a real conservative.. you should be pro choice. You may not like abortion for yourself.. but you don't want the government making those decisions.
A real conservative thinks the government should stay out of your bedroom... and what you want to do with another consenting adult.. including marry.. is up to you. We would have preferred tha the government stayed out of marriage in the first place.. but we can't put that genie back into the bottle.

Conservatives do not think that the US should be the worlds policeman. We think other countries should be responsible for their own security as well.
Conservatives believe in a free and fair market. Employees should be allowed to unionize and they should be able to work without a union. They should be able to vote a union out as easily as voting one in.

Conservatives believe that the government has a role in building infrastructure and that the money spent should be for the good of all and not for one or two special interests. We think government should be fiscally sound and should have to justify every cent of money it taxes and that waste and fraud should be prevented and punished.

Conservatives again believe in personal responsibility and think that blaming "guns" for murder is about as smart as blaming spoons for making people fat.

There.. start with that. Now tell me what is absurd about those points.

They describe a conservative from another planet :2razz:

The typical Obama-era U.S. conservative holds a minority of those beliefs; that has also been true for quite some time before Obama's appearance on the scene (I'd say Reagan got the ball rolling on radicalizing the typical middle-class moderate conservative with his racism agenda (his 'welfare queen' creation) and his anti-government agenda).

 

[JasperL]

Re: Record Tax Revenues For FY14

They describe a conservative from another planet :2razz:

Or a democrat.

The only position that isn't easily accepted in the Democratic party mainstream is the gun position, and there is a wide range of gun positions in the democratic party.

 

[Fenton]

Re: Record Tax Revenues For FY14

Then list 'em.

Get ready for the absurd talking points.

Pot meet kettle.

 

[Fenton]

Re: Record Tax Revenues For FY14

They describe a conservative from another planet :2razz:

The typical Obama-era U.S. conservative holds a minority of those beliefs; that has also been true for quite some time before Obama's appearance on the scene (I'd say Reagan got the ball rolling on radicalizing the typical middle-class moderate conservative with his racism agenda (his 'welfare queen' creation) and his anti-government agenda).

I love it !

Desperation strikes again.

Now Conservatives and Reagan are " Racist "

Democrats filibustered the 1964 voting rights act. Thats 20 years before Reagan

The KKK is a Democrat organization. Was INSPIRED by Democrats

 

[Kushinator]

Re: Record Tax Revenues For FY14

Ladies..... There is a more appropriate forum to continue your discussion.

 

[Zyphlin]

Re: Record Tax Revenues For FY14

Moderator's Warning:

The topic is Record Tax Revenues in FY14, not what a "real conservative" is, the KKK, or abortion policy. Let's cease the attempted threadjacking and get on topic

 

[Meister]

Re: Record Tax Revenues For FY14

The self-evident is not an accusation. If someone was claiming that the world was flat, would a supporting argument for a lack of critical thought be necessary?

The topic is nonsensical as well. As the economy picks up, albeit slowly, tax revenues should be expected to increase proportionally. If I'm operating above the average level here, then I'm sorry. I don't think dumbing down is a prerequisite for debate, although in some instances or on some sites it may be more fair. As such, the topic does not require a serious reply, for it is facetious on its face.

Along with the interest rates. You really should try critical thinking, because you only saw one side of the equation.

 

[Kushinator]

Re: Record Tax Revenues For FY14

Along with the interest rates. You really should try critical thinking, because you only saw one side of the equation.

Along with inflation. I will refrain from making a derogatory comment regarding your critical thinking abilities.

 

[Meister]

Re: Record Tax Revenues For FY14

Along with inflation. I will refrain from making a derogatory comment regarding your critical thinking abilities.

So you're going with that it will somehow offset themselves? Really?

 

[Kushinator]

Re: Record Tax Revenues For FY14

So you're going with that it will somehow offset themselves? Really?

The deficit in 1943, the all time high as a percentage of GDP, was about $55 billion.