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How are tax cuts not "free" if you cut spending as well?
Some might think that if one mans tax is cut someone else will have to make up the difference, but once the positive affects of a cut begin to slowly take hold in peoples minds the expanding economy makes up the short term loss of revenues.
It's economics 101 and it's also basic human psychology 101. What goes around comes around.
**** it, ill prove it anyways.
Output= 1000
taxation rate= 20%
Revenue= 200
If the tax rate is decreased by 5% to 15%, all else equal, the total revenue falls to 150. What the "pro-tax cuts are free" people are automatically assuming is that economic activity will instantaneously increase to the point where there will be no deficit. So my question to the "pro-tax cuts are free" people is: In my example, by what percentage would output have to grow in order for revenues to be 200?
Is that remotely realistic?
In your example, 33% increase in output would be required, but we're not talking about a change from 20% to 15%. We're talking about a change from 40% to 35%, which would require a 14% increase in output. I don't think it's unreasonable to expect an increase in productivity in that range if we stop taking money from people who earn it and giving it to people who sit on their asses. Do you?
In your example, 33% increase in output would be required, but we're not talking about a change from 20% to 15%. We're talking about a change from 40% to 35%, which would require a 14% increase in output. I don't think it's unreasonable to expect an increase in productivity in that range if we stop taking money from people who earn it and giving it to people who sit on their asses. Do you?
Turtledude has repetitively argued that tax cuts cost nothing, aka they are free.
So do you agree, that tax cuts cost nothing, that they are revenue neutral, that they are free?
Given that tax cuts are not revenue outlays, they are certainly not spending, and so they do not ever have a cost in that respect.The REAL TRUTH:
In essence tax cuts ARE free. If taxes are cut, government revenue is cut. Therefore government has fewer resources to do malicious things to the people, i.e. fewer officers to harass the people and eat out their substance.
You are talking about the top marginal rate, not the effective tax rate. Government typically takes in around 20% of output regardless of this rate.
A nice tax analysis.
Yeah, I'm talking about the top marginal rate. Since that's the only tax rate being debated in current events at the moment, I assumed that's what we were talking about. My bad...
Turtledude has repetitively argued that tax cuts cost nothing, aka they are free.
So do you agree, that tax cuts cost nothing, that they are revenue neutral, that they are free?
Does 14% real output growth seem realistic following a 5% decrease in the top marginal rate? Can you point to any time in history when we had greater than 14% real output growth?
Turtledude doesn't know what he's talking about.
Lowering a tax rate or otherwise changing policy to generate less revenue means taking a loss. Unless you offset the loss with a major policy change on the spending end.
It's a akin to a business not billing for services.
There is no longer a surplus (thanks W.) and extending the tax cuts will result in lost revenue. How do they purpose to pay the $678 billion?
This is not a semantics issue, this is fact.
Exactamundo!
People who listen to right wing radio think this because they lack the education to know any better.
Less money spent by the govt is a good thing, and should be expanded.However, a tax cut would indeed mean that the Government has less money to spend/redistribute. Let us think hypothetically for a moment. Let's assume that a tax cut will equate to the government not being able to fund a particular project - repaving a highway for instance. The monetary COST in this scenario could be that the private paving contractors would lose the contract. It could equate to less money in the pocket of the company owners or a temporary layoff for the workers. WHile this obviously does not equate to a monetary loss for you or I, SOMEONE will "pay" the cost. Another way of looking at it could be that local drivers would not receive the potential benefits of a newly paved highway - one pothole and a blow-out could equal a monetary cost for that particular driver. My point was, simply, EVERY economic decsion produces tradeoffs to some extent and often, neither you nor I can fully understand the extent to which these decisions will COST someone else.
Turtledude has repetitively argued that tax cuts cost nothing, aka they are free.
So do you agree, that tax cuts cost nothing, that they are revenue neutral, that they are free?
True..The Alaskan "Bridge to Nowhere" would not have been built....supposedly..And that incredibly stupidly conceived wall between our nation and Mexico......lolLess money spent by the govt is a good thing, and should be expanded.
Malicious?The REAL TRUTH:
In essence tax cuts ARE free. If taxes are cut, government revenue is cut. Therefore government has fewer resources to do malicious things to the people, i.e. fewer officers to harass the people and eat out their substance.
Yes, there are a few things government must do and get paid for. But that is a tiny percentage of what government currently does.
Tax cuts are not only free, they pay dividends.
Malicious?
So who does things "perfectly" ??
And private enterprise is not malicious at times...
The argument is immature and silly...
"The Real Truth".
Hokum!
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