Does GDP growth mean Federal Tax revenue growth?

[danielpalos]

If you lowered taxes to zero, would you get more or less revenue?

Zero. Just like how relevant that is to the discussion. Zero.

It's relevant because it's the first step in breaking down this nonsense from the right that tax cuts always increase revenues.

Tell me ... if a person or a business has a lower tax bill, what do you think happens to the savings?
A) Does the business or person hide the tax savings under their mattress or bury in the back yard?
B) Do they spend it on wild and crazy things...like new car, or new building, or hire more people or what?
C) Do they invest it?

Now 2 of the 3 choices are positive effects on the economy. It's called the "multiplier effect". You don't believe in the "multiplier effect" do you?
Tell me what happens to the money that doesn't go to the Federal government?

tax cuts do not benefit local and State governments as much as upgrading infrastructure would.

Comment does NOT answer my question!
What happens to the money that doesn't go to the Federal government? Not complicated is it?

Will it go to infrastructure or the private and capital, bottom line?

 

[Darkwind]

You Dem's should just increase taxes to 99% we all know you want to you communist pukes. You want to see your average Dem shit themselves, ask them to pick a number, just how high should be taxes raised.

Taxes should be raised to balance the budget, and kept there.

Spending should be cut to balance the budget in line with income; And KEPT THERE!

 

[Brain357]

If you lowered taxes to zero, would you get more or less revenue?

Zero. Just like how relevant that is to the discussion. Zero.

It's relevant because it's the first step in breaking down this nonsense from the right that tax cuts always increase revenues.

Tell me ... if a person or a business has a lower tax bill, what do you think happens to the savings?
A) Does the business or person hide the tax savings under their mattress or bury in the back yard?
B) Do they spend it on wild and crazy things...like new car, or new building, or hire more people or what?
C) Do they invest it?

Now 2 of the 3 choices are positive effects on the economy. It's called the "multiplier effect". You don't believe in the "multiplier effect" do you?
Tell me what happens to the money that doesn't go to the Federal government?

tax cuts do not benefit local and State governments as much as upgrading infrastructure would.

Comment does NOT answer my question!
What happens to the money that doesn't go to the Federal government? Not complicated is it?

I'm still waiting for you to show me when a tax cut has ever lead to lower deficits. When has a tax cut ever increased revenue without increases in spending?

 

[NYcarbineer]

You Dem's should just increase taxes to 99% we all know you want to you communist pukes. You want to see your average Dem shit themselves, ask them to pick a number, just how high should be taxes raised.

Taxes should be raised to balance the budget, and kept there.

Spending should be cut to balance the budget in line with income; And KEPT THERE!

Then why do you support tax cuts that are not matched by spending cuts?

You are the problem.

 

[NYcarbineer]

You Dem's should just increase taxes to 99% we all know you want to you communist pukes. You want to see your average Dem shit themselves, ask them to pick a number, just how high should be taxes raised.

Taxes should be raised to balance the budget, and kept there.

Spending should be cut to balance the budget in line with income; And KEPT THERE!

Show me the politician in Congress who will vote for cutting the federal budget by one third.

 

[BuckToothMoron]

I know, I know, it should seem to be common sense that the answer is a RESOUNDING YES!
But some tax cut critics keep complaining that Trump tax cuts will ruin our economy. Will add to the debt..something they didn't seem to care about when Obama added $9 trillion with no major events, 9/11 worst hurricanes, etc. that GWB experienced and Obama even had TARP repaid with a profit!
So here is a chart I made combining GDP with Federal Tax revenue.
Some observations points:
A) Kennedy's tax cuts didn't reduce revenue.
B) Please consider Inflation during the years 1978 through 1982 (averaged 10.5%)
C) Look at years in red GDP versus years in red Tax receipts.. and consider the time lag... i.e. when GDP decreases
people in the following years are laid off. Meaning NO federal payroll taxes, or personal income taxes WHILE at the same time unemployment and welfare outlays increase.

So given this chart wouldn't it also make sense that if the GDP grows as the Atlanta Fed Reserve predicts Q118
at over 5% Federal tax revenues i.e. more people working more payroll taxes less unemployment benefits less welfare payments outlay that there would be lower deficits adding to the national debt?
Talk amongst yourselves and comment!
View attachment 176064

There is no debate on the revenue side(taxes, tariffs, etc.) that higher GDP increases tax revenues. The debate has been if lowering tax RATES will increase revenues. The answer- sometimes it will, sometimes it won’t. It depends on the state of the economy and fiscal situation of tax payers.

 

[BuckToothMoron]

You Dem's should just increase taxes to 99% we all know you want to you communist pukes. You want to see your average Dem shit themselves, ask them to pick a number, just how high should be taxes raised.

Taxes should be raised to balance the budget, and kept there.

Spending should be cut to balance the budget in line with income; And KEPT THERE!

Show me the politician in Congress who will vote for cutting the federal budget by one third.

Yep, you’re right. Memebers on both sides will talk about controlling spending, but none will consider giving up goodies for their constituents.

 

[NYcarbineer]

If you lowered taxes to zero, would you get more or less revenue?

Zero. Just like how relevant that is to the discussion. Zero.

It's relevant because it's the first step in breaking down this nonsense from the right that tax cuts always increase revenues.

Tell me ... if a person or a business has a lower tax bill, what do you think happens to the savings?
A) Does the business or person hide the tax savings under their mattress or bury in the back yard?
B) Do they spend it on wild and crazy things...like new car, or new building, or hire more people or what?
C) Do they invest it?

Now 2 of the 3 choices are positive effects on the economy. It's called the "multiplier effect". You don't believe in the "multiplier effect" do you?
Tell me what happens to the money that doesn't go to the Federal government?

That only happens if you cut taxes without cutting spending IOW, you add to the deficits.

If you cut taxes and cut spending, you're not multiplying anything.

If you shut down a defense plant (government spending) to give people a tax cut, where's the economic gain?

 

[danielpalos]

Providing for the general welfare is a general power.

Providing for the common defense is a common power.

 

[The Derp]

I know, I know, it should seem to be common sense that the answer is a RESOUNDING YES!But some tax cut critics keep complaining that Trump tax cuts will ruin our economy. Will add to the debt..something they didn't seem to care about when Obama added $9 trillion with no major events, 9/11 worst hurricanes, etc. that GWB experienced and Obama even had TARP repaid with a profit!

The fact that your tax cut adds at least $1.5T to the debt isn't what's going to tank the economy. The fact that your tax cut creates trillion dollar deficits "indefinitely" isn't what's going to tank the economy. The fact that your tax cut forces automatic cuts to Medicare and Medicaid (Because you grew the deficit to over $1T) isn't what's going to tank the economy. The fact that the tax cuts for 99% of people expire in 2025 while the cuts for the 1% and corporations are permanent isn't what's going to tank the economy.

What's going to tank the economy is the fact that your tax cut will cause inflation to rise, which is going to wipe out any nominal wage gain workers have/will see. What's going to tank the economy is the fact that your tax cut will juice what is, in reality, a bear market...which is going to lead to an even greater selloff than we're seeing right now. What's going to tank the economy is the increase in consumer-debt-toGDP which always goes up post-tax cuts, and the eventual defaulting on that debt. Bush's economy wasn't affected by 9/11...all market losses on 9/11 were regained by November of that year. GDP growth for 2001 was still positive. 2001 still had a surplus. But by 2002, that surplus vanished and by 2003, we hit the first of three record deficits that Bush the Dumber would set. Bush's "hurricanes" didn't affect the economy, his pathetic response to them did. Before Obama, it was Bush the Dumber who added more debt than any President before him. Of course, when Bush was President, you Conservatives forgot all about the debt and deficit, just like you're doing today. Conservatives create trillion dollar deficits, then expect everyone else to accommodate them.

Bush was handed a thriving economy and budget surplus and squandered both. Without people using their homes as ATMs and nearly doubling consumer debt as a % of GDP, Bush's economy was the worst in 80 years because of the tax cuts. Tax cuts which added at least $2T to the debt, didn't pay for themselves, didn't lead to increased consumption, and were responsible for the mortgage crisis according to Bush himself. Bush campaigned in 2004 on the idea that his "tax cuts were the economy's savior", and that the thriving housing market -in 2004- was proof his tax cuts worked:

Bush Ties Policy to Record Home Ownership
March 26, 2004
Touting his tax cuts as the economy's savior — and pointing to the strong housing market as proof — Bush said "more people own their own home now than ever." More than 50 percent of minorities owned their own homes in the last three months of 2003 for the first time ever, the president said.​

 

[healthmyths]

I know, I know, it should seem to be common sense that the answer is a RESOUNDING YES!But some tax cut critics keep complaining that Trump tax cuts will ruin our economy. Will add to the debt..something they didn't seem to care about when Obama added $9 trillion with no major events, 9/11 worst hurricanes, etc. that GWB experienced and Obama even had TARP repaid with a profit!

The fact that your tax cut adds at least $1.5T to the debt isn't what's going to tank the economy. The fact that your tax cut creates trillion dollar deficits "indefinitely" isn't what's going to tank the economy. The fact that your tax cut forces automatic cuts to Medicare and Medicaid (Because you grew the deficit to over $1T) isn't what's going to tank the economy. The fact that the tax cuts for 99% of people expire in 2025 while the cuts for the 1% and corporations are permanent isn't what's going to tank the economy.

What's going to tank the economy is the fact that your tax cut will cause inflation to rise, which is going to wipe out any nominal wage gain workers have/will see. What's going to tank the economy is the fact that your tax cut will juice what is, in reality, a bear market...which is going to lead to an even greater selloff than we're seeing right now. What's going to tank the economy is the increase in consumer-debt-toGDP which always goes up post-tax cuts, and the eventual defaulting on that debt. Bush's economy wasn't affected by 9/11...all market losses on 9/11 were regained by November of that year. GDP growth for 2001 was still positive. 2001 still had a surplus. But by 2002, that surplus vanished and by 2003, we hit the first of three record deficits that Bush the Dumber would set. Bush's "hurricanes" didn't affect the economy, his pathetic response to them did. Before Obama, it was Bush the Dumber who added more debt than any President before him. Of course, when Bush was President, you Conservatives forgot all about the debt and deficit, just like you're doing today. Conservatives create trillion dollar deficits, then expect everyone else to accommodate them.

Bush was handed a thriving economy and budget surplus and squandered both. Without people using their homes as ATMs and nearly doubling consumer debt as a % of GDP, Bush's economy was the worst in 80 years because of the tax cuts. Tax cuts which added at least $2T to the debt, didn't pay for themselves, didn't lead to increased consumption, and were responsible for the mortgage crisis according to Bush himself. Bush campaigned in 2004 on the idea that his "tax cuts were the economy's savior", and that the thriving housing market -in 2004- was proof his tax cuts worked:

Bush Ties Policy to Record Home Ownership
March 26, 2004
Touting his tax cuts as the economy's savior — and pointing to the strong housing market as proof — Bush said "more people own their own home now than ever." More than 50 percent of minorities owned their own homes in the last three months of 2003 for the first time ever, the president said.​

Well your statement: "Bush was handed a thriving economy " is 100% wrong!
Facts :

 

[OKTexas]

Not necessarily. If you reduce taxes, you could get GDP growth but not enough to overcome the loss of revenue from the tax cuts.

Yet I heard this morning that Jan revenues were up 5+%, go figure.


.

 

[The Derp]

A) Kennedy's tax cuts didn't reduce revenue

1. Kennedy didn't cut taxes, LBJ did. The tax cut passed in 1964, after Kennedy was killed and was called The United States Revenue Act of 1964...so right away you get basic facts wrong.
2. LBJ increased spending by 50% from 1964-1968. It was that spending that made revenue gain positive.
3. LBJ's tax cut was from 90% to 70% on the wealthy, which is a rate I'd be happy with today.
4. LBJ's tax cut wasn't weighted at the top for the 1%; the majority of benefit from those tax cuts went to middle class workers as it was a 20% rate reduction across the board. The majority benefit of your tax cut goes to the 1% and their pet corporations, and your tax cut actually raises taxes on those in the first bracket, going from 10% to 12%.

B) Please consider Inflation during the years 1978 through 1982 (averaged 10.5%)

1. Inflation today is near 0%, so the Trump tax cuts were completely unnecessary and will actually cause inflation to increase.
2. The Fed policy of high inflation was set by Conservatives during Nixon who wanted to blunt the wage growth that unions were achieving for their workers; Nixon's Fed thought the workers were getting too wealthy, so that's why the Fed's monetary policy was to counteract that wage growth with higher inflation...which is exactly what is going to happen today.
3. So you're admitting that it was high inflation, not Carter policy, that caused the stagflation we saw. Carter actually had a higher monthly job creation average than Reagan did...higher wage growth on average too. And the prescription for solving the stagflation wasn't tax cuts, but rather a lowering of the interest rate by the Fed. So when you credit Reagan with recovering from stagflation, you're crediting the wrong person...you should be crediting the Fed with bringing us out of the recession in the early 80's, not Reagan or his tax cuts.

C) Look at years in red GDP versus years in red Tax receipts.. and consider the time lag... i.e. when GDP decreasespeople in the following years are laid off. Meaning NO federal payroll taxes, or personal income taxes WHILE at the same time unemployment and welfare outlays increase.

Every time taxes have been cut since 1980, there has been a slowdown in revenue growth. Tax cuts do not pay for themselves, nor do they increase revenue growth. In fact, both Clinton and Obama had higher revenue growth than Reagan, Bush the Elder, and Bush the Dumber, according to the Tax Policy Center Historical Federal Outlays & Receipts:

Reagan
Receipts 1981: $599.3
Receipts 1989: $991.1
Revenue growth: 65%

Clinton
Receipts 1993: $1,154.3
Receipts 2001: $1,991.1
Revenue growth: 73%

Bush the Dumber
Receipts 2001: $1,991.1
Receipts 2009: $2,105.0
Revenue growth: 6%

Obama
Receipts 2009: $2,105.0
Receipts 2017: $3,643.7
Revenue growth: 73%

So Reagan and Bush cut taxes, revenue growth comes in below that of Obama and Clinton, who raised taxes.

 

[The Derp]

Well your statement: "Bush was handed a thriving economy " is 100% wrong!

No, you're wrong. Bush was handed an economy at full employment, an economy that even with the mild 2001 recession still grew in 2001; GDP growth in 2001 was still positive, even with 9/11 and the recession. I can't help it that you Conservatives can't manage an economy under any circumstances. Bush was handed a budget surplus, one that he could have used to retrain those thousands of out-of-work dotcom workers to rebuild our nation's power grid. But what did you guys do instead? You passed tax cuts that didn't pay for themselves, that didn't create any jobs, and that had a hand in creating the housing bubble that would burst just a few years later.

Conservative policy never works as advertised, and it's not supposed to. Conservative policy is meant to destroy the economy so they can remake it into the fascist, theocratic state they've always wanted.

 

[The Derp]

Yet I heard this morning that Jan revenues were up 5+%, go figure..

Yeah...because minimum wage increases went into effect in 18 states that impacted 4.5 million workers.

So you want to know why wages grew and why revenues grew? Because the minimum wage increased in 18 states.

 

[AntonToo]

I know, I know, it should seem to be common sense that the answer is a RESOUNDING YES!
But some tax cut critics keep complaining that Trump tax cuts will ruin our economy. Will add to the debt..

Dummy, just because tax-cuts create some growth before the bills are due, does not AT ALL mean that this growth is so large as to offset upfront reductions in revenues. And what happens 5-10 years from now when our credit cars are maxed out, we pay 5-7% interest on our debt and another recession hits? We are FUCKED, that's what happens.


Here, read what Bush's CONSERVATIVE chair of economic advisers explains about the subject:


My other work has remained consistent with this view. In a paper on dynamic scoring, written while I was working at the White House, Matthew Weinzierl and I estimated that a broad-based income tax cut (applying to both capital and labor income) would recoup only about a quarter of the lost revenue through supply-side growth effects. For a cut in capital income taxes, the feedback is larger--about 50 percent--but still well under 100 percent. A chapter on dynamic scoring in the 2004 Economic Report of the President says about the the same thing.

Greg Mankiw's Blog: On Charlatans and Cranks

something they didn't seem to care about when Obama added $9 trillion

Total bullshit. Bush submited 1.3T dollar deficit budget in 2008, almost half of which was direct result of disastrous revenues in the middle of recession are you are going to tell us Obama spent that too?

If not counting extension of Bush's tax-cuts, the actual cost of Obama's polices is less than 1T.

If you disagree go ahead and LIST WHAT OBAMA SPENT 9 TRILLION DOLLARS ON.

 

[The Derp]

Spending should be cut to balance the budget in line with income; And KEPT THERE!

OK, so what spending are you going to cut? Medicare? Medicaid? Social Security? Between those three things + interest on the debt, that's about 69% of the budget. Military spending makes up about another 20%. Which leaves about 10% left for everything else. Also, 10% of our current budget is about $400B, but the deficit is over $1T. So unless you are going to cut SS, Medicare/Medicaid or raise taxes back to what they were before, you're never going to achieve a balanced budget by cutting discretionary spending.

 

[The Derp]

There is no debate on the revenue side(taxes, tariffs, etc.) that higher GDP increases tax revenues. The debate has been if lowering tax RATES will increase revenues. The answer- sometimes it will, sometimes it won’t. It depends on the state of the economy and fiscal situation of tax payers.

The last 40 years of empirical evidence shows that they do not increase revenues. Every time taxes have been cut, revenues have declined or grew at a slower rate. Every. Single. Time. Over. The. Last. 40. Years.

 

[The Derp]

Yep, you’re right. Memebers on both sides will talk about controlling spending, but none will consider giving up goodies for their constituents.

What spending do you want to control? Medicare, Medicaid, Social Security, and interest on the debt is about 65-69% of the budget. Defense spending is about another 20-25%. That leaves about 5-10% of the remaining budget for discretionary spending.

Some math for you;

The budget Trump submitted is about $4T
The deficit attached to that budget is about $1T
So even if you cut all discretionary spending (which is about $400-$500B), you are still running the same size deficit Obama ran at the end of his term. Your deficit is still about $500B even if you eliminate all discretionary spending.

Clearly the problem is that we aren't collecting enough revenues, not that we're over-spending.

 

[NYcarbineer]

Not necessarily. If you reduce taxes, you could get GDP growth but not enough to overcome the loss of revenue from the tax cuts.

Yet I heard this morning that Jan revenues were up 5+%, go figure.


.

That's funny, because I heard this:

"The Congressional Budget Office on Wednesday moved up its projection for when the Treasury will likely run out of cash to the first half of March, citing lower government revenues after the Republican overhaul of the U.S. tax system in December."

Treasury Secretary Mnuchin frantically calls for debt ceiling increase