Why is it so hard to understand that TAX cuts INCREASES tax revenues?

[bendog]

HCM is nuts. OK? He/she thinks there's some universal economic truth out there about tax cuts. There isn't . There are certain proven economic truths - bubble markets burst (the Holland Tulip Bubble), people do NOT act in their true self interest ALL THE TIME, and markets do NOT self-regulate unless bubble bursting is your idea of regulation. Leaving aside Reaganomics, supply side and tax loopholes that hinder growth by distorting the econ benefits of profits and losses for investing ........ And at the end a footnote on the Kansas experiment

There is some scholarly support for the notions that given the econ conditions at present, a tax cut aimed at workers would create a temporary additional deficit, but workers would spend the tax cut, and this would cause more goods to be produced, and growth would lead to more taxes being collected.

Tax Cuts For The Rich Don't Create Many Jobs, But What About Tax Hikes?

Gerald Ford tried this, but it didn't work because .... wait for it ... people didn't spend the money. (I saved mine and used it for partial payment for tuition) W tried it with more success is stemming off the looming recession of stagnant wage growth and the real estate bubble.

Why Bush's 2008 Rebate Checks Didn't Work
"For example, the 2001 rebate checks increased total consumption by 0.8 percent in the quarter that the checks were received and 0.6 percent in the subsequent quarter."

Would it work today? Imo sure. Clinton's growth was partially caused by people refing homes and spending the savings. W ... see above. Will the gop ever actually agree to this heresey for them that cutting workers taxes instead of the poor towntrodden overtaxed rich ..... I'll believe it when I see it. I had some hope for the Orangutun, but he's more interested in his ego and avoiding Putingate to actually be a decent potus. And he's a racist fuck to boot. (And I'd love to) LOL

There is also some econ support for the notion of a tax cut on corp profits aimed at getting corporations to bring to the US past profits that they hold overseas, would both create a temporary additional deficit, but over time we'd see more profits taxed, and that would lead to more revenues. But the naysayers note that unless corporations think that they'll sell more, they won't use their profits for anything beyond ... buying their own stock - good for the stock market, not so good for the underemployed in the rust belt.

Doubts arise on whether corporate tax cut would boost growth

Of course, if there was actual consumer demand out there .... they might make shit. LOL

Kansas. Brownback is an ideologue. But there is a pragmatic argument for cutting government, certainly on the state level. It assumes all govt agencies bloat their budgets. So, you slowly cut them, while leaving their resposibilites alone. Over time, it should be possible to identify the point of where they can do their duty acceptabaly for the lowest cost.

 

[healthmyths]

It seems that many people primarily uninformed people don't see HOW the correlation between reducing taxes can increase revenue.
The primary reason they don't understand is fundamentally they don't know:
1) simple arithmetic.
2) that don't know what happens to money.
View attachment 149122

Do Tax Cuts Increase Government Revenue?

Why according to the above chart does receipts increase as marginal tax decreases?
1) Simple arithmetic.
If taxable income grows tax receipts increase. Simple.
$1,000 taxable income 90% tax $900.
But if taxable income grows to $2,000 and tax is 70% $1,400 versus $900. Simple.
Now some people say "well if the tax was still at 90% it would be $1,800! WRONG!
Because there was NO reason for the taxable income to grow if all it did was pay more taxes!
2) Don't know what happens to money.
Most naive and uninformed people I honestly believe think that people that have excess money:
a) put the money in a mattress or bury it in the backyard. Seriously! They don't seem to comprehend
b)the excess money is
1) spent on consumer goods, more cars, more clothes, more housing, more food.
2) or save putting into the bank which by the way then the bank lends to people to spend..
3) or invest in business to hire more people, spend more money

It is that simple.
The economic multiplier states for every $1 million spent, IT is multiplied by 1.18 or the economy grows with that $1 trillion to $1.2 trillion.
• $1.188 million in total economic activity takes place for every $1 million spent..
• Each $1 million spent provides $205,829 in labor incomes
• Each $1 million represents 7.7 workers and assuming 35% (payroll taxes, FICA, FUTA, Medicare, SS)
http://www2.econ.iastate.edu/research/webpapers/paper_13143.pdf

Does this graph explain current day Kansas and the great tax cutting experience?

Also, President Clinton raised taxes of the top wage earners in 1993. Can you point to that spot on the graph and go hmmmmm....

Kansas tax-cut experience is RED RIVERS and deep public services cuts.

June posted higher than expected revenues BUT THAT IS ONE MONTH. For the year there was only 1.3% higher revenues than already LOWERED projections projections due to tax cuts.

You made that chart up didn't you? Why is it so difficult to put a link so others can verify your work? Coward?

 

[healthmyths]

HCM is nuts. OK? He/she thinks there's some universal economic truth out there about tax cuts. There isn't . There are certain proven economic truths - bubble markets burst (the Holland Tulip Bubble), people do NOT act in their true self interest ALL THE TIME, and markets do NOT self-regulate unless bubble bursting is your idea of regulation. Leaving aside Reaganomics, supply side and tax loopholes that hinder growth by distorting the econ benefits of profits and losses for investing ........ And at the end a footnote on the Kansas experiment

There is some scholarly support for the notions that given the econ conditions at present, a tax cut aimed at workers would create a temporary additional deficit, but workers would spend the tax cut, and this would cause more goods to be produced, and growth would lead to more taxes being collected.

Tax Cuts For The Rich Don't Create Many Jobs, But What About Tax Hikes?

Gerald Ford tried this, but it didn't work because .... wait for it ... people didn't spend the money. (I saved mine and used it for partial payment for tuition) W tried it with more success is stemming off the looming recession of stagnant wage growth and the real estate bubble.

Why Bush's 2008 Rebate Checks Didn't Work
"For example, the 2001 rebate checks increased total consumption by 0.8 percent in the quarter that the checks were received and 0.6 percent in the subsequent quarter."

Would it work today? Imo sure. Clinton's growth was partially caused by people refing homes and spending the savings. W ... see above. Will the gop ever actually agree to this heresey for them that cutting workers taxes instead of the poor towntrodden overtaxed rich ..... I'll believe it when I see it. I had some hope for the Orangutun, but he's more interested in his ego and avoiding Putingate to actually be a decent potus. And he's a racist fuck to boot. (And I'd love to) LOL

There is also some econ support for the notion of a tax cut on corp profits aimed at getting corporations to bring to the US past profits that they hold overseas, would both create a temporary additional deficit, but over time we'd see more profits taxed, and that would lead to more revenues. But the naysayers note that unless corporations think that they'll sell more, they won't use their profits for anything beyond ... buying their own stock - good for the stock market, not so good for the underemployed in the rust belt.

Doubts arise on whether corporate tax cut would boost growth

Of course, if there was actual consumer demand out there .... they might make shit. LOL

Kansas. Brownback is an ideologue. But there is a pragmatic argument for cutting government, certainly on the state level. It assumes all govt agencies bloat their budgets. So, you slowly cut them, while leaving their resposibilites alone. Over time, it should be possible to identify the point of where they can do their duty acceptabaly for the lowest cost.

And you know what YOU and all these "economic" brainless people's problem is? TIME!

Hey news flash! An oil tanker doesn't turn around on a dime, nor does an aircraft carrier or any other large vessel!
AND so does an economy!
YOU idiots you don't see any change after two years and you say..."didn't work" raise taxes!
How f...king dumb! You and your elitists ilk are like little kids! Especially you for example! YOU said you used yours for tuition! GEEZ what did the school do with
it? Hide in a mattress, or bury your tuition in back yard!
It takes time for policies to take affect especially when people like you doubt they will work so you do what you did!

And basically what happens is when conservatives make tax cuts it's because elitist liberals like you have spent more on dumb ass things like these:

And then dumbass elitists like you wonder why there is waste and duplicity in the Federal government!

 

[AntonToo]

It seems that many people primarily uninformed people don't see HOW the correlation between reducing taxes can increase revenue.
The primary reason they don't understand is fundamentally they don't know:
1) simple arithmetic.
2) that don't know what happens to money.
View attachment 149122

Do Tax Cuts Increase Government Revenue?

Why according to the above chart does receipts increase as marginal tax decreases?
1) Simple arithmetic.
If taxable income grows tax receipts increase. Simple.
$1,000 taxable income 90% tax $900.
But if taxable income grows to $2,000 and tax is 70% $1,400 versus $900. Simple.
Now some people say "well if the tax was still at 90% it would be $1,800! WRONG!
Because there was NO reason for the taxable income to grow if all it did was pay more taxes!
2) Don't know what happens to money.
Most naive and uninformed people I honestly believe think that people that have excess money:
a) put the money in a mattress or bury it in the backyard. Seriously! They don't seem to comprehend
b)the excess money is
1) spent on consumer goods, more cars, more clothes, more housing, more food.
2) or save putting into the bank which by the way then the bank lends to people to spend..
3) or invest in business to hire more people, spend more money

It is that simple.
The economic multiplier states for every $1 million spent, IT is multiplied by 1.18 or the economy grows with that $1 trillion to $1.2 trillion.
• $1.188 million in total economic activity takes place for every $1 million spent..
• Each $1 million spent provides $205,829 in labor incomes
• Each $1 million represents 7.7 workers and assuming 35% (payroll taxes, FICA, FUTA, Medicare, SS)
http://www2.econ.iastate.edu/research/webpapers/paper_13143.pdf

Does this graph explain current day Kansas and the great tax cutting experience?

Also, President Clinton raised taxes of the top wage earners in 1993. Can you point to that spot on the graph and go hmmmmm....

Kansas tax-cut experience is RED RIVERS and deep public services cuts.

June posted higher than expected revenues BUT THAT IS ONE MONTH. For the year there was only 1.3% higher revenues than already LOWERED projections projections due to tax cuts.

You made that chart up didn't you? Why is it so difficult to put a link so others can verify your work? Coward?

No, those are the projection and actual revenues, which show a clear decline while surrounding states revenues grew.

Don't like my numbers? Go get your own asshole.

While you are at it stop dodging and answer simple questions.

 

[Dragonlady]

It seems that many people primarily uninformed people don't see HOW the correlation between reducing taxes can increase revenue.
The primary reason they don't understand is fundamentally they don't know:
1) simple arithmetic.
2) that don't know what happens to money.
View attachment 149122

Do Tax Cuts Increase Government Revenue?

Why according to the above chart does receipts increase as marginal tax decreases?
1) Simple arithmetic.
If taxable income grows tax receipts increase. Simple.
$1,000 taxable income 90% tax $900.
But if taxable income grows to $2,000 and tax is 70% $1,400 versus $900. Simple.
Now some people say "well if the tax was still at 90% it would be $1,800! WRONG!
Because there was NO reason for the taxable income to grow if all it did was pay more taxes!
2) Don't know what happens to money.
Most naive and uninformed people I honestly believe think that people that have excess money:
a) put the money in a mattress or bury it in the backyard. Seriously! They don't seem to comprehend
b)the excess money is
1) spent on consumer goods, more cars, more clothes, more housing, more food.
2) or save putting into the bank which by the way then the bank lends to people to spend..
3) or invest in business to hire more people, spend more money

It is that simple.
The economic multiplier states for every $1 million spent, IT is multiplied by 1.18 or the economy grows with that $1 trillion to $1.2 trillion.
• $1.188 million in total economic activity takes place for every $1 million spent..
• Each $1 million spent provides $205,829 in labor incomes
• Each $1 million represents 7.7 workers and assuming 35% (payroll taxes, FICA, FUTA, Medicare, SS)
http://www2.econ.iastate.edu/research/webpapers/paper_13143.pdf

Because your chart fails to show that along with the cut in taxes, there was a huge increase in government spending.

The History of U.S. Government Spending, Revenue, and Debt (1790-2015) - Metrocosm

With Reagan almost doubling government spending while cutting taxes, the increase in revenue came from increased government spending not from the tax cuts.

 

[healthmyths]

It seems that many people primarily uninformed people don't see HOW the correlation between reducing taxes can increase revenue.
The primary reason they don't understand is fundamentally they don't know:
1) simple arithmetic.
2) that don't know what happens to money.
View attachment 149122

Do Tax Cuts Increase Government Revenue?

Why according to the above chart does receipts increase as marginal tax decreases?
1) Simple arithmetic.
If taxable income grows tax receipts increase. Simple.
$1,000 taxable income 90% tax $900.
But if taxable income grows to $2,000 and tax is 70% $1,400 versus $900. Simple.
Now some people say "well if the tax was still at 90% it would be $1,800! WRONG!
Because there was NO reason for the taxable income to grow if all it did was pay more taxes!
2) Don't know what happens to money.
Most naive and uninformed people I honestly believe think that people that have excess money:
a) put the money in a mattress or bury it in the backyard. Seriously! They don't seem to comprehend
b)the excess money is
1) spent on consumer goods, more cars, more clothes, more housing, more food.
2) or save putting into the bank which by the way then the bank lends to people to spend..
3) or invest in business to hire more people, spend more money

It is that simple.
The economic multiplier states for every $1 million spent, IT is multiplied by 1.18 or the economy grows with that $1 trillion to $1.2 trillion.
• $1.188 million in total economic activity takes place for every $1 million spent..
• Each $1 million spent provides $205,829 in labor incomes
• Each $1 million represents 7.7 workers and assuming 35% (payroll taxes, FICA, FUTA, Medicare, SS)
http://www2.econ.iastate.edu/research/webpapers/paper_13143.pdf

Because your chart fails to show that along with the cut in taxes, there was a huge increase in government spending.

The History of U.S. Government Spending, Revenue, and Debt (1790-2015) - Metrocosm

With Reagan almost doubling government spending while cutting taxes, the increase in revenue came from increased government spending not from the tax cuts.

You are close regarding "doubling government spending"... 1981 Outlays $678.2 Billion 1988 outlays: $1,064 Billion... nearly double.
FACTS from this source:Historical Tables

BUT you also conveniently forget THESE FACTS: Unemployment under Carter's dismal economic strategies (I stupidly voted for Carter by the way)
increased just like an oil tanker can't stop on a dime, so to economic situations drove unemployment under Reagan to nearly 10.8%! These were actual unemployment
costs born by the government in many ways and again it took time for the rate to decline by nearly HALF to 5.5% at end of Reagan term.
Once again people jumping to conclusions about how quick economies rebound! It took nearly 4 years to recover from Carter's Misery Index.
Remember the Prime Interest rate under Carter (meaning money the banks borrowed) was on April 2, 1980 20.00%
United States Prime Rate History
Again remember Reagan had to figure out how to prime the pump with US treasuries paying:
By 1980, one-year Treasury bonds were paying more than 16 percent – a number that might be dumbfounding to contemporary investors who have seen rates closer to 0.1 percent to 0.4 percent on bonds of the same duration over the last year.
Here's what the major interest rate cycles since the 1970s have looked like

And INFLATION! Reached 13.5% and that INFLATED Reagan's "spending figures"... dramatically!
Consumer Price Index, 1913- | Federal Reserve Bank of Minneapolis

AGAIN these are ALL facts that went into that "doubling in spending which again...most people relying on hearsay,etc. don't do any research!
I DO!

 

[healthmyths]

I know, I know... it is very hard to keep from dealing with FACTS when it is SO easy to get them!
But the FACTS are when people decry Reagan's "spending" they have NO IDEA of the reality at that time!
Inflation 13%... Unemployment 10% Treasuries 16% Prime rate 20%!
Folks is it ANY wonder that under Reagan the spending "doubled"!
YET... when he left office: unemployment down. Prime down.. Inflation down!
And still we have dummies that don't simply use the internet BEFORE they make dumb ass comments!

 

[AntonToo]

I know, I know... it is very hard to keep from dealing with FACTS when it is SO easy to get them!
But the FACTS are when people decry Reagan's "spending" they have NO IDEA of the reality at that time!
Inflation 13%... Unemployment 10% Treasuries 16% Prime rate 20%!
Folks is it ANY wonder that under Reagan the spending "doubled"!
YET... when he left office: unemployment down. Prime down.. Inflation down!
And still we have dummies that don't simply use the internet BEFORE they make dumb ass comments!

Reagan also left office having raised taxes numerous times after initial tax cuts. Why? Because he has seen the rivers of red ink they caused and it's too bad you are still stuck in 1980.

 

[healthmyths]

I know, I know... it is very hard to keep from dealing with FACTS when it is SO easy to get them!
But the FACTS are when people decry Reagan's "spending" they have NO IDEA of the reality at that time!
Inflation 13%... Unemployment 10% Treasuries 16% Prime rate 20%!
Folks is it ANY wonder that under Reagan the spending "doubled"!
YET... when he left office: unemployment down. Prime down.. Inflation down!
And still we have dummies that don't simply use the internet BEFORE they make dumb ass comments!

Reagan also left office having raised taxes numerous times after initial tax cuts. Why? Because he has seen the rivers of red ink they caused and it's too bad you are still stuck in 1980.

And you are so ignorant about the 80s ...inflation 13% that doesn't inflate government spending?
Treasuries 16% rate... and that doesn't become an expense? GEEZ are you really that stupid?
Finally 10% unemployments means DUMMY people don't pay payroll taxes! GEEZ just amazes me why idiots who make fun of the FACTS as I provided!
Get your head out of the MSM bullcrap and think for once !

 

[Toro]

It seems that many people primarily uninformed people don't see HOW the correlation between reducing taxes can increase revenue.
The primary reason they don't understand is fundamentally they don't know:
1) simple arithmetic.
2) that don't know what happens to money.
View attachment 149122

Do Tax Cuts Increase Government Revenue?

Why according to the above chart does receipts increase as marginal tax decreases?
1) Simple arithmetic.
If taxable income grows tax receipts increase. Simple.
$1,000 taxable income 90% tax $900.
But if taxable income grows to $2,000 and tax is 70% $1,400 versus $900. Simple.
Now some people say "well if the tax was still at 90% it would be $1,800! WRONG!
Because there was NO reason for the taxable income to grow if all it did was pay more taxes!
2) Don't know what happens to money.
Most naive and uninformed people I honestly believe think that people that have excess money:
a) put the money in a mattress or bury it in the backyard. Seriously! They don't seem to comprehend
b)the excess money is
1) spent on consumer goods, more cars, more clothes, more housing, more food.
2) or save putting into the bank which by the way then the bank lends to people to spend..
3) or invest in business to hire more people, spend more money

It is that simple.
The economic multiplier states for every $1 million spent, IT is multiplied by 1.18 or the economy grows with that $1 trillion to $1.2 trillion.
• $1.188 million in total economic activity takes place for every $1 million spent..
• Each $1 million spent provides $205,829 in labor incomes
• Each $1 million represents 7.7 workers and assuming 35% (payroll taxes, FICA, FUTA, Medicare, SS)
http://www2.econ.iastate.edu/research/webpapers/paper_13143.pdf

Greg Mankiw, who was the Chairman of the Council of Economic Advisors under Bush, has estimated that for every $1 in income tax cuts, government revenue declined by 83 cents.

"Tax Cuts Don't Pay for Themselves" - GOP Economists

 

[peach174]

It seems that many people primarily uninformed people don't see HOW the correlation between reducing taxes can increase revenue.
The primary reason they don't understand is fundamentally they don't know:
1) simple arithmetic.
2) that don't know what happens to money.
View attachment 149122

Do Tax Cuts Increase Government Revenue?

Why according to the above chart does receipts increase as marginal tax decreases?
1) Simple arithmetic.
If taxable income grows tax receipts increase. Simple.
$1,000 taxable income 90% tax $900.
But if taxable income grows to $2,000 and tax is 70% $1,400 versus $900. Simple.
Now some people say "well if the tax was still at 90% it would be $1,800! WRONG!
Because there was NO reason for the taxable income to grow if all it did was pay more taxes!
2) Don't know what happens to money.
Most naive and uninformed people I honestly believe think that people that have excess money:
a) put the money in a mattress or bury it in the backyard. Seriously! They don't seem to comprehend
b)the excess money is
1) spent on consumer goods, more cars, more clothes, more housing, more food.
2) or save putting into the bank which by the way then the bank lends to people to spend..
3) or invest in business to hire more people, spend more money

It is that simple.
The economic multiplier states for every $1 million spent, IT is multiplied by 1.18 or the economy grows with that $1 trillion to $1.2 trillion.
• $1.188 million in total economic activity takes place for every $1 million spent..
• Each $1 million spent provides $205,829 in labor incomes
• Each $1 million represents 7.7 workers and assuming 35% (payroll taxes, FICA, FUTA, Medicare, SS)
http://www2.econ.iastate.edu/research/webpapers/paper_13143.pdf

Greg Mankiw, who was the Chairman of the Council of Economic Advisors under Bush, has estimated that for every $1 in income tax cuts, government revenue declined by 83 cents.

"Tax Cuts Don't Pay for Themselves" - GOP Economists

That's because government refused to cut also.
Tax and government cuts promote growth.

 

[otto105]

Just more right wing fantasy? Why not show the debt correlation to lowering taxes.

Because the debt correlation is directly attributable to spending, not income.

However, healthmyths isn't doing his argument any favors with that chart. I am a believer in tax cuts to stimulate growth, provided that equal cuts in spending happen. But the chart shows an increase in revenue BEFORE the tax cuts happened. The ability to read a chart is crucial. The growth in revenue can be more easily attributed to population growth.

OK... growth revenue population growth. So all those people don't spend any money which grew the economy which increased revenues. Wow... what a concept! population growth spent everything on taxes. That's the only attribution. Of course spending increased and I for one totally decry federal government spending on non-defense of country issues! I mean that is a given! The point is even Arthur Laffer says there is a point where taxes must be paid... but not 90%!

The laffer curve is an economic joke.

And who are YOU to say that? My opinion of you is YOU are a JOKE!

Empirical facts and the fact you don't know them.

 

[otto105]

It seems that many people primarily uninformed people don't see HOW the correlation between reducing taxes can increase revenue.
The primary reason they don't understand is fundamentally they don't know:
1) simple arithmetic.
2) that don't know what happens to money.
View attachment 149122

Do Tax Cuts Increase Government Revenue?

Why according to the above chart does receipts increase as marginal tax decreases?
1) Simple arithmetic.
If taxable income grows tax receipts increase. Simple.
$1,000 taxable income 90% tax $900.
But if taxable income grows to $2,000 and tax is 70% $1,400 versus $900. Simple.
Now some people say "well if the tax was still at 90% it would be $1,800! WRONG!
Because there was NO reason for the taxable income to grow if all it did was pay more taxes!
2) Don't know what happens to money.
Most naive and uninformed people I honestly believe think that people that have excess money:
a) put the money in a mattress or bury it in the backyard. Seriously! They don't seem to comprehend
b)the excess money is
1) spent on consumer goods, more cars, more clothes, more housing, more food.
2) or save putting into the bank which by the way then the bank lends to people to spend..
3) or invest in business to hire more people, spend more money

It is that simple.
The economic multiplier states for every $1 million spent, IT is multiplied by 1.18 or the economy grows with that $1 trillion to $1.2 trillion.
• $1.188 million in total economic activity takes place for every $1 million spent..
• Each $1 million spent provides $205,829 in labor incomes
• Each $1 million represents 7.7 workers and assuming 35% (payroll taxes, FICA, FUTA, Medicare, SS)
http://www2.econ.iastate.edu/research/webpapers/paper_13143.pdf

Greg Mankiw, who was the Chairman of the Council of Economic Advisors under Bush, has estimated that for every $1 in income tax cuts, government revenue declined by 83 cents.

"Tax Cuts Don't Pay for Themselves" - GOP Economists

That's because government refused to cut also.
Tax and government cuts promote growth.

This is standard reply by people who know nothing on subject.

 

[healthmyths]

Just more right wing fantasy? Why not show the debt correlation to lowering taxes.

Because the debt correlation is directly attributable to spending, not income.

However, healthmyths isn't doing his argument any favors with that chart. I am a believer in tax cuts to stimulate growth, provided that equal cuts in spending happen. But the chart shows an increase in revenue BEFORE the tax cuts happened. The ability to read a chart is crucial. The growth in revenue can be more easily attributed to population growth.

OK... growth revenue population growth. So all those people don't spend any money which grew the economy which increased revenues. Wow... what a concept! population growth spent everything on taxes. That's the only attribution. Of course spending increased and I for one totally decry federal government spending on non-defense of country issues! I mean that is a given! The point is even Arthur Laffer says there is a point where taxes must be paid... but not 90%!

The laffer curve is an economic joke.

And who are YOU to say that? My opinion of you is YOU are a JOKE!

Empirical facts and the fact you don't know them.

How about this "empirical" fact? Let's assume your position which is WITHOUT any substantiation i.e. that the Laffer Curve is a "joke"!
So according to you our country would thrive, grow and prosper at the same rate we have for the last 200 years, i.e. for example in 1980 there was one millionaire for every 51,000 people...in 36 years i.e. 2016 there are one millionaire for every 30 people... if the Government tax rate was 100%?
You firmly believe Laffer curve is a joke then you have NO problem with 100% Federal tax rate? Talk about "empirical" i.e. "based on, concerned with, or verifiable by observation or experience rather than theory or pure logic" FACTS... That is a fact. Laffer Curve shows a tax of 100%.
But being the knowledgeable "practical" empirically minded person... YOU must admit a 100% tax rate is shown on the curve!
AND THAT IS AN EMPIRICAL fact!
Here let the "empirical" FACTS prove!

The Laffer Curve suggests that, as taxes increase from low levels, tax revenue collected by the government also increases. It also shows that tax rates increasing after a certain point (T*) would cause people not to work as hard or not at all, thereby reducing tax revenue.
Eventually, if tax rates reached 100%, shown as the far right on his curve, all people would choose not to work because everything they earned would go to the government. Governments would like to be at point T*, because it is the point at which the government collects maximum amount of tax revenue while people continue to work hard.

Read more: Laffer Curve Laffer Curve
Follow us: Investopedia on Facebook

 

[Dragonlady]

I know, I know... it is very hard to keep from dealing with FACTS when it is SO easy to get them!
But the FACTS are when people decry Reagan's "spending" they have NO IDEA of the reality at that time!
Inflation 13%... Unemployment 10% Treasuries 16% Prime rate 20%!
Folks is it ANY wonder that under Reagan the spending "doubled"!
YET... when he left office: unemployment down. Prime down.. Inflation down!
And still we have dummies that don't simply use the internet BEFORE they make dumb ass comments!

When unemployment went back up to 6% in Reagan's second term, he hired a million federal employees saying federal employees bought cars and houses too.

At the end of his administration, the Democratic Congress forced Reagan to scrap his Star Wars defence initiative and raise taxes, otherwise things would have been worse.

Economically, none of Reagan's loony theories worked as advertised. Cutting taxes didn't increase revenues as promised (dubbed "Voodoo economics"), nor did it create jobs.

Massive defence spending increased jobs and revenues, not tax cuts.

 

[healthmyths]

It seems that many people primarily uninformed people don't see HOW the correlation between reducing taxes can increase revenue.
The primary reason they don't understand is fundamentally they don't know:
1) simple arithmetic.
2) that don't know what happens to money.
View attachment 149122

Do Tax Cuts Increase Government Revenue?

Why according to the above chart does receipts increase as marginal tax decreases?
1) Simple arithmetic.
If taxable income grows tax receipts increase. Simple.
$1,000 taxable income 90% tax $900.
But if taxable income grows to $2,000 and tax is 70% $1,400 versus $900. Simple.
Now some people say "well if the tax was still at 90% it would be $1,800! WRONG!
Because there was NO reason for the taxable income to grow if all it did was pay more taxes!
2) Don't know what happens to money.
Most naive and uninformed people I honestly believe think that people that have excess money:
a) put the money in a mattress or bury it in the backyard. Seriously! They don't seem to comprehend
b)the excess money is
1) spent on consumer goods, more cars, more clothes, more housing, more food.
2) or save putting into the bank which by the way then the bank lends to people to spend..
3) or invest in business to hire more people, spend more money

It is that simple.
The economic multiplier states for every $1 million spent, IT is multiplied by 1.18 or the economy grows with that $1 trillion to $1.2 trillion.
• $1.188 million in total economic activity takes place for every $1 million spent..
• Each $1 million spent provides $205,829 in labor incomes
• Each $1 million represents 7.7 workers and assuming 35% (payroll taxes, FICA, FUTA, Medicare, SS)
http://www2.econ.iastate.edu/research/webpapers/paper_13143.pdf

Greg Mankiw, who was the Chairman of the Council of Economic Advisors under Bush, has estimated that for every $1 in income tax cuts, government revenue declined by 83 cents.

"Tax Cuts Don't Pay for Themselves" - GOP Economists

Here is what Mankiw said:
How unlikely? N. Gregory Mankiw, another former Council of Economic Advisers head in the Bush White House, concluded in 2005 that cuts on capital gains taxes could generate enough extra growth to recoup half the lost revenue in the long run; cutting taxes on wages could recover just 17 percent of the costs.
An analysis conducted by the Congressional Budget Office under the direction of Douglas Holtz-Eakin, who had been an economic adviser in the Bush White House, found that, under the rosiest of scenarios,
a 10 percent reduction in the personal income tax rate would generate enough economic growth to replace
22 percent of lost revenue in the first five years and 32 percent in the second five.

Economists See Little Magic in Tax Cuts to Promote Growth

Guess what taxes Mr. Mankiw and all you brilliant economically oriented idiots FORGET!!!

Payroll taxes!
The only measure these idiots including Mankiw looked at was the fact that MORE people working means both employer and employee are paying more SS/Medicare tax!
Increase the number of employed from what it was at beginning of Trump i.e.
Long term unemployment page 4 of the below was 8,149,000.
http://www.aarp.org/content/dam/aarp/ppi/2017-01/January 2017 Employment Digest_formatted.pdf

Assume that figure drops by 20% or 1.629 million start to work at average hourly rate:$25.00.
How Does Your Income Stack Up Against the Average American's? -- The Motley Fool

This means:
1) no more collecting unemployment checks for 1.629 million at $1,200/month or for six months $12 billion in savings!
2) With 1.629 million earning $25.00 or...at 13.4% payroll taxes paid by employer/employee a total in one year of over $11 billion in new tax revenue!
And that is just in payroll taxes!
Here are some of the changes over 10 years, compared with projected spending under current law, according to a Times analysis:
How Trump’s Budget Would Affect Every Part of Government

• $627 billion cut to Medicaid* --- again if 1.6 million become employed NO NEED for Medicaid!
• $194 billion cut to food stamps-- again if 1.6 million become employed NO NEED for Medicaid!

 

[peach174]

It seems that many people primarily uninformed people don't see HOW the correlation between reducing taxes can increase revenue.
The primary reason they don't understand is fundamentally they don't know:
1) simple arithmetic.
2) that don't know what happens to money.
View attachment 149122

Do Tax Cuts Increase Government Revenue?

Why according to the above chart does receipts increase as marginal tax decreases?
1) Simple arithmetic.
If taxable income grows tax receipts increase. Simple.
$1,000 taxable income 90% tax $900.
But if taxable income grows to $2,000 and tax is 70% $1,400 versus $900. Simple.
Now some people say "well if the tax was still at 90% it would be $1,800! WRONG!
Because there was NO reason for the taxable income to grow if all it did was pay more taxes!
2) Don't know what happens to money.
Most naive and uninformed people I honestly believe think that people that have excess money:
a) put the money in a mattress or bury it in the backyard. Seriously! They don't seem to comprehend
b)the excess money is
1) spent on consumer goods, more cars, more clothes, more housing, more food.
2) or save putting into the bank which by the way then the bank lends to people to spend..
3) or invest in business to hire more people, spend more money

It is that simple.
The economic multiplier states for every $1 million spent, IT is multiplied by 1.18 or the economy grows with that $1 trillion to $1.2 trillion.
• $1.188 million in total economic activity takes place for every $1 million spent..
• Each $1 million spent provides $205,829 in labor incomes
• Each $1 million represents 7.7 workers and assuming 35% (payroll taxes, FICA, FUTA, Medicare, SS)
http://www2.econ.iastate.edu/research/webpapers/paper_13143.pdf

Greg Mankiw, who was the Chairman of the Council of Economic Advisors under Bush, has estimated that for every $1 in income tax cuts, government revenue declined by 83 cents.

"Tax Cuts Don't Pay for Themselves" - GOP Economists

That's because government refused to cut also.
Tax and government cuts promote growth.

This is standard reply by people who know nothing on subject.

I know economics and our history about the subject.

 

[NYcarbineer]

Because the debt correlation is directly attributable to spending, not income.

However, healthmyths isn't doing his argument any favors with that chart. I am a believer in tax cuts to stimulate growth, provided that equal cuts in spending happen. But the chart shows an increase in revenue BEFORE the tax cuts happened. The ability to read a chart is crucial. The growth in revenue can be more easily attributed to population growth.

OK... growth revenue population growth. So all those people don't spend any money which grew the economy which increased revenues. Wow... what a concept! population growth spent everything on taxes. That's the only attribution. Of course spending increased and I for one totally decry federal government spending on non-defense of country issues! I mean that is a given! The point is even Arthur Laffer says there is a point where taxes must be paid... but not 90%!

The laffer curve is an economic joke.

And who are YOU to say that? My opinion of you is YOU are a JOKE!

Empirical facts and the fact you don't know them.

How about this "empirical" fact? Let's assume your position which is WITHOUT any substantiation i.e. that the Laffer Curve is a "joke"!
So according to you our country would thrive, grow and prosper at the same rate we have for the last 200 years, i.e. for example in 1980 there was one millionaire for every 51,000 people...in 36 years i.e. 2016 there are one millionaire for every 30 people... if the Government tax rate was 100%?
You firmly believe Laffer curve is a joke then you have NO problem with 100% Federal tax rate? Talk about "empirical" i.e. "based on, concerned with, or verifiable by observation or experience rather than theory or pure logic" FACTS... That is a fact. Laffer Curve shows a tax of 100%.
But being the knowledgeable "practical" empirically minded person... YOU must admit a 100% tax rate is shown on the curve!
AND THAT IS AN EMPIRICAL fact!
Here let the "empirical" FACTS prove!
View attachment 149404
The Laffer Curve suggests that, as taxes increase from low levels, tax revenue collected by the government also increases. It also shows that tax rates increasing after a certain point (T*) would cause people not to work as hard or not at all, thereby reducing tax revenue.
Eventually, if tax rates reached 100%, shown as the far right on his curve, all people would choose not to work because everything they earned would go to the government. Governments would like to be at point T*, because it is the point at which the government collects maximum amount of tax revenue while people continue to work hard.

Read more: Laffer Curve Laffer Curve
Follow us: Investopedia on Facebook

Are you able to see on the Laffer curve that as taxes are lowered revenues fall?

 

[AntonToo]

I know, I know... it is very hard to keep from dealing with FACTS when it is SO easy to get them!
But the FACTS are when people decry Reagan's "spending" they have NO IDEA of the reality at that time!
Inflation 13%... Unemployment 10% Treasuries 16% Prime rate 20%!
Folks is it ANY wonder that under Reagan the spending "doubled"!
YET... when he left office: unemployment down. Prime down.. Inflation down!
And still we have dummies that don't simply use the internet BEFORE they make dumb ass comments!

Reagan also left office having raised taxes numerous times after initial tax cuts. Why? Because he has seen the rivers of red ink they caused and it's too bad you are still stuck in 1980.

And you are so ignorant about the 80s ...inflation 13% that doesn't inflate government spending?
Treasuries 16% rate... and that doesn't become an expense? GEEZ are you really that stupid?
Finally 10% unemployments means DUMMY people don't pay payroll taxes! GEEZ just amazes me why idiots who make fun of the FACTS as I provided!
Get your head out of the MSM bullcrap and think for once !

....dummy what you said in no way responded to my post, so not sure why you even bothered posting it.

Everything you said has to do with MONETARY, not fiscal policy.

Yes, Reagan raised taxes, clearly this means he DID NOT believe at that point that lowered taxes were self-financing let alone brought in more revenue. Nothing about inflation can refute that.

 

[AntonToo]

It seems that many people primarily uninformed people don't see HOW the correlation between reducing taxes can increase revenue.
The primary reason they don't understand is fundamentally they don't know:
1) simple arithmetic.
2) that don't know what happens to money.
View attachment 149122

Do Tax Cuts Increase Government Revenue?

Why according to the above chart does receipts increase as marginal tax decreases?
1) Simple arithmetic.
If taxable income grows tax receipts increase. Simple.
$1,000 taxable income 90% tax $900.
But if taxable income grows to $2,000 and tax is 70% $1,400 versus $900. Simple.
Now some people say "well if the tax was still at 90% it would be $1,800! WRONG!
Because there was NO reason for the taxable income to grow if all it did was pay more taxes!
2) Don't know what happens to money.
Most naive and uninformed people I honestly believe think that people that have excess money:
a) put the money in a mattress or bury it in the backyard. Seriously! They don't seem to comprehend
b)the excess money is
1) spent on consumer goods, more cars, more clothes, more housing, more food.
2) or save putting into the bank which by the way then the bank lends to people to spend..
3) or invest in business to hire more people, spend more money

It is that simple.
The economic multiplier states for every $1 million spent, IT is multiplied by 1.18 or the economy grows with that $1 trillion to $1.2 trillion.
• $1.188 million in total economic activity takes place for every $1 million spent..
• Each $1 million spent provides $205,829 in labor incomes
• Each $1 million represents 7.7 workers and assuming 35% (payroll taxes, FICA, FUTA, Medicare, SS)
http://www2.econ.iastate.edu/research/webpapers/paper_13143.pdf

Greg Mankiw, who was the Chairman of the Council of Economic Advisors under Bush, has estimated that for every $1 in income tax cuts, government revenue declined by 83 cents.

"Tax Cuts Don't Pay for Themselves" - GOP Economists

Here is what Mankiw said:
How unlikely? N. Gregory Mankiw, another former Council of Economic Advisers head in the Bush White House, concluded in 2005 that cuts on capital gains taxes could generate enough extra growth to recoup half the lost revenue in the long run; cutting taxes on wages could recover just 17 percent of the costs.
An analysis conducted by the Congressional Budget Office under the direction of Douglas Holtz-Eakin, who had been an economic adviser in the Bush White House, found that, under the rosiest of scenarios,
a 10 percent reduction in the personal income tax rate would generate enough economic growth to replace
22 percent of lost revenue in the first five years and 32 percent in the second five.

Economists See Little Magic in Tax Cuts to Promote Growth

Guess what taxes Mr. Mankiw and all you brilliant economically oriented idiots FORGET!!!

Payroll taxes!
The only measure these idiots including Mankiw looked at was the fact that MORE people working means both employer and employee are paying more SS/Medicare tax!
Increase the number of employed from what it was at beginning of Trump i.e.
Long term unemployment page 4 of the below was 8,149,000.
http://www.aarp.org/content/dam/aarp/ppi/2017-01/January 2017 Employment Digest_formatted.pdf

Assume that figure drops by 20% or 1.629 million start to work at average hourly rate:$25.00.
How Does Your Income Stack Up Against the Average American's? -- The Motley Fool

This means:
1) no more collecting unemployment checks for 1.629 million at $1,200/month or for six months $12 billion in savings!
2) With 1.629 million earning $25.00 or...at 13.4% payroll taxes paid by employer/employee a total in one year of over $11 billion in new tax revenue!
And that is just in payroll taxes!
Here are some of the changes over 10 years, compared with projected spending under current law, according to a Times analysis:
How Trump’s Budget Would Affect Every Part of Government

• $627 billion cut to Medicaid* --- again if 1.6 million become employed NO NEED for Medicaid!
• $194 billion cut to food stamps-- again if 1.6 million become employed NO NEED for Medicaid!

I asked if conservative economists understand economics and you responded that yes, yes they do. But now that we showed you that they reject your magic bean tax-cut stories you claim they are idiots.

They are not idiots and they aren't ignorant, you are.