Cutting Taxes = Increasing Revenue »
Posted By Shana4Liberty 10 months ago in NewsAround 150 BC, Emperor Ching Ti came to power in China and immediately faced a major problem: his treasury was empty.
Taxes were very high, but no real revenue was coming in. That’s because the system of taxes at that time was an early form of income tax that centered on the government taking a large percentage of a farmer’s crops.
So Ching Ti did something bold and innovative: he cut taxes.
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Shana4Liberty
I'm a stay-at-homeschooling mom of 4 living in central Alabama, but a native of south Texas. Feel free to friend me and send me ...
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Goppy10 months ago
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I hear ya, Shana4Liberty.
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Taxes .... HUHN ... YEAH ... what are they good for ... ... Absolutely NUTHIN! ... 'Good God' .... Taxes I despise, cause it means destruction of my piggy bank!
Say it Again! ... YEah ... GOOD God!
But wait!
Cutting Taxes to Stimulate Growth has been the Centerpiece of TWO Republican Administrations ... and both were budgetary and economic failures.
Yes, yes, I know ... my fellow Christian Conservatives LOVE Reagan and attribute an astonishing Economic Recovery to him ... as well as the fall of Communism and every bright sunny day.
But Reagan combined Tax Cuts with MASSIVE DEFICIT SPENDING ... so we will never know if his VooDoo Economics really worked. If you look at the link below ... you will see that the debt we incurred under RR led to precipitous increases in debt.
And the ONLY thing that staved off an economic catastrophe is when George H. W. Bush broke his 'no new taxes pledge' and increased taxes to STOP what could have been an economic meltdown not unlike what George H. W. Bush's son gave us.
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Look, it's just common sense.
If you own a home, and you have a budget ... you can't decide to take a cut in pay ... while simultaneously INCREASING your spending levels.
The result is something that every American Household understands VISCERALLY ... BANKRUPTCY. And that is what has been happening to our nation under TWO Modern Republican Administrations.
WHY?
Because The Modern Republican believes in TAX CUTS as a RELIGIOUS observance ... NOT an Economic Theory.
Here ... check out this graph ... it COULD be a graph showing the budget of any American family with a Mortgage.
But it's not.
It's a graph showing how The Modern Republicans Messianic Embrace for TAX CUTS have plunged our nation into massive debt.
http://www.scribd.com/doc/3015540/US-Budget-Defici...
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So, am I an advocate for HIGHER TAXES?
NO ... NO ... NO ... NO ... NO ... NO ...
I'm an advocate for RATIONAL Governance.
I look forward to the day when our Government is run efficiently ... raises enough income to function smoothly ... maybe with a bit of a surplus for a rainy day ... like we had when Clinton left office... fix bridges ... roads ... schools ... etc ... and make our Government FUNCTION.
This will not happen with Modern Republicans.
Remember, their platform is ... "Elect us ... we HATE Government".
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slate10 months ago
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It's the over spending that got us here Goppy. No matter how much revenue you bring in if you over spend things crash. Hey just like your check, only the numbers are incomprehensibility large.
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Spending what amounts to a million dollars a day for 2,000 years and still not reaching the number is what causes problems, not people keeping a little more of their money.
THe great society has cost us trillions of dollars and the same gripes of the 60s are still being mouthed. Case closed. -
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jovial10 months ago
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Let's really take a look at what was going on then in the Ching Ti dynasty. Some 9/10 of the population was living in the countryside. Most were peasants, and a few were craftsmen working for the emperor and his relatives. All men between 23 and 56 would also be trained 2 years for the armed forces or on security duties. They would also work one month a year for the state in labour gangs.
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"Despite the fact that they and the reformists shared the same priority –agriculture over trade and manufacture- they didn’t agree over the means. On one hand, the modernists encouraged free enterprise and even the creation of estates in the primary sector, while the rest would be controlled by the state. On the other hand, reformists were afraid that estates would create an imbalance between rich and poor; this explains also why they were on principle against the creation of large fortunes through trade. Finally, they saw little interest in the exchange of luxury goods with foreign countries, something that will be developed under modernists’ impulse, as we’re about to see. "
Souce:
http://www.asian-center.net/chinahistory/CHC1/han1... -
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GLee10 months ago
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As a small businessman I am going to make it real simple for you. If you raise my taxes I raise the cost of my goods to contractors who inturn raise the cost to the homeowner (the end user). Now you tell me who is going to pay the tax increase?
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icono110 months ago
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Yep it is that simple.
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If you let people keep more of their money then they are more inclined to utilize that income in the market place by making purchases which will, of course, increase demand, which will increase jobs to manufacture the products sold to the consumer.
This is a simple concept our current crop of 'in power' politicians have, some how, not been able to comprehend.
I take it 'supply and demand' is no longer taught in Econ classes.-
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Goppy10 months ago
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Comeon 'comrade' .. we know you don't really care about American Economics.
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You're a Soviet emigre ... so proud of your Soviet past ... you use the Russian Crest as your avatar.
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I do know that people who come to this country from repressive regimes naturally gravitate towards the Republican party.
And I'm sure you feel a special tenderness towards our nation's Modern Republican party ... after all ... they modeled their system of Gulags and Torture after your native Soviet Union.
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Natureboy10 months ago
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"If you let people keep more of their money then they are more inclined to utilize that income in the market place by making purchases which will, of course, increase demand, which will increase jobs to manufacture the products sold to the consumer."
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What people?
If you allow a single mother who is putting herself through college to keep more of her money, that cash is SPENT, and fast.
OTOH, allow a billionaire to keep a little more, and it really doesn't help. She/he is already sitting on far more money than can easily be spent; excess cash in this area just tends to stagnate.
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flyonthewallzz10 months ago
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http://home.att.net/~rdavis2/taxcuts.html
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"The argument that the near-doubling of revenues during Reagan's two terms proves the value of tax cuts is an old argument. It's also extremely flawed. At 99.6 percent, revenues did nearly double during the 80s. However, they had likewise doubled during EVERY SINGLE DECADE SINCE THE GREAT DEPRESSION! They went up 502.4% during the 40's, 134.5% during the 50's, 108.5% during the 60's, and 168.2% during the 70's. At 96.2 percent, they nearly doubled in the 90s as well. Hence, claiming that the Reagan tax cuts caused the doubling of revenues is like a rooster claiming credit for the dawn. " -
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flyonthewallzz10 months ago
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http://www.portfolio.com/views/blogs/odd-numbers/2...
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"Ranson then uses this fact to make the Republican-friendly argument that raising taxes on the wealthy -- as both Barack Obama and Hillary Clinton are expected to try to do -- will lower government revenue because higher taxes tend to cut GDP growth.
But there are a couple of problems with this argument. First, it strikes me that if you're going to plot tax rates for individuals, you should also look at tax revenues from individuals (all charts below show revenues as percentage of GDP):" -
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flyonthewallzz10 months ago
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This is my own research: and I do not expect folks to believe it.
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I was intrigued when I saw the dramatic revenue jump from 2003-2005…$1.8 T -$2.2 T.
I was convinced that the concept of tax cuts worked, but those tricky words got me digging.
On the books the revenue looks like this 2000 = $ 2,025,457,000 / 2007= $2,540,096,000
Both Clinton and Bush used the earned income tax credit, and the child credit to make it appear that revenue was higher… but it actually is just a revolving door, because the money just goes straight to outlays…..2000 = $27B / 2007 = $54B
There is health insurance tax credit……. 2007 = $18M
And there is the interest paid out for refunds….2000 = $2.7B / 2007 = $3.3B
I have stated before that the numbers we are given for revenue are not the “Net” ones. The IRS publishes the real net numbers after tax refunds, and these refunds do not show up in outlays…..2000=$196B / 2007=$279B (as far as I can tell this is ghost money, here is a link to a spreadsheet from the IRS)
http://www.irs.gov/pub/irs-soi/02db01co.xls
Now some of things I pointed out here may seem nit-picky, but when combined and then adjusted for inflation the revenue looks like this………
I do not expect you to trust my math.-
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flyonthewallzz10 months ago
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Year …Gross ...…Actual ....…Inflation adjusted
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2000…$2,025,457,000 …$1,800,114,000 … $1,800,114,000
2001…$1,991,426,000 …$1,708,808,000 …$1,663,883,155
2002…$1,853,395,000…$1,558,657,000 …$1,477,400,000
2003…$1,782,532,000… $1,444,724,000 …$1,334,001,847
2004…$1,880,279,000…$1,562,231,000 …$1,407,415,315
2005…$2,153,859,000 …$1,843,102,000 …$1,619,597,540
2006…$2,407,254,000 …$2,086,421,000 …$1,787,850,043
2007…$2,540,096,000 …$2,203,190,000 …$1,842,132,107
Social Insurance Taxes and Contributions (gross) 2000 = $652,852,000 / 2007 = $873,377,000
Total number of individual tax returns 2000 = 129,373,500 / 2006 = 138,394,754 (2007 missing)
It would be fair to put the SS number through the same wringer.
2000 = $647,895,000 / 2007 = $ 720,473,244
So even though the 2007 number looks $42 Billion bigger, there where almost 10 million more returns and $72 billion of it was an increase in Social Insurance Taxes and Contributions.
By my reckoning the tax cuts did not increase income tax revenue.
The data I used came from the OMB and the IRS.
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flyonthewallzz10 months ago
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http://www.cbpp.org/7-27-06tax.htm
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"TREASURY DYNAMIC SCORING ANALYSIS REFUTES CLAIMS BY SUPPORTERS OF THE TAX CUTS
by Jason Furman
On July 25, the Treasury Department released a study entitled “A Dynamic Analysis of Permanent Extension of the President’s Tax Relief.” This study refutes many of the exaggerated claims about the tax cuts that have been made by the President and other senior Administration officials, the Wall Street Journal editorial page, and various other tax-cut advocates. Contrary to the claim that the tax cuts will have huge impacts on the economy, the Treasury study finds that even under favorable assumptions, making the tax cuts permanent would have a barely perceptible impact on the economy. Under more realistic assumptions, the Treasury study finds that the tax cuts could even hurt the economy."
The study cost $1/2 a billion. -
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flyonthewallzz10 months ago
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http://www.factcheck.org/taxes/supply-side_spin.ht...
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“Federal revenue is lower today than it would have been without the tax cuts,” Alan D. Viard of the conservative American Enterprise Institute told the Washington Post last October. Viard, who worked in the Treasury Department’s Office of Tax Analysis and the White House’s Council of Economic Advisers under President Bush, told FactCheck.org that “nobody can absolutely prove that.” Proof would require time travel and a reversal of tax policy. “But among economists, there’s no dispute.” -
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flyonthewallzz10 months ago
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I have been looking at 2 IRS spreadsheets for 2002 (I figured they where kind of like now)
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Crap! I am missing one of the links, but here is one of them, and you will have to trust me on the other.
http://www.irs.gov/pub/irs-soi/02ot2busbr.xls
This not a complete list of US industry and I could not line it up with census data, but no mater the total shown for business receipts is greater than $23 Trillion dollars.
The other Sheet (I lost the link) is for individual income tax: and it shows an adjusted Gross Income of $6 Trillion dollars.
I may be way dumb..but I can not figure out we are buying $23 T worth of stuff for $6 T.
The sheet does support the conservative argument that folks with big income pay a large share of income tax. I like to use the SS cap as a break point.
According to this sheet the folks that show more than the cap show 40% of the AGI and pay 60.1% of the income tax. Or $508 billion, which is about 27% of Government revenue.
FY2002 Personal income tax (gross) = $ 858,345,000,000
FY2002 Social Insurance Taxes and Contributions = $700,760,000,000
SS payments are only on “Earned income”, Salaries and wages represent 76% of the AGI.
Folks under the cap represent 78% of the returns and 51% of the AGI.
Folks over the cap represent 8% of the returns and 25% of the AGI.
Folks under have deducted $8 Billion and folks over have deducted $7 billion for self-employment tax.
I am confused. -
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sumptuousdigs10 months ago
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Historical perspectives are often used to good effect when one wants to drive home a point.
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BUT GOOD GOD! Dynastic China is a far stretch!
What else can history teach us about the eras' benevolent rulers...Lol!
How 'bout the Federalist Papers, or Hamiltons' work and views on how to build a National Treasury. A little closer to home, and a lot closer chronologically. The Libs ( short for Libertarians) must be getting desperate.
Better yet, let the libbers live in Dynastic China and refuse to pay their taxes. A revolution for sure, short and sweet. Emperors of that era were known for their sense of humor!! -
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wesxauto10 months ago
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We all know that cutting taxes is better for the economy but the only lose nut in that fact is the goverment that people are seeing waste the tax money rather than trying to cut goverment spending.That is wy the people and business and the market and the lenders have No confidence in the system at this time
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CRYMTYPHON10 months ago
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Iron Age China is, perhaps, not the best example for an economic model.
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It is enough to note:
1) in a global economy tax cuts will be re-invested across the globe . It won't trickle down to your town or nation; it may even put you out of business.
2) The quickest profits will be in countries like modern China that cut expenses by having no human rights, no labour laws, no water or air pollution standards.
Slave states.
3) When tax cuts are not even balanced by spending cuts,
- then American workers pay the cost plus interest for subsidizing foreign economies.
Americans know business.
We know instinctualy that a company must invest its profits in growth.
But for too long we have listened to those who told us
a nation does not have to invest in itself .
They told us schools and hospitals, libraries and police,
health and education and transportation were entitlements
dragging down the profits we could make.
They made a lot of money off that fraud, - while America rusted.
Let us rebuild our country before we begin to envy iron-age China; - or are owned by the modern version. -
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Goppy10 months ago
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Hey slate, I always appreciate when you comment ... but I want to be clear with you.
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When you say ... "It's the over spending that got us here Goppy. No matter how much revenue you bring in if you over spend things crash." ... I'm agreeing with you. In fact, I specifically mentioned the overspending by Reagan and Bush2.
And I also agree with you when you say ... "THe great society has cost us trillions of dollars and the same gripes of the 60s are still being mouthed." ... was an over-reach by Democrats.
My point is ... knowing that The Great Society was an over-reach ... why do Modern Republicans insist on replicating those welfare programs with massive Welfare for the Wealthy programs in the form of massive tax roll-backs?
And by the way ... I did not vote for Democrats during the era of The Great Society ... so I really have no 'dog in that race'.
All I want is this ... effective management of government ... i.e. ... take care of infrastructure, ensure adequate education opportunities are available, protect our borders, regulate commerce, justice for EVERY American, ... and for God's sake, pare down the massive military spending (our military budget nearly equals the REST OF THE WORLD'S budget ... COMBINED ... which to my way of thinking ... is no different than trying to create 'The Great Society' ... but with the military.)... stuff like that.
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Hhussk10 months ago
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I support tax cuts. The problem with the last administration is that they overspent.
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People complained that we overspent in the Bush era.
Now, we have increased our overspending and subsequently, our taxes. As taxes rise, revenues will fall.
For those of you who believe government is efficient (or can be), you are about to learn, first-hand, the problems with socialist policies.-
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SpareChange10 months ago
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LOL socialist policies. That cracks me up, it's such a talking point.
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y'all had your chance to prove your ideology and we see where it got us.
let's give something else a try. Too bad obama didn't get a nice clean slate like Bush did, good economy, no war, budget surplus. Too bad we have to clean up after all this B.S. before doing anything new to prove our point.
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BudBrooks10 months ago
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No, no, no. Tax cuts do NOT equal increased revenues. In fact, as a general statement (i.e., even in theory), that is nonsensical. As a practical statement, it is just stupid and ignorant.
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Anyone interested in actually thinking and learning and reaching conclusions based on information and reason rather than on what feels good should visit my posts (as “B Rational”) at http://swordscrossed.org/diary/20081017/no-bush-ta... and at http://swordscrossed.org/node/1672
Or you could just continue listening to others who have no clue telling you what you want to believe. It’s your choice. -
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SpareChange10 months ago
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Whenever I hear this libertarian complaining about taxes, I ask if they've been to a 3rd world country. They usually answer no.
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if you've been to the third world, you quickly see how we in the first world get a lot for what we pay for in taxes. Do you like clean drinking water that always flows? Like flushing the toilet and not having to think about where all the crap goes? Or when you drive down the street, like not seeing massive piles of trash and packs of dogs digging through it? What about the education your kids get or the legal system that protects you from a company dumping radioactive waste in the stream your kids play in.
Don't want to pay taxes, move to the third world. you won't have to pay taxes and you'll get what you pay for. -
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THOMNH6210 months ago
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simple question, for every dollar I make how much is fair for the state, and federal government to take. I know you don't have any income info here but in general when is it enough, 40%, 50% 70% just so I know. I don't want to move that is a stupid question and your a moron the reason stop when you ask them that is they realize talking to you is useless your an idiot.
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THOMNH6210 months ago
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simple question, for every dollar I make how much is fair for the state, and federal government to take. I know you don't have any income info here but in general when is it enough, 40%, 50% 70% just so I know. I don't want to move that is a stupid question and your a moron the reason people stop when you ask them that is they realize talking to you is useless your an idiot.
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Goppy10 months ago
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If you don't like high taxes ... demand that politicians reduce spending on the military.
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Our military spending is the highest in the world.
In fact, we spend almost as much on the military as the REST OF THE WORLD .... COMBINED.
So ... like I say ... if you want your taxes reduced. That's the shortest, most direct route.
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GLee10 months ago
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As a small businessman I am going to make it real simple for you. If you raise my taxes I raise the cost of my goods to contractors who inturn raise the cost to the homeowner (the end user). Now you tell me who is going to pay the tax increase?
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