Redstate

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"Those who expect to reap the blessings of freedom must, like men, undergo the fatigue of supporting it."
-Thomas Paine: The American Crisis, No. 4, 1777

If you read my post, all I said is that the tax cuts facilitated economic growth, which in turn resulted in MORE THAN SUFFICIENT growth in tax revenue.

I don't know what level tax revenue would be at without the tax cuts and neither do you. Maybe it would be higher, maybe not.

But what I am confident saying is that if tax revenues are growing by 8%, compared with the overall economy growing less than 3%, there should be no need for higher tax revenue growth (in the event that the hypothetical you believe is true)- ie whether or not tax revenue would be higher without the cuts, it doesn't matter, the current level should be more than sufficient for our current needs. In fact, if the economy is only growing 3%, its easy to argue that the 8% tax revenue growth we are seeing in fact is too much.

You wrote "if we want to eliminate the budget deficit, we should keep taxes low, which stimulates growth and in turn actually gives us more than sufficient tax revenue growth". Were you not implying cause and effect -- that the Bush tax cuts have caused this increase in revenue and that extending them would cause a continuation of this supposed revenue growth?

As for what is or isn't "known" about the Bush tax cuts' impact on revenues, while we cannot "know", we can look to the overwhelming consensus of supply-side economists, including Bush's own economists, all of whom say that the Bush tax cuts have not caused the higher revenues, but rather have caused LOWER revenues than we would have had without the cuts. Again, please go to the link I provided and read through if you want to be educated on this question.

I'll try to say this again- never once have I said that tax revenues have been HIGHER than they otherwise would have been if the tax cuts didn't occur.

You are now saying two things- first you try to lecture me on something I never said, then you say:

"Were you not implying cause and effect -- that the Bush tax cuts have caused this increase in revenue and that extending them would cause a continuation of this supposed revenue growth?"

What I am "implying" is simply that low taxes facilitate a strong economy, which in turn leads to higher tax revenue- I'll say again not necessarily the maximum level of tax revenue that would have been possible without the tax cuts, but a level of tax revenue that is more than sufficient to meet our reasonable current spending needs.

To sum it up what I'm saying is the tax cuts have helped the economy do well, the growing economy has led to higher tax revenue, and 8% growth in tax revenue should be more than suffient to meet our current needs, especially if the economy is only growing at 3%.

And its not supposed revenue growth- when tax revenue increases by 8% over the prior year that is real revenue growth.

Yeah, a "failure to communicate". When someone repeatedly says that an action "leads to" a particular result, I interpret that as an implication of cause and effect. I'm funny that way. Crazy, isn't it?

The "supposed" in my comment was meant to refer to the supposed causation -- and the expectation of it continuing -- but I should have been more precise in my language. Perhaps you wish to concede as much with your own language: You say that the tax cuts have "led to" higher revenues, and recommend keeping the tax rates low to continue this dynamic, yet deny that you are asserting cause and effect. Does that make sense?

The treasury does accept voluntary contributions.
______________________________
"Those who expect to reap the blessings of freedom must, like men, undergo the fatigue of supporting it."
-Thomas Paine: The American Crisis, No. 4, 1777

See if this clarifies things...

I don't want to put words in your mouth, but you seem to be reading the comments as saying that lowering taxes leads to a higher level of taxes than their otherwise would have been if the tax cuts hadn't happened in the first place.

What I am saying is that lowering taxes facilitates economic growth, and when you have robust economic growth, you will see tax revenue grow at a level that should be more than sufficient to meet the government's needs. Hopefully it is clear- I'm saying something different than what I think you are.

I am not denying asserting cause and effect- I believe lowering the tax rate has a stimulative impact on the economy.

Maybe this will help as well, I'll certainly concede there are other ways to eliminate the deficit- including raising taxes. But as a conservative, the ideal way is to keep taxes low, but still have tax revenue grow by a substantial amount each year because of the growing economy (which is stimulated, among other things, by the low tax rate), and at the same time to hold spending growth to a low rate so that it doesn't consume your substantially growing tax revenue.

No one disputes that tax cuts stimulate the economy (other things equal). The question is how much, and to what extent this incremental growth -- and resulting incremental growth in the tax base (along with increased compliance) -- recovers what is lost by lowering the tax RATE.

My point is that there is strong consensus (univeral as far as I could find) that tax cuts like Bush's are not likely to come even close to revenue-neutrality, let alone higher revenues than we'd receive without those cuts. Do you agree, disagree, or not have any idea (after, hopefully, reviewing the economist quotes from the other thread to which I linked)? It may be that you're agreeing that the Bush tax cuts have caused (and would continue to cause) LOWER revenues than we'd receive without the cuts (i.e, at the previous tax rates), but that revenues would still grow enough DESPITE the tax cuts to fund our needs. Is that what you're saying?

An economy running at the tax rate that provides for optimal growth will, in fact, produce higher revenues than a tax rate that is higher and recoups more revenues in the short run.

A larger economy produces more revenues than a smaller economy. It's that simple. That's not what these numbers point to, necessarily, but it's a possible contribution to them.

Not necessarily, by any means. The economists I've cited are indeed talking about the long term, not just short-term effects. They do not believe that there would be enough incremental growth for tax cuts like Bush's to cause higher revenues even over the long term.

Well, then I think that they underestimate how far off of the growth optimizing tax rate we are and how much growth a flat 15% (or 10% like Albania) would produce over the course of 30 to 50 years.

That is what I am saying:

I don't know what revenue would have been if the tax cuts hadn't occurred, but for the sake of arguement I will agree with you that tax revenue may very well have been higher if the tax cuts hadn't taken place.

You characterize what I'm saying as " It may be that you're agreeing that the Bush tax cuts have caused (and would continue to cause) LOWER revenues than we'd receive without the cuts (i.e, at the previous tax rates), but that revenues would still grow enough DESPITE the tax cuts to fund our needs."

Basically, that is what I am saying: tax cuts reduce tax revenue but stimulate economy -> stimulated economy generates strong and growing tax revenue -> new tax revenue, while potenitally not as high as it otherwise would have been without the cuts, is still growing at a level that should be more than sufficient to meet our current needs (the 8% tax revenue growth we are having this year).

OK, but you still seem to be assuming that 8% growth is likely to continue indefinitely. Do you have any basis for that belief? Also, the question isn't whether or not tax policy is generating sufficient revenue to meet "our current needs". You have to look to the future. Please see my links regarding the projected explosion of entitlement costs. We should be paying DOWN debt now, not adding to it, or at least reducing the debt-to-GDP ratio. If revenues had been higher over the last several years we would not have been adding (or adding as much) to the debt, or perhaps would even be paying it down a bit at this point. And, while there would be some negative short-term impact on GDP if we didn't have the tax cuts, the debt-to-GDP ratio would still be lower.

One other point, people often point to tax cuts and praise them for stimulating the economy, then turn around and blame spending for the deficits, neglecting the fact that both tax cuts and spending are stimulative. In fact, spending is more stimulative in the short term than are tax cuts, because 100% of spending is immediately spent (by definition). Take away the deficit spending and short-term GDP would be lower, and in turn, tax revenues would be lower vs. without the deficit spending.

We tried to get ahead of the curve with raising taxes for future entitlement liailities once before- the FICA taxes were raised in the early 80s. This created a huge social security surplus well in advance of when we actually needed the tax revenue. So what happened? Did it go to pay down debt to prepare ourselves for later years? No- Congress spent it and used it to offset what would have otherwise been a much higher deficit on the non-entitlement budget.

So if you want my taxes to pay for future entitlement liabilities, come back and see me in 2015 or whenver the crunch starts happening. If you raise taxes now to address it, you are naive if you don't believe the surplus you create is going to get spent, and Congress will just come back with its hand out again anyway.

Also, to your last point, I certainly agree, spending increases stimulate the economy. I give Bush and Congress a free pass for blowing out the spending 2002-2003 when we were coming out of a recession, in fact I would have done the same thing. But now that the economy is doing well, there is no reason to justify excess spending, and one of the points in my OP was that I was happy that spending growth is only coming in at 2.5% so far this year.

There are two problems with your argument. First, if we ignore the problem of our debt and our unfunded liabilities (for entitlements) and just kick the can down the road, the eventual sacrifices that we'll need to make will be much greater. (For one thing, we'll have a lower worker-to-retiree ratio.) On that point, economists (and even politicians) agree: the longer we wait, the more painful the solution will be.

Second, rather than ignoring the problem and letting it fester, we should find a way to enforce control over spending and to prevent any increase in revenues from causing incremental spending. If we can achieve annual surpluses, we can use it to pay down debt (buy back bonds), so our debt-to-GDP level is lower in a decade or two when we are faced with the fiscal burden of increased entitlement costs for all those retirees (Medicare and Social Security). The lower our debt-to-GDP when the sh*t hits the fan, the more capable we'll be of meeting that burden without severe consequences for our standard of living ("our" meaning as a nation -- both workers and retirees). I've been advocating the following approach as a matter of process: http://www.redstate.com/blogs/brooksrob/2007/may/01/providing_cover_for_...

Lastly, the jury is still out on the relationship between revenues and spending. While it may be intuitive to think that the more money Washington has the more it will spend, and if it has less it will spend less, respected economists are currently debating this question. Needless to say, Washington is not constrained in any technical way by the amount of revenues -- they can borrow and spend (the deficit and debt). Here's what I found re: economists' views on this question:
http://www.redstate.com/blogs/joliphant/2007/may/10/tax_revenues_hit_rec...

We tried raising taxes in the 80s to address future entitlement shortfalls and the politicians screwed us and squandered the money. Just like we tried an amnesty in the 80s that was supposed to be part of an overall fix, but the politicians screwed us and the problem got worse.

I'd be all in favor of fixing the problem now if I believed Congress was capable of it, but it keeps happening time and time again that we get sold a bill of goods and told that the problem will be fixed, and then lo and behold 10 or 20 years later the politicians are back telling us the problem is now worse than ever and we need a new fix.

In short, our human nature makes us fundamnetally incapable of solving a problem like the Medicare shortfall this far out in advance. Unless the problem is glaring and immediate, people are unwilling buy into a solution today that in any way impacts them negatively to solve a problem 10 years out in the future.

So I actually don't necessarily agree with you when you say "The lower our debt-to-GDP when the sh*t hits the fan, the more capable we'll be of meeting that burden without severe consequences for our standard of living ("our" meaning as a nation -- both workers and retirees)." But it just simply isn't going to happen, like I said human nature- obvisiously YMMV.

You're obviously free to hold whatever position you wish, but you should know that the one thing every informed person and organizatin across the political spectrum seems to agree on is that we CANNOT ignore this problem, because if we do, it will get much worse.

Is any politican talking about any remotely serious solution to the projected Medicare shortfall (which dwarfs social security)? No, no one is- they are all ignoring it, and they will ignore it unless and until it blows up in our faces.

You are right the looming problem are well documented, but poll the public on priority for finding a Medicare fix for 10 years from now. No one cares, the public and the politicians are content to ignore it. It's human nature, there's nothing you or I can do to change that, far more prominent people than us have tried to put forth solutions that have gone nowhere.

Don't tell me I can't ignore the problem, I'd actually like to see a solution suggested beyond telling me to open my wallet and turn it upside down. I don't see any from you beyond a generic desire to raise taxes, and the desire for a commission headed by some prominent figure to figure it all out. I hate to burst your bubble but when a politician wants to kick the can down the road, forming a blue ribbon commission to study the issue is exactly what he does.

I recommend reading up on this issue at http://www.concordcoalition.org/

A couple of specific links from that site that you may wish to read (among others) are:

http://www.concordcoalition.org/events/fiscal-wake-up/fiscal-wake-up-cal...

http://www.concordcoalition.org/events/fiscal-wake-up/docs/fwut-candidat...

http://www.concordcoalition.org/doc/nytimesad/2007-ad.pdf

You're probably correct that tax cuts like Bush's won't lead necessarily to revenue neutrality, but the problem isn't achieving revenue-neutrality, it's achieving government shrinkage. You could achieve revenue neutrality if you actually shrunk the size of the government and cut back on how much money it spends.

During the last debate, Tommy Thompson answered one of my questions in the Spin Room about the size of government by saying that he would require all of his Secretaries to bring in budgets that were 2% a year less than the previous years' budgets.

The Democrats certainly don't intend to do that, even though it isn't even a "drastic" move, in terms of restructuring. You would think that if they really wanted to balance the budget they'd be talking about reducing the size of the government first, and raising taxes on anyone -- including the rich -- last, but that's not part of their program. The problem isn't taxes, it's spending.

This administration has been about par for the course in not stopping the relentless expansion, which is why so many Conservatives and Republicans are rightfully pi**ed.

I think Thompson should make it his campaign slogan: "I'm A -2%er!"

When pigs fly is when the American People (as represented by the overwhelming bureaucracies that take their money) will have that happen, unfortunately. And Thompson missed criticizing the DoD, which I can tell you from firsthand experience is stuffed chock-full of people who earn six figures while working on so-called "Lean Six" and only come into work ten hours per week.

That's the problem, BrooksRob. It won't get better until some politician somewhere has the cojones to say it and *make it stick.*

I understand the problem (or better put, problems). And I want lower spending as much as just about anyone (as long as it doesn't cut into our military capability). A couple of things to note, however. One is that the real problem lies in entitlements, not discretionary spending, so if Tommy Thompson's idea relates to budget submissions from his secretaries, it may not address the bulk of the problem. Second, the most important consideration here is fiscal responsibility, meaning managing our debt-to-GDP so we reduce the threat of substantial harm to our standard of living. We should fight for low spending and fight hard, but at the end of the day be realistic about what is politically achievable in terms of spending limitations (and I'm talking about Republican politicians as well as Democrats, although the latter are obviously worse), and then base tax policy on the level of revenues needed to be fiscally responsible. And as I've noted in a previous comment on this thread (and provided link), it's not at all clear among economists that "starve the beast" works (i.e., that lower revenues lead to lower spending, as opposed to just more borrow-and-spend).

Again, we need to first put pressure on the politicians to be fiscally responsible -- to force all of them to fight it out over WHICH sacrifices should be made, rather than avoiding the needed sacrifices and letting the problem worsen. We should do that via a commission http://www.redstate.com/blogs/brooksrob/2007/may/01/providing_cover_for_... . Within that framework, we can fight for the lower taxation, lower spending options among alternative plans for fiscal responsibility.

New York City is a microcosm of this phenomenon. The only reason that Michael Bloomberg is thinking of levying an $8 per day user fee on all the cars and a $21 dollar per day user fee on all the trucks in New York City is that the CITY IS GOING BROKE over its pension obligations.

Bloomberg is selling it as a way to reduce congestion but really it's a meausre to help forestall NYC's impending congestive heart failure because of their pension and benefits obligations to city employees, which they can't afford. And they can't afford them because New York City is a Democrat-run town.

"This is a huge liability," said Jan Lazar, an independent benefits consultant in Lansing, Mich. "If anybody understands it, they'll freak out."

That's Duluth, but the problem is even worse in New York. They can't raise taxes enough to cover it, and instead they're going to charge exorbitant driver user fees to try to keep it at bay.

It's a microcosm of the federal entitlement problem, and the Democrats are going to have similar solutions at the federal level because of their complete inability (and ours, these past eight years) to do something meaningful in terms of spending.

It's absolutely hideous. Even the NYT admitted in 2006 that the tax receipts in NYC were rising because of the Bush tax cuts, but which one of the Democratic Presidenial nominees is talking about cutting spending? I was at the Presidential debate in Manchester, and apart from the military budget, nobody was talking much about that. So it's more of the same.

Raising taxes on the "rich" does not help the poor, as much as Democrats would like to believe that all of our problems could be solved if only we taxed the rich enough.

I'm not rich, and in fact I have to work very hard to get enough money into my bank account to pay my bills right now each month. I do, however, have several family members who *are* rich, in both parties, and the majority of what they do with their extra disposable income is to grow the economy by investing in their businesses, through philanthropy, and other important areas.

Taxing the rich more than the middle class is also stupid because whenever you try to do it, GWB was correct: they'll hire accountants for $100+ an hour to find a way to shield the revenue. One of my favorite uncles does that, has a Piaggio jet, lives in the Virgin Islands, and is a Democrat. That's right -- he's a Democrat.

The difference between what you hear on television and what happens actually where rich people are concerned is that they *all* want to be able to direct their money where they think it will do the most good. And it's a sure bet that it does the *least* good in a noncompetitive area like the government. For that reason, even the most liberal members of my family who are wealthy try to keep the largest portion of what they earn away from the tax man: it isn't because they're scumbags, it's because they know how to use the money!

The Donks really need to stop this idea that somehow the rich don't contribute -- because they DO contribute -- more than their share in terms of numbers. They should cut it out and let people get rich, and donate. Most of the people that I've known who are wealthy are also very generous, and I know that I will be if I ever become "wealthy" -- but I want the money to go to causes that are worthwhile, not down a rathole or into a government agency.

you are basically correct. Taxing "the Rich" can have a negative effect on investment because that money has more velocity (in Economic terms) than money being used to merely pay bills. On the other hand, the middle class can be taxed too much and have an even larger negative effect on the economy. Since it is really middle class consumerism that fuels the economy.

I don't mind progressive taxation because, like the reason John Dillinger robbed banks "Thats where the money is". The problem isn't taxation on principle its the amount of the tax, particularly marginal tax rates, and taxes on capital gains.

"Nothing works like freedom, Nothing succeeds like liberty"
Kyle

Tax rate cuts have never caused a shrinkage in government. But, less tax revenues might.
The irony is that the tax rate cuts have actually increased the amount of revenues available for the welfare state. It appears that tax rate policies have little impact on the size of government.

There have been some wild and woolly discussions in this thread by people whose backgrounds as economists (or armchair economists) are more extensive than mine, and so I'd like to simplify things a little and bring them back down to my level, a level that most entrepreneurs and businesspeople who didn't earn an economics Ph.D. can understand:

You're right. From my perspective, the growth of government spending is the problem because of entrenched bureaucracies that are impossible to turn around, or even ask to cut their spending by 1 or 2 percent per year -- even though a reduction in the spending would help to balance the federal budget and allow for some savings and perhaps make a dent in the enormous entitlement debacle that's going to arrive in this country relatively soon.

As a business owner, I am acutely aware of the effect of tax policy on my business. I'm building a company in a relatively low profit-margin business (printing and mailing) where I literally strive to make a few tenths of a cent on a piece of mail and use best practices to optimize my business in order to eke that out while doing a superior job for my customers. When my taxes rise (local, state or federal) and my revenue doesn't, all of my profit disappears and I can't pay my mortgage, my electric bill, the rent and insurance on my capital equipment costs, or even do such mundane things as placing a better sign on the outside of my building.

And I also can't afford to think about placing a job opening in the local newspaper and hiring one of the local high school kids who might otherwise sit idle and do something less productive with themselves during the summertime, because I have to worry about whether I can meet the payroll.

I can tell you conclusively that lowering my tax burden would have a very immediate and positive effect on my ability to do those things as a businessperson, and that is *exactly* what I would do if that ever came to pass. Unfortunately, the biggest problem that I see is that the Democrats have effectively trained people: "Tax cuts mean service cuts" and because of that, they've managed to get more people inveigled into voting for bigger government and less self-reliance every time they go to the polls.

The only way to have tax policy influence the size of government is to do something like what Tommy Thompson suggested in the Spin Room at the last debate: require every federal agency to submit austerity budgets that come in 2% less than the ones before them, for as long as it takes to whip the government agencies into shape and improve their efficiency. Continuing to fund things at the status quo or the status quo++ will never cause that to happen.

I don't mind paying taxes as a businessman in the ultimate, final reality: I know that there are things the government has legitimate uses for. The problem is that we have expanded the scope of what "government is useful for" to include all manner of things that *nobody* is useful at doing for someone else.

Right now borrow-and-spend is the most politically advantageous policy for the politicians in Washington, despite the fact that it is reckless and will eventually screw this nation. If a politician advocates true fiscal responsibility to prepare us fiscally for the aging baby-bommers -- i.e., if the candidate advocates substantially scaling back Medicare or Social Security benefits (and/or eligibility) and/or raising taxes, he will probably lose the next election. The key is to force them to make the hard choices between lower spending vs. higher taxes, and then push them as far as we can toward the lower spending side. As I keep saying, as a first step we need to get them to provide themselves political cover for fiscal responsibility. http://www.redstate.com/blogs/brooksrob/2007/may/01/providing_cover_for_...

Until we change the political calculus, they won't act responsibly.

What we need is a President and a Congress that are willing to say, and mean, the following slogan:

"The People's Buck Stops Here."

Both the Democrats and the Republicans are currently lying to the American people. That has to end if America as a nation is going to do what every responsible businessowner does and get their financial house in order.

You got a guy who argues black is white with equanimity of delusion.

Envisioning when all that is Left is the Right.

Research, read, learn, think...then speak.

Your heart's in the right place, however we're enough years down the road from the tax cuts that I think it's fair to say that the increased economic growth over that time has probably pushed tax revenues higher than they would be without the cuts.

Run like Reagan!

Thanks, but I'll choose the professional analysis of economists over my observation of a few simple correlations as long as those economists have no reason to be biased toward this conclusion, and the supply-side economists I've mentioned (including Bush's economists) have no such reason. They have reason to be biased in the OTHER direction -- attributing the revenue rises to the tax cuts -- yet they all agree on the opposite. Why would they, if your conclusion is so obvious?

Have you mentioned any economists in this thread?

Run like Reagan!

Please see link I provided above.

I just checked, and at least in some cases (such as one brief, context-free quote of socialist-leaning Ben Bernanke.

But do you have any analyses to cite estimaing the change in economic growth triggered by the tax relief, and what that would do to tax revenues this many years on?

Run like Reagan!

I meant at least in some cases you were quoting generalities, not economics discussing this specific tax cut.

Run like Reagan!

If you really want to be informed on this question, please take more than a brief look at that thread. At least scroll through and read all the quotes of economists that I have provided in several comments. Those quotes were examples of results of my search for several hours to try to find an economist who contends that the Bush tax cuts have generated equal or greater revenues than we would we would have been receiving otherwise, or that extending them would have such an effect. All I found was the opposite contention. I have challenged others to find ECONOMISTS who disagree with those whom I've cited on this question. No one has.

I don't feel like filtering through a haystack of generic comments hoping to find a few needles of comments specific to the question at hand: the size of the economy this many years after the implementation of the supply-side cuts, sorry.

Run like Reagan!

Well, it would take about 10 minutes to spot and read the quotes in a few of my comments, most of which are in italics so they are easy to spot, and all of which relate directly to the question of the relationship between the Bush tax cuts and revenues. If that 10 minutes is not worth an education to you, feel free to just go with whatever assumptions (and conclusions) make you feel good.

I simply disagree with their conclusions. You would have me believe that we would have seen the same incredible growth rate in this economy and the incredible growth in government receipts if the marginal tax rates would have remained at 70% and no relief in capital gains taxes?

It is just silly, its as soon believe that the Soviet Unions command economy would have produced similar growth rates.

"Nothing works like freedom, Nothing succeeds like liberty"
Kyle

Alright, you obviously don't think increased economic growth, sparked by tax relief, has boosted revenue. But if that's your position case you have an obligation to explain what you think actually did cause the revenue increase. There are a number of things which typically lead to economic growth: low energy prices, low interest rates, investment, etc. We certainly haven't been benefiting from low energy prices (quite the contrary), and while interest rates used to be low, the Fed has been jacking them up for some time now without a noticeable decrease in revenue. The stock market's been doing well of late, but trading is still only a little above where it was at the end of the 1990's.

For my part, I think the revenue growth is directly related to employment growth, specifically the last 45 consecutive months of payroll job growth.[1] But of course, that would have been impossible without consistent gains in GDP, which I continue to believe could not have happened without the tax cuts. Maybe I'm wrong, but if so, please point out what part of the puzzle I'm missing.

[1] http://data.bls.gov/PDQ/servlet/SurveyOutputServlet?data_tool=latest_num...

A precedent embalms a principle.
- Disraeli

Sorry, the 3rd sentence is supposed to read this way:

"There are a number of things which typically lead to revenue growth ..."

A precedent embalms a principle.
- Disraeli

I disagree with your premise. Just because I -- or perhaps even the economists I've cited -- can't explain precisely what has driven the revenue growth, that doesn't mean that they can't consider a particular factor (the tax cuts) to be an unlikely cause. I haven't researched what economists DO attribute it to, but in any case, again, one needn't identify and quantify likely causes in order to discount a particular cause as unlikely. To illustrate with an extreme example, I'm pretty sure we can't attribute the revenue increases to my spending on my 2003 vacation. For whatever it's worth, I have seen Bruce Bartlett attribute it to the "normal business cycle", meaning growth that would have occurred anyway.

Additional point: If we can simply observe a few correlations and imply causation (both in terms of observed results and in terms of establishing a cause & effect relationship in general -- and use that assumed relationship for setting policy), than the same argument could be made that the 1993 Clinton tax INCREASE caused the revenue increases in subsequent years. See chart http://www.heritage.org/research/features/BudgetChartBook/charts_R/r2.cf...

Point is, economic analysis is more sophisticated than simply making the observation that tax cuts occurred and revenues increased in the following few years, and concluding cause & effect on that basis. That's why they get those PhDs.

because whenever this issue is discussed someone inevitably brings up Clinton and the 1993 tax increase and conveniently leaves out the 1997 tax cut, and by looking at your chart you aren't making the case you think you are making.

/broken record

___________________________________
The CIA has better politicians than it has spies - Fred Thompson

______________________________
"Those who expect to reap the blessings of freedom must, like men, undergo the fatigue of supporting it."
-Thomas Paine: The American Crisis, No. 4, 1777

Thanks for making my point that factors other than tax policy can affect the economy, and in turn, tax revenues.

Unless you are asserting that the people disagreeing with you hold the position that the marginal tax rates are the only factor affecting the economy. In which case you are building a nice strawman.
______________________________
"Those who expect to reap the blessings of freedom must, like men, undergo the fatigue of supporting it."
-Thomas Paine: The American Crisis, No. 4, 1777

I resisted responding to your initial comments because, based on our dialogue at that other thread, I know you are simply unwilling to apply reason to this question. I gave in and responded, but I'll try to resist further. No point to it.

I am also known for not being argued out of positions. I am really well known for not letting people who have gotten hysterical about a non catastrophe harsh my mellow.

P.S. You really haven't responded thats part of the problem.
______________________________
"Those who expect to reap the blessings of freedom must, like men, undergo the fatigue of supporting it."
-Thomas Paine: The American Crisis, No. 4, 1777

Wrong. Look again at the chart. The growth starts following the 1993 tax increase. Kind of odd that you apparently repeatedly "correct" people on this point, yet you're wrong.

Nobody is suggesting a simple post hoc ergo propter hoc explanation. Well, at least I'm not. Obviously, you have to have other good reasons why A, which precedes B, actually caused B. What I've suggested is that the recent economic recovery, which we all agree is behind the revenue increase, was due in large part to the tax cuts which were implemented in the early part of George Bush's tenure (they were fully phased in 2003). I believe that because:

1) Many other factors, which might reasonably have explained the economic renewal, were absent.

2) The tax cuts injected billions of dollars of personal spending money into the economy.

3) The effect of that money can be traced in a number of ways, particularly in the growth in employment in the retail sector, increased spending on luxury items early in the recovery period, [1] and increased spending on IT by corporations around the same time. [2]

Now, you may think my reasoning is inadequate, or that my evidence is insufficient. And that's your prerogative. But my challenge remains the same: come up with a better explanation.

On a related note, throughout this strand you referenced the work of leading economists. I’d like to make two points on that score. First, economists aren’t nearly as uniform or homogenous as you let on. In fact, economists come in all shapes and sizes: conservatives, libertarians, socialists, supply-siders, Keynes fans, etc. And some of them do believe that tax cuts can stimulate revenue. As just one example, check out this guy. [3]

Second, over the last generation or so economics had gained a completely undeserved reputation as a science. It isn’t. What makes physics or biology “science” is that they can accurately predict the result of experiments. Economists have no experiments and they usually don’t predict anything with reasonable certainty. That’s why they fight like cats and dogs all the time, and why they get stuff wrong on a regular basis. When CNN goes looking for predictions about the next employment report or next quarter’s GDP numbers they have to take a poll of several economists and make a prediction based on the average response. Why? Simple, the economists just don’t agree with each other. If that’s science, I’m a pregnant hippo.

The way I see it, economics is a lot like psychology: a profane art that attempts to interpret what is essentially human behavior using a hodgepodge methodology cobbled together from techniques borrowed from other academic disciplines. Intuition plays a bigger role in both disciplines than anybody is willing to admit. Ultimately, an economist’s practical value to his/her employer, be it the state or a corporation, rests on his understanding of the behavior of the most complex social organism around: the marketplace.

[1] http://media.www.dailytexanonline.com/media/storage/paper410/news/2003/1...
[2] http://retailindustry.about.com/cs/technology/a/bl_nrf011304.htm
[3]
http://www.econlib.org/Library/Columns/y2003/Wesburytaxcuts.html
A precedent embalms a principle.

- Disraeli

First, with respect, I doubt you have considered all the factors that the major economists I have cited have considered, or have the same level of understanding they have as to the likely degree to which revenue feedback effects of the Bush tax cuts have contributed to revenues, which is why, again, when there is overwhelming consensus even among supply-side economists who support the tax cuts (for other reasons) -- indeed, even among Bush's OWN economists -- that the tax cuts have a substantial net NEGATIVE effect on revenue, I conclude that they are much more likely to be correct than incorrect, even if I can't point to other factors that have driven these revenues (and even if these economists can't identify and quantify these factors precisely -- I don't know yet to what extent they can or can't, but I'm saying that even if they can't say what HAS driven the revenues, it doesn't mean they can't rule OUT a particular factor as a likely driver).

Second, there is indeed a strong consensus among economists on this question, even among supply-siders. I checked your link #3 (to some economist who may be a quite minor figure on this issue for all I know), and I scanned his piece and could not find an assertion that Bush's tax cuts (or tax cuts in general) are revenue-neutral or increase revenues. Can you copy & paste a quote that says this, if such a quote exists?

Finally, yes, economics is not a hard science like physics and it is less reliable. But we are talking about probabilities here. We should base policy -- all policy -- on what we think will be the MOST LIKELY impact, even if we are not CERTAIN. So when I see an overwhelming consensus among experts on the answer to a question, and these experts have no incentive to be biased toward that conclusion (in fact, in this case they have the opposite incentive, since they are supply-siders and in some cases even work for Bush), I think it's only sensible to believe that their conclusion is more likely to be correct than the opposite conclusion. Sure, experts can be wrong, even a consensus of experts, but again, we're talking probabilities. Doesn't that make sense?

It lends great credence to your argument.
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"Those who expect to reap the blessings of freedom must, like men, undergo the fatigue of supporting it."
-Thomas Paine: The American Crisis, No. 4, 1777

With respect to link 3, I was referring to two sections. First, the part where he talks about the 1997 capital gains tax, which drove up the stock market by 20 percent per year for five straight years. While the author doesn't actually say the words, "and revenue increased too," he implies as much, and of course we know that capital gains tax revenue did increase in the years following the 1997 tax cut. [1] BTW, for a more complete discussion of the net revenue impact of the capital gains tax cuts in 1997 and 2003, see this article.[2]

Second, I was referring to the last couple of paragraphs where the author talks about bracket creep. The author argues that eventually strong economic growth pushes people into higher tax brackets, which in effect raises their taxes. The author believes this is a bad thing because it constitutes a de facto tax increase on our most productive citizens (I tend to agree), but the net result of such a trend is obviously more revenue for the government.

BTW, while I obviously do not agree with you, I do admire the stamina you've displayed in this strand.

[1] http://www.cbo.gov/ftpdocs/0xx/doc2/E&b01-97.pdf
[2] http://www.nationalreview.com/nrof_luskin/luskin200601270946.asp

A precedent embalms a principle.
- Disraeli

Thanks re: compliment on "stamina" here. I wish I could say that I felt like my efforts were accomplishing something. It seems like most on this thread just want to believe what they want to believe, rather than trying to be objective and seeking the best possible information. I appreciate the fact that you have done a bit of research.

Quick note re: that National Review piece (which someone commented on previously in this thread, (1) the writer is NOT an economist, (2) it deals only with the capital gains tax cut (not the 2001 and 2003 Bush cuts as a whole), (3) his argument is a non sequitur. He points to the fact that actual revenues have been higher whereas the prior CBO projections expected them to be lower, and presents that as proof that revenues are higher than they would have been without the cuts. It just doesn't follow. It's a non sequitur.

As for the 1997 cap gains tax cut and subsequent revenues, I think it goes back to the fact that an observation of correlation does not prove causation, which again is why professional analysis is more persuasive than a couple of observations you or I might make, particularly when the professionals (the economists) apparently all agree on the matter. They have a better sense of what data to include to establish strength of correlation, have the theoretical grounding to consider various potential causal factors, and have the analytical tools and methodologies to conduct sound analysis. Meteorologists aren't always right, but if they all predict a low temperature tomorrow for Manhattan of, say 65 degres, I don't think it's likely to get under 50 degrees, even if I observed that on tomorrow's date last year that's what happened.

If you can find economists who contend that the Bush tax cuts have had a net positive effect on revenues (i.e., vs. what revenues would have been without the cuts), please send. Thanks.

You can tell, because he keeps pulling out lines like

the overwhelming consensus of supply-side economists

strong consensus (universal as far as I could find)

I'll choose the professional analysis of economists over my observation of a few simple correlations

And yet, he has no explanation at all for why, after the tax cuts of the early 1960s, the early 1980s, and early in this decade, we had unparalleled economic growth. He'll hand-wave it away as 'part of the business cycle' or some such, or start going on about spending-- which is important to keep under control, of course-- without ever giving credit to what turned the business cycle around in the first place.

He's firmly in 'Dead men do bleed' territory.

---
(Formerly known as bee) / Internet member since 1987
Member of the Surreality-Based Community

"Wubbies World" aka: Brian; MSgt, U.S. Air Force (Retired): An argument is a sequence of statements aimed at demonstrating the truth of an assertion.

Also note he is probably a strict balanced budget proponent who doesn't believe its possible to reduce spending. Or, he just doesn't want to.
______________________________
"Those who expect to reap the blessings of freedom must, like men, undergo the fatigue of supporting it."
-Thomas Paine: The American Crisis, No. 4, 1777

That is just so moronic. First, I never said tax cuts don't stimulate economic growth. To the contrary, they obviously do. If I must say it once again, the question is whether tax cuts like Bush's (i.e., taxes on labor income and on capital gains, from starting points of rates that existed prior to the Bush cuts), generate enough incremental growth (and incremental tax compliance) to be revenue-neutral or even have a net positive impact on revenues. The overwhelming consensus among economists -- even among supply-siders and even among Bush's own economists -- is that the answer is NO. That may bother you. It may FEEL better to you to believe otherwise. But it's true. And if you choose to dismiss this consensus and opt instead for your beliefs to the contrary based on your own crude observations, well, go ahead, but we're in trouble if people making policy for our nation make decisions in that way.

Why don't you educate yourself on the issue. Read what is being said by major economists -- you know, the folks with the PhDs so they know how to conduct professional analysis, using the right data, the right methodologies and tools, etc. Heck, just read what Bush's own economists are saying. Base your beliefs on good information, not on what makes you feel good to believe. And then speak from an informed standpoint rather than spewing trash borne of ignorance.

Now repeat after me

So your revenue neutrality statement is a nonsequitor.
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"Those who expect to reap the blessings of freedom must, like men, undergo the fatigue of supporting it."
-Thomas Paine: The American Crisis, No. 4, 1777

Against my better judgment, I'll break my rule of not responding to your (consistently nonsensical) comments on this issue.

Don't you think all the economists I've cited have factored those dynamics into their analyses?? Or do you think it's only laypeople like you who are clever enough to think of such obvious stuff?? Econ 101 says that particular types of transfer payments (particularly those related to poverty) and economic health are positively correlated and are cause & effect, for obvious reasons. Congrats on stating the obvious. Double-Congrats on thinking you have thought of something that all those economists are missing. Do you see why I try not to bother responding to you on this issue?

What I think is you read the economists through a prism of your own expectations.

Whats more given the time interval between my post and reply, I would hazard you didn't actually think about your reply or consider what you were replying to.

Now on my transfer payment statement, sure its obvious. Why have you been missing it ?
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"Those who expect to reap the blessings of freedom must, like men, undergo the fatigue of supporting it."
-Thomas Paine: The American Crisis, No. 4, 1777

Thanks for showing me once again why it is a waste of time to respond to your comments on this issue.

Is to continue to beat this bloggyhorse every chance you get. It is unknowable what the exact impact of the tax cuts are, except that (as you admitted yourself) they spurred economic growth, resulting in AT LEAST SOME offsetting revenue increase. It continues to be unknowable even after you find a couple of OPINION pieces on the web.
---
Underlying most arguments against the free market is a lack of belief in freedom itself. - Milton Friedman

Ahh, Zuiko. I can always count on YOU to make sense...not. In my other comments on this thread (and the previous thread) I explain why your comment makes little sense. I don't care to repeat myself here, particularly with someone who just won't get it anyway.

Apparently everyone on this site is just far too stupid to ever "get it," so why do you persist in beating your bloggyhorse?
---
Underlying most arguments against the free market is a lack of belief in freedom itself. - Milton Friedman

Please don't equate yourself with "everyone on this site". I certainly wasn't referring to all RedStaters, just to you. Yes, there are a few others like you in terms of a general unwillingness or inability to apply reason to at least some issues. But I made no such generalization.

I believe you have managed a direct recursion.
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"Those who expect to reap the blessings of freedom must, like men, undergo the fatigue of supporting it."
-Thomas Paine: The American Crisis, No. 4, 1777

...a long habit of not thinking a thing wrong, gives it a superficial appearance of being right...

---Thomas Paine---

a balanced budget. Barring act of god or democrat controlled congress.
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"Those who expect to reap the blessings of freedom must, like men, undergo the fatigue of supporting it."
-Thomas Paine: The American Crisis, No. 4, 1777

it took me about 1 minute on Google to find an economist who disagrees with you:

http://www.nationalreview.com/nrof_luskin/luskin200601270946.asp

I stopped there. I have no doubt that there are many more. Your argument is a bit misdirected. No, the tax cuts do not DIRECTLY lead to revenue improvements. They lead to a better economic environment, which in turn leads to increased revenues.

Well, I lied...I didn't completely stop there. Just to test my assertion about there being "many more," I paged to the next page of Google hits and found this one:

http://63.161.169.137/cea/NPressClub20031104.html

In his talk, Mankiw says:

It is hard to estimate how much capital we do not have thanks to the estate tax. But the issue is of paramount importance. Research has established that intergenerational transfers accounts for a large fraction of capital accumulation in the U.S. economy. It is very possible that the depressing effect of the estate tax on economic growth offsets a significant part of the revenue attributed to it.

Oh, and this one:

http://www.econbrowser.com/archives/2007/04/new_estimates_o.html

where the article states:

Their estimates imply that a tax hike that initially raises tax revenues as a percent of GDP by 1% would lead to a 3% lower value for real GDP 2-1/2 years later, a surprisingly big effect. The Romers shy away from then asking the question of interest for tax-cut advocates of whether, as a result of this stimulus to GDP, total tax revenues would eventually actually fall as a consequence of the initial tax hike. It is my impression that the effect reported above is so big that if one asks this question using their methodology, one might well find that they would.

I'll just stop there (now) on the article research. Dueling articles hardly accomplishes anything, other than to demonstrate that ona topic like this, (contrary to your assertion) there is a variety of opinions. That's why there is "supply-side" and Keynesian economics, but I'm out of my league, since I'm just a simple computer architect...

What's "funny" (or sad) is that you offer these examples as strong support of your point. I'll take them one by one.

Re: the National Review piece, (1) the writer is NOT an economist (apparently you didn't do another "minute" of research to find out), (2) it deals only with the capital gains tax cut, (3) his argument (that the fact that actual revenues being higher while the prior CBO projections expected them to be lower proves that revenues are higher than they would have been without the cuts) is a non sequitur.

Re: my argument being "misdirected" because the tax cuts lead only indirectly to revenue improvements via economic stimulus...well, duh. Obviously I understand this dynamic.

Re: your Mankiw excerpt, he is only discussing the estate tax, which he acknowledges is only tiny portion of total revenues (1.4% in 2001 for estate and gift taxes), and it's "funny" that you didn't include this quote in your excerpt:

"Let me be perfectly clear here. Tax reductions are generally not self-financing. In the vast majority of cases, the behavioral responses to changes in tax rates just are not high enough to yield that result. But estate tax repeal could be an exception to that general rule. It is conceivable that repeal could actually increase total federal revenue. Or, if not, the revenue loss could be small."

If you want to know what Mankiw's view on the revenue effects of tax cuts in income taxes (i.e., labor income) and capital gains -- which was in my comments on the other thread, by the way -- here it is:

Gregory Mankiw, former Chairman of George W. Bush’s Council of Economic Advisors. Currently he is an economics professor at Harvard.
"In the long run, about 17 percent of a cut in labor taxes is recouped through higher economic growth. The comparable figure for a cut in capital taxes is about 50 percent."
"… The consensus view is that tax cuts indeed influence national income, but not to the extent that they are fully self-financing."
http://www.nber.org/digest/jul05/w11000.html

"Most economists … believe that taxes influence national income but doubt that the growth effects are large enough to make tax cuts self-financing."
http://econweb.fas.harvard.edu/hier/2005papers/HIER2057.pdf

Re: the Romer study, here's a more representative excerpt from the economists who wrote the summary of their study. You conveniently left some important statements out, statements that substantially dilute the extent to which this information supports your point.

"The Romers shy away from then asking the question of interest for tax-cut advocates of whether, as a result of this stimulus to GDP, total tax revenues would eventually actually fall as a consequence of the initial tax hike. It is my impression that the effect reported above is so big that if one asks this question using their methodology, one might well find that they would. The Romers do not explore this question in their paper, however, and have some concerns that other changes after the initial tax change (for example, subsequent legislation undoing the original action) could account for that tax revenue effect."

"The potential contribution of such other factors of course also makes it hard to trust estimates such as those displayed above for GDP. For example, the 1981 tax cut did not arrive out of a vacuum, but instead resulted from a political process for which an important determining factor was the poor economic performance under President Carter and in particular the recession of 1979-80. If one believed, as I do, that regardless of fiscal policy, an economic recession is likely to be followed by above-average economic growth as the economy starts to recover, one would attribute at least some of the rapid growth of 1983 not to the fiscal stimulus but to the fact that the economy was recovering from a recession."

"Such factors make it difficult ever to be fully persuaded by statistical efforts like the Romers' latest study."

Is that all ya got? Anything that can come anywhere close to standing up against the economists I have cited (including the economists of the Bush Administration, who agree with my point and disagree with yours)?

I'll try again with those links:

http://www.heritage.org/research/features/budgetchartbook/charts_P/p9.cf...

http://www.heritage.org/research/features/budgetchartbook/charts_P/p4.cf...

How about cutting it ?
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"Those who expect to reap the blessings of freedom must, like men, undergo the fatigue of supporting it."
-Thomas Paine: The American Crisis, No. 4, 1777

Our system needs to be tweaked somehow to give political cover to those that pursue the tough decisions of spending cuts, especially entitlements. We also need to break down the current culture in Washington and create a new one.

The current political environment causes almost all of our elected elite to wait on the big problems until they become full fledged crises. Then and only then can politicians act without suffering political damage. "Hey, we HAD to raise taxes to cover SS shortfalls." We need to learn that an ounce of prevention is worth a pound of cure.

I believe we do send many well intentioned people to Washington but they get sucked up into the system of horse trading for favors. It's more the system that produce this rather than the people. In the immigration bill thread Rep Cannon's remarks shows us it ain't easy getting stuff done in Washington. It's a "I'll scratch your back if you scratch mine" mentality there instead of "What can we do to improve America" attitude.

This is why term limits or other solutions need to be considered where they can serve 1 or 2 terms then they have to sit out 1 term to eliminate the incumbent advantage. Reduce government and pay more to attract better professional managers was another idea mentioned here. If we put our minds to it and see the big picture we can come up with 100's of ideas. Gingrich has launched Americansolutions.com where many chapters are opening up across the country discussing problems and coming up with solutions. These are the types of things we need for our country to have another fabulous century ahead of us.

Many of these issues we devote thousands of comments and 100,000's of words to are actually SYMPTOMs of a larger problem. We are always tackling the symptoms with aspirin instead of knocking out the core illness with some sunlight and penecillin.

Ask not what you can do for your country, ask what your country can do for you. Washington Elected Elite

Indeed, we must provide the "political cover". I still say this is what we need: http://www.redstate.com/blogs/brooksrob/2007/may/01/providing_cover_for_...

Thats why I view fostering good economic growth as essential. If you have it, theres room to maneuver. If you don't things are that much more difficult.

Taxing ourselves to solve the entitlements problem will not help us. If anything it will crash us in a way that would make the great depression look pleasant.

On the term limits, there was a study done way back that showed elected officials tendency to spend was pretty much linear with time in office.
______________________________
"Those who expect to reap the blessings of freedom must, like men, undergo the fatigue of supporting it."
-Thomas Paine: The American Crisis, No. 4, 1777

I learned in business I must tailor my employees compensation package to incentivise them to be in alignment with my plan to achieve the desired business results. Changing sales people's comp plans from overrides on existing business to bonuses on new accounts, generated new accounts. Paying production people for more production and higher quality got more production and higher quality.

Maybe we need to look at the elected elite compensation plans and change them to achieve desired results. Paying bonuses to congress for reduction in spending. We could incentivize certain targeted areas more than others.

Ask not what you can do for your country, ask what your country can do for you. Washington Elected Elite

The problem is we have 536 CEOs. A good percentage of which are little better than crooks and pathological liars. Plus any bonus that was enacted would be paltry in comparison to theft or just monetary. One of the most painful lessons I learned in business is that you can only encourage people, not reform or change them.

How much of his own money (rather his wifes) money did Ned Lament flush down the toilet to attempt a shot at the senate ? Most of the members of congress are already millionaires. The utility of a few extra bucks isn't going to affect them much. At tech startups they call the problem calling in rich.

On the flip side if you want to feel good about our system take a look at the thread where they are liveblogging the senate earmarks. Our guys are giving them grief.
______________________________
"Those who expect to reap the blessings of freedom must, like men, undergo the fatigue of supporting it."
-Thomas Paine: The American Crisis, No. 4, 1777

Good points. I would suggest not only in form of monetary compensation but other carrots that will encourage the correct behavior and bigger sticks to cut down the bad behavior.

I disagree to a point that you make that money does not motivate our elected elite. I contend it is about the money many many times. They pull favors for lobbyists and donors like crazy. Look at William Jefferson. Strung himself up over $100,000. For every Ned Lamont there are plenty who aren't multi millionaires. Especially in the House and state government.

We also need those carrot/sticks immediately and not 2 yrs later at an election. Try punishing your dog 2 yrs later for soiling the carpet today. It just doesn't work.

The activism over the amnesty bill was inspiring. How do we get more of that action on other issues such as spending.

Ask not what you can do for your country, ask what your country can do for you. Washington Elected Elite

I've told you, Joliphant, I'm done responding to your arguments (for lack of a better word) on this issue. It's a waste of my time. You are incapable or unwilling to apply reason to this issue. I spent time responding to you in the other thread a couple of weeks back, but you kept coming back with nonsense, and your comments on this thread show the same thought process or lack thereof.

Your arguments have been nothing but appeals to authority.

The problem is you haven't even understood the point of your arguments.

Your post about the unfunded liabilities is what clued me to this. I do make the effort to understand what the other person is saying. Especially if I disagree with them. It helps ever so much in making your point.

Anyway back to the unfunded liabilities. This is a function of the Debt and the Deficit. It is not a function of revenue. Debt and Deficit are a matter of net outflow from the treasury not revenue collection alone.

Now Reducing taxation under our current entitlement regime subject to constraints will almost always reduce the deficit even though it may not actually increase revenue This is because when the economy is not good the entitlement programs that are the bulk of our government become more expensive. When people our out of work they collect unemployment, welfare, medicaid, etc the really expensive programs.

HENCE THE TITLE OF THE POST FEDERAL DEFICIT SHARPLY LOWER
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"Those who expect to reap the blessings of freedom must, like men, undergo the fatigue of supporting it."
-Thomas Paine: The American Crisis, No. 4, 1777

And a softening economy argues for not raising taxes and perhaps a small fed stimulus but thats another issue.
______________________________
"Those who expect to reap the blessings of freedom must, like men, undergo the fatigue of supporting it."
-Thomas Paine: The American Crisis, No. 4, 1777

was talking non-sense. I was reading your two exchanges and I sum it up this way.

Your saying the government can take more money out of the economy and people will keep spending that money they no longer have due to the government taking it. However, because the government is running a deficit, and therefor borrowing even more money and taking that money out of the economy too, the economy will preform better with that money removed.

Joliphant is saying that with reduced tax rates, people keep more of their money and spend that money in the economy. This creates more economic activity, and that creates more jobs. All this additional economic activity expands the tax base and therefor increases revenue to the government.

Yes, you can dump on me for ignoring some point you made, but this is the what I got out of your postings in a nut shell.

I think Joliphant has it right. Your argument sounds like classic socialism and we all know how well that works.

But that is my opinion.

"Wubbies World" aka: Brian; MSgt, U.S. Air Force (Retired): An argument is a sequence of statements aimed at demonstrating the truth of an assertion.

I really wouldn't know where to start in responding to your comment (it's just so wrong in so many ways), and I get the feeling it would be fruitless anyway. I can't justify putting in time to even begin to try to correct you if that comment reflects your understanding so far. But I respect and appreciate your military service, so I'll leave it at that.

God forbid we see the day when there is significant pressure from the (Republican) Treasury Department to decrease spending.

I only borrow money to buy stock, so I don't follow mortgages closely. The night before I wrote that story, I asked Thomas about mortgage rates. From the yield curve, I expected him to say they had been rising for 6 to 8 weeks. Sure enough, that was exactly right. That's when I knew I had a story.

Cramer is a liberal Dem as well as a nut job. I'd love to debate him on TV.

To say that I'm "not looking for insight anyways" is the ultimate of ironies. It seems I'm the only one in this thread who has done any research on this question -- meaning researched what ECONOMISTS have been saying. Everyone else is just making their own crude observations, perhaps combined with what they hear Limbaugh and some politicians say, and drawing the conclusion that makes them feel good.

And by the way, you write "there were a bunch of economists who said, based on their models, that the tax cuts would dampen the economy and that there wouldn't be job growth." Really? Who? Please provide a links to a few such statements by some members of this "bunch".

As for economists' expectations regarding the revenue impact of the Bush tax cuts, well, I would expect his 2000 campaign folks to put forth the most favorable projection. Below is what Martin Feldstein wrote in an op-ed appearing in the Wall Street Journal in 1999 in support of the Bush campaign and, in particular, the (labor) income tax cut. He predicts a substantial revenue LOSS.

Martin Feldstein, former chairman of President Reagan's Council of Economic Advisers. Professor of economics at Harvard and an adviser to the Bush 2000 campaign.

Originally published in the WALL STREET JOURNAL
Monday, December 6, 1999
Martin Feldstein

Bush's Tax Plan Makes Sense
The revenue effect of specific tax changes is of course important if we are to avoid a return to budget deficits. Any sensible estimate of the effect of tax rate reductions on government revenue would take into account their favorable impact on work effort, skill development, risk-taking and other factors that increase taxable income… I estimate that such favorable feedback effects would offset about one-third of the traditionally estimated revenue loss from cutting the top tax rate to 33% from 39.6%.

Full op-ed: http://www.nber.org/feldstein/wj120699.html

... was an extremely poor word choice on my part. I should have said that I think you may be off in the weeds a bit by basing so much of your analysis on particular economists' views. I apologize the very weak statement. You obviously have done some reading on all of this and I respect that.

I suggest you go dust off a 1999 OMB or CBO report (they are available in PDF) and look at the revenue projections. You'll find that 2001-2004 revenues were below projections, but that 2005-2007 have been above projections. Take it for what it's worth, but those reports were obviously not influenced by the Bush Administration.

I'll find link on more economists later, but you can start with MIT grad and alleged economics guru Paul Krugman of the NY Times, who had much to say when the tax cuts were enacted.

--
We would also like to know your advice for somebody like my daughter, who's going to graduate in two years, advice that you would give a young person.

SEC. RUMSFELD: Advice for a young person. Study history.

Krugman is such an obvious Democratic/liberal partisan anything he says has to be taken with a grain of salt. Even so, if you have a link to a quote from him per your previous comment, please send.

Supply siders are stupid...

--
We would also like to know your advice for somebody like my daughter, who's going to graduate in two years, advice that you would give a young person.

SEC. RUMSFELD: Advice for a young person. Study history.

... this. But this guy isn't an economist.

--
We would also like to know your advice for somebody like my daughter, who's going to graduate in two years, advice that you would give a young person.

SEC. RUMSFELD: Advice for a young person. Study history.

...that ultimately has proven unsound.

I'm getting bored. There are hundreds of these...

--
We would also like to know your advice for somebody like my daughter, who's going to graduate in two years, advice that you would give a young person.

SEC. RUMSFELD: Advice for a young person. Study history.

I took a quick look and I'm not sure that I see claims that "the tax cuts would dampen the economy and that there wouldn't be job growth" (and I saw one or two acknowledgments that the tax cuts would be stimulative), but in any case, if I may make a suggestion at this point, a better use of your time would be researching if there are economists who disagree with the consensus opinion I have presented (see the list of exerpts in a common below on this thread) that the Bush tax cuts are NOT likely to be revenue-neutral, much less have a net positive impact on revenues. I've presented the opinions of major economists, mostly supply-siders and some within the Bush Administration or formerly within it. If you can find economists who disagree with them, I'd like to see it, particularly if they are economists of some note.

from May 2001 to Jan 2003 when Jumpin' Jim Jeffords.... jumped and the Democrats controlled the Senate. IIRC, that's when the spending really went haywire.

___________________________________
The CIA has better politicians than it has spies - Fred Thompson

That is precisely when non-defense discretionary spending jumped througg the roof.

Run like Reagan!

I know I have said it before but it bears repeating. As this graphic illustrates

As this graphic illustrates We are rapidly approaching a balanced budget and at the time of the tax cuts we were in a recession. A bad recession.

So I ask just what is the point you are trying to make. If we did not apply an economic stimulus during the recession our budget deficit would be less now ?

If we hadn't of cut taxes then we would have more revenue coming in now ?

That absent the stimulative effect of the tax cuts that the debt would be less ?

Oddly enough despite the negatives you claim for the negative effects of the tax cut the deficit has shrunk and is nearly at the point where it will become a surplus( no congress won't let that happen)

Please enlighten me as to how not making these tax cuts would have improved the country's financial situation ?

P.S. The links you have to the Heritage foundation don't make the argument you think they do.

*eppur si muove reputedly Galileo's last words (And yet it moves)
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"Those who expect to reap the blessings of freedom must, like men, undergo the fatigue of supporting it."
-Thomas Paine: The American Crisis, No. 4, 1777

He has some cut-and-paste quotes that begin with "as a general rule, I don't believe..." and "the general view is..." What more evidence do you want? That all seems like irrefutable proof to me. That's like totally a scientific consensus, don't ya know.
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Underlying most arguments against the free market is a lack of belief in freedom itself. - Milton Friedman

If you don't agree with him, your a moronic layperson who doesn't get econ 101.
______________________________
"Those who expect to reap the blessings of freedom must, like men, undergo the fatigue of supporting it."
-Thomas Paine: The American Crisis, No. 4, 1777

If the shoe fits. And it's not a matter of disagreeing with me, but rather of being impervious to reason.

For you don't post your own thoughts and reasoning and then back it up with data and evidence and NOT just appeals to authority. Nope, you're whole shtick is "these opinion pieces agree with me." Then you repeat this endlessly. People just give up arguing with a brick wall like that, and you claim victory. It's annoying.

___________________________________
The CIA has better politicians than it has spies - Fred Thompson

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"Those who expect to reap the blessings of freedom must, like men, undergo the fatigue of supporting it."
-Thomas Paine: The American Crisis, No. 4, 1777

We are talking about economic analysis here: the relationship between the Bush tax cuts and revenues. I stated my opinion and explain that it is based on the overwhelming consensus among economists (including Bush's economists), and assert that it only makes sense to assume that these economists -- who have greater expertise and resources (data, analytical tools, theoretical grounding, etc.) -- are more likely to be correct than some conclusion that a layperson draws based on crude observations. I provide extended quotes with their writings and statements, and where possible provide links for anyone who wishes to see the full context. Why is that a problem?

If someone were contending that the earth were flat and all the scientists disagreed, I would take the same approach. I would cite the writings of the scientists (and probably provide a photo from space provided by NASA -- yes, authorities). Would that constitute "just appeals to authority"? All I'm asking people to do is base their beliefs on this question on the best information available, which in this case is the consensus of opinion among economists. I encourage everyone to take 10 minutes and read through the quotes I've provided, then do your own research and see if you find differing opinions among ECONOMISTS (not Rush Limbaugh or some politician or political columnist), and if anyone finds such differing opinions, I'm all ears. I will be more than happy to weigh those opinions vs. the ones I've found and listed here.

I would like nothing more than for it to be true that tax cuts like Bush's result in higher tax revenues. Who wouldn't love that?? We could all have our cake and eat it, too. But I don't base my beliefs on what feels good -- I base it on the best information available and I face reality, and if that means I can't have my cake and eat it, too, then so be it. That's the responsible way to make policy decisions. If we make policy based on delusional, feel-good assumptions, we most likely end up worse off than if we try to be objective.

No snark intended here, but I'm just curious, are you a taxpayer? We have a lot of people on this site who are in college or grad school or law school. I have no idea if that applies to you, but I work, make ok money and pay what I consider to be, even after giving effect to Bush's tax cuts, an ungodly amount of taxes. Factor in the Federal Income tax, FICA, FUTA, State Income tax, State sales tax and property taxes, add it all up and its pretty brutal.

When you realize that 40% of the country pays substantially all of the income taxes now, if you are not part of that 40%, it doesn't make your opinion invalid, but you may want to think long and hard about the perspective of the 40% of us who are picking up the tax bill and how condesending and irritating it is to hear someone tell us that we need to "be responsible," let the Bush tax cuts expire and fork over even more into Uncle Sam's black hole. We're already floating the other 60% of the country. And I guess that's fine, just don't be so cavalier about demanding we pay more.

If you are in the 40% who pays all the taxes, and you want to pay substantially more, all I can say is God bless you.

First, I graduated from college twenty years ago, worked two years, then got my MBA and have worked since (mostly as a management consultant) and paid more than my share of taxes. Second, as you acknowledge, even if that were not the case it would not invalidate my point (so why bring it up?). Third, and most imporantly, I hate paying taxes as much as you do, but that has nothing to do with the question here of whether or not tax cuts like Bush's increase or decrease revenues. We should be able approach and discuss that question in a rational, not emotional, way, and try to maintain objectivity in seeking an answer despite our dislike of taxes. If, as the economists contend, such tax cuts are likely to result in substantially lower revenues than we would have otherwise (and if it results in higher debt-to-GDP), than all we're doing by cutting taxes now is essentially buying stuff on a credit card, hiding the cost and adding interest expense -- meaning severe tax INCREASES later (probably coupled with draconian cuts in Medicare and/or Social Security and quite possibly cuts in Defense that affect our national security -- the AARP is strong now and will be even stronger later, and seniors tend to vote, so they'll force cuts elsewhere).

Given our current debt and our unfunded liabilities for entitlements, the only thing worse than a policy of tax-and-spend right now would be borrow-and-spend. We need to fight hard for lower spending, but at the end of the day set tax policy so we receive a fiscally-responsible level of revenues, and we should not maintain the fantasy that we can have our cake and eat it too (tax cuts and higher revenues) simply because it feels good to hold that belief and have that policy.

See where I'm coming from?

I have followed tax and spend policy for a long time. Every time Government has increased taxes, it has increased spending. Most times it increases spending at a greater rate than the tax increase. You are fantastically naive if you think we can simply tax our way out of a deficit.

Like I said, I brought it up because many of us in the 40% that are actually taxpayers are feel overtaxed and that we are paying more than our fair share. Couple that with seeing the deficit decline steeply (although to your much repeated point not as much as it otherwise may have, but still steeply none the less), and you are not going to find a receptive audience when you brow beat people to "be responsible" and let the tax cuts expire and cough up more money now in hopes that it will be handled prudently to solve for a problem 10 years in the future.

I've never once said that cutting taxes automatically translates to higher tax revenue, so no pretense of having cake and eating it too.

I've simply said I don't want to see taxpayers paying more than the already substantially growing current level of tax revenue. Since you sound like you have had a nice career and and as a result paid a sizable chunk of taxes, I would have expected you to have a little more sympathy for the rest of us that are feeling pretty stretched. Maybe you are so rich that tax increases don't really phase you- a nice problem to have.

I hear you about future entitlement problems and agree with you that it's a problem, but- as per our discussion upthread- I'm highly skeptical that the answer is simply to jack up taxes now.

I have nothing against your choice of profession. But I've spent ungodly amounts of money in my business career on attorneys, economists, and management consultants. And they are very useful individuals, and I don't begrudge the expense.

But from the perspective of a senior manager, I have to tell you: these are all people you hire to tell you what not to do, rather than what to do. They're decision support, not decision-makers.

Most of the economists that have graduated in the last thirty or so years are of the "financial" (mathematical) variety. And it's completely true that their proudest achievement (modern portfolio theory) has completely transformed the financial world. However, I have to say, and this is from experience, that economists as a group have no special insight about business or about real-world economic decisions that other people don't have.

In discussing the relationship between marginal rates and total revenues, you lost me from the first moment you appealed to the authority of economists.

First, thanks for your grudging support of us management consultants -- some of us are not so bad. By the way, you may have heard this line before about how sometimes managers really just hire consultants to support decisions they want to make anyway: "Managers often use consultants the way a drunk uses a lamppost -- more for support than illumination." I've always been pretty good in that regard. Once a prospective client -- a senior manager -- indicated that he hoped that if he hired me for a project that ultimately my report would support some initiatives he wanted to take, and I told him "Well, if you're right, it will." (I got the project anyway).

As for your disinclination to put much stock in the consensus of economists re: the relationship between marginal rates and revenues, my only question would be: If not economists, who? If, on the one hand, there is a consensus conclusion on the matter (even among economists who have every incentive to reach the opposite conclusion -- such as Bush's economists), and on the other hand, we have an opposite conclusion from the the "analyses" of laypeople without the training in economic theory, analytical methodologies and tools, etc. (and laypeople whose objectivity is suspect, since the conclusion they have reached happens to be the one they feel good reaching), which conclusion would you assume to be MORE LIKELY? I'm not arguing for certainty or withdrawing all skepticism, just asking about probabilities.

You are basing your opinion on the opinions of others and claiming it as fact. Thanks for finally agreeing with my point. I'm still laughing at the "overwhelming consensus" and have to ask is that part of the Department of Government Redundancy Department? No, no, no, not just a consensus an overwhelming consensus!

The problem is you are presenting their opinions and not the facts on which those opinions are based (much like the weather/weatherman analogy below), and unlike your Flat Earth analogy, you haven't provided any photos from space nor have you linked to how to calculate the curvature of the earth (or at least to someone who shows their calculations).

In regards to your last paragraph - No, at 100% tax rate revenues would be ZERO, therefore at some point, lowering taxes does in fact raise revenue. You're saying the Laffer Curve doesn't exist while arguing where we should be on it.

We have several instances of cutting tax rates providing for a booming economy (and thus enhanced revenues) and not just the 1960s, 1980s, 1997, and 2003 in the US (there are a mix of cutting both income and corporate taxes).

Nielsen at Goldman Sachs is betting that lower corporate taxes, by making businesses more competitive, will help euro-zone economies grow at a faster rate without heating up inflation. An improved business climate has helped raise that rate, the so-called speed limit, to as much as 2.5 percent for the bloc's economies, from 2 percent, he said.

That's consistent with the findings in a study of 86 countries last year by KPMG International, which showed corporate tax cuts allowed countries to attract and retain business investment with little loss of revenue. While governments collect less from companies, the difference is offset by new revenue stimulated by expanded hiring and spending, the study found.

"It's not just a free gift to companies; it's a way to improve the overall economy," said Loughlin Hickey in London, head of KPMG's global tax practice.
(emphasis mine)

So if you don't mind, I'll take the data over someone's interpretation of the data.

___________________________________
The CIA has better politicians than it has spies - Fred Thompson

Let me address your errors one at a time.

First, for the millionth time, yes, I think it only makes sense to regard the conclusions held by – yes, the overwhelming consensus of economists as more likely to be correct than conclusions you or I might draw by making a few crude observations, because those economists have the expertise (they have a much better sense of which data to include and how to analyze it) and have no reason to reach that conclusion due to bias. The only explanation I can think of for someone dismissing this consensus (assuming they are not ignorant of it) is that some let their emotions cloud their judgment. They believe what feels good to believe. And if they had their way, that’s how policy would be set. I’m not a meteorologist. If they all tell me the low temperature tomorrow will be 65 degrees, but I recall that June 14 of last year had a low of, say, 49 degrees, I’m still going to consider it unlikely that tomorrow’s low will be under 50 degrees. I’ll go with the consensus of impartial experts who have information and analytical expertise and tools that I lack. Doesn’t that make sense? And no, I’m not saying that economics is nearly as exact a science as hard sciences, only that if virtually all the economists hold a particular conclusion, it is MORE LIKELY to be correct than some conclusion to the contrary that a layperson draws based on my crude observations, such as a few correlations that he has (perhaps conveniently) selected to draw his conclusion – particularly when it’s a conclusion that would make him feel good.

Second, you write “In regards to your last paragraph - No, at 100% tax rate revenues would be ZERO, therefore at some point, lowering taxes does in fact raise revenue. You're saying the Laffer Curve doesn't exist while arguing where we should be on it.” Boy, talking about putting words in my mouth (straw man) ! I’ve never said anything of the sort. Common sense – and basic algebra – tells one that your statement is true. No one disagrees with it. Obviously at some point tax rates can be high enough that raising them would decrease revenues and vice-versa. My point – and the point of the economists I’ve quoted, if you bothered to read the excerpts – is that prior to the Bush cuts, tax rates were simply nowhere near where we’d have to be on the Laffer Curve for that dynamic to hold. So please speak for yourself, not for me.

Third, you cite an article (which I had seen previously) regarding corporate tax cuts around the world. Leaving aside the question of whether the same dynamics abroad appy in the U.S., we have been discussing the Bush tax cuts, not corporate tax cuts. I haven’t said anything about corporate tax cuts, and I wouldn’t express an opinion unless I researched the matter (kind of a requirement I place on myself, which seems, unfortunately, not to be universal).

is the same one I read by Greg Mankiw, that the Laffer Curve exists but it is asymptotical and that we are so far under it that none of our current tax policy will have the desired effect, or to put another way our tax cuts cannot be paid for by increases in tax receipts from greater growth. ALL of which assumes that the growth would be there more or less even without the tax cuts and so we are foregoing opportunity taxation.

I simply disagree with that. we have ample evidence that tax receipts grow at an order of magnitude higher when the economy is vigorous. You can see it after the tax cuts in the early 1960's 1980's and recently, and it can be seen in other nations as well.

I don not know where the equilibrium point is on the Laffer curve, I suppose it is flexible and changes with confidence in the economy. But I'll bet we have not reached it yet!

"Nothing works like freedom, Nothing succeeds like liberty"
Kyle

First, why do you say "no" and then proceed to state what I had just said? (that's a rhetorical question)

Yes (again), that is what I'm contending re: where are -- or more precisely, where we are NOT -- on the Laffer Curve. OK, you disagree with all the conservative economists, including Bush's own economists. You'll have to forgive me if I think it's more likely that they are right than you. I think they have a slight edge in terms of expertise.

having seen it happen right before my very eyes, not once but several times.

"Nothing works like freedom, Nothing succeeds like liberty"
Kyle

The only one who cares what experts think is you. And I find it mildly amusing that you think they're "impartial," do you still believe in the Easter Bunny and Santa Claus too? Maybe you can't understand the actual concepts that underlie economics, but the rest of us seem pretty capable to handling it. I can just imagine you walking into a store and they are having a sale, I bet you mutter to yourself, "YOU FOOLS!!!! Cutting prices won't lead to increased sales, you'll just lose money!!!!"

Data. Data. Data. You keep shoving opinion after opinion on us, like it's supposed to impress me that you can cut & paste someone else's thoughts. Thanks, but no thanks.

P.S. You still haven't answered Joliphant's graph question.

___________________________________
The CIA has better politicians than it has spies - Fred Thompson

What was the point you are trying to make ?

This is done two posts above.

Since I have asked the question. You have called me impervious to reason. You have asserted a subset of Redstaters are too stupid to get it and that those that disagree are moronic. Your own word "Moronic". A word which oddly enough you are using incorrectly. The word you would want is either ignorant , or ignoramous for the actual individual.

If you wish to make your point I would suggest taking out paper, pencil, and calculator. Then constructing some formulas of how reducing taxes or increasing taxes would affect the treasury. Barring that level of ambition, you might try actually replicating the work the economists you cite used to generate their opinions.

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"Those who expect to reap the blessings of freedom must, like men, undergo the fatigue of supporting it."
-Thomas Paine: The American Crisis, No. 4, 1777

I guess I need to become a meteorologist to think it's unlikely that the temperature tomorrow in New York will won't be under 20 degrees, since listening to the weather forecast on TV is just an "appeal to authority". Yeah, that makes sense.

That new york is currently in an unseasonably cool mass of air with low pressure system. The low pressure system is expected to stick around till the end of the week at which point it will be displaced with warmer air to the south.

At which point it would be very hard to argue.

Just saying thats what the weatherman said is an appeal to authority.
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"Those who expect to reap the blessings of freedom must, like men, undergo the fatigue of supporting it."
-Thomas Paine: The American Crisis, No. 4, 1777

oh, and you actually asked the same question three different ways, and the answer is obviously "yes", and the fact that you had to ask makes me shake my head wondering how you could not already know my obvious answer given my comments throughout this entire thread and the previous one.

And your contention that the Heritage quote does not support my point shows that you don't understand my point, don't understand what Heritage said, or -- most likely -- both.

Congrats on getting me to spend time responding once again. I'm sure you'll come back with another gem.

If you don't perceive the difference, it might be an idea to reread them until you do. Words have specific meanings.
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"Those who expect to reap the blessings of freedom must, like men, undergo the fatigue of supporting it."
-Thomas Paine: The American Crisis, No. 4, 1777

If you have the time to take out a pencil, paper, and calculator and make complicated formulas to figure this all out, more power to you. I imagine this is the kind of thing Economists spend their lives with, so I am really not interested in spending my life doing this, therefore I will go with what the experts say. I am also not interested in figuring out millitary strategy so I will go with what a consensus of Generals say rather than drawing up my own war plans. I also don't know why vaccinations work, but I didn't spend a year studying chemistry and medicine to know for myself - I took what was the consensus of the experts. We live in a specialized world where one cannot do all things, and that is why we rely on specialists. We all choose what speciality we will contribute to the world, and I didn't choose ecconomics.
Finally when this debate began a couple month ago or whenever. I was pretty open to both sides of the arguement, I would have been okay if Brooksrob was proved wrong, and it was proved that we would have optimal revenue with a flat tax of 10%. Brooksrob was the only person who came up with actual evidence. The rest of you only came up with reasons why tax-cuts could generate more revenue - not reasons why they did. Or you use ancedotal evdidence, such as as we cut the taxes and revenues went up. So for now I am in Brooksrob's camp on this. He won the arguement. IMO I am then one who counts as far as who won, because I was nuetral, and the rest fo you had your opinions and were sticking to it.

Thanks, and as usual, very well said. I hope you don't get too much grief for agreeing with me. Glad to see someone is willing and able to be as objective as possible and let the chips fall where they may, rather than sticking to conclusions that feel good, and resisting new information. Needless to say, I'm not just saying the above because you agreed with me, but rather because of your mature and intelligent approach to the issue.

I must confess, my tone has gotten less than polite with some in this thread. It's been very frustrating and I didn't force myself to continue resisting the urge to be less than diplomatic in some cases.

it is called History, Tax rates plummeted in the 1960's and the 1980's and tax receipts grew at an astronomical rate, happened in other countries too.

Thats good enough for me. The argument is that the economy was going to grow anyway and we gave up opportunity taxes. That sounds like a crock of crap. We could have had nineteen seventies style stagflation forever if we never had tax cuts.
It has happened to other socialist countries, no growth for generations.

"Nothing works like freedom, Nothing succeeds like liberty"
Kyle

Let me give it a try.

I don't have the time to learn how car sales work, so I'll just go to the dealer on the first of the month and see what he recommends.

I don't have time to learn how to repair my house, so I will listen to what the contractor has to say.

I don't have time to learn medicine so I will listen to the doctor and have the surgery recommended. (This one is personal btw. It turned out the best thing I ever did was do some research and get a second opinion)

Well you get the picture.

But seeing as you are in favor of evidence from experts. Lets take it from a source that Brooksrob has cited as an authority.

http://www.heritage.org/Research/Taxes/bg2001.cfm

Nearly all of the conventional wisdom about the Bush tax cuts is wrong. In reality:

* The tax cuts have not substantially reduced cur­rent tax revenues, which were in fact not far from the 2000 pre–tax cut baseline and over the 2003 pre–tax cut baseline in 2006;
* The increased child tax credit, 10 percent tax bracket, and fix of the alternative minimum tax (AMT) reduced tax revenues much more than most of the "tax cuts for the rich";
* Economic growth rates have more than doubled since the 2003 tax cuts; and
* The tax cuts shifted even more of the income tax burden toward the rich.

So how do you feel when Brooksrob misuses his evidence ?
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"Those who expect to reap the blessings of freedom must, like men, undergo the fatigue of supporting it."
-Thomas Paine: The American Crisis, No. 4, 1777

but it seems to me that there is still a place for the experts. You said that you got a second opinion in regard to getting your surgery - I assume it was from someone in the medical field and not a blog from the internet. Do you think that I need to understand how a vaccine works before I get vaccinated. As far as what the heritage foundation said there it seems that they say itis that it is close to revenue nuetral. Though they still seem to suggest that they might be some loss, but I couldn't completely understand what they were saying, but you are on the right track there at least.

You just have to be able keep them honest. You also have to be willing to believe in what you see. In my case when the doc told my I would need surgery, I immediately hit the library.(we didn't have the internet yet) When I felt I had enough info I went to another doctor.

Theres a concept in science/engineering called a reality check. Oftentimes we have to make very complex calculations that can be prone to error. What you use are simple checks to make certain the calculation is plausible. An example might be that the units you expect are the ones you get.

Lets do a reality check on Brooksrob's experts.
1. The Bush Tax cuts will not come close to paying for themselves
2. We were experiencing deficits prior to their enaction.

this gives us the following expectations
A. If the tax cuts are contributing to increasing the deficit by adding a recurring and increasing burden the deficit would at best be expected to stay the same.

B. If the bush tax cuts are overall beneficial you would expect the deficit to shrink.

B. Has been whats happened. Brooksrob never addresses this. He doesn't even come close and avoids it like poison. The closes t he has come is endlessly repeating that economists say the bush tax cuts reduce revenue.

Well revenue is not the whole story of any enterprise. So when you say costs of the bush tax cuts are never made up you have to factor in savings. The savings from not paying for safety net programs because the economy is good. Speaking about revenue without considering cost savings is all smoke and mirrors.

In 2002 the unemployment was north of 6%. Thats a lot of people in safety net programs that aren't now. A real savings from the tax cuts which isn't shown in revenue to the federal government.

______________________________
"Those who expect to reap the blessings of freedom must, like men, undergo the fatigue of supporting it."
-Thomas Paine: The American Crisis, No. 4, 1777

First, yes a reality check may be a good idea, but I don't think your reality check is accurate. Just because we expect that a tax-cut will not increase revenue doesn't mean that there aren't other factors that will. Since there is such a thing as lurking variables you should not confuse the fact that something happens at the time with a direct cause and effect relationship. In stats you do a test (I seem to recall that it is something like a least squares regression test) to figure out whether there is a strong correlation. You can't just say this happened and then that happened therefore this caused that - doing that is a logical falacy. Therefore, in order to prove your point through history you need to do a statistical test on the data to see if it is statically significant or whether it is due to lurking variables.
The tax-cuts may cut down the need for spending somewhat, but I guessed I missed the news where spending is down. So the point still remains we need to cut down spending or raise more revenue, and so far nobody has made a good arguement as to tax-cuts raising revenue. They cut down the need for spending, but unless we actually make sure spending is cut that isn't enough.
Finally, why do you think there is no ecconomist arguing your point, or if there are why have you not mentioned them.

of revenue.

As to the economists and predictions. Its kind of strange. I googled for "effect of the bush tax cut " 90% of what I got was from 2001-2002 and was predicting the death of the republic.

The current situation suggests they were wrong.
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"Those who expect to reap the blessings of freedom must, like men, undergo the fatigue of supporting it."
-Thomas Paine: The American Crisis, No. 4, 1777

that the tax cuts paid for themselves. The ecconomy did better than what some said, and I am happy about that. I am not rejoicing that we have a lower deficit because I don't feel that we should have one at all. Last I heard our debt is seven tillion dollars, divide that among three hundred million people( which about what I think I heard the number of people in the United States is) and it's $23,000 per person - my intuition tells me that is a problem. So when people talk about decreasing how much our debt is growing from half a trillion dollars (over a thousand dollars per person) to say a quarter of a trillion I don't get real excited.

Well so far nobody has given anything but ancedotal evidence that the tax cuts paid for themselves.

There's CAN'T be proof that the tax cuts paid for themselves. Conversely there CAN'T be proof that they didn't. So if you are waiting for concrete evidence you'll never find it. You're welcome to have blind faith in the views of a few economists but their opinions (and that's all they are) are completely untestable. It's no different than blindly following experts on religion about the existence or non-existence of a god. Their statements aren't provable one way or another. The "experts" might have opinions one way or the other, but they got no data to support their beliefs... so that's all they are.

It's all pretty meaningless anyway. What's the difference between 75% recovery of revenues, 100% recovery of revenues, and 125% recovery of revenues? The number is not 0%, which is what the tax cut opponents always use. Even Mr. Brick Wall admits that much.

So when people talk about decreasing how much our debt is growing from half a trillion dollars (over a thousand dollars per person) to say a quarter of a trillion I don't get real excited.

And this has nothing to do with anything. The problem here is spending. Tax hikes aren't going to lead to reduced spending.
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Underlying most arguments against the free market is a lack of belief in freedom itself. - Milton Friedman

evidence is hardly an advanced concept. Correlation does not mean causation, and that is not an advanced concept either. In order to give good evidence from history that lower tax rates mean higher revenue (which obviously sometimes they do) you need to look at each incident and do a statistical test on the data. You seem to be convinced that there is no way to have an approximate idea of how much revenue taxes will bring in. I disagree with you on this; there are people out there who can do data analysis that can give estimates of correlation between different factors and so forth; I know enough about this sort of thing to know that there are other people out there who know a lot more about it than what I do. You seem to think that economics is some sort of conspiracy of people claiming to know something, but they really don't. Anyway if there is no logic to economics why has your side not been able to name one economist who takes your side? If economics is all just a matter of opinion, how come all economists seems to come to the same conclusions?

Joliphant, please see my reply down below (subject line "Joliphant Re: your Heritage").

What I'm saying -- based on the consensus of economists -- is that, at tax rates that existed prior to the Bush cuts, the Bush tax cuts -- or more generally, cuts in rates on labor income and capital (cap gains and/or dividends) -- from those starting point rates are generally unlikely to be even close to revenue-neutral, let alone have a net positive effect on revenues. In other words, we are far from the region of the Laffer Curve at which tax cuts are likely to have a net positive effect on revenues.

I have not researched the views of economists on the relationship between corporate tax rates and overall tax revenues, so I have no opinion on corporate taxes.

Have I answered your question?

a foot by normally conservative/free market economists to repudiate supply side. They say that the Laffer Curve is asymptotical and our tax cuts cannot possibly spur the economy enough to raise tax receipts enough to make up for the tax shortfall.

On their side they have all sorts of impressive graphs, On the supply side of the argument however, we have several instances when that actually happened.

Proof that it is not just silly left wingers who can get all confused in their Ivory Towers.

"Nothing works like freedom, Nothing succeeds like liberty"
Kyle

cause I like to barf up their facts and figures. Somebody is trying to justify raising taxes. My Congressman-D Lillington, NC Etheridge responded to my partisan attack on the Dems with justification of tax increases cause of the need for more revenues. Totally amazing considering the record amounts flowing in recently-in spite of the economic slowdown.

The main thing I don't like about the tax scheme now is that 60 million people don't really pay net taxes after the refunds. I'll admit that I'm one of them hence my liking for the Fairtax- I'd get my whole paycheck without deductions.
Hope somebody figures out this entitlement boondoggle stuff out in time.

because, above all, we must be demagogued.

Of all the things I hate about Reagan, this is the king: My mom had a CD (certificate of Deposit) , a pretty big one, like $10,000, 10-years at (hope you're sitting down) 13.0% interest. 13% on a CD!!!! When it matured sometime around 1988, she was given the option of cashing out, or renewing it at something like 4%.

Ronny baby, what were you THINKING????? Spiraling inflation -- GONE!!! Gas lines -- GONE!!! Interest rates on CD's -- in the toilet!!!

Oh well, I think mom most of it on a pretty fancy Chrysler New Yorker at the time. Or maybe a large part of my college education, I forget which.

It's war -- so when can we start shooting back at the enemy Democrats?

made the unemployment rate dip below double digits and still outspent the Soviet Union!

"Nothing works like freedom, Nothing succeeds like liberty"
Kyle

first blog titles how avoid the coming 70% tax rates through Swiss bank accounts

Trade your way to millions with foreign exchange
Carry trades- an alternative to your social security check?

and never ever believe that the Bush tax cuts pay for themselves or else?

IBDeditorial pages fit only for your bird cage and dog house, especially the economic stuff touting all the results of the Bush II tax cuts

It must be late cause my simpleton switch is on really good and have lost respect for all economists

More technologically advanced ships, tanks, jets, combat infantry, SDI!!!! Whatever will we DO with all that worthless stuff anyway?

It's war -- so when can we start shooting back at the enemy Democrats?

fortunately, I had a rate locked in a year earlier at 8.75%

My current mortgage (done 2004) is around 5.5%, a rate that my parents enjoyed in the early 1960's.

Clearly, 25 years of supply side economics has been a dismal failure!

"movement" -- Is that like "conspiracy"?

Are you implying that these economists are deliberately producing biased results to pursue some agenda? What agenda?

Are you including in this "movement" Bush's own economists, his Treasury Secretary, and other conservative economists, most of whom ADVOCATE extension of the Bush tax cuts? How about Greg Mankiw? How about the economists at the Heritage Foundation? If so, can you explain their motive? Or are they all sincere but just all stupid?

No economist would ever be biased!!! They are as pure as the wind driven journalist!

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The CIA has better politicians than it has spies - Fred Thompson

it is just that in this case they are demonstrably wrong. Or else you have to believe that the GOvernment would have just as much revenue to day and our economy be just as large had we never had the Reagan Tax cuts or the big capital gains tax cut.

That is something that you have to be, pardon me, very silly to believe, Or an Ivory Tower intellectual.

"Nothing works like freedom, Nothing succeeds like liberty"
Kyle

I see. So Bush's own economists are biased toward concluding that his tax cuts have caused LOWER revenues than we would otherwise have. Kind of a masochistic bias? A desire to impede one's career perhaps?

You said that they aren't biased, I just made fun of you.

Anyways, many of Bush's own economic advisers aren't/weren't supply-siders, or aren't you smart enough to understand that and need me to bring in an expert? I don't even think Bush is a supply-sider, he seems to be Keynesian not a Laffer for the most part - which is to say some of the cuts were supply side (namely 2003 dividend, cap gains and accelerated marginal rate cuts) and some were not (stupid $300 rebates in 2001).

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The CIA has better politicians than it has spies - Fred Thompson

Well, at least we can agree that some of those cuts were not efficient at all, although I would say they were driven more by politics than by Keynsian economic theory. People (voters) like rebates. They are quick & simple. Just not the most efficient type of tax cuts -- i.e., not good economics.

driven by politics, but that didn't make them supply-side cuts (I would go as far as saying that one time rebates aren't a tax cut at all).

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The CIA has better politicians than it has spies - Fred Thompson

But, even if I were to accept your dubious assertion that some sort of bias is behind Bush's own economists' assertion that his tax cuts have caused LOWER revenues, what sort of bias to you attribute to all the other conservative economists, who generally ADVOCATE extending the Bush tax cuts? Wouldn't any bias be in the other direction?

Whether or not experts believe in supply-side economics doesn't really have any bearing on whether they think raising taxes is a good thing (unless you believe the Democrat talking points that "rolling back" the tax cuts is somehow magically not a tax increase).

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The CIA has better politicians than it has spies - Fred Thompson

Try again -- Boortz is NOT an economist, just a talking head former lawyer.

"No kidding"? You write "I'm a Boortz economist fan, an avowed Bush tax cuts cause revenues increase type economist" and then you claim you knew that he was NOT an economist? Hard to escape the conclusion that you were being less than honest either then or now.

First, I never said anything about tax cuts going to the rich or made any comment whatsoever regarding the distributional aspects of the tax cuts, so please don't set up a straw man.

Second, you write "What is true is that by creating a dynamic of powerful economic growth, lower taxes expand the economy and, therefore, overall tax revenues. They do this by giving people more incentives to work, save, invest and innovate — all drivers of long-term economic growth." Well, to borrow your phrase, no kidding. No one questions the fact that, other things equal, tax cuts provide stimulus to the economy. The question is one of degree and whether or not particular tax cuts from particular starting points (rates prior to the cuts) under particular economic conditions are likely to generate enough incremental growth in the economy -- more precisely, in the tax base and in tax compliance -- to offset the rate reduction and have a net positive impact on revenues. And as I've represented, the consensus among economists is that the Bush tax cuts have most likely had a substantial negative net impact on revenues (vs. what revenues would have been without the tax cuts), and extending them would likely have a similar effect. Yes, revenues are up, but correlation (particularly with a few favorably selected data points) does not necessarily imply causation. That's where the folks with the PhDs come in and apply their understanding of economics and analytical methodologies and tools. Understand?

The President's first try at a tax cut, that rebate check, was terrible. That was never going to accomplish anything.

We're lucky he turned it around with the second round of cuts, and made some supply-side cuts.

The kind of tax cut you do definitely matters.

Run like Reagan!

You write "However, I disagree that tax rates have any controlling force on government spending. This has never happened. You have to consider the source of all government revenues. The feds can either borrow, or just print more money. It is the latter two cases that the feds are dangerous."

The "starve the beast" argument is currently being debated among economists, with some saying lower revenues have been shown to constrain spending and some saying they don't -- even contending the opposite, presumably because lower taxes (and borrowing to spend) makes the pain of spending less visible (kind of like buying stuff on a credit card) and thereby encourages more spending vs. if taxpayers were forced to pay for the spending. Here's what I found re: this debate http://www.redstate.com/blogs/joliphant/2007/may/10/tax_revenues_hit_rec...

And some useful reading:
http://www.cato.org/pubs/policy_report/v26n2/cpr-26n2-2.pdf

http://gregmankiw.blogspot.com/2006/06/starving-beast.html

http://article.nationalreview.com/?q=MzAwMWJmMjE2M2UwN2YyNjI3NDIyZTI5ZWQ...

The most puzzling aspect of the "starve the beast" argument to me is not whether or not it is valid, but how so many people who call themselves fiscal conservatives can contend BOTH that "starve the beast" is valid AND that tax cuts always generate higher revenues. Obviously the two are mutually exclusive. A given tax cut will either cause lower revenues (to starve the beast) or higher revenues over a given period of time, but can't do both.

You seem bereft of self control.
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"Those who expect to reap the blessings of freedom must, like men, undergo the fatigue of supporting it."
-Thomas Paine: The American Crisis, No. 4, 1777

You accused me of misrepresenting "the evidence" and did so in a comment to another RedStater, Populist Conservative. I'm responding mainly for Populist Conservative, but also because you actually tried to research expert opinion, and despite the flaws in your research, you made an effort and I want to encourage you to try further.

See below.

You actually worked as a management consultant ?
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"Those who expect to reap the blessings of freedom must, like men, undergo the fatigue of supporting it."
-Thomas Paine: The American Crisis, No. 4, 1777

Government revenue soared by more than $1.7 trillion since 1965, in part because top marginal income, capital gains, and corporate tax rates were cut.

This is your first link from the heritage foundation.

Now what might have caused revenues to fall before the tax cuts and accelerate through 2003 ? HMMMMMM COULD IT BE THE TECH BUBBLE BURST AND WE WERE IN A RECESSION ????

From your own email

The only part where I say a tax cut paid for itself was the Cap Gains cut. And while I do note that 2006 revenues came in higher than the level CBO projected before the 2003 tax cuts, that is simply a factual statement. You can look up the CBO March 2003 revenue baseline yourself. But nowhere in that section did I say the Bush tax cuts are the sole reason 2006 revenues came in higher. Inflation played a role, so did the business cycle.

Now what effect did tax cuts have on the business cycle ?

Or here the part of the letter you choose so blithely to ignore.

With no change in current law, EGTRRA’s lower marginal rates on ordinary income and JGTRRA’s preferential rates on individual net capital gains realizations and dividend income will expire at the end of 2010. Extending these provisions would boost U.S. GDP, employment, and incomes over the 10-year budget period and generate substantial revenue feedbacks. However, the President’s fiscal year 2008 budget includes only a one-year extension of AMT relief for individuals. The AMT’s expanding reach partially offsets simulated economic gains from the extension plan.
Alison is looking into how we can best revise the paper. Please let us know if you have any concerns or questions about this revision or other aspects of the report.

And the really funny part is their reply to you

Yes, you are correct that the chart uses static analysis. We do not at present have a dynamic analysis chart, in part because the numbers are bad enough already, though yes, you have a very valid point that more would be helpful to communicate the dangers of these policies and of raising taxes.
We’ll look into doing your suggestions on point number three, thanks. Of course from our perspective, this is a spending problem and taxes should not be raised to fill the gap. Rather we should restructure entitlements. We’ll take a look at your suggestions and see if we might do an update later in the year.

Is what I said here
http://www.redstate.com/blogs/shaggy_dog/2007/jun/12/federal_deficit_sha...

Brooksrob I have said this before you are reading what is being said and only taking away what you came with
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"Those who expect to reap the blessings of freedom must, like men, undergo the fatigue of supporting it."
-Thomas Paine: The American Crisis, No. 4, 1777

Wow, you are really something. You're like a non sequitur machine. I'll have to go back to my policy of trying, at least, to resist responding to your comments on this issue. It's time-consuming and it's unlikely to get through to you. I will, just to provide a couple of examples, refute two of your arguments.

You bolded the line that read "Extending these provisions would boost U.S. GDP, employment, and incomes over the 10-year budget period and generate substantial revenue feedbacks" as if that contradicts my point. You obviously have no idea what you're talking about. As I've said repeatedly, no one doubts that tax cuts are stimulative and generate revenue feedbacks, even potentially substantial revenue feedbacks, but the question in the magnitude of those feedbacks -- to what extend they recover part or all of what is lost by the rate reductions (or go beyond recovery and increase revenues). Understand the distinction now? So if someone points out that there would be substantial revenue feedbacks but elsewhere acknowledges or implies that there would still be a substantial net LOSS in revenues, (1) these are not contradictory statements, and (2) they are supporting my point, not yours.

Regarding Heritage's comment regarding revenues since 1965 (below the chart), my comments have pertained to the Bush tax cuts and to tax cuts generally FROM RATES THAT EXISTED PRIOR TO THE BUSH CUTS, meaning where we were on the Laffer Curve in terms of rates. I've never argued that tax cuts from higher rates couldn't increase revenues. To the contrary, I've said that it's obvious that at some point rates can be high enough that tax cuts would increase revenues (that's common sense combined with simple algebra). So tax cuts prior to the Bush cuts -- cuts from higher marginal rates -- do not apply to my argument. Having said that, I've quoted Bartlett as strongly contending that neither he nor any other responsible economist expected the Reagan tax cuts to increase revenues or contend that it did (vs. what revenues would have been otherwise), but I haven't researched that question so I have not commented on it.

Why don't you just do some real research, read, think, learn -- and also try to understand what I'm saying -- and then comment instead of more of this blather. If you come up with anything that makes sense, I'll be glad to respond.

Seeing as you never actually reply to them.

The graph above that you introduced into evidence shows revenues were in a state of decline prior to the Bush tax cuts. The economy was also in a state of decline before the tax cuts. After the tax cuts they both picked up. By your own statement "no one doubts that tax cuts are stimulative and generate revenue feedbacks

So without the Tax cuts the Decline in the economy would have

A. Stopped
B. Continued ?

If you chose A
The recovery would have been

A. The same
B. stronger
C. weaker

If the recovery happened later or was not as strong
Revenues to federal government would be
A. Less
B. More
C. The Same.

If the recovery had of been weaker or not happened
Outlays from the treasury
A. More
B. Less
C. The Same.

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"Those who expect to reap the blessings of freedom must, like men, undergo the fatigue of supporting it."
-Thomas Paine: The American Crisis, No. 4, 1777

You just don't get it. You probably never will no matter how many times I try to present and explain the relevant information and correct you on your facts and your logic. And you show no good-faith effort to understand, as far as I can tell. So I just can't justify spending more time going back and forth with you.

You insult me.

I think, there is an inkling forming in my fevered brow about the management techniques you consulted on.
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"Those who expect to reap the blessings of freedom must, like men, undergo the fatigue of supporting it."
-Thomas Paine: The American Crisis, No. 4, 1777

I can't resist replying to one more of your arguments (for lack of a better word). You point to the dip in revenues and argue that the tech bubble bursting was a major factor. Once again you are inadvertently, obliviously making my point -- that correlation does not imply causation and that factors other than tax rates can affect tax revenues, so we can't simply observe the increases in revenues in recent years and attribute it to the Bush tax cuts simply because they coincide, and we therefore should be at least somewhate deferential to the overwhelming consensus of economists who contend otherwise.

So many times without actually encountering another related thought circulating around the same brain.

Thought A

"You point to the dip in revenues and argue that the tech bubble bursting was a major factor."

Meet thought B

""no one doubts that tax cuts are stimulative and generate revenue feedbacks"
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"Those who expect to reap the blessings of freedom must, like men, undergo the fatigue of supporting it."
-Thomas Paine: The American Crisis, No. 4, 1777

non sequitur #5,439 from you. Amazing.

Nor does it constitute a contribution to the debate.

But it does seem to constitute a pattern
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"Those who expect to reap the blessings of freedom must, like men, undergo the fatigue of supporting it."
-Thomas Paine: The American Crisis, No. 4, 1777

Look, I've put in a lot of time responding to your many errors and non sequiturs and you have shown no willingness or ability to understand any of my explanations, and you keep coming back with more errors and more non sequiturs. I think at some point I'm entitled to stop responding.

that point was the first time they were asked.

A pattern that seems to repeat.
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"Those who expect to reap the blessings of freedom must, like men, undergo the fatigue of supporting it."
-Thomas Paine: The American Crisis, No. 4, 1777

Man oh man, another one.

You write "He calls a fairly well accepted economy theory voodoo economics". What economic theory is that?

As for the "liberal" comment, that's just lame. As for "common sense and observation", well, let's just say that, unlike you apparently, I appreciate the difference between crude observations by laypeople and thorough analysis by professionals who know what they're doing.

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"Those who expect to reap the blessings of freedom must, like men, undergo the fatigue of supporting it."
-Thomas Paine: The American Crisis, No. 4, 1777

What are your opinions in regard to the economics principles that were advanced by Milton Freedman?

Please keep your response specifically to what Milton Freedman advocated. I really want to know if you think he was wrong too.

Wubbies World, MSgt, USAF (Retired):
public static void main(String[] args) {
System.out.println("An argument is a sequence of statements aimed at demonstrating the truth of an assertion.) }

From what I know of his views, I like him. He was a strong free-trader, as I am, and he believed strongly in low government spending, as I do.

By the way, apparently he expected the Bush tax cuts to cause LOWER revenues than we would have had without the tax cuts. See below (my bolding added).

On the Bush tax cuts: "I am in favor of cutting taxes under any circumstances and for any excuse, for any reason, whenever it's possible. The reason I am is because I believe the big problem is not taxes, the big problem is spending. The question is, ‘How do you hold down government spending?’ Government spending now amounts to close to 40% of national income not counting indirect spending through regulation and the like. If you include that, you get up to roughly half. The real danger we face is that number will creep up and up and up. The only effective way I think to hold it down, is to hold down the amount of income the government has. The way to do that is to cut taxes."
Source: http://www.taxfoundation.org/news/show/2016.html

Have I answered your question? I don't know specifically to what you were referring (which of his views) or if you just wanted my general opinion.

Obviously you don't irritate yourself.

I meant what I said and I said what I meant. An elephant's faithful 100 percent.

Yes, yes. Over 100 miles and carrying a briefcase.

I meant what I said and I said what I meant. An elephant's faithful 100 percent.

Once you know he was a management consultant, the debating style and methodology are recognizable.

Remember for his job description being correct is a tertiary concern, not being wrong is secondary, maintaining a good relationship with clients and preventing challenges primary.
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"Those who expect to reap the blessings of freedom must, like men, undergo the fatigue of supporting it."
-Thomas Paine: The American Crisis, No. 4, 1777