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Old 03-05-2013, 01:57 AM   #3901
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Originally Posted by cordycord View Post
I'm simply calling bullshit on your charts. That's all. lowering tax rates, especially across the board, has historically raised tax revenues. Kennedy, Reagan, Bush, all of them. Sure, there were other issues at hand; there always are. The inverse has been true since they've kept records. Hell, go back see what happened to Rome.

Your charts = bullshit

Let me now go on record to say that while I'm virally anti-Socialist redistribution, the Republicans can suck it too. Government at our current size is bad, whether blue or red.
You know, Cordy, I had taken my time and wrote out a long, detailed post wrecking your post. Then I realized something. From the article, which you clearly didn't bother to read:

Quote:
Furthermore, the receipts from individual income taxes (the only receipts directly affected by the tax cuts) went up a lower 91.3 percent during the 80's. Meanwhile, receipts from Social Insurance, which are directly affected by the FICA tax rate, went up 140.8 percent. This large increase was largely due to the fact that the FICA tax rate went up 25% from 6.13 to 7.65 percent of payroll. The reference to the doubling of revenues under Reagan commonly refers to TOTAL revenues. These include the above-mentioned Social Insurance revenues for which the tax rate went UP. It seems highly hypocritical to include these revenues (which were likely bolstered by the tax hike) as proof for the effectiveness of a tax cut.
The charts are not magically created, mystical wonders. They are based on commonly available, well-sourced, well-vetted, well-respected data - the very same data that says "Oh, but we increased revenue under Reagan et al!" If you try to claim what you are claiming about revenue, then by default you are also claiming what the charts say - because they are using the same data you are. This is the amazing beauty of those articles - the very logic you are trying to use and the data you are basing your arguments on is all central to those articles and they base their arguments off of the very same data.
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Old 03-05-2013, 02:29 AM   #3902
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It's like magic!!!

From JFK To Bush, Treasury Swelled After 'Tax Cuts For The Rich' - Investors.com

This stuff is so obvious that most thinking liberals wouldn't touch it with a 10' pole, which is why Biden jumped right in during the debates.

The inverse is also painfully true. Look out window. See truth.
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Old 03-05-2013, 11:12 AM   #3903
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You're both right.

Federal tax receipts have generally gone up with tax cuts. They also generally go up after tax increases. They essentially always go up over time on an absolute basis because of economic and population growth.



Federal tax receipts as a percent of GDP tend to have less correlation with the tax increases or reductions than most might think.




The reality is, it's very difficult to separate economic growth, contraction, tax increases, tax cuts and Federal receipts. If the economy is in contraction and Washington cuts taxes and then the economy recovers, tax receipts with go up. Did the economy recover because of the tax cuts?

Likewise, if an economy is growing and tax rates are raised, tax receipts might go up as the economic growth continues (potentially at a slower rate, but still growth).


Cord's article cited only decreases in the top marginal income tax bracket. I find that less useful than examining the effective tax rates. If my marginal tax rate is 90% but I have an effective of 30%, that's actually less taxes out of my pocket than a marginal rate of 39% and an effective of 33%.
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Old 03-05-2013, 11:18 AM   #3904
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Except that tax cuts increasing tax revenue has never held true, Cordy.

when people dont believe in the laffer curve, I stop believing in these people.

you might as well believe in Xenu for all I care anymore.
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Old 03-05-2013, 12:39 PM   #3905
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when people dont believe in the laffer curve, I stop believing in these people.

you might as well believe in Xenu for all I care anymore.
Yes, this is why I don't put [much] work into disproving Blaen99. And Jack, YOU'RE partially right too. Raising tax rates invariably raise tax revenue, but only for a short time. Our current tax structure is sooo bad that all the profit-making companies are now keeping their profits outside the U.S.

The other guys who drive me crazy are the ones who say, "See?! The DOW is at an all-time high! Obama has done such a wonderful job."

The Last Time The Dow Was Here... | Zero Hedge
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Old 03-05-2013, 12:53 PM   #3906
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But history has proven time and time again that it knows best and always give its citizens the best life ever.


Look how awesome life is in France with 75% tax rate on the rich, the income distribution is so much better and everyone pretty much lives in nirvana. there is never war and unicorns poop rainbows
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Old 03-05-2013, 01:08 PM   #3907
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Originally Posted by cordycord View Post
It's like magic!!!

From JFK To Bush, Treasury Swelled After 'Tax Cuts For The Rich' - Investors.com

This stuff is so obvious that most thinking liberals wouldn't touch it with a 10' pole, which is why Biden jumped right in during the debates.

The inverse is also painfully true. Look out window. See truth.
Please, keep ignoring the critical parts of the articles more, Cordy. Quoting again,

Quote:
Furthermore, the receipts from individual income taxes (the only receipts directly affected by the tax cuts) went up a lower 91.3 percent during the 80's. Meanwhile, receipts from Social Insurance, which are directly affected by the FICA tax rate, went up 140.8 percent. This large increase was largely due to the fact that the FICA tax rate went up 25% from 6.13 to 7.65 percent of payroll. The reference to the doubling of revenues under Reagan commonly refers to TOTAL revenues. These include the above-mentioned Social Insurance revenues for which the tax rate went UP. It seems highly hypocritical to include these revenues (which were likely bolstered by the tax hike) as proof for the effectiveness of a tax cut.
You are ignoring the tax increases and growth from those administrations, as well as only focused on a tiny portion of the actual population, which renders much of the argument irrelevant*. In fact, the second article I linked completely debunks your article that you linked, making it further pretty clear you never bothered to even do anything more than glance over it.

Finally, FactCheck.org : The Impact of Tax Cuts - feel free to cite actual rigorous studies, with actual sources instead of news sound bites if you want, Cordy. But as always, you are linking nice sound bites with no real content and numerous severe problems in the article.

*: Article's argument made no discussion about adjustments for inflation, GDP growth, et al so this is an assumption. It's a common mantra to only look at absolute numbers - but if we only look at absolute numbers, and not adjusted numbers...ERMAGERDSZ, our current national debt is tens or hundreds of times the budget of 1867, we're all going to die!

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Originally Posted by Scrappy Jack View Post
You're both right.

Federal tax receipts have generally gone up with tax cuts. They also generally go up after tax increases. They essentially always go up over time on an absolute basis because of economic and population growth.

Federal tax receipts as a percent of GDP tend to have less correlation with the tax increases or reductions than most might think.

The reality is, it's very difficult to separate economic growth, contraction, tax increases, tax cuts and Federal receipts. If the economy is in contraction and Washington cuts taxes and then the economy recovers, tax receipts with go up. Did the economy recover because of the tax cuts?

Likewise, if an economy is growing and tax rates are raised, tax receipts might go up as the economic growth continues (potentially at a slower rate, but still growth).


Cord's article cited only decreases in the top marginal income tax bracket. I find that less useful than examining the effective tax rates. If my marginal tax rate is 90% but I have an effective of 30%, that's actually less taxes out of my pocket than a marginal rate of 39% and an effective of 33%.
Scrappy, you can go over my premise and logic the best of anyone here.

Premise: Tax cuts do not pay for themselves in federal tax revenue (Note: I am not saying they do not spur GDP growth, revenue growth, or anything else. My claim is VERY specific that no tax cut in the US's federal government's history has ever paid for itself in tax revenue, although I do not doubt that there are tax cuts who have more than paid for themselves in GDP Growth/et al as a result. My argument is very, very specific.)

H1: As provided previously, the administration most oft cited for massive growth due to tax cuts included significant tax increases. We cannot logically say "But tax revenue increased" as a whole as a result of this - if I cut one tax by 20%, but raise another tax by 10% - but the other tax's base is twice as large as the first, it's not a wise argument to make.

H2: Due to published public data based on tax revenue, we can extrapolate specific taxes from year to year from a specific tax source. Thus, we can demonstrate if a specific tax cut resulted in that increased tax revenue specifically, or a specific tax increase resulted in decreased tax revenue (See: Reagan's various tax increases, such as a FICA increase, while decreasing other taxes).

H3: We need to adjust for inflation and similar adjustments in ANY numbers used - using absolute numbers is retarded, see previous 1863 budget mention.

Anyways, what I'm getting at Scrappy. Looking at just one metric that is easily proven seriously flawed is retarded, we have to look at more than just one metric, and the metrics used must be adjusted. The article that Cordy links, as an example, uses absolute, non-adjusted numbers (Or if it is adjusted, it does not state it). The peak tax cut #'s it cites comes years later - and when they are adjusted for inflation and tax increases (Kennedy had a 10% income tax surcharge in '69, and that's when Kenndy's tax revenues soared), they are lower than the post-tax cut numbers. These statements are based solely on IRS numbers. To say they are bullshit is to say the IRS and the government is lying about the tax revenues it received, as well calls bullshit on the very data Cordy is advocating from.

Explaining Cordy's oft-cited numbers.
It's entirely possible to look at specific Reagan tax cuts, as well as specific Reagan tax increases. I've provided that previously. We can further adjust those for inflation.

Once adjusted for inflation, Reagan's GDP growth was lower than the previous decade and roughly the same as the next decade of growth. Reagan's tax cuts were, in general after adjustment, a net tax revenue decrease (See the articles for in-depth info there), and Reagan's tax increases were, in general after adjustment, a net tax revenue increase.

Quoted is a more lengthly explanation.

Quote:
The above table shows that Reagan's initial tax cut in 1981 was estimated to have a large negative effect on revenues. This is apparent in the graph titled "Receipts and Selected Tax Rates" at recsrc11.html which shows a sharp drop in individual income tax revenues from 1982 to 1984. This drop was arguably a major motivation for the Tax Equity and Fiscal Responsibility Act of 1982 and the Deficit Reduction Act of 1984, both of which had a positive effect on revenues and helped to stabilize them. The Tax Reform Act of 1986 (which cut the top marginal rate from 50 to 28 percent), however, appeared to have only a slight effect on revenues. How could this be? The answer lies in looking more closely at the provisions in the two tax bills. Following are the provisions listed by the Treasury document for the 1981 tax bill:

Economic Recovery Tax Act of 1981

phased-in 23% cut in individual tax rates; top rate dropped from 70% to 50%
accelerated depreciation deductions; replaced depreciation system with ACRS
indexed individual income tax parameters (beginning in 1985)
created 10% exclusion on income for two-earner married couples ($3,000 cap)
phased-in increase in estate tax exemption from $175,625 to $600,000 in 1987
reduced Windfall Profit taxes
allowed all working taxpayers to establish IRAs
expanded provisions for employee stock ownership plans (ESOPs)
replaced $200 interest exclusion with 15% net interest exclusion ($900 cap) (begin in 1985)

As can be seen, all of the provisions are effectively tax cuts. On the other hand, following are the provisions listed by the document for the 1986 tax bill:

Tax Reform Act of 1986

reduced individual income tax rates (top rate 28%) and repealed capital gains exclusion
repealed investment tax credit
lowered corporation income tax rates; top rate lowered to 34 percent
increased personal exemption amount from $1,080 to $2,000
set uniform capitalization rules for manufacturing or construction
increased standard deduction from $3,670 to $5,000 (joints)
limited deduction for nonbusiness interest
repealed second earner deduction
limited passive losses
established income limits on use of IRAs for taxpayers covered by pensions
revised corporate minimum tax
repealed sales tax deduction for individuals
set 2-percent floor on miscellaneous itemized deductions

As can be seen, a number of these provisions are effectively tax hikes, offsetting the additional cuts in the tax rates. Those provisions include items 2, 7 through 10, 12, 13, and the second half of item 1 (repeal of the capital gains exclusion). That is likely the major reason why revenues did not fall further. In any case, this shows that the top marginal rate does not always tell the whole story about the level of individual income taxes.

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Old 03-05-2013, 01:56 PM   #3908
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My claim is VERY specific that no tax cut in the US's federal government's history has ever paid for itself in tax revenue, although I do not doubt that there are tax cuts who have more than paid for themselves in GDP Growth/et al as a result. My argument is very, very specific.)
two questions:

1 Why do tax cuts have to pay for themselves in tax revenue?
2. Is that even the point?
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Old 03-05-2013, 02:02 PM   #3909
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Holy crap Blaen! Was that a post or a dissertation?

In response I will just say that you should be horse-whipped for even introducing 'Factcheck.org' into the hallowed halls of MT.

And this, ladies and gentlemen, is the mental gymnastics required to offset the simple beauty of the Laffer Curve.
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Old 03-05-2013, 02:22 PM   #3910
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Please, keep ignoring the critical parts of the articles more, Cordy.
You might as well be trying to convince a devout Catholic that there is no such thing as God, Jesus, Heaven and Hell. Cord holds strong beliefs. These beliefs are unwavering.

I looked out my window. Taxes went up on everyone this year and there were waits for dinner on Friday, lunch on Saturday and lunch on Sunday. Home prices are going up in my neighborhood and have been for the past year. My clients are making more money.

Ergo, raising taxes is good for the economy.

Quote:
Premise: Tax cuts do not pay for themselves in federal tax revenue (Note: I am not saying they do not spur GDP growth, revenue growth, or anything else. My claim is VERY specific that no tax cut in the US's federal government's history has ever paid for itself in tax revenue, although I do not doubt that there are tax cuts who have more than paid for themselves in GDP Growth/et al as a result. My argument is very, very specific.)
How would you expect to see the counter premise proved? That is, if I posit that "Federal income tax rate reductions pay for themselves in Federal tax revenue," how would I prove that?

I don't think you can prove or disprove it. I think there are far too many variables at play to say conclusively one way or the other. I also think where on Braineack's Lafferer Curve you are makes a difference. Going from 50% effective to 30% effective is probably going to be different than going from 30% effective to 25% effective. Likewise, the inverse.

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Originally Posted by Scrappy Jack View Post
Federal tax receipts as a percent of GDP tend to have less correlation with the tax increases or reductions than most might think.

[img]http://research.stlouisfed.org/fredgraph.png?g=gbV[img]


The reality is, it's very difficult to separate economic growth, contraction, tax increases, tax cuts and Federal receipts. If the economy is in contraction and Washington cuts taxes and then the economy recovers, tax receipts with go up. Did the economy recover because of the tax cuts?

Likewise, if an economy is growing and tax rates are raised, tax receipts might go up as the economic growth continues (potentially at a slower rate, but still growth).
Quote:
Originally Posted by Braineack View Post
two questions:

1 Why do tax cuts have to pay for themselves in tax revenue?
2. Is that even the point?
I think you make a fair point, but I would argue several politicians have pitched tax rate cuts as doing just that ("paying for themselves").
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Old 03-05-2013, 02:42 PM   #3911
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Originally Posted by Scrappy Jack View Post
I think you make a fair point, but I would argue several politicians have pitched tax rate cuts as doing just that ("paying for themselves").

Those guys just need to be better at networking:

Email tells feds to make sequester as painful as promised - Washington Times
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Old 03-05-2013, 02:50 PM   #3912
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I also think where on Braineack's Lafferer Curve you are makes a difference. Going from 50% effective to 30% effective is probably going to be different than going from 30% effective to 25% effective. Likewise, the inverse.
That's why I was trying to get blaen to clarify if he was merely claiming that tax cuts had never resulted in increased tax revenue in American history, or if tax cuts could never possibly result in a tax revenue increase.

I can understand an argument about where on the Laffer curve we are at this moment, but not an argument over whether there exists a point on the Laffer curve at which a tax cut would result in a tax revenue increase.
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Old 03-05-2013, 03:49 PM   #3913
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Old 03-05-2013, 03:51 PM   #3914
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[QUOTE=Scrappy Jack;985934]You might as well be trying to convince a devout Catholic that there is no such thing as God, Jesus, Heaven and Hell. Cord holds strong beliefs.


The point is that this is the WRONG VENUE to discuss intricate economic policy. What you end up with is what you see--nonsense.

"Wait, you ignored the point I made in the fourth paragraph."
"You clearly didn't read to the bottom of that Mother Jones article."
"My chart clearly disproved your chart."

Nonsense.
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Old 03-05-2013, 07:17 PM   #3915
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Default Hugo Chavez DED

Hugo Chavez, passionate but polarizing Venezuelan president, dead at 58 - The Washington Post

Chavez is dead.

The Washington Post's reporter, Juan Forero, sounds like he has a chubby for Hugo Chavez. But then again, it's the WaPo...

He could have written this:

http://pjmedia.com/blog/the-chavez-legacy-in-venezuela/

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Old 03-05-2013, 07:43 PM   #3916
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Default Benghazi

Kerry Stammers: 'Can't Answer' Why No One Allowed To Interview Benghazi Survivors

Really....is anybody curious? If one of the 25 survivors wanted to talk to the press, WOULD WE KNOW ABOUT IT?
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Old 03-06-2013, 01:16 AM   #3917
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You might as well be trying to convince a devout Catholic that there is no such thing as God, Jesus, Heaven and Hell. Cord holds strong beliefs. These beliefs are unwavering.
Point. This reminds me now of trying to get a relative to understand that all Muslims aren't out to bomb the US, and that the terrorists in the world aren't only Muslims (Seriously, the second someone tries to claim Timothy McVeigh was a Muslim, there's a serious disconnect with reality), or that Obama isn't a muslim or that Obama was born in the US . I didn't connect it until you put it that way.

Quote:
I looked out my window. Taxes went up on everyone this year and there were waits for dinner on Friday, lunch on Saturday and lunch on Sunday. Home prices are going up in my neighborhood and have been for the past year. My clients are making more money.

Ergo, raising taxes is good for the economy.
Actually, I disagree with raising taxes being good for the economy and quite strongly at that. I never made that argument at any point in my posts Scrappy. I will grant the point it is theoretically possible, but it has the same theoretical possibility as lowering taxes being bad for the economy. Trying to say something as simple as that is an incredibly sweeping generalization that has no really relevant meaning in the context as a result.

Quote:
How would you expect to see the counter premise proved? That is, if I posit that "Federal income tax rate reductions pay for themselves in Federal tax revenue," how would I prove that?
Easy. As pointed above, you simply track year to year income tax revenue, offset for items such as inflation.

See further commentary.

Quote:
I don't think you can prove or disprove it. I think there are far too many variables at play to say conclusively one way or the other. I also think where on Braineack's Lafferer Curve you are makes a difference. Going from 50% effective to 30% effective is probably going to be different than going from 30% effective to 25% effective. Likewise, the inverse.
Actually, I think we're on the left side of the Laffer curve as Laffer defined it, and not how it is being repurposed by various political astroturfing groups right now (Who, notably, are completely decimating Laffer's original idea after a great deal of reading on the topic). This is not to say that being on the left side or right side of the Laffer curve is good or bad however - I'm not making a stance on it, period.

Quote:
I think you make a fair point, but I would argue several politicians have pitched tax rate cuts as doing just that ("paying for themselves").
Ding ding ding. You hit the nail on the head.

I'm not calling BS that cutting taxes can stimulate the economy, or give us a myriad of excellent benefits as a country. I'm not calling BS on anything except for the idea that "Tax cuts give us more tax revenue". They never have historically in this country.

However, interestingly, and as a counter-example in one of the articles I linked, Ireland DID see a tax revenue increase from cutting taxes.

It's not impossible to see a tax revenue increase from cutting taxes, it's this specific country that never has seen them on a federal level in modern history* - and I would speculate that it is because our tax cuts are all extremely politically motivated, with the primary gain meant for specific groups rather than to specifically stimulate the economy or to increase tax revenues.

(Edit)*: And to be even more specific, I'm not claiming this is even the case of the US's entire history, just our modern history. I have NO IDEA if this holds true for the country's entire past history, just for the specific timerange I've looked into.

Last edited by blaen99; 03-06-2013 at 01:34 AM.
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Old 03-06-2013, 11:26 AM   #3918
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Originally Posted by Scrappy Jack View Post
I looked out my window. Taxes went up on everyone this year and there were waits for dinner on Friday, lunch on Saturday and lunch on Sunday. Home prices are going up in my neighborhood and have been for the past year. My clients are making more money.

Ergo, raising taxes is good for the economy.
Quote:
Originally Posted by blaen99 View Post
Actually, I disagree with raising taxes being good for the economy and quite strongly at that. I never made that argument at any point in my posts Scrappy.
That was in reference to another post suggesting we "[l]ook out window. See truth."

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Originally Posted by Scrappy Jack View Post
How would you expect to see the counter premise proved? That is, if I posit that "Federal income tax rate reductions pay for themselves in Federal tax revenue," how would I prove that?
Quote:
Originally Posted by blaen99 View Post
Easy. As pointed above, you simply track year to year income tax revenue, offset for items such as inflation.
[...]
I'm not calling BS that cutting taxes can stimulate the economy, or give us a myriad of excellent benefits as a country. I'm not calling BS on anything except for the idea that "Tax cuts give us more tax revenue". They never have historically in this country.
There's a lot of nits to pick there. First, how do you define a "tax cut?" How are the proponents of the "tax cuts pay for themselves" defining it? As you pointed out, marginal income tax brackets can be reduced, even if deductions are eliminated or capped and other taxes (estate, gifting, payroll, etc) are increased. In that scenario, you could see marginal rates decrease but effective rates increase.

Some would argue that the marginal income tax brackets are the only thing they are discussing when they talk about "tax cuts."

Second, I don't think you can make a direct causal link to year-to-year income tax revenue from tax cuts or increases. As we have belabored, there are way too many variables.

Third, even if you did accept that there was a direct causal relationship, I would argue they probably work on a lag and that there are seasonal adjustments that would need to be made for the fact that you have three different time periods (tax year, calendar year, Federal fiscal year).


But, even ASSuming correlation = direct causation, 2010 = 14.92% of GDP and 2011 = 15.28% of GDP (2012 = 15.62%). In 2010, the payroll tax holiday was enacted. So, you have at least one example in which taxes were cut and tax receipts went up.

If you apply a two to three year lag, you find more examples. Keep in mind you are talking about a data set of like 4 marginal income tax reductions since 1960.
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Old 03-06-2013, 11:33 AM   #3919
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remember when coolidge cut taxes and the GDP boomed?

remember when hoover and fdr raised taxes and the recovery sucked?
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Old 03-06-2013, 12:10 PM   #3920
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remember when coolidge cut taxes and the GDP boomed?
remember when hoover and fdr raised taxes and the recovery sucked?
If you're a Lefty, that's too long ago. The modern economy that's not tied to gold has no correlation to way back then.

The more recent iron-clad proof of the Laffer Curve are handled similarly, with some really creative charts and graphs.

Bottom line; you don't need to convince everyone, just your own on the Left, who are inclined to believe anyway. Then they can look over at the supply-siders, point, and say "look at those dunces, blindly believing the Laffer Curve even after I've shown them this nifty chart." It's a wonderful circular game.

Obama is playing the "It's not my fault, it's their fault." game to perfection. The amazing thing is that even with trillion dollar + deficits for the past five years, he's yet to cut anything, except White House tours, which are put on by VOLUNTEERS anyway. Government is bigger, spending more, bringing in more revenue (for now), all with fewer people paying the taxes. This course of action is unsustainable in ANY economic model, but the Left dare not slow down the juggernaut because they're getting their "stick it to the rich" utopian society. Bubble, meet pin.
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