Big government statists make the common mistake of confusing taxes and revenue. They are not the same thing
Taxes are an assessment by government on your earnings. Revenue is the money flowing to the US treasury as a result of taxation. There is not a direct correlation between the two. In fact, government data shows that often it is an inverse relationship.
Liberal Nostalgia
Poor liberals, staggering blindly around Left and Right Blogistan, suffering under the crack-brained theories of a Robert Reich or Rachel Maddow, parroting nonsensical "theories." The latest shiny ideological bauble that has enraptured Left Blogistanis is the idea that government can restore fiscal sanity by returning to the sky high tax rates of the 1950's.
Why 70% Tax rates won’t work
...and this is what Mr. Reich and his friends always fail to mention—the individual income tax actually brought in less revenue when the highest tax rate was 70% to 91% than it did when the highest tax rate was 28%.So Robert Reich and his fellow travelers are peddling a cartload of statist crap. The other factor these petty statists ignore is that in the 1950's we were the only viable post-WWII economy still standing. We weren't just the only game in town, we were the only game in the world! The rich had few options to hide their money from the avaricious clutches of the US government. Nowadays, the wealthy have a global smorgasbord of tax avoidance options. They won't just sit here and take that level of taxation.
President John F. Kennedy's across-the-board tax cuts reduced the lowest and highest tax rates to 14% and 70% respectively after 1964, yet revenues (after excluding the 5%-10% surtaxes of 1969-70) rose to 8% of GDP.
President Reagan's across-the-board tax cuts further reduced the lowest and highest tax rates to 11% and 50%, yet revenues rose again to 8.3% of GDP. The 1986 tax reform slashed the top tax rate to 28%, yet revenues dipped trivially to 8.1% of GDP. (WSJ - Alan Reynolds)
Our tax code is an incoherent mess. Half pay no income tax, the rich escape it, the working class cannot, businesses keep their money overseas to avoid US taxation, and friends of Obama like GM poobah Jeffrey HeMelts pay no taxes at all.
Caroline Baum lays out the solution quite nicely:
The solution, of course, is “the lowest rate on the broadest base with the least incentive to avoid, evade or not report taxable income,” Laffer says.But no, some progressives don't care about facts and numbers, they just want to punish the rich, even if it results in less revenue flowing into the treasury, higher unemployment, and tax breaks for friends of Obama.
And once we find that illusive rate, let’s leave it there. Walk away. Forget about it. Tax policy, almost all experts agree, should be designed to raise revenue for necessary government programs as simply and as fairly as possible while minimizing economic inefficiency.
As things stand, tax policy is informed by special interests and implemented by lawmakers in the service of those interests. What’s good for one isn’t good for all, which is why tax uniformity should be the goal.
Picture yoinked from The Astute Bloggers
Always focused on the income tax even though tax policy has changed to make income and payroll taxes relatively equal portions of Federal revenue.
ReplyDeleteSaint Ronald Raygun raised payroll taxes as one of the largest tax hikes in American history and started a widening in income disparity that is doing harm to America.
When the fringe right starts in with the "liberals don't know their facts" chorus about St. Ronald Raygun they never mention the payroll tax increase. Probably because they get their talking points from Rush "Talent on Loan from Synthetic Morphine" Limbaugh.
The fringe right, constantly boxing outside their weight.
Couldn't the inverse relationship between taxes and revenue be in part to the fact that when we raise taxes we generally tend to spend more?
ReplyDeleteI think we would work wonders on our budget if we could agree to both raise taxes (a little) and simultaneously make budget cuts. God forbid we raise taxes and keep ourselves from spending the extra revenue.
Well that was certainly the case in the Raygun administration.
ReplyDeleteHe RAISED taxes and also raised government spending (primarily defense). Expenditures as a percentage of GDP were a few percentage points higher under Raygun.
However, we did get the invasion of Grenada for all that spending.
Attempts to reduce deficits under Carter and Clintoon (sic) were reasonably successful and reversed by Republican administrations.
The more tax monies the government rakes in, the more the government wastes those monies.
ReplyDeleteReminds me of the Windows operating system: leave your computer on all the time, and Windows gets greedy with gobbling up memory.
Jack:
ReplyDeleteJust how inverse the relationship is depends on what the level of taxation is before the cut. It's more so when taxes are really high, and the returns diminish as taxes get lower.
What you're talking about is a pure spending issue. The root of the problem is that spending climbs inexorably, outstripping revenues. Government also locks those spending levels in, guaranteeing nothing is ever cut. This happens under democrats and republicans.
Ducky: Did Reagan beat you up and steal your girl back in the 50's? You sure are fixated on him.
ReplyDeleteYou failed to make the connection between payroll tax increases and income disparity. Had they not increased the payroll tax, social security would be insolvent now, instead of ten years from now.
http://en.wikipedia.org/wiki/Reaganomics
But everybody knows it was better during the Carter years than it was during the Reagan 80's, right?
BTW, I guess you pulled us so far off topic because you could not refute what I said in the blog post.
I would add that so called subsidies are not that nor are "loop holes". It is merely the tax code that is written. Similar to my home mortgage interest. Do we consider it a loop hole, or subsidy?
ReplyDeleteThere's no way to refute the substance of the blog post. Facts is facts, ain't they?
ReplyDeleteHowever, there is an ASSUMPTION on the part of "Progressives" (surely the dominant force in governance since the 1930's) -- and entirely too much passive acceptance on the part of "traditional" Republicans -- that there is a genuine NEED for the massive amount of government intrusion and intervention we have let evolve.
I don't have the numbers, but government has been growing by leaps and bounds ever since the New Deal. The trend towards ever greater Centralized Power unsanctioned by the Constitution began with Lincoln (Oh yes it did!), and then got into gear during The Progressive Era, and hasn't stopped since. The vast increase in the number of aides working for each senator and representative alone should tell the story.
We don't need higher revenue. We certainly don't need higher taxes. We don't even need simply to "reduce spending." We should never have established the need for a FICA tax in the first place, nor should we ever have instituted Medicare.
What we DO need are massive cutbacks in the federal bureaucracy, the complete elimination of at least half of all social programs, and a gradual phasing out of Social Security and Medicare both of which are de facto Ponzi Schemes destined to break the backs of future generations.
We ALSO need a radically different approach to foreign policy. Acting on the notion that we have a duty -- and a right -- to interfere in the internal affairs of foreign nations with costly, disastrously ineffective military intervention in order to "correct" violations of human rights or to "spread democracy" to people who neither want it, nor have the wherewithal to sustain it is insane. The Founders warned against "foreign entanglements." We should have heeded their wise words.
I'm a radical -- just not the bomb-throwing, bearded-Marxist kind the term usually brings to mind. Thoreau (1817-1862) defined what-I-see-as-the-problem very well in these few words:
"There are a thousand hacking at the branches of evil to one who is striking at the root."
Why we must put off doing what is necessary to save ourselves until disaster strikes when intelligent changes in policy could avoid prevent it I'll never understand, yet all we seem capable of at the moment is tongue-clucking and dithering.
Thoreau also said:
"Men will lie on their backs, talking about the fall of man, and never make an effort to get up."
Pretty smart guy, wasn't he?
~ FreeThinke
silverfiddle, the issue is not whether or not they should have increased SSI taxes, it was needed.
ReplyDeleteThe issue is fringe right claims that revenue was increased by supply side economics, It was NOT.
The SSI increase immediately went to military spending so that he could embolden terrorists by getting conned by Sharon in Lebanon and protect our freedoms from the Grenadian special ops.
Raygun initiated the fatal decline of America. Clintoon finished laynig the foundation and Chucklenuts Bush finished it. And the fringe right doesn't understand they are being done raw.
For class discussion: The maligned Jimmy Carter was paying the price for the milquetoast Arthur Burns caving to Nixon's politically expedient request to keep interest rates low and Carter helped resolve the mess for Saint Ronald Raygun by appointing Paul Volker
ReplyDelete"The class" doesn't discuss cheap liberal talking points. If you want to conduct a class discussion on frivolous topics do it at your own blog.
ReplyDeleteCarter's economy stank, Reagan pulled it out of the toilet, and yes, Carter appointee Volker was key to our recovery. A strong dollar and low taxes and regulation fueled the longest economic boom in our nation's history.
If you insist on defending Carter's economy go right ahead. We'll laugh at you while you do it.
So Ducky, how do you propose to generate revenue higher than the historic 17-18% of GDP?
The Socialist Democrats produced "The People's Budget," and it required around 25% (optimistically) to make it work. So how will this work?
Ah, Voo Doo economics. Ya' gotta wonder if any conservative alive ever took a math class...
ReplyDeleteYour logic is laughably specious.
The only way to really measure if revenues increased because of taxes going up or down would be to look at revenues as a percent of GDP, and by that measurement, we've been hovering around the 18% mark for over 65 years.
Here's the Heritage Foundation, if you don;t believe me: http://www.heritage.org/budgetchartbook/current-tax-receipts
What little correlation there is, does show the higher the rates the higher the revenue. Period. But there's much more to the story.
Look at the Heritage chart. Notice when we had recessions are other economic calamities. Notice that Reagan's steep cuts did not raise revenues. In fact, they declined as a percentage of GDP.
So really, as GHWB once said, this is all Voo Doo economics. A specious, spurrious, inaccurate, purely ideological driven LIE.
JMJ
I'm not sure that higher revenue is the goal of the liberal love affair with higher taxes and/ or taxing the rich. Higher taxes on any income group always end up hurting the poor and the middle class the most. But, higher taxes mean the the people have less resources to use to take care of themselves. Therefore the people will become more dependent on government programs to survive and this means bigger and bigger government. That is the true goal of the liberals.
ReplyDeleteIf only I could send you an amazing cartoon I got today in email.....
ReplyDeletewhat the heck...I'll post it at geeZ now so you can see it.
it's the image for your piece...you can "yoink" it from me :-)
Cheap liberal talking points? That your best game, silverfiddle.
ReplyDeleteYou turtle like z?
2 points, Silver:
ReplyDelete1) Hauser's law. Period. That answers the revenue question.
2)Government spending is a problem, both on the fiscal side, as well as the economic growth side. Search "Far from the meddling crowd" and read the piece from The Economist from last fall - not a conservative journal by U.S. standards. They report several studies that show that government spending slows growth. One (from Europe) shows a 1% increase in gov't spending reduces private spending by 1.9%.
So there you have it; higher tax rates will not bring in additional revenues, and higher levels of spending will lower revenues by slowing the economy. There are tighter parameters to what we can do than liberals/Keynesians will admit.
You turtle like z?
ReplyDelete...said the Left's mpost prolific brown-capper.
Why would we want to increase tax revenues? Giving the federal government more money is the surest way to destroy the country.
ReplyDeleteTaxing the rich is a stupid plan, it's more like trying to rob school children of their lunch money instead of robbing a bank. Because the REAL money lies in taxing the Middle Class. And you can bet that the moment they've taxed the rich into the middle, they'll be after the nouvo-riche (the current Middle Class) to pay their "fair share" to cover the expenses of the 50% of the US population that goes completely un-taxed.
ReplyDeleteAh, Voo Doo economics. Ya' gotta wonder if any conservative alive ever took a math class...
ReplyDeleteYour logic is laughably specious
See, it's comments like this that reinforce my adamant refusal to entertain the absurd idea that leftists are capable of rational thought.
As if we need math lessons at the knee from a leftist who can't see that increases in payroll taxes under Reagan did not cancel out or even exceed income tax cuts, and the federal revenue increases under Reagan were more due to closing loopholes and exemptions in the tax code itself.
As if demand side economics - burning down neighborhoods so the fire department will start hiring - is the answer. Puh-lease.
Increases in military spending led to the microchips in your computer and GPS in your smartphone, along with millions of jobs. Increases in social entitlement spending has given us a debt crisis.
Good on the other poster for mentioning Hauser's Law.
More righty BS.
ReplyDeleteNow Beamish, Saint Ronnie Raygun's SSI tax hike was the largest peacetime tax hike in American history. How large was his income tax cut (be sure to factor in the alternative minimum tax hike).
ReplyDeleteJust asking. Fact is the man was no a tax cutter.
Fact is that Clintoon for all his faults did hike the maximum marginal rate with no ill effect. So this is all a little more complicated than you admit.
Now go reboot the server.
Beamish,
ReplyDeleteYou're not applying the scientific method to your reasoning.
Just because revenues went up after taxes went down doesn't mean they wouldn't have gone up even higher is taxes went up.
Now, unless you know of some alternate dimension in which all things were equal except taxes went up instead of down, you can not assert that taxes would not have gone higher if taxes had gone up.
Get it yet?
Now, I showed you a chart, from the Heritage Foundation, that showed revenues per GDP, a way of actually measuring revenues against potential revenues. I showed you that in fact revenues against GDP DECLINED when taxes went down. You make NO attempt to refute that. Because you have no real mathematic or scientific argument.
Take your point about microchips. NO. Most advances in computer technology came from the civilian sector, not the military. You're just making stuff up because it fits your agenda.
Instead of blithely skipping through life in an ideological haze, why don;t you try looking at the FACTS and then making an INFORMED opinion. No? Oh. That's right. Then you wouldn't be a conservative. ;)
JMJ
The problem with the left is that they honestly believe they are entitled to a percentage of everyone else’s money. I have to laugh every time the fraud Ducky tells us how much money he pays in taxes … somewhere around three times what most of us make in a year. I can understand why someone with an inferiority complex would brag about how much he makes, true or not, but I’m not sure I understand why anyone with an ounce of brains would want to “give up” twenty to thirty-five cents of every dollar to the federal government. This doesn’t include what we shell out to state governments or additive to that, property taxes.
ReplyDeleteThis isn’t an argument against paying for infrastructure. It is an argument for responsible budgeting and spending plans. We really do need an amendment that limits government to revenues, and an enlightened constituency who knows when to fire lawmakers who try to take more than we think they’re entitled to. It isn’t enough to say that we must have a smaller government, because no one is quite sure how much government is too much. My solution is simple: if it isn’t in the Constitution, then the federal government can’t do it, and we the people aren’t paying for it. If this means we need to keep turning over members of congress at every election, then that is what we must do.
SF: Uh, neither?
ReplyDeleteDucky: Sorry about that AFLAC business you got a raw deal.
What did we get from Reagan's increased defense spending, other than Grenada? How about the collapse of the Soviet Union? Nah, that was probably Carter also.
What do I want from my federal government? How about Article 1, Section 8?
Ducky,
ReplyDeleteNow Beamish, Saint Ronnie Raygun's SSI tax hike was the largest peacetime tax hike in American history. How large was his income tax cut (be sure to factor in the alternative minimum tax hike).
Just asking. Fact is the man was no a tax cutter.
ROFLMAO! All these decades of the left criticizing Reagan's approach of cutting taxes to spur economic growth and employment and now he's to be debased as a tax-and-spender.
Have Reagan's critics over the past 30 years been wrong all this time thus requiring this new, bizarre "Reagan raised taxes" contrivance?
Let me know when your pathetic "argument" that Reagan "raised taxes" gets to the point where you claim it's okay for Obama to raise taxes because he's a Democrat.
JMJ,
Just because revenues went up after taxes went down doesn't mean they wouldn't have gone up even higher is taxes went up.
Now, unless you know of some alternate dimension in which all things were equal except taxes went up instead of down, you can not assert that taxes would not have gone higher if taxes had gone up.
Get it yet?
Of course I get it. The "alternate dimension" you're looking for is called reality, you know, where decreased taxation spurred economic growth under Kennedy, Reagan, and Clinton.
If we could one day harness all the energy that the Left spends trying to denigrate the accomplishments of Ronald Reagan, America would become the world's largest net energy exporter
ReplyDeleteTake your point about microchips. NO. Most advances in computer technology came from the civilian sector, not the military. You're just making stuff up because it fits your agenda.
ReplyDeleteI wasn't aware that the fact that the very first computer microchips ever put into production was the result of designing a guidance system for the Minuteman missile is something I "made up to fit my agenda," as well as the fact that the civilian sector spun off this military contract into thousands of commercial projects and applications. Perhaps the fact that military technology research has yielded more job creation than Medicaid spending doesn't fit your agenda, hmmm?
Instead of blithely skipping through life in an ideological haze, why don;t you try looking at the FACTS and then making an INFORMED opinion. No? Oh. That's right. Then you wouldn't be a conservative. ;)
I do not have the vast deficiency in IQ points required to be left-wing. Continued discussion will only have me using you as an example of this easily observed fact. I hope you won't take my ongoing demonstration that you're an imbecile personally.
So really, as GHWB once said, this is all Voo Doo economics. A specious, spurrious, inaccurate, purely ideological driven LIE.
ReplyDeleteWait, I thought Clinton wanted GHW Bush out of office for caving to Democrats on breaking his promise of "no new taxes."
I wish you leftists had a mind to make up.
So Jersey let me ask. If Revenues increased when taxes went down, why is that? Was it magic? What about when taxes increased and revenue fell? How can you not see the relation? Do we need to go back through centuries of Roman history, or is the past hundred year enough?
ReplyDeleteReagan was tax and spend. No you've got it Beamish.
ReplyDeleteRepeat it three times, click your heels and you're home.
Imagine finally understanding that the pure stinky cheese can live on in the culture without being corrected. I'm happy for you.
Reagan was tax and spend. No you've got it Beamish.
ReplyDeleteIf true (it isn't), Reagan would be a leftist hero. Why isn't he?
Imagine finally understanding that the pure stinky cheese can live on in the culture without being corrected. I'm happy for you.
You're happy that I deduced that you're full of shit?
Beamish, did you bother to look at my Heritage Foundation link, or are you insane? Did you get my point at all?
ReplyDeleteAnyone here want to help Beamish???
JMJ
you didn't show jack, Jersey. Revenue stubbornly remains at 17-18 % of GDP regardless of tax rates, and your conclusion is flat out wrong. Revenue/GDP went up after the Kennedy and Reagan tax increases. They flatlined after the Bush cuts, but then increased.
ReplyDeleteYou want to talk scientific method? The best measurement instruments of the myriad economic indicators are human beings. Only complete morons prefer the Carter years over the Reagan years.
Beamish, did you bother to look at my Heritage Foundation link, or are you insane? Did you get my point at all?
ReplyDeleteDoubling down insistence on your lack of chart reading comprehension skills isn't going to get you past the hurdle that a 28% top marginal top rate in 1988 under Reagan yielded more federal revenue than a top marginal tax rate of 70% under Carter in 1980 because the economy grew and annual GDP rose due to decreased taxation. (Lower taxes rates, more economic expansion, more people employed and paying taxes, less people reliant on government handouts.)
Anyone here want to help Beamish???
You don't feel stupid enough?
you didn't show jack, Jersey. Revenue stubbornly remains at 17-18 % of GDP regardless of tax rates, and your conclusion is flat out wrong. Revenue/GDP went up after the Kennedy and Reagan tax increases. They flatlined after the Bush cuts, but then increased.
ReplyDeleteExactly. Hauser's law shows that US federal revenue has never been able to surpass around 20% of GDP regardless of tax rates. And the record under Kennedy, Reagan, and Clinton also shows that growth of GDP diminishes under higher taxation and expands under lower taxation.
It boils down to which dog you want to feed... do you want to grow the size of the economy, or do you want to grow the size of the government... we're back to the subject line of your post, unrefuted.
Cut taxes to expand the economy to create more jobs and thus more tax payers, or tax employers out of business to pay for unemployment programs?
20% of a shrinking GDP or 20% of an expanding GDP?
The lefties want to presume they can teach us math? Seriously?
Perhaps the Left just wants to go back to the FDR days of 95% top marginal tax rates, food and fuel rationing cards, women in bomb factories, and helping the Soviet Union conquer Eastern Europe.
ReplyDeleteOr, these days, helping al Qaeda conquer North Africa.
You've nailed it, Beamish. The left has a fundamental mistrust of the people and our unbridled behavior, unleashed from governmental control.
ReplyDeleteThe left has a fundamental mistrust of the people and our unbridled behavior, unleashed from governmental control.
ReplyDeleteThat's half of it. The other half is illustrated by Obama taking two and a half years to figure out the CBO can't estimate his speeches.
Leftism is a sinister combination of having the hubris to believe people need you to think for them and the idiosyncratic need to be the biggest blithering idiot in a room.
I see that Beamish has arrived. **smile**
ReplyDelete"What the heck difference does it make if the feds raise taxes or increase the debt limit, in either case, it will not solve our debt problem because whether they raise taxes or increase the debt limit or both, the government will just spend that much more. Governments are fiscally irresponsible."
ReplyDeleteThank you, Father Gregori.
Voltaire said it another way:
"In general the art of government consists in taking as much money as possible from one class of citizens to give to the other."
~ FreeThinke
Silverfiddle - glad I found you and I'll try to visit frequently.
ReplyDelete@beamish - Liberalism is a social disease. It comes prolonging the survival of the unfit.
@duck - blah blah
It is not useful to debate to what degree a government can abuse you. Set state taxes to a ceiling of 10%, sales tax only, period. No other taxes and no exclusions, no exemptions. Then 10% of that total goes to the national government. Let them manage on a budget, not manage to bankrupt all of us.
If a profligate elitist governing class finds that insufficient, then we need to work on educating the voters who chose that government.
@badwolf79: It is not useful to debate to what degree a government can abuse you. Set state taxes to a ceiling of 10%, sales tax only, period. No other taxes and no exclusions, no exemptions. Then 10% of that total goes to the national government. Let them manage on a budget, not manage to bankrupt all of us.
ReplyDeleteThat is a right fine piece of concise wisdom.
SIlver,
ReplyDelete"Revenue/GDP went up after the Kennedy and Reagan tax increases."
"They flatlined after the Bush cuts, but then increased."
As a percentage of GDP, they went down during the Reagan years. They peaked a little toward the end because of the mortagage and stock market crashes in the late eighties. If GDP falls, and it always falls a year or so before the revenues, it always appears that revenues peak after the first year or so of a recession or other economic calamity. What's really happening is the economy is shrinking, causing relative revenue inflation.
The Bush years are strikingly similar. Republicans never learn.
In Kennedy's case, yes revenues went up, but not that much. As well, the general health of the economy was far better in the Sixties than it has been since then.
Modern History and Economy 101.
JMJ
Beamish, Hauser's Law is not really a "law," but rather an observation. And remember, it only looks at income taxes - which of course will always be relatively set by the GDP. I'm pretty sure Hauser acknowledged that.
ReplyDeleteIt doesn't include FICA or all sorts of other taxes and fees and tariffs and collection and etc.
And remember - a large sum of these revenues are paid a year or more after they're earned or gained!
That's the point I was making to Silver - and Trestin, too.
All the same, changes of just a percentage or two in revenues of the hundreds of billions are very significant. They can make the difference between a balanced budget and some fiasco like what happened at the end of the Bush years.
And take the Bush years - he theoretically could have made the tax cuts work if he hadn't gone to war. He and the GOP inherited a country that was in relatively good shape. He was able to parlay that into tax cuts. But then he went to war.
If you look at the costs of the war, and you look at the deficit - you'd be retarded not to notice the commonality.
Hauser's Law doesn't address these sorts of things.
JMJ
No Jersey, you and your ilk will never learn.
ReplyDeleteLook at the next chart after the one you linked to:
http://www.heritage.org/budgetchartbook/income-tax-receipts
As you love to say that is HISTORY, not just me talking. Tax rates stairstepped down over the century but tax receipts remained the same. Cutting taxes did to result in a decrease in revenues.
And the only reason you didn't see great gains in revenue/GDP after the Reagan cuts is because GDP skyrocketed.
Nice try, but that next chart blows a hole in your boat.
Silver,
ReplyDeleteHave I ever argued that rates should be arbitrarily, permanently set?
I do not believe we need rates anywhere near the WWII years. Why would I? We are not engaged in a World War (at the moment).
GDP can skyrocket even when many other economic indicators decline. Do you understand that?
If you only look at rates per GDP or rates over time or rates in real dollars, or just forget about all the possible external factors, you can't grasp what the rate should be.
And no, revenues declined per GDP during the "growth years" of the Reagan and Bush years. True, as I said, revenues are always delayed a year, but the declines far exceeded the rises.
You seem to be really, really, really, really missing me here.
I'm sorry, I guess I just couldn't find a way to convey my point on this one. I tried!
JMJ
You didn't even look at the other chart, did you Jersey?
ReplyDeleteRevenue increased, you are wrong.
I understand how it is you voted for Obama.
Keep smokin' that hopium!
Silver,
ReplyDeleteRevenues did not increase as a percentage of GDP. Therefore, it could be posited that revenues could have been higher if tax rates were higher.
You have no control in your experiment. Revenues could have been higher had rates been higher.
JMJ
Alright Jersey, you're not a scientist so you can stop with the scientific talk. It doesn't apply here. We're talking simple facts. Look at the chart I provided a link to. It completely backs what I am saying. We lowered the tax rate from 90 to 28 with no loss of revenue.
ReplyDeleteThat's not an experiment, it's a fact.
All the same, changes of just a percentage or two in revenues of the hundreds of billions are very significant.
ReplyDeleteYou're missing the point. Income taxes taking in revenue equivalent to 20% of GDP is going to take in more revenue if GDP grows higher. (Duh!) Under Reagan, America's GDP went from $2.7 Trillion in 1981 to $5.1 Trillion in 1988 - Cumulatively, Reagan nearly doubled the size of the US economy in eight years (really six years, as 1981-82 were recessionary).
You can stand there and stamp your pumps and insist that Reagan raising Social Security taxes accounts for nearly doubling the size of the US economy, lowering unemployment, and creating 16 million jobs, but we're just going to laugh and point at you.
The fact of the matter is economic growth under Reagan put people to work in jobs rather than on welfare, raised the standard of living across the board, and resulted in a larger pool of taxpayers. That's what happens when you cut taxes on job creators. They create jobs, and working people have more money to spend to fuel the expansion of the economy further.
They can make the difference between a balanced budget and some fiasco like what happened at the end of the Bush years.
Bush's annual deficits never hit, much less exceeded $500 Billion any year he was in office. Obama's been running a $1.3 Trillion deficit every year he's been in office.
And take the Bush years - he theoretically could have made the tax cuts work if he hadn't gone to war. He and the GOP inherited a country that was in relatively good shape. He was able to parlay that into tax cuts. But then he went to war.
If you look at the costs of the war, and you look at the deficit - you'd be retarded not to notice the commonality.
The TOTAL costs of the Iraq and Afghanistan wars COMBINED, since 2001 when they started, sits at around $1.2 Trillion.
Obama's deficits in 2009, 2010, and 2011 COMBINED are $3.9 Trillion - over three times as much money as funded the Iraq and Afghanistan wars COMBINED OVER 10 YEARS.
Two and a half of those years are under Obama. Ignoring the neon elephant in the room that as those wars have drawn down over those last 2.5 years their operational costs should be decreasing under Obama to make your argument even more silly, let's divide the total cost of the wars into equal shares of one year for the 10 years they've been ongoing, and we find that the cost of the wars becomes $120 Billion a year. Multiply that by Obama's 2.5 years so far, and you've plausibly accounted for $300 Billion of Obama's $3.9 Trillion in deficit spending so far. If you must insist that war spending is driving Obama's deficits, then you must explain:
1. Why it is that why we could pay for the last 10 years of war with either Obama's 2009 or 2010 or 2011 deficits
2. Why it is deficit spending has quadrupled under Obama if war operations are winding down in both Iraq and Afghaistan
3. Why it is that war spending only accounts for 10% of Obama's annual deficits
The answer to all of these is that deficit spending under Obama has increased to create a public debt that is 90% of current GDP. Obama has put America in more debt in 2 years than Presidents Washington through Reagan did COMBINED over 200 years!
Where's our new Louisiana Purchase? Our new transcontinental railroad? Our new oil pipelines? Our new interstate highways? Our new moon landings? Our new space shuttles? The Internet's next major upgrade?
Does Obama have anything to show for spending so much money?
Hello?
From where I'm sitting, blaming 10 years of war for 3 years of Obama deficits that could pay for that 10 years of war three times over is what accurately signifies "retarded."
Both wars in Iraq and Afghanistan account for 12 days of Obama spending per year. What's Obama spending on for the other 355 days a year?
ReplyDeleteIf war spending at $120 billion a year is part of Obama's $1.3 Trillion annual deficits as a whole, then war spending is only accounting for 12 days worth of Obama's spending of the 4 months out of each year Obama is spending money the government doesn't have in revenue.
What's up with that?
Obama has spent $2.2 Trillion MORE in 2.5 years (so far) than Bush did in his first four years in office (2001 - 2005), when the wars in Iraq and Afghanistan were arguably at their most intense and costly.
ReplyDeleteObama's 2009 through 2011 spending is the equivalent of almost every penny spent by Bush from 2001 - 2006.
How can it be argued that massive spending increases under Obama is not the problem?
My only sources for this are Glenn Beck and Rush Limbaugh, and admittedly they may be just wee bit biased, but they have said that President Obama has committed us to spending more in his first eighteen months in office than all monies spent by every previous administration COMBINED since the founding of the republic.
ReplyDeleteI have no idea whether inflation and the massive changes and fluctuations in the economy over the past 200+ years were measured mathematically and properly factored in or not, but any way you slice it, the current administration's policies reek of incompetence and irresponsibility at best downright fiendishness at worst.
It is tempting to believe that Team Obama (I believe him to be merely the Front Man for a nefarious cabal of immensely powerful "puppeteers" who work surreptitiously behind the scenes) has deliberately set the country on a course destined to take it over the cliff and onto the rocks.
Whether you believe our ruination has been a conscious, deliberate, craftily planned goal of this administration, or if current policies have come about only because of well-meaning ignorance, incompetence and short-sightedness, the result is the same.
Motives may not be as important as the harsh realities we soon must confront with hard-headed pragmatism or go the way of myriad other once-great-now-dead civilizations.
If you're deep in a hole, and the sides are starting to collapse in on you, FOR GOD'S SAKE STOP DIGGING.
~ FreeThinke