Posted on 05/09/2017 1:35:23 PM PDT by lowbridge
Washington Compost, well, compost...
Dear Dumb F%$k:
You ever hear of the Laufer Curve?
All the best...
China
"Those of us who argued in the late 1970s and early 1980s for lower tax rates were often characterized as “radical supply-siders” and criticized for claiming that all tax-rate reductions lead to higher tax revenues. This was untrue; none of the principal advocates of Reagan’s 1981 tax cuts made this claim.
The Reagan tax cuts reduced rates for all income classes, even though it was well understood that cutting the lower rates would result in substantial revenue losses."
His further statement:
"The Reagan tax-rate reductions did, in fact, pay for themselves — but it took about seven years"
I find misleading because he's not accounting for the factors besides the tax cuts that contributed to growth and the increased total revenue over that span- that would require a regression analysis like the one that Lindsey used in his book.
I assume that Rahn is using shorthand here because getting into that detail would require a book and not a short article.
The Reagan team picked a tax rate designed to maximize economic growth. That was their goal. A tax rate designed to maximize total tax revenue is higher than the tax rate that gives the best economic growth. The two rates simply aren't the same; Lindsey has written a monograph on that very subject.
The rate that you choose depends upon what your goal is. Do you want the American people to get the benefits of maximum economic growth like Reagan did? Then choose the lower rate.
Do you want Big Government to get the biggest tax haul that it can, like Obama? Then choose a higher rate. Government will be richer but the people poorer.
Again, you are working in the short run.
In the long run, higher economic growth in many cases overcomes the short-term take.
“Again, you are working in the short run. In the long run, higher economic growth in many cases overcomes the short-term take.”
Well let’s see... I can go with your expertise, or I can go with Lindsey...
Decisions decisions..... Lindsey is a PhD... Senior Staff Economist for Tax Policy under Reagan... Director of the Nat’l Economic Council for Bush 43... wrote a book on Reagan’s tax cuts based on a large regression analysis...
A tough choice. I’ll have to mull it over for awhile.
Hey, I understand—there are those so enamored with credentials that they can’t think for themselves.
But Lindsey’s analysis was done in the ‘80s, rather than in the long run, and for the purposes of pushing his own tax reform plan.
You usually make sense but you are out to lunch on this one. Explain how revenues never decrease year over year in the 1980's. Of course lowering marginal rates increases income tax revenue. It always has done so. What you are saying is absolute poppy cock.
You are confusing deficits with tax revenues. Why do people do that?
Are you sure that you want Tennessean4Bush to read that Cato article? He’s going to see Rahn say:
“Those of us who argued in the late 1970s and early 1980s for lower tax rates were often characterized as “radical supply-siders” and criticized for claiming that all tax-rate reductions lead to higher tax revenues. This was untrue; none of the principal advocates of Reagan’s 1981 tax cuts made this claim.
“The Reagan tax cuts reduced rates for all income classes, even though it was well understood that cutting the lower rates would result in substantial revenue losses.”
This is the very same point made by Martin Anderson is his memoir ‘Revolution’- of course he was one of Reagan’s principal advisors and helped design Reagan’s economic policy so it makes sense that he would agree with Rahn.
As far as the overall growth during the Reagan years some of it was due to increased spending as the national debt grew from $900 billion to 2.7 trillion over those same years. The GDP formula is still GDP= C+I+G+(X-M) and you can’t simply pretend that that large increase in gov’t spending didn’t have an impact.
Oh my God you are crazy. You need to stop and look at the tax revenue data from the 1980s. If you would stop and do that you will be red faced embarrassed at how wrong you are and take all of this back.
Stop. Google the raw income tax revenue data form the 1980s. You are embarrassing yourself.
“Of course lowering marginal rates increases income tax revenue. It always has done so.”
According to who? Not the Reagan economists who designed his program and whose writing I’ve read. I’m not confusing anything unless the Reagan economist themselves don’t know what they are talking about.
They uniformly said that they expected economic growth to recover a large portion of the revenue loss that the rate cuts would create. Their prediction was in the 60% range and that’s what Lindsey’s later study found. None of them ever made the claim that the tax cuts would pay for themselves. Various cheerleaders like Gilder and Wanniski did and that claim constantly gets repeated by Limbaugh. But the Reagan people not only didn’t say it they complained about those who were making that claim.
You see that phrase “regression analysis” in regard to Lindsey’s study? That’s how you account for the various factors that affected economic growth and therefore tax receipts. It’s a statistical model needed to isolate the effect of multiple variables. Factors including a tripling of the gross national debt. You can’t just subtract the 1981 tax haul from that of 1989 and declare that it’s all due to the rate cuts. Well you can but no one is going to take you seriously if you do.
So you agree revenue increased year over year throughout the 1980s. But according to you that was not due to the tax rate cuts of 1983. However I'll bet if revenue decreased or remained flat after the rate reductions went into effect you'd be the first to blame the marginal rate tax reductions. LOL. It's a no win situation.
Give it up the FACTS are revenues went thru the roof after the tax rate cuts went into effect. Facts are hard thing to ignore but keep trying.
Gosh. I’m so embarrassed. I didn’t realize that looking at a graph of tax revenue for the 1980s would tell us everything we could know about tax cuts and their effects. /sarc
I was told by you that increasing tax rates increases revenues so therefore the converse must also be true that decreasing tax rate decreases revenue. BUT THE DATA DOESN'T SUPPORT THAT.
All tax cuts aren’t equal when it comes to stimulating growth. Some of Trump’s proposed cuts will be very stimulative, some will not.
Look, I like your economic nationalism and a lot of your other posts. But you don’t know what the hell you’re talking about here. I’ve read a thousand tedious pages on this stuff written by the Reagan people themselves. What I learned from them is what I’ve been posting. Argue with them all that you want. I don’t pretend to know more than they do.
Martin Anderson complained about “the myth of the supply siders”, those who claimed that tax cuts would pay for themselves. When he wrote his memoir he could certainly see the results of the program that he helped design- he could have said “gee, it turned out far beyond my wildest dreams and the optimists were right”. He didn’t. In case his name is unfamiliar to you:
https://en.wikipedia.org/wiki/Martin_Anderson_(economist)
Ok if both lowering tax rates increases revenue and raising tax rates increases revenue then HOW DO YOU LOWER REVENUE?
That’s certainly true. Some will go for consumption, some for investment. And there’s no guarantee that that will be spent or invested in America.
Reagan’s first program included investment tax credits to encourage money to go where it would stimulate domestic growth. We know that Trump has a definite interest in reviving American business so I expect we will see something like it.
Lowering tax rates lowers revenue. When Tip O’Neill reneged on spending cuts Reagan had to reverse about a third of his initial tax cuts to keep the deficits from exploding.
You seem fixated on the idea that the growth in total tax revenue during the ‘80s is due to the rate cuts and that’s not so. There was a tripling of the national debt, there was foreign investment, there was the natural business cycle and more. All of these contributed. This is the stuff that is accounted for in Lindsey’s study. You can read about all in his book The Growth Experiment. It’s written for the layman, it’s not loaded with formulas and jargon.
Bull Sh!t.
Revenue 1983 = $1.13T adjusted for inflation.
Revenue 1989 = $1.48T adjusted for inflation.
Sorry those are the stats. You lose.
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