Except for a capital gains tax cut, I don't believe any tax cut "pays for itself". Do you dispute the fact that a cut in marginal income tax rates partially "pays for itself"?
In other words, if you cut the top tax rate from 70% to 50% you should reduce receipts by 28.5%. If you reduce the top rate from 50% to 28% you should reduce receipts by 44%. Does this actually occur?
I am more than willing to look at any serious evidence that any Concord Coalition member is willing to present.
What you're saying is that everyone is supposed to accept high taxes, and that any reduction has to be justified to the satisfaction of the tax advocate. I prefer the idea that any taxes at all have to be justified before I'm willing to vote for them. Let's decide who has the burden of proof.
| Who has to explain the need for taxes? | Taxpayer | Tax spender |
| expat_panama | x | |
| Remember | x |
So far it's a tie. Anyone else care to vote?
If nothing else, some of the revenue lost in a cut in marginal income tax rates will come back to the government via other taxes. That is, some of that extra money in taxpayer's pockets will be invested or spent and incur other taxes. Likewise, much of the money spent by government is invested or spent by the recipients and incur other taxes. But these and many of the obvious motivational effects are factored into the revenue estimates.
Hence, in that sense, tax cuts (and spending) partially pay for themselves. Likewise, I would have had no problem if ChessExpert had said:
Federal tax receipts shrank less in response to a tax cut than one might expect. Again.
Then, I would have had no disagreement. The trouble is, he said something quite different. In any case, I'm happy to see that you are taking a reasonable view on this matter and not the "tax cuts = free lunch" view.