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To: Toddsterpatriot
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"?

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.

14 posted on 11/24/2005 12:52:23 AM PST by remember
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To: remember

Government needs to be smaller. I don't care if tax cuts pay for themselves. Money kept in my pocket is better spent than if taken by government.

That said, there is the law of diminishing returns that is a corrolary to Laffer. Confiscate too much, you get less because folks produce less or find loopholes. So, yea, if you take less, you'll encourage at least some extra productive activity and thus some extra revenue that would otherwise have evaporated.


53 posted on 12/06/2005 10:29:37 PM PST by Larry Lucido (Boycott taglines that don't say Merry Christmas!)
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