Thomas Sowell isn't much of a sailor. He's so confused that he doesn't even understand that we're not in the same boat with other nations. That was simply pathetic. Jealousy is an ugly thing. Very ugly.
Posted on 12/31/2005 8:45:33 AM PST by george76
Ronald Reagan once said an economist is someone who sees something that works in practice and wonders if it would work in theory.
So why is it that when confronted with a concept that works in both practice and theory, so many people refuse to believe it?
The Laffer Curve, popularized by economist Arthur Laffer, says the government can maximize tax revenue by setting the tax rate at ...
The logic is obvious on the ends of the spectrum: if the tax rate is 0%, the government collects no money.
If it is 100%, people have no reason to earn, and the government still collects no money.
Federal tax receipts for October and November (the first two months of fiscal 2006) were $288 billion. This is up from the first two months of fiscal 2005 ...
Despite cutting tax rates in May 2003, tax receipts for this two-month period have risen for three consecutive years.
We were on the wrong side of the curve (and may still be):
Tax rates were too high.
(Excerpt) Read more at humaneventsonline.com ...
"Allowing the government to impose tariffs that restrict our freedom to choose, freedom to purchase and invest in what we want, is hardly being a "flexible economy." That is the tactic of the centrally managed economy so adored by Socialists."
So you're saying that from about 1790 to 1960 our country was a centrally managed ecomomy adored by socialists? You do realize that most of the protectionism that is proposed now by Buchanan and others is a weak version of what the United States used over that 170 years? Sorry, but "free trade" is only a very recent episode in US history. Protectionism and limited, controlled immigration has been the rule through most of our nation's history. And during that period we rapidly led the world in technology, medicine, wages, and standard of living. Most of our powerful industrial base existed with the considerable assistance of protectionist insulation. So it can definitely be said that without protectionism, we would not have had the industrial base capable of challenging Germany and Japan during WWII.
PING!
Thomas Sowell isn't much of a sailor. He's so confused that he doesn't even understand that we're not in the same boat with other nations. That was simply pathetic. Jealousy is an ugly thing. Very ugly.
The real curve [as opposed to its theoretical simplification] might well be more complex and have some local minimums and maximums. More, the position of these can be shifting with time, as both structure and type of underlying economy changes. Thus, even when the optimal taxation rate has been found by trial and error, there is no guarantee that it will be the right taxation rate five years down the road. Thus there'll be no end to trial and error search.
GW has done so many things right, but he's foolishly expected his results to speak for themselves. He's been wrong to think that very many people can read anything more complicated than a bumper sticker. Sure, he's won a big following with the internet crowd, and we're a group that's gaining power all the time. That doesn't change the fact that he's getting paid to do more than apologize for bad things whether it was his fault or not . I say it's high time that he starts reporting with unmistakable clarity all the good things that he's done.
Good point.
"it's not a tax on the wealthy; it's a tax on those trying to get wealthy."
The Teresa Heinz Kerry folks with Trust Funds hide allot of their cash off-shore in foreign banks and in other clever places ( like Muni-bonds ). They pay little to no American taxes.
The growing middle class does not have that luxury. The alternative minimum tax with no inflation indexing is growing every year.
More appropriate in light of your tag line...
Cheers!
True but I have to admit that I stole the line about the 15 year-old from PJ O'Rourke
As for anyone wanting to use the tax rate to manage the growth of the economy - that is simply Keynesian tomfoolery. Tax rates are part of the FISCAL tools available for use by the government, but their affects are often deleterious when used for short term goals. The reason for this is that by the time any economic analysis is performed on our large economy, the macro forces are too far down the road to bring them back where they can be managed. Add in the fact that the tax rate would affect future cash flows not yet known, the prescription could be worse than the illness. Just imagine what would have happened if we had a tax increase on 9/10/01 - do you the think the democrats would have rescinded it???
Monetary policy, as determined by the fed, is much more useful in the realm of inflation and economic growth because the tools used are immediately implemented against trailing data. That said, the effects are sometimes felt as much as 18 months after the policy is implemented.
Just put the idea of adjusting the tax rate to affect the economy out of your mind - its not only a bad idea, its stupid.
To which I'd respond by asking whether they would be content to work for no pay. The point was always driven home.>>>>>>>>>>>>>
Interesting illustration, of course most of us would go home well before the tax rate hit 100 percent. I wonder what the true tax rate is in this country if all categories could be calculated and accounted for as to how they affect the wage earner, keeping in mind that the old saw that unemployment taxes and half of social security and medicare are paid by the employer are only accounting gimmicks dictated by the government to hide the truth. I suspect we are a lot closer to total slavery then most people ever suppose.
I believe that all levels of government should be kept on an almost starvation revenue. >>>>>>>>>
Absolutely, I want to be able to count the ribs through a shirt.
"In 1930, the Republican-controlled House of Representatives, in an effort to alleviate the effects of the... Anyone? Anyone?... the Great Depression, passed the... Anyone? Anyone? The tariff bill? The Hawley-Smoot Tariff Act? Which, anyone? Raised or lowered?... raised tariffs, in an effort to collect more revenue for the federal government. Did it work? Anyone? Anyone know the effects? It did not work, and the United States sank deeper into the Great Depression. Today we have a similar debate over this. Anyone know what this is? Class? Anyone? Anyone? Anyone seen this before?"
I agree that a lower amount should be sufficient, but don't agree that it should be based on a percentage. This is where the government has difficulty planning as well as contstraint.
I suggest that we have a "residency fee" for anyone staying over 30 days and prorated per day after that. Find out what the actual bills are for the necessary programs of the government and divide that amount by the number of EVERY living person in the country. This way, everyone pays the same amount and every addition to our handouts would really affect every person, thus reducing the size of all handouts. Workers deserve to know how much they would have to pay each year based on real governmental costs- Now you have no idea exactly how much you'll have to pay until your tax-return is accepted by the IRS. And, even then, you are subject to audits and changes years later. I'd much rather have the 13 percent tax, as you suggested, than what we have now.
We need a Laffer curve to explain to some of the management types that a lower wage rate does not AUTOMATICALLY translate to a lower unit labor cost! I have been working at the same job for three years because at my age I cannot get an interview for anything in line with my abilities and I must keep medical coverage for my wife. I have seen good people leave and seen new people hired a couple of months later for two cents an hour MORE than the person who left was earning. The pathetic part is that at least two of those who left were super productive and possessed skills that will not be learned by a new hire in less than two years if we are lucky. In most cases they will not be able to hire anyone who will EVER be as good as the two I am referring to. A two dollar an hour increase would probably have kept both of these men working and would have been far less expensive than trying to replace them. It will take at least THREE good people to do what these TWO were doing. You can't hire enough average people to do what they were doing. In my humble opinion one of the major problems with American industry is that there is no incentive for people who truly excel in everyday job categories. At least there isn't in the place where I work.
I like it!
I should have used "Chinese moonshine" or saki or maybe Bombay gin so as not to be misunderstood. Maybe we can all light out for the territory to be free from working for over a decade for nothing.
The Laffer Curve is a good tool for lots of reasons.
Productivity of a business is often increased by offering a bonus or other benefit. Not just for faster work, but for smarter work with new ideas, new equipment and/or software.
I agree that the lowest cost price is often more expensive in the long run.
"In 1930, the Republican-controlled House of Representatives, in an effort to alleviate the effects of the... Anyone? Anyone?... the Great Depression, passed the... Anyone? Anyone? The tariff bill? The Hawley-Smoot Tariff Act? Which, anyone? Raised or lowered?... raised tariffs, in an effort to collect more revenue for the federal government. Did it work? Anyone? Anyone know the effects? It did not work, and the United States sank deeper into the Great Depression. Today we have a similar debate over this. Anyone know what this is? Class? Anyone? Anyone? Anyone seen this before?" You know you won't receive an answer. But your point is spot on.
Interesetingly enough, the current President's father referred to this as "something- D.O.O. economics." Anyone? Anyone?
Disclaimer- I am not a hugh fan of GHWB.
Interesetingly enough, the current President's father referred to this as "something- D.O.O. economics." Anyone? Anyone? He called it "voodoo economics."
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