Posted on 10/06/2006 10:19:40 AM PDT by West Coast Conservative
The federal budget estimate for the fiscal year just completed dropped to $250 billion, congressional estimators said Friday, as the economy continues to fuel impressive tax revenues.
The Congressional Budget Office's latest estimate is $10 billion below CBO predictions issued in August and well below a July White House prediction of $296 billion.
The improving deficit picture _ Bush predicted a $423 billion deficit in his February budget _ has been driven by better-than-expected tax receipts, especially from corporate profits, CBO said.
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? The Laffer Curve. Anyone know what this says? It says that at this point on the revenue curve, you will get exactly the same amount of revenue as at this point. This is very controversial. Does anyone know what Vice President Bush called this in 1980? Anyone? Something-d-o-o economics. "Voodoo"
But Laffer curve doesn't show it that way. To follow your description, it would have had only the second part of the X-axis, but starting from 0% tax rate. Don't get me wrong, I understand what you're saying, and agree with it. But, having 0% tax rate is just not supported by the curve you showed.
...Social Security, Medicare and Medicaid. Doesn't take a libertarian to say it.
This doesn't include the war, does it?
no this was in 2001
Yes, the deficit includes all war spending. Wars are frequently funded through supplemental bills, but end of the year deficits measure all money taken in against all money spent, whether in the annual budget or not
So, $250 billion is a small number now? Wow.
Those who are unappeasable have to live with themselves. I will proudly vote. Not proud of the candidate choice, but proud to be able to support this President.
70% of the wealth in the US is owned by people 55 and up and these are the people that are being subsidized. Fricken amazing.
I think you are confusing tax rate, tax revenue, and personal income. The latter is not represented by the curve and the curve is also not necessarily symmetrical. Remember, this is a static representation of a dynamic function. If you move the tax rate lower against a current curve, you will see a loss of revenue. But after a period of time, the revenue can equal the original revenue due to rising incomes. The 2 curves can have the same basic shape, but the value of the y axis (revenue) in the second curve will have increased. Same shaped curve, 2 different x values (tax rate), same revenue.
I'm aware that the curve doesn't have income. But that's exactly my point. If people simply look at the curve, they would come to the conclusion that low tax rates are not necessarily good. That's why we need to be careful in citing the Laffer curve alone.
Perhaps a Certain Someone long ago named it a "tithe" as Elizabethan English later put it.
I completely agree. It's designed to show only 3 basic things: 0% tax rate = $0 revenue, 100% tax rate = $0 revenue, and tax rates between 0%-100% will produce revenue.
There's no way to produce a snapshot curve with specific values because there's no way to sample all the tax rates at the same time. A curve could be plotted over time, but likely would span too much time to be relevant because of the correction periods the economy would need in order to take a stable reading. Plus, who wants politicians doing empirical testing on our living breathing economy?
It's just my belief that raising any tax rate is like taking a wrong turn. By the time you figure it out, you have to go back to the beginning of the mistake just to get where you started. It’s also my belief that lowering any tax is a good thing because it allows those who earned the wealth to keep it. Even if revenue suffers.
I know you understand all this, but I'm trying to fix my poor explanations for everyone else.
And no unappeasable could ever convince me otherwise.
Arthur Laffer is the man !
.
"So we've almost cut the deficit in half."
Wow! You mean it was about 500 billions not long ago?
I wish I could cut my debts in half. I got debts totaling about $284,000 (I included in that sum $4,000 for miscellaneous items) on a $46,000 annual income. I guess the situation with the running of our government is similar - ie, a deficit occurs when spending exceeds revenue.
"according the dems, we did have a surplus when BJ was in office, which of course is NONSENSE.
Didn't BJ leave Bush a huge deficit? I thought that was the reason why we're still running deficits.
I've had lefties try to tell me that we've gone too far on the Laffer curve, that taxes have been cut too much.
These results show that to be a false assertion.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.