Free Republic
Browse · Search
News/Activism
Topics · Post Article

To: babble-on
babble-on said: "To believe that anyone's behavior is going to change as a result of lowering the tax rate from 36 to 34% beggars belief,..."

What will the person who receives the additional two percent of their income do with it? Burn it? Not likely. What they will do is spend it or "save" it.

Saving it typically means that somebody else gets cheaper use of the money than they otherwise would.

Both scenarios increase economic activity and will increase the taxable base.

The only reason that taxes don't depress the economy more than they do, is because the government spends the tax money. Government activity generates economic activity that is then taxed.

Now you can ask yourself the question, "What will happen when the government must increase taxes to satisfy our debts, without being able to generate economic activity with the money?"

The answer is that economic activity will surge in areas populated by debtors of the U.S., like China, and economic activity will stagnate in the U.S.

There is never long term economic benefit from unnecessary government spending nor is there long term economic benefit to deficits which increase the national debt.

Most government spending is simply waste. It is the nation's wealth squandered on liberal nonsense. The delayed payment through deficit spending will not permit that waste to go unrecognized forever. In fact, as the boomers retire, the waste of government spending during their lifetimes will become quite evident.

34 posted on 03/09/2008 5:49:05 PM PDT by William Tell (RKBA for California (rkba.members.sonic.net) - Volunteer by contacting Dave at rkba@sonic.net)
[ Post Reply | Private Reply | To 31 | View Replies ]


To: William Tell
But that is not the contention. The contention is that lowering tax rates from 36 to 34% increases tax revenues, because people who felt that there was no point in working or generating economic activity when rates were at 36%, suddenly become productive economic dynamoes when rates hit that new threshold of 34%.

I hate government spending too, believe me. I know its all a waste and I would much rather that there were a lot less of it. But that is not what this thread is about. Its about whether cutting taxes actually increases government revenue at all points on the chart, and its clear that it a false belief. We need to be grown-ups and admit this is the case.
36 posted on 03/09/2008 6:12:10 PM PDT by babble-on
[ Post Reply | Private Reply | To 34 | View Replies ]

Free Republic
Browse · Search
News/Activism
Topics · Post Article


FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson