Posted on 03/14/2010 9:06:14 AM PDT by WOBBLY BOB
Self-paying tax cuts are a popular delusion, except among economists.
University of Michigan economist Joel Slemrod is adamant on one of the key economic issues of our day: 'Tax cuts don't pay for themselves! Period!'
Hardly any economist would disagree. This is true for Republicans as well as Democrats. It is also true regardless of whether they describe themselves as NeoClassical, New Classical, Rational Expectations, Monetarist, Keynesian, Austrian or New Institutional economists.
Yet, for a substantial portion of the general public, the idea that cutting tax rates will increase tax revenues has become an article of faith. The following anonymous comment to an online Associated Press story is typical: "The only way our government can create jobs is to cut taxes. It's been proven over and over again. Cutting taxes also increases government revenue."
(Excerpt) Read more at twincities.com ...
Maybe the government should cut taxes and CUT SPENDING TOO, to balance the budget. sheesh
Oh yes, raising taxes and “spreading the wealth” are proven remedies for economic growth. That’s why we have 10% unemployment and rising.
In similar fashion, a few decades of colder temperatures, increasing ice packs in the Arctic and Antarctic Regions are scientific anomalies; optical illusions, that mislead many members of the public to doubt the words of publicly supported experts, who are feverishly trying to save us from AGW, despite ourselves.
If the learned were to take advice from the ordinary, it could lead to chaos. E.G., Doctors might start using willow bark, and foxglove, among other superstitious remedies for fevers and heart problems. Just imagine that!
What next? Ordinary citizens reading the Constitution? Folly! .
Laffer curve tells it all. Revenue will increase when tax rate decrease.
And in other news, using sales commissions to reward salesmen does not increase sales.
/s
And I mean freeze it to a dollar amount. If you are spending one billion on welfare, next year it will be exactly one billion again. After a few years they will have to cut out the waste and fraud.
Add to your list: Cut all government pay by 10% for every three months that the Federal budget is not balanced. Cut federal pay to match the average of the American people. Get rid of all pork and earmarks. Cut the number of federal and state employees by 30%.
Yep, I guess those record tax proceeds thaat eminated from the tax cuts never happened either. Life is so easy when morality, reality, truth and facts are trumped by ideology.
So no Supply side economist or Friedman or any non-Marxist. When only poll Keynesian flavored economist you get poop flavored outcome.
Well it’s good that we’re following this guy’s advice right now then. :)
"...few have ever really run a business,..." Oh brother, you can say that again. Go to youtube and look up the clip from Back To School with Rodney Dangerfield, the one in economics class. It is a classic.
When lower taxes bring in more revenue, these economists point out that there isn't enough money to supply some essential service... that the politicians have spent it all on their projects doesn't count, and the cycle repeats while the public nods (off)...
I had an excellent econ prof. Sadly, just had the one course with him. He was an austrian so we got along!
The particularly wonderful thing abou the Laffer Curve is how many regular Joe 6-Packs “get it”.
At first, I thought that Amish Dude needed SpellCheck. But then I said to the dog, "Clever!" (Came to scoff, stayed to praise).
EXACTLY. It's one of the fundamental things I have to drum into some clients new to my industry. Ignore the profit margin, ignore the number of units sold. The ONLY thing that matters is the number of dollars in your pocket at the end of the day.
Tax rates should be considered fluid and variable, and if cutting the tax rate (margin) by a factor of 3 results in a net increase in dollars at the end of the day then it was the right move to make.
The data is there. Even Laffer stated that a flat tax of 12.5% will result in an increase in tax revenue. The problem the left has with this is that they can’t use it as a political issue for class warfare.
The left does not understand free markets, and sensible low tax rates. Everything is driven by short-term political gain.
Lucky. Most of my Econ professors were ex-hippies or ex-full time students with no practical economic experience.
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