Liberal Economic Illiteracy ...(there's stupid, breathtakingly stupid — and liberalism)

JWR ^ | Feb. 1, 2010 | Arnold Ahlert

[IrishMike]

When it comes to economic policy, there's stupid, breathtakingly stupid — and liberalism. Thursday, in another mind-numbing display of ideology-driven stupidity, Senate Democrats passed new budget rules only a liberal could believe will make it harder to run up the deficit: they will make it as difficult as possible to extend the current tax cuts, or enact new ones.

This is precisely what happens to people suffused with an ideologically-inflamed sense of superiority. They truly believe that both common sense — and historical evidence — are irrelevant considerations with respect to economics.

For example, it doesn't matter one iota that there have been three major tax cuts initiated by three different presidents since the 1960s — and every one of them resulted in increased revenue flowing into federal coffers. It doesn't even matter that the largest one was passed, not by a Republican president, but by Democrat John Fitzgerald Kennedy.

Here's what one of the American left's most cherished icons had to say about the subject:

"Lower rates of taxation will stimulate economic activity and so raise the levels of personal and corporate income as to yield within a few years an increased-not a reduced-flow of revenues to the federal government."

[MrB]

It’s all about the self-styled elites, the “ruling class”, kicking the door shut on anyone else that seeks to succeed.

[Truth29]

As stated in the article, it is it is about power and control, not deficit reduction.

[WOBBLY BOB]

ping

[grumpygresh]

Let’s make it very simple by asking this question: What is the tax rate tipping point. That is, at what aggregate marginal tax rate will the government tax revenue fall. I know that it will depend on economic conditions such as GDP, unemployment, inflation. Nonetheless, economists should endeavor to best answer this question. We should all start by asking our liberal friends and politicians: what it the tax rate tipping point?

[MrB]

You’d be arguing from the false/assumed premise that the left’s purpose of taxation is to fund the government and maximize revenue to it.

That is not their purpose. Their purpose is to punish their political enemies, kick the door shut on those aspiring to succeed, and to keep the maximum number of people dependent on gov’t as possible.

[maine-iac7]

And the non-senator still sitting in Brown's seat voted this in.

They are delaying Brown being seat until the very last possible day - 11 Feb -

Past newly elected reps from Mass. were seated 1 and 2 says from election. Only difference: they were democrats.

We should be burning up the phone lines an crashing the emails of our senators demanding he be seated NOW.

We should demand FROX pound on this every day. Even if not successful, it will remind the people of yet one more obstructionist move from the rats.

Bipartisanship, Obama?

[Blue Collar Christian]

Since when did anyone reasonable expect liberals to want to do something that would actually BENEFIT the U.S.?

[grumpygresh]

I agree. The ideologues will resist the logical premise of the question. However, it will put the ideologues on the defensive because many Democrats and all independents are indeed NOT ideologues and would rather have increased government revenue even if it means that “rich” people will keep more of their money.
The tax rate tipping point is a more specific variation of the question of how much tax is too much. It serves as a way to ferret out ideologues that will ignore and dismiss the question and help to crystallize this concept in the minds of an awakened public.

[uncommonsense]

Every time the econo-eggheads try to simulate the macro-economy, they get it wrong. There are too many factors that are related in ways no one understands and leaving something out, or getting one or more of the inputs wrong, can make a huge difference.

Also, too many of the variables have changed in our economy to begin to make an educated guess on the "taxation tipping point". We have different countries that we compete with and serve different industries, we have a larger percent of the population who rely on public funds - federal, state, local, and indirect employment through grants, contracts, etc. - now it's over 50 percent. Plus, there is a lot of psychology which dictates behaviors and subsequent outcomes ("confidence", predictions, etc.).

IMHO, we don't want to focus on the maximum we can tax before messing up private enterprise - which would be the "tipping point". Wouldn't it be much easier to show what we did with taxes and what happened to the economy, with caveats documented where needed (like 911, rebuilding the military to topple USSR without firing a shot), than try to come up with a formula and convince dummies that it's correct? This has already been done - to no effect.

Besides, when is the last time you won an argument with a leftist by using "facts"? They may help persuade a few independents, but Rats and libs are ideologues and don't give a flip about anyone's logical or fact-based debates about tax policies.

[MrB]

Proverbs 26:4-5
4 Do not answer a fool according to his folly,
Or you will also be like him.
5 Answer a fool as his folly deserves,
That he not be wise in his own eyes.

Solomon understood and recorded (through his God-granted wisdom) the idea of not arguing with a fool based on his false or deceitful premises, but to attack those premises directly.

[RobinOfKingston]

... increased revenue ...

Increased revenue is not the goal. Increased control is. Don't mistake 'stupid' for 'evil.'

[grumpygresh]

I would never think of actually convincing an ideologue. I can only hope to expose the fallacy and hypocrisy of the liberal ideologue to awakening minds.

[KansasGirl]

[What is the tax rate tipping point. That is, at what aggregate marginal tax rate will the government tax revenue fall]

I believe it is 17% according to the Laffer curve. Maybe somebody else can say with certainty.

[grumpygresh]

Because this figure is subject to human behavior, the exact figure cannot be known precisely and will vary with changing conditions. The Laffer curve is a theoretical construct and not a result of an equation based on empirical data. However, we do have historical examples such as the lowering of taxes after Wilson in the 1920s, Jack Kennedy, Reagan, Bush 2. We also have the opposite examples of raising marginal income tax rates with Hoover, FDR, Jimmy Carter. Other examples abound in other countries. There are other contingencies that will affect government tax yield such as unemployment, GDP, inflation, a transformational new technology. Nevertheless, we should develop economic models that estimate the the optimal tax yield.
I’m sure we will find a low rate around 20-25% is optimal. Even though I would argue that a lower rate is even better for the economy, I think that one would certainly agree that this is a major improvement over our current predicament.

[Publius6961]

This would be a useful thread, had it not ignored the possibility of a conscious strategic plan, the most likely force behind it.

Just saying.

[uncommonsense]

Understood. Here are a few resources you may find interesting:

The Center for Data Analysis
The Heritage Foundation is committed to building an America where freedom, opportunity, prosperity and civil society flourish.

EconTracker
Get the latest economic data and weigh-in on the growing debate: Is the economy getting better or worse? EconTracker surfaces top economic indicators and lets you follow forecasts, trends and the Journal Community's take on the economy

U.S. Department of Commerce Bureau of Economic Analysis
The Bureau of Economic Analysis (BEA) promotes a better understanding of the U.S. economy by providing the most timely, relevant, and accurate economic accounts data in an objective and cost-effective manner.

This is actually a pretty good historical overview of changes to the tax systems and results

History of the U.S. Tax System
The federal, state, and local tax systems in the United States have been marked by significant changes over the years in response to changing circumstances and changes in the role of government. The types of taxes collected, their relative proportions, and the magnitudes of the revenues collected are all far different than they were 50 or 100 years ago. Some of these changes are traceable to specific historical events, such as a war or the passage of the 16th Amendment to the Constitution that granted the Congress the power to levy a tax on personal income. Other changes were more gradual, responding to changes in society, in our economy, and in the roles and responsibilities that government has taken unto itself.

Duties & Functions of the U.S. Department of the Treasury
(BARF ALERT):
Serve the American people and strengthen national security by managing the U.S. Government's finances effectively, promoting economic growth and stability, and ensuring the safety, soundness, and security of the U.S. and international financial systems.