Posted on 09/28/2015 9:53:07 AM PDT by JoeSeales
It won’t work (to eliminate the IRS while still having a flat tax.) Income tax needs “income determination”. If you have a “simple” income, say, a weekly paycheck, and little else, then income determination is easy. (There’d still need to be a much reduced IRS to ensure honest reporting.) But, if one has costs included in how they make their income (reducing it), income determination can get very hairy, very quickly.
For example, once I get my Federal Schedule C filled out, I’m “almost done”, but the related forms and work to get to that point takes me nearly a week, not counting accounting work done during the tax year. And I’m just a stinky little 1-person (plus a little help from my wife at times) business...
That's by static analysis and a lib talking point to be sure. Tax cuts designed to grow the economy can increase revenues nicely. See: Reagan. (The problem in the '80's was that Reagan failed to control spending.)
There is actually NO good reason why growth in the US can't be on a par with China's. We even have the benefit of less corruption - so far...
A lot of this **** needs to go out the window, too:
http://thesouthern.com/news/local/chaos-in-cairo/article_2dcf027e-e465-552a-a71f-fd8085941b6e.html
If Trump can stick with this sort of presentation (not just on taxes) he can continue to do well. He comes across much better, I think, than even speeches of a couple weeks ago.
I understand about growth bringing in more revenue, etc... However, you need to remember that most government spending is on autopilot, and will continue to grow unless something is done. So even if you get some growth to offset some of the reduction in rates, it will be very difficult to get enough to offset the reduction in rates AND the growth in spending. And please note that Trump is the one claiming a massive cut in rates for everyone will be revenue neutral - so what rate of growth is he projecting to be able to make that claim?
If Trump’s plan can match Reagan’s in results, on the revenue side, then it will have done well. My initial response is to say “Reagan type growth” would be needed, but I’m not so sure those are the right kind of numbers, because the situation is different. I really think it’s possible to do quite a bit better, on the growth side, and at least as well on revenues. Just in energy production alone, we have tremendous potential: It’s an area where Trump sounds much like Sarah Palin.
To be fair, increased taxes in Reagan’s 2nd term did create some of the jump in revenues, but also helped cause the sputtering during Bush 1. There are several things to remember about the ol’ Laffer curve, one being that it usually involves significant “lag” in results. This has to be looked at over long time periods, without ignoring the short term: Trump addresses the short term with, among other things, incentives for businesses to bring back the $$ they have stashed overseas. IF he can bring back in $2-3 trillion, that helps enormously.
Right now, of course, Obama has revenues looking fairly good, too, but I would argue part of this is in spite of him (growth in the energy sector), and part is by means that are going to at the least severely harm the country, economically and otherwise. Obama’s policies (such as high taxes) are hampering growth now, and setting the stage for the next major downturn. Many think it could be a real bear, and not just for stocks...
As for spending growth, Trump promises slimming down. Can he do it, where Reagan failed? I don’t know. It’s a tough road, but must be done, or we are looking at a black hole. “Stuff” like that link I gave is “everywhere” which is both a big problem, and a big opportunity.
However, that’s a different discussion, as is getting rid of income taxes entirely, which I favor. For now, I’ve not conceded that the “black hole” is inevitable, and little of this really matters. So, I look at it this way: Yes, I’ve stated some pretty big “IF’s”. But, which is better, the present situation of revenue from taxes that are well past optimum on the Laffer Curve (in the long run), or getting back to close to optimum?
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