Snow Says Tax Cuts Will Increase Tax Revenue

[DuncanK]

The Reagan administration told us that tax cuts would increase tax revenue too in the 80s. We had almost a decade of huge deficits, and finally taxes had to be raised again. The tax cuts that Bush and Treasury Secretary Snow wan't to pass will create bigger deficits than the Reagan tax cuts did.

Reagans economic advisors told him that tax cuts would increase tax revenue too, and Reagan forwarded that opinion to us. Now Snow is claiming that the Bush tax cuts are going to increase tax revenue.

http://www.msnbc.com/news/880979.asp?0cv=CB10

This is crap folks. Anyone who believes this needs to seriously think it through and look at history. I'm sick of the Republicans giving us the same old bull**** when they know it's bull****.

[Sava]

This is crap folks. Anyone who believes this needs to seriously think it through and look at history. I'm sick of the Republicans giving us the same old bull**** when they know it's bull****.

[Adam Smith]

Snow Says Tax Cuts Will Increase Tax Revenue

It is not clear to me that Snow says that in the article you cite.

There are two issues here.
1. Will tax cuts stimulate the economy? Every kind of economic model there is says they will.

2. Will the increase in tax revenue resulting from this growth more than outweigh the initial tax cut? Arthur Laffer asserted that it would, but there has never been one shred of evidence to support this for the US economy.

It appears from the article you cite that Snow is saying the tax cuts would stimulate the economy, but makes no claim that resulting revenues would more than cover the initial tax cut.

[Ned]

Duncan, Reagan really wanted two things, less government and more growth in the private sector. Tax cuts achieve both provided one also cuts spending.

So, spending went up, not down. The economy took off - due to the spending or the cuts? Probably a little of each. But certainly, by the end of the Reagan administration, tax revenues had increased. But we STILL had deficits.

The only problem for you was that these were not attibutable to the tax cuts. They were caused by the spending increases.

[chequita guevara]

A tax cut, when we're about to go to war? We have a major unknown expenditure in the immediate future, and we're going to cut government revenues?

[DuncanK]

Originally posted by Adam Smith
It is not clear to me that Snow says that in the article you cite.

There are two issues here.
1. Will tax cuts stimulate the economy? Every kind of economic model there is says they will.

2. Will the increase in tax revenue resulting from this growth more than outweigh the initial tax cut? Arthur Laffer asserted that it would, but there has never been one shred of evidence to support this for the US economy.

It appears from the article you cite that Snow is saying the tax cuts would stimulate the economy, but makes no claim that resulting revenues would more than cover the initial tax cut.

He is defending the tax cuts and then he says this:

“governmental revenues are coming in at a slower pace. And the reason they’re coming in at a slower pace is that the economy is not growing fast enough. ... The best way to deal with the deficit is to have rising government revenues from growth in the economy.”

So he is saying that tax cuts will grow the economy and revenues will increase.

[DuncanK]

Originally posted by Ned
Duncan, Reagan really wanted two things, less government and more growth in the private sector. Tax cuts achieve both provided one also cuts spending.

So, spending went up, not down. The economy took off - due to the spending or the cuts? Probably a little of each. But certainly, by the end of the Reagan administration, tax revenues had increased. But we STILL had deficits.

The only problem for you was that these were not attibutable to the tax cuts. They were caused by the spending increases.

Ned,

My problem is that Reagan and his advisors told us that tax cuts would increase tax revenue just like Bush and Snow are doing now. That is crap, and they know it. I just wish the voters would call them on it.

[MichaeltheGreat]

Originally posted by DuncanK


He is defending the tax cuts and then he says this:

“governmental revenues are coming in at a slower pace. And the reason they’re coming in at a slower pace is that the economy is not growing fast enough. ... The best way to deal with the deficit is to have rising government revenues from growth in the economy.”

So he is saying that tax cuts will grow the economy and revenues will increase.

México is a perfect example of a tax system out of control - just about everything and everyone is taxed half to death, so the only way people get by with anything beyond the clothes on their back is massive non-compliance for everyone who can do something under the table. About the only exception to the "tax it to death" phenomena is property taxes. Income is taxed to hell (if you make about $15,000 a year, which doesn't go far here, you're in a 35% tax bracket for income taxes, on top of the 10% value added tax on almost everything, on top of more taxes. And the income tax brackets go up further), so what people do is try to make money under the table, then buy a chunk of land to keep the money out of the banking system (where it can be located and taxed). Nobody can afford to do anything with the land, so it sits there, and all people do is look for ways to keep what they have away from the tax man.

Tax cuts here would certainly stimulate the economy, if they were deep enough to reward investment and income production, instead of punish it. If the tax cuts were large enough, the revenue gains would offset the tax cuts very quickly, because the hassle of successful tax evasion would become more annoying than the pain of compliance.

Whether tax cuts in the US would provide enough stimulus to eventually get higher net revenue is debatable, but depends largely on how those cuts are targeted, and what your time frame is to see the net revenue gains.

[Demerzel]

is his the Bush based tax cut which will only benefit rich americans? doesn't sound like it will have much of a boost on the economy if the poor get little reward...

[DuncanK]

Originally posted by MichaeltheGreat
Whether tax cuts in the US would provide enough stimulus to eventually get higher net revenue is debatable, but depends largely on how those cuts are targeted, and what your time frame is to see the net revenue gains.

The high taxes and whether lower taxes in Mexico would increase tax revenue has to do with corruption and tax evasion. Taxes are so high that people avoid taxed activity so as not to have to pay them. The situation is completely different. Taxes are no where near what they are in Mexico. In fact we have very low taxes compared to most of the world. I don't think it's debatable at all, but I'm sure Republicans would like us to think that. Again, such a sceme has never worked so they certainly don't have proof.

[DuncanK]

Originally posted by Demerzel
is his the Bush based tax cut which will only benefit rich americans? doesn't sound like it will have much of a boost on the economy if the poor get little reward...

No it wont. And as Che mentioned it's a particularly bad time for deficits. Our Social Security Fund is going to start running deficits in a few years. We will have to raise taxes for that anyway. The increase in taxes in the future will be a horrible shock to our economy. Tax increases are better made slowly.

[Imran Siddiqui]

We will have to raise taxes for that anyway.

I thought you were for CUTTING the payroll tax. Be consistant man!

Oh, and I agree with Adam Smith. Tax cuts will help growth. We'll deal with the defects during the boom time (like we did in the late 90s).

[DuncanK]

Originally posted by Imran Siddiqui
Oh, and I agree with Adam Smith. Tax cuts will help growth. We'll deal with the defects during the boom time (like we did in the late 90s).

expecting another dotcom boom?

[Ben Kenobi]

DuncanK:

This is no different than from BC under the Liberal party or the Klein government.

Reduce taxes, cut spending, encourage investment, and watch the economy turn around.

Of course, one has to be careful not to cut to hard and too fast.

[Imran Siddiqui]

expecting another dotcom boom?

No, but expecting another economic boom is not crazy. It's how the system works.