View Poll Results: Tax cuts cost nothing and are free

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  • No way.

    47 40.87%
  • Yes, they are free

    68 59.13%
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Thread: Tax cuts are free

  1. #221
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    Re: Tax cuts are free

    Quote Originally Posted by Lord Tammerlain View Post
    Then you can cut taxes to zero and have the entire government funded for free as well? What wonderfull magic


    hyperbole and silliness, sprinkle in a little extremist logic FTW!
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    Re: Tax cuts are free

    Quote Originally Posted by ReverendHellh0und View Post
    hyperbole and silliness, sprinkle in a little extremist logic FTW!
    The point stands. You can only view tax cuts as "free" if you follow the logic of our former VP.

    Quote Originally Posted by Dick Cheney
    "You know, Paul, Reagan proved deficits don't matter,"
    It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.
    "Wealth of Nations," Book V, Chapter II, Part II, Article I, pg.911

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    Re: Tax cuts are free

    Quote Originally Posted by Goldenboy219 View Post
    The point stands. You can only view tax cuts as "free" if you follow the logic of our former VP.


    How are tax cuts not "free" if you cut spending as well?
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  4. #224
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    Re: Tax cuts are free

    Depiction of the economy after all the deficit spending.



    I voted YES because I assume this is a question about personally receiving a tax cut.

    It is a mistake to think that a Tax cut will cost the Government Revenues. Because it's all about perception and in politics and the engine that drives economics everything is dependent on a positive perception.

    The mere threat of a tax increase is enough to slow, stall, or reverse a trend in the stock markets.

    The same threat will put doubt in the minds of executives who make the decisions to to expand a work force or to increase production or even expand the size of a business or manufacturing company.

    FDR made a lot more mistakes than most people care to notice or remember, but one thing he was right about was his famous statement that "the only thing we have to fear is fear its self."

    During past times of economic uncertainty and recession major tax cuts along with major reductions in spending caused the Tax revenues to increase along with the job market, the stock markets and in a short time consumer confidence was also restored and that brought about the need to manufacture more consumer goods because everyone's attitude had be adjusted in a positive direction.

    The more product produced, grown, or manufactured the greater the economy expands and good news feeds off itself in a very positive direction, where bad news has just the opposite affects.

    Some might think that if one mans taxes are cut someone else will have to make up the difference, but once the positive affects of a cut begin to take hold in peoples minds the expanding economy makes up the short term loss of revenues.

    It's economics 101 and it's also basic human psychology 101. What goes around comes around is true in this case.

    The sad fact is that is true about defect spending also it puts that doubt into play and everything then begins to suffer and the deeper that hole is dug the worse the economy gets because that vicious cycle will propagate itself.

    So tax cuts are not only free they can if used in conjunction with balanced reduction in spending not deficit spending but over all spending to bring about more prosperity.

    The key comes back to that old adage: If you want to work you way out of a hole the first thing you must do is stop digging.

    Those who stand for nothing fall for anything, or in this case fall into a deep dark hole of economic ruin.
    Last edited by Councilman; 09-27-10 at 11:01 AM.

  5. #225
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    Re: Tax cuts are free

    Quote Originally Posted by ReverendHellh0und View Post
    How are tax cuts not "free" if you cut spending as well?
    Tax cuts are deficit neutral only if they are accompanied with spending cuts; it is the necessary requirement. Tax cuts ≠ spending cuts, therefore to state the two as mutually synonymous is incorrect. As stated previously, in theory, tax cuts could be deficit neutral if, and only if, the reduction in taxation causes economic activity to increase to the extent that would allow tax revenues to be equal to the previous period where taxation was higher. I can formally prove (if you want) why this is next to impossible given the current reality.
    It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.
    "Wealth of Nations," Book V, Chapter II, Part II, Article I, pg.911

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    Re: Tax cuts are free

    Quote Originally Posted by Councilman View Post

    Some might think that if one mans tax is cut someone else will have to make up the difference, but once the positive affects of a cut begin to slowly take hold in peoples minds the expanding economy makes up the short term loss of revenues.

    It's economics 101 and it's also basic human psychology 101. What goes around comes around.
    That is incorrect. Your conclusion is based entirely on your assumption.
    Last edited by Kushinator; 09-27-10 at 10:59 AM.
    It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.
    "Wealth of Nations," Book V, Chapter II, Part II, Article I, pg.911

  7. #227
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    Re: Tax cuts are free

    **** it, ill prove it anyways.

    Output= 1000
    taxation rate= 20%
    Revenue= 200

    If the tax rate is decreased by 5% to 15%, all else equal, the total revenue falls to 150. What the "pro-tax cuts are free" people are automatically assuming is that economic activity will instantaneously increase to the point where there will be no deficit. So my question to the "pro-tax cuts are free" people is: In my example, by what percentage would output have to grow in order for revenues to be 200?

    Is that remotely realistic?
    It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.
    "Wealth of Nations," Book V, Chapter II, Part II, Article I, pg.911

  8. #228
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    Re: Tax cuts are free

    Quote Originally Posted by Goldenboy219 View Post
    **** it, ill prove it anyways.

    Output= 1000
    taxation rate= 20%
    Revenue= 200

    If the tax rate is decreased by 5% to 15%, all else equal, the total revenue falls to 150. What the "pro-tax cuts are free" people are automatically assuming is that economic activity will instantaneously increase to the point where there will be no deficit. So my question to the "pro-tax cuts are free" people is: In my example, by what percentage would output have to grow in order for revenues to be 200?

    Is that remotely realistic?
    In your example, 33% increase in output would be required, but we're not talking about a change from 20% to 15%. We're talking about a change from 40% to 35%, which would require a 14% increase in output. I don't think it's unreasonable to expect an increase in productivity in that range if we stop taking money from people who earn it and giving it to people who sit on their asses. Do you?

  9. #229
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    Re: Tax cuts are free

    Quote Originally Posted by FederalRepublic View Post
    In your example, 33% increase in output would be required, but we're not talking about a change from 20% to 15%. We're talking about a change from 40% to 35%, which would require a 14% increase in output. I don't think it's unreasonable to expect an increase in productivity in that range if we stop taking money from people who earn it and giving it to people who sit on their asses. Do you?

    If the tax rate was causing a strong decline in economic activity by forcing business to operate in other location yes I would agree. However given that the US has among the lowest tax rates of the OECD countries with only very small countries potentially having lower tax rates, I dont think the US has many companies/ investors tax jurisdiction shopping to set up new business's. Nor is the tax rate in the US much of a disincentive to invest in most cases. Investing with a good potential return is better then getting a 3% return on T bills.

    So would a tax cut probably increase economic activity in the US, most likely, but not enough to make up for the lost revenues, and should the government be forced to balance the budget, in the short term the economy would contract not expand
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  10. #230
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    Re: Tax cuts are free

    Quote Originally Posted by FederalRepublic View Post
    In your example, 33% increase in output would be required, but we're not talking about a change from 20% to 15%. We're talking about a change from 40% to 35%, which would require a 14% increase in output. I don't think it's unreasonable to expect an increase in productivity in that range if we stop taking money from people who earn it and giving it to people who sit on their asses. Do you?
    You are talking about the top marginal rate, not the effective tax rate. Government typically takes in around 20% of output regardless of this rate.
    It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.
    "Wealth of Nations," Book V, Chapter II, Part II, Article I, pg.911

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