View Poll Results: Which is more important to you?

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  • Cutting taxes

    2 8.70%
  • Reducing the deficit

    10 43.48%
  • The thread's premise is faulty (explain)

    11 47.83%
  • Neither matter to me

    0 0%
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Thread: Tax cuts or Deficit reduction?

  1. #21
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    Re: Tax cuts or Deficit reduction?

    Quote Originally Posted by The Mark View Post
    Not necessarily...

    IF raising taxes would generate more revenue, THEN that would be one way to reduce the deficit...

    However, IMO we've passed the point that raising taxes would increase revenue, and any tax increases at this time would decrease revenue (due to the higher taxes decentivizing [is that a word?] growth and such).

    But if we had really low (like 5%) taxes, then obviously raising them would create more revenue, and potentially reduce the deficit (if the assholes didn't try to spend even more)...
    Increased taxes only have a temporary net positive. Obviously there is a point of diminishing return for both. I'm not sure what that point is, so I'm not advocating increases or decreases. But people treat the deficit as if it is a revenue problem and it is not. It is a spending problem.
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  2. #22
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    Re: Tax cuts or Deficit reduction?

    Quote Originally Posted by The Mark View Post
    Not necessarily...

    IF raising taxes would generate more revenue, THEN that would be one way to reduce the deficit...
    Not so. Increasing taxes would indeed increase government revenue, but it would also slow the economy by taking money out of the hands of the citizens. The government, to get this scheme to work, would have to take all of that increased revenue and pay off the deficit with it, thus doing nothing to help the economy at all. Overall, you have a net loss which, over time, results in less tax money making it into government coffers.

    It's a lose-lose situation.
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  3. #23
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    Re: Tax cuts or Deficit reduction?

    Quote Originally Posted by Cephus View Post
    Tax cuts will stimulate the economy, reducing spending dramatically will reduce both the need for higher taxes and enable reducing the deficit. One without the other is pointless.
    While it is true that tax cuts are economically stimulative, spending reduction (specifically entitlements) is counter-intuitive to that approach.
    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

  4. #24
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    Re: Tax cuts or Deficit reduction?

    Quote Originally Posted by Cephus View Post
    Not so. Increasing taxes would indeed increase government revenue, but it would also slow the economy by taking money out of the hands of the citizens. The government, to get this scheme to work, would have to take all of that increased revenue and pay off the deficit with it, thus doing nothing to help the economy at all. Overall, you have a net loss which, over time, results in less tax money making it into government coffers.

    It's a lose-lose situation.
    I don't think this raising taxes would increase revenues at all. This link makes sense to me, though I didn't read it that closely.
    Tax cuts improve W. Kurt Hauser: There's No Escaping Hauser's Law - WSJ.com
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  5. #25
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    Re: Tax cuts or Deficit reduction?

    Quote Originally Posted by zimmer View Post
    Both tax cuts and deficit reduction... one goes with the other... and throw in massive spending cuts.


    .
    Tax cuts don't reduce the deficit, but cutting loopholes in the tax code does:

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    Third, the new tax bill should improve both the equity and the simplicity of our present tax system. This means the enactment of long-needed tax reforms, a broadening of the tax base and the elimination or modification of many special tax privileges. These steps are not only needed to recover lost revenue and thus make possible a larger cut in present rates; they are also tied directly to our goal of greater growth. For the present patchwork of special provisions and preferences lightens the tax load of some only at the cost of placing a heavier burden on others. It distorts economic judgments and channels an undue amount of energy into efforts to avoid tax liabilities. It makes certain types of less productive activity more profitable than other more valuable undertakings. All this inhibits our growth and efficiency, as well as considerably complicating the work of both the taxpayer and the Internal Revenue Service.

    These various exclusions and concessions have been justified in part as a means of overcoming oppressively high rates in the upper brackets--and a sharp reduction in those rates, accompanied by base-broadening, loophole-closing measures, would properly make the new rates not only lower but also more widely applicable. Surely this is more equitable on both counts.


  6. #26
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    Re: Tax cuts or Deficit reduction?

    Quote Originally Posted by Barbbtx View Post
    I don't think this raising taxes would increase revenues at all. This link makes sense to me, though I didn't read it that closely.
    Tax cuts improve W. Kurt Hauser: There's No Escaping Hauser's Law - WSJ.com
    Tax revenue as a % of GDP was under the historical 19% figure that is known as Hauser's law in 2008 (i believe 14.5%). Arguing under the basis of tax elasticity being < 1 contradicts the numerical evidence.
    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. #27
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    Re: Tax cuts or Deficit reduction?

    Quote Originally Posted by Cephus View Post
    Not so. Increasing taxes would indeed increase government revenue, but it would also slow the economy by taking money out of the hands of the citizens. The government, to get this scheme to work, would have to take all of that increased revenue and pay off the deficit with it, thus doing nothing to help the economy at all. Overall, you have a net loss which, over time, results in less tax money making it into government coffers.

    It's a lose-lose situation.
    I was thinking longer-term.

    Given a few years, I think taxes that are too high (especially with multiple tax brackets) would reduce revenue because the higher tax (especially if bracketed) would be a disincentive to earning more money.

    Other factors affect this, obviously…

    If there are more government restrictions and/or requirements on an area of potential business, thus increasing the operating costs of such, it seems to follow that potential businesspersons would be less likely to try starting/running a business in that area.

    In my mind, I imagine some kind of balance between taxes that are too high and taxes that are too low, and another kind of balance between regulations and such that are too restrictive and those that are too unrestrictive.

    Part of the current disagreement between a the “Right” and the “Left” as they currently stand in the USA – at least as I understand it – is that the “Left” thinks the tax rates and regulations are not high enough or regulatory enough (respectively), while the “Right” thinks the opposite.

    Personally, I think it’s a bit more nuanced than that.

    I think some (if not most) of the regulations/restrictions are (depending on area) either too targeted, or too general. In short, they are not designed well.

    But I digress…
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  8. #28
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    Re: Tax cuts or Deficit reduction?

    Quote Originally Posted by the makeout hobo View Post
    But specifically between tax cuts and deficit reduction, which do you think is a bigger priority?
    tax cuts because tax hikes are an excuse for the government to spend even more



  9. #29
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    Re: Tax cuts or Deficit reduction?

    Ironically leading economists will tell you now is not the time to cut spending or reduce taxes. Doesn't make any sense to me but that is what they are saying.

    What really really really pisses me off is I heard McConell and Boner say "We" need to cut government spending as in we the people. *&^^%$#@! Hey dumb ****s you were the ones with your hands on the check book not us! (I'm referring to all congress critters.)

    It's like the fox in the hen house saying "WE" need to stop eating the chickens!


  10. #30
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    Re: Tax cuts or Deficit reduction?

    Quote Originally Posted by the makeout hobo View Post
    Republicans and conservatives have lately been championing two positions: one, that taxes need to be cut as low as possible, and that the deficit needs to be shrunk as small as possible. As I see it, by themselves the two are exclusive. Ignoring a change in spending, reducing revenue by cutting taxes means more money is borrowed and the deficit grows. So between cutting taxes and reducing the deficit, which would you say is more important?
    The premise is flawed.

    First, you're asking a hypothetical in hopes of catching people in a hypocritical situation based in real life. However, spending IS an option in real life.

    Second, you're hypothetical also assumes that somehow having more revenue coming into the government will magically make the deficit reduced. This somehow assumes that the government will not turn around and spend all that new money gained in ways they wouldn't had they not gained it, thus leaving the deficit at the same point but having us paying them more.

    If somehow, someway, we lived in a black and white world where literally the ONLY choic was "Tax Cuts, High Deficit" or "Deficit Reduction, High Taxes" and in said magical world there was a garauntee that the money gained from lack of tax cuts would go directly to reducing the deficit then I'd say the second option.

    However, that's like saying "If given a magical world where there's a choie between owning a unicorn or owning a dragon, I'd choose the dragon". Wonderful, I've chose a fantasy answer....doesn't really have much relevance to reality.

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