Are you still touting that failed law? First off, a law that is not experimentally proven is not a law, it's a theory at best.
:lol: you're coming out with the "theory" argument?
okay. it's only a theory. like evolution.
Second off, this year and last both disprove it.
incorrect; the last
three years demonstrate that when you drastically increase the size of government as a percentage of GDP, revenue drops
as a percentage of GDP. Revenues themselves dropped roughly down to 2004 levels:
Relative size of government was fairly constant throughout the period we discussed as well - averaging at a little under 20% of GDP
but we have shot government up to 24.5% as a percent of GDP. Now, government doesn't tax itself as much as it does labor, investment, and production; so when you increase government as a size of GDP, you decrease revenue as a percent of the same. you will observe, for example, a rough inverse effect:
Third off, the variations in it represent hundreds of billions of dollars.
true, it's a general point that people are rational decision makers, and will move to protect their income from taxation. however, as the incentives to do so lessen, so does the amount of resources and time which people are willing to devote to that task.
that is why you will note that after Kennedy started cutting taxes, slowly over time revenues
increased as a percentage of GDP. Note that this was
despite a minor
increase in the size of government that was bettered by impressive reductions in tax
rates. Within the trend, revenues appear to be rather elastic.
Trying to claim only one factor drives revenue is one of the dumbest things I have ever heard.
the dominant factor in
revenues is GDP, not tax rates. from there it can be driven up or down by the
relative size of government, how onerous the tax rates are, and numerous other smaller factors. but those first two are the biggies if you are looking at fixing a deficit. If you want to increase revenues, increase economic growth. If you want to reduce the deficit, reduce the relative size of government.