I want to respond to Boo here who brought me into this by naming me some postings back, even though I wasn't in that particular back and forth....
Joe, you say that taxes have little relation to what goes on in the economy, and if I read you correctly, alot of your argument boiled down seems to be the tired old argument that tax cuts only benefit the wealthy in our society...This is patently false, and has been demonstrated and documented in the past with real numbers....
"Shifting tax burden describes the situation where the economic reaction to a tax causes prices and output in the economy to change, thereby shifting part of the burden to others. An example of this shifting took place when the government placed a sales tax on luxury goods in 1991, assuming the rich could afford to pay the tax and would not change their spending habits. Unfortunately, demand for some luxury items dropped and industries such as personal aircraft manufacturing and boat building suffered, causing unemployment for many factory workers. Tax shifting must be considered when setting tax policy."
snip
"Consumer spending typically equals two-thirds of GNP. As you would expect, lowering taxes raises disposable income, allowing the consumer to spend additional sums, thereby, increasing GNP."
Further, the article says:
"Reducing taxes, therefore, pushes out the aggregate demand curve as consumers demand more goods and services with their higher disposable incomes. Supply side tax cuts are aimed to stimulate capital formation. If successful, the cuts will shift both aggregate demand and aggregate supply because the price level for a supply of goods will be reduced, which often leads to an increase in demand for those goods."
and
"Tax cuts, when used properly, have stimulated the economy. Many credit President George W. Bush's tax cuts for moving the economy out of recession. Similarly, in 1964, Congress enacted an 18% cut in personal taxes to spur growth. The legislation was designed to encourage consumer spending - many believe that it succeeded admirably as consumers delivered a textbook reaction.
According to a December 2004 article in Celtia.info, a magazine distributed in Celtic countries, tax cuts have also shown positive results in other countries as well. Ireland's recent tax cuts are believed to have improved living standards significantly. For years, the Irish were faced with high unemployment, budget deficits and high taxes. In 1986, Ireland faced a fiscal crisis. After reducing government spending, the government lowered taxes on both individuals and corporations. Over the next 13 years, Ireland's per capita income went from only 63% of the United Kingdom's average to besting it in 2000. Ireland now enjoys one of the highest standards of living in Europe."
Do Tax Cuts Stimulate The Economy?
And Joe, if you want real world, real time experience of this, we only need look to our great friends, and neighbors to the north....This from an article in that right wing rag, the HuffPo....
"Instead of grants and handouts to the politically connected, I believe tax cuts create jobs. This idea is central to An Agenda for Growth. Tax cuts spur economic activity and expand the economy wherever they're tried. The result is more government revenue, not less.
Here in Ontario, this was our experience. I'm proud to have been part of a government that substantially cut taxes on both people and businesses and carried through other pro-growth policies like balancing the budget and eliminating smothering red tape. The result was over a million net new jobs, credit rating upgrades and a 35 per cent increase in tax revenues."
Tim Hudak: How Cutting Taxes Actually Helps the Economy
But let's not take a Canadian politician's word for it, or a _______pedia's word either right? How about a PhD laying it out? Is that enough education in economics to break through the insanely stupid meme of "All the economists agree"?
"There is a distinct pattern throughout American history: When tax rates are reduced, the economy's growth rate improves and living standards increase. Good tax policy has a number of interesting side effects. For instance, history tells us that tax revenues grow and "rich" taxpayers pay more tax when marginal tax rates are slashed. This means lower income citizens bear a lower share of the tax burden - a consequence that should lead class-warfare politicians to support lower tax rates.
Conversely, periods of higher tax rates are associated with sub par economic performance and stagnant tax revenues. In other words, when politicians attempt to "soak the rich," the rest of us take a bath.
snip
"The tax cuts of the 1920s
The share of the tax burden paid by the rich rose dramatically as tax rates were reduced. The share of the tax burden borne by the rich (those making $50,000 and up in those days) climbed from 44.2 percent in 1921 to 78.4 percent in 1928.
The Kennedy tax cuts
Just as happened in the 1920s, the share of the income tax burden borne by the rich increased following the tax cuts. Tax collections from those making over $50,000 per year climbed by 57 percent between 1963 and 1966, while tax collections from those earning below $50,000 rose 11 percent. As a result, the rich saw their portion of the income tax burden climb from 11.6 percent to 15.1 percent.
The Reagan tax cuts
The share of income taxes paid by the top 10 percent of earners jumped significantly, climbing from 48.0 percent in 1981 to 57.2 percent in 1988. The top 1 percent saw their share of the income tax bill climb even more dramatically, from 17.6 percent in 1981 to 27.5 percent in 1988."
Historic Tax Cuts and Economic Growth | Lessons of Lower Tax Rates
So, as we see, lower tax rates, spur treasury revenue increases...Part of that is simply because those that have the means to hide their money, loosen up on just paying the tax on it because it is not such a burden to comply....This increase to the treasury means we don't have to borrow as much, and can use that surplus to pay down debt, and coupled with sane budgeting, (as if we have done a budget at all under this demo rule) can bring America back....
Now look, You know me Joe, I am just a middle class guy, with a good job, but over the past, I'd say 8 years (yes that's right some during the Bush era as well) have seen my pay check cover less and less due to government policy, that has resulted in hidden inflation, and rising costs. To the point that I have actually this year considered suspending my retirement savings to make ends meet....That shouldn't be a choice in this country.
Now you tell me Joe, what is it that demo's have done that have improved my middle class standard of living? Because all I see is them saying one thing, and attacking it behind the scenes.