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Tax cuts or Deficit reduction?

Which is more important to you?

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the makeout hobo

the makeout hobo

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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 makeout hobo said:
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?
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Both tax cuts and deficit reduction... one goes with the other... and throw in massive spending cuts.

JFK, Address at the Economic Club of New York, December 14th, 1962
http://www.jfklibrary.org/Asset+Tree/Asset+Viewers/Audio+Video+Asset+Viewer.htm?guid={A138FFB8-5B6A-4C6A-A8CC-70C6E4FF39DA}&type=Audio

In short, it is a paradoxical truth that tax rates are too high today and tax revenues are too low and the soundest way to raise the revenues in the long run is to cut the rates now. The experience of a number of European countries and Japan have borne this out. This country's own experience with tax reduction in 1954 has borne this out. And the reason is that only full employment can balance the budget, and tax reduction can pave the way to that employment. The purpose of cutting taxes now is not to incur a budget deficit, but to achieve the more prosperous, expanding economy which can bring a budget surplus.

I repeat: our practical choice is not between a tax-cut deficit and a budgetary surplus. It is between two kinds of deficits: a chronic deficit of inertia, as the unwanted result of inadequate revenues and a restricted economy; or a temporary deficit of transition, resulting from a tax cut designed to boost the economy, increase tax revenues, and achieve--and I believe this can be done--a budget surplus. The first type of deficit is a sign of waste and weakness; the second reflects an investment in the future.
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zimmer said:
Both tax cuts and deficit reduction... one goes with the other... plus massive spending cuts.

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Just focusing on the deficit vs. tax cuts, would you like to explain to me how reducing revenue lets you reduce the deficit?
 
Stop spending so much damn money. And when I say stop spending, I mean stop doing things like bailing out irresponsible corporations*, stop wasting so much on making war, and stop using our money to give certain friends of powerful people huge defense contracts.

*Though you should bail out the employees who will lose their jobs when the corporation goes belly up and the people on top go to jail - and they should go to jail, for a very long time.
 
Paschendale said:
Stop spending so much damn money. And when I say stop spending, I mean stop doing things like bailing out irresponsible corporations*, stop wasting so much on making war, and stop using our money to give certain friends of powerful people huge defense contracts.

*Though you should bail out the employees who will lose their jobs when the corporation goes belly up and the people on top go to jail - and they should go to jail, for a very long time.
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But specifically between tax cuts and deficit reduction, which do you think is a bigger priority?
 
When highly successful international businesses like Wal Mart and McDonalds set their pricing, the question was not “should we cut prices or increase revenues?” They knew that given the choice between a $3 McDonalds big mac and a $7 Chili’s thickburger, consumers who can’t afford a $7 burger every other day would buy the big mac. When McDonalds wanted to increase revenues again, they didn’t introduce the $10 menu, they introduced the $1 menu. Raising prices only equals raising revenues when all other things are equal. By volume selling at lower prices, McDonalds continues to grow while more upscale burger joints are struggling in the down economy.
Just like with cheap burgers, the economy pays more taxes when the economy grows. If someone pays 35% on $800,000 in income, that is higher revenue to the government than when someone pays 39.6% on $500,000. Part of the reason the deficit is so high is because revenues have dropped with the down economy. Obama has shown that union bailouts and duck ponds don’t grow the economy. Bush showed that tax cuts do.
Tax cuts spur the economy more than revolving door jobs on short term government debt funded projects. Economic growth means more tax revenues, even at lower rates. Therefore, we need tax cuts AND deficit reduction.
 
zimmer said:
Both tax cuts and deficit reduction... one goes with the other... and throw in massive spending cuts.


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And thats the problem. Until the federal government is weaned off their crack habit, tax cuts and deficit reduction wont matter...because even with tax increases they are just going to spend more money. Until THAT changes...responsible government...responsible spending...tax cuts or increases are immaterial and deficit/debt reduction is all just rhetoric.
 
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.
 
Cephus said:
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.
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Tax cuts do not always stimulate the economy. Morever, they don't always grow the economy enough to offset their loss of revenue.
 
if you will note the Bowles Simpson preliminary report; it is quite possible to do both.

hobo said:
Tax cuts don't always grow the economy enough to offset their loss of revenue.
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they certainly seem to have a habit of doing so.

observe:
Federal-Personal-Income-Tax-Collections.JPG
 
cpwill said:
if you will note the Bowles Simpson preliminary report; it is quite possible to do both.



they certainly seem to have a habit of doing so.

observe:
Federal-Personal-Income-Tax-Collections.JPG
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I thank you for your unsubstantiated and unsourced graph.
 
the makeout hobo said:
I thank you for your unsubstantiated and unsourced graph.
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In general, I think there's a balance (probably changing from year to year, perhaps from month to month, and possibly even from day to day) somewhere between 100% taxes and 0% taxes...

Personally, I think we are currently past that balance point, and taxes are too high.

Depending on multiple other factors, tax cuts can improve the economy (IMO), thereby increasing all related aspects (job numbers, average income, ect.).

I personally think the current situation calls for spending cuts and tax cuts - but for the spending cuts to be at least slightly more, thus reducing the deficit...

------------

Now, I know some claim that tax cuts will actually increase revenue...And that is possibly true, up to a point.

That balance I mentioned earlier? If it's balanced correctly, maximum revenue is brought in...

There, I threw some thoughts at the page, let’s see what sticks…
 
the makeout hobo said:
Tax cuts do not always stimulate the economy. Morever, they don't always grow the economy enough to offset their loss of revenue.
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All things being equal, tax cuts will always do better to stimulate the economy than tax increases. More often than not, the "loss of revenue" means that the government needs to spend less and live within it's means. Of course, that's often difficult when both sides spend money like it's going out of style, but that's something we the people need to control.
 
Cephus said:
All things being equal, tax cuts will always do better to stimulate the economy than tax increases. More often than not, the "loss of revenue" means that the government needs to spend less and live within it's means. Of course, that's often difficult when both sides spend money like it's going out of style, but that's something we the people need to control.
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My point with this poll is to figure out, between tax cuts and deficit reductions, which people see as more important. I really didn't mean for it to get bogged down like this
 
the makeout hobo said:
My point with this poll is to figure out, between tax cuts and deficit reductions, which people see as more important. I really didn't mean for it to get bogged down like this
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Tax cuts, atm - because I think a small tax cut will increase revenue due to improving economy.

Deficit reduction can easily be tied to that, however, as long as the nitwits in DC don't increase spending along with the revenue increase I guesstimate-predict...

So, really, both...
 
the makeout hobo said:
My point with this poll is to figure out, between tax cuts and deficit reductions, which people see as more important. I really didn't mean for it to get bogged down like this
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If I have to pick just one, then tax cuts to get the economy going. After all, with Obama spending money he doesn't have like a drunken sailor, I have no faith whatsoever that he'd actually cut spending as would be required for the other.
 
False Premise, the only way to reduce the deficit is to cut spending.

Let's put it this way, I did the math and if you eliminate Medicare, Medicaid, SCHIP, and SS and all other social spending, you could pay off the national debt in 35 years. The cuts equal approximately 60% of total spending.
 
ksu_aviator said:
False Premise, the only way to reduce the deficit is to cut spending.

Let's put it this way, I did the math and if you eliminate Medicare, Medicaid, SCHIP, and SS and all other social spending, you could pay off the national debt in 35 years. The cuts equal approximately 60% of total spending.
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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)...
 
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the makeout hobo said:
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?
Click to expand...
Cut taxes and cut spending at the same time.
When you cut taxes revenues increase.
 
Barbbtx said:
Cut taxes and cut spending at the same time.
When you cut taxes revenues increase.
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Only too a point - if you cut taxes too far, they decrease.

However, IMO we're nowhere near that point.
 
The Mark said:
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)...
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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.
 
The Mark said:
Not necessarily...

IF raising taxes would generate more revenue, THEN that would be one way to reduce the deficit...
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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.
 
Cephus said:
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.
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While it is true that tax cuts are economically stimulative, spending reduction (specifically entitlements) is counter-intuitive to that approach.
 
Cephus said:
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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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
 
zimmer said:
Both tax cuts and deficit reduction... one goes with the other... and throw in massive spending cuts.


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

http://www.jfklibrary.org/Asset+Tre...8FFB8-5B6A-4C6A-A8CC-70C6E4FF39DA}&type=Audio

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.
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