Trump’s treasury secretary: The tax cut ‘will pay for itself’

[JasperL]

My only argument was tax cuts dont necessarily reduce revenue. The OP posts as if economic is scientific fact.

For any purpose that matters, in the U.S. in 2017, it is a scientific fact. If a government needs to spend MORE money, only morons as legislators or in the public will support tax rate CUTS to fund that extra spending.

 

[JasperL]

The rich are already paying the huge majority of the taxes now. What do you want to do, run them out of the country and pay zero taxes? The 35% who pay zero taxes can pay $100. It's not the rich's responsibility to take care of the moochers.

Moochers. OK... :roll:

 

[Moderate Right]

IMHO, the federal MW should be indexed to the CPI just like social security retirement benefits are. That takes the politics out of it yet still allows any state or local government to raise it further if they feel special.

I personally don't think that is a good idea, mostly because if we go into a period of much higher inflation then indexing the MW to inflation is going to make the economy worse, adding fuel to the fire.

 

[Moderate Right]

The argument that we need to coddle the rich with low tax-rates out of fear that if we didn't, they'd pick up and move to Zimbabwe, is just grabbing at straws, when there is no rational arguments left.

The U.S. has one of the lowest marginal tax-rates in the modern world. Somehow, I don't think the rich want to pick up and move to the third world to escape taxation. The rich are willing to spend more on homes and automobiles because they perceive the value. They aren't going to move away from a well-protected democracy that affords amenities not found in low-tax countries merely to escape taxes, which are a cost of living.

I don't know what's with the conservative view that paying taxes is the worst thing in the world.

The rich already pay the lion's share of the taxes now. I'm not for tax cuts to the rich, other than lowering the corporate tax rate SOME, but I am against increasing the taxes they already pay when they are already paying that lion's share. I'm also against the rich paying little taxes, unless they have had losses, such as what happened with Trump. If you have to pay taxes on income then you shouldn't have to pay taxes on negative income.

 

[Moderate Right]

Moochers. OK... :roll:

It's a liberal myth that there are no moochers. There are many.

 

[ttwtt78640]

I personally don't think that is a good idea, mostly because if we go into a period of much higher inflation then indexing the MW to inflation is going to make the economy worse, adding fuel to the fire.

Keeping wages low does not fight inflation.

 

[MTAtech]

I personally don't think that is a good idea, mostly because if we go into a period of much higher inflation then indexing the MW to inflation is going to make the economy worse, adding fuel to the fire.

First, it would be good if we had more wage inflation right now because it would give workers more buying power.
Second, how come corporations never seem to worry about inflation when they give their executive huge compensation packages?

Examples:
CBS Chief Leslie Moonves Sees 2016 Salary Soar to $69.6 Million | Variety
UnitedHealth CEO's compensation swells in 2016 to $17.8 million - Modern Healthcare

 

[MTAtech]

The rich already pay the lion's share of the taxes now. I'm not for tax cuts to the rich, other than lowering the corporate tax rate SOME, but I am against increasing the taxes they already pay when they are already paying that lion's share. I'm also against the rich paying little taxes, unless they have had losses, such as what happened with Trump. If you have to pay taxes on income then you shouldn't have to pay taxes on negative income.

So, you then would be against Trump and the GOP's plan to lower the top marginal tax rate?

 

[Absentglare]

My only argument was tax cuts dont necessarily reduce revenue. The OP posts as if economic is scientific fact.

Tax cuts directly reduce revenue by definition. Furthermore, tax rates on the wealthy are already extremely low. How much should we cut taxes on the wealthy?

 

[Absentglare]

It's a liberal myth that there are no moochers. There are many.

The guy who is mooching some bare-minimum anti-poverty benefits cost us almost nothing. The Goldman Sachs executives who are mooching these tax cuts from Uncle Sam via corruption and the complicit agreement of the right are extremely expensive.

 

[jonny5]

For any purpose that matters, in the U.S. in 2017, it is a scientific fact. If a government needs to spend MORE money, only morons as legislators or in the public will support tax rate CUTS to fund that extra spending.

Its not scientific fact, so treating it like it is makes no sense. The argument here is that we should cut taxes to encourage growth and that such growth will increase revenue base over the long term. Thats a reasonable argument, and there is no scientific fact to prove it one way or the other.

 

[MTAtech]

The guy who is mooching some bare-minimum anti-poverty benefits cost us almost nothing. The Goldman Sachs executives who are mooching these tax cuts from Uncle Sam via corruption and the complicit agreement of the right are extremely expensive.

Not to mention a particular NYC real estate mogul who refuses to release his tax returns because they likely show no taxes at all.

 

[sear]

"Tax cuts directly reduce revenue by definition." Ag #184

If I may:

"Precision & clarity in the use of language leads to precision & clarity of thought." G. Gordon Liddy

Tax RATE cuts do not necessarily; due to the wisdom of the Laffer Curve. I'll illustrate.

- At zero% tax rate the government derives no tax revenue, because zero% of $Trillions is $zero.

- At 100% tax rate government derives virtual zero revenue, because there's no incentive to work, because the worker has no opportunity for $gain.

- THEREFORE!! (according to the Laffer Curve)
Maximum government revenue will be derived from a tax rate somewhere between zero and 100 %.

SO !!

If the tax rate is 99.999%, leaving workers with 0.001% of what they have earned, they have virtually no incentive to work. They won't have enough to feed themselves.

BUT !!

Drop the $tax $rate from 99.999% to 25%, it may technically reduce the government's share.

BUT !!

The government will more than make it up on volume. Workers will flood into the labor market, earn $lots & $lots of $money; and get to keep $75% of it. It's a much better deal than only keeping $0.001% of it.

"Tax cuts directly reduce revenue by definition." Ag #184

It's a common misconception.
Reality may be a little counter-intuitive.

But study the Laffer Curve, and you will see the assertion is false, despite its air of superficial plausibility.

 

[sear]

PS

"Not to mention a particular NYC real estate mogul who refuses to release his tax returns because they likely show no taxes at all." M #187

Been there.
Done that.

When challenged on it during presidential candidate debate, Trump not only didn't deny that the real estate exemption spared him paying any U.S. federal income tax that year; Trump's reply was: "That makes me smart."

 

[JasperL]

Its not scientific fact, so treating it like it is makes no sense.

Of course it makes 'sense' to expect tax rate cuts to lower revenue, because that's what happens in nearly every case. So anyone legislating tax cuts and expecting more revenue is either ignorant, or a liar, or irresponsible. Show me any low tax rate state with higher per capita spending than it's high tax rate neighbors. Show me any country that manages to increase spending per capita and pay for it by keep cutting tax rates. You can't.

The argument here is that we should cut taxes to encourage growth and that such growth will increase revenue base over the long term. Thats a reasonable argument, and there is no scientific fact to prove it one way or the other.

That argument as stated is just fine. Lowering tax rates does provide a small boost to economic growth, and that does increase the revenue base somewhat. Friedman estimated that if the tax cuts weren't borrowed, the 'dynamic' effect would offset roughly 10% of the nominal cut. So a nominal cut of $1 would 'only' cost 90 cents. That's reasonable. What's not is pretending that a $1 tax cut will MAKE money, and that's the fairy tale, lie, told in the OP and by GOP hacks and liars everywhere.

It's really simple - if you want a low tax rate state, you accept small government. If you want big government, you need high tax rates. Why is this even controversial?

And there IS tons of evidence to demonstrate this. You can't find a legitimate economist anywhere who will with a straight face and in direct language say that tax cuts pay for themselves. When asked directly about the U.S. in 2017, Art Laffer won't even make that claim. The only people who make it are propagandists selling tax cuts but who don't want to make the spending cuts that are required.

 

[JasperL]

It's a liberal myth that there are no moochers. There are many.

Oh, nice, another straw man. You're on a roll.

 

[Visbek]

Report: Trump Rolls Back $60 Billion More in Regulatory Savings - Washington Free Beacon

Yeah, actually, he has.

Egads. Where do you get this stuff?

For example, the article claims that rolling back Every Student Succeeds Act would save $86 billion -- over what time frame, by the way? The problem is, that's an act of Congress, and Trump cannot void it with a pen stroke. It's a bipartisan law, by the way, that basically fixes some of the problems caused by No Child Left Behind.

It also claims that Trump's revision to the eligibility for SNAP will save 40 million paperwork hours. Somehow, that seems a tad unlikely, given that is the equivalent of the full-time work of about 20,000 staffers.

This is the same group that claims Trump's vague promise to "cut 2 regulations for every new one" would save $181 billion.

But let's take this at face value. How much of the federal budget is $60 billion? Not much. Given that these changes are usually projected to take place over 10 years, that's $6 billion a year. Total federal spending for 2015 was $3.8 trillion; so we're looking at... 0.15% of federal spending.

Woah.

And of course, at some point we have to start counting revenue lost as a result of slashing regulations, let alone tax cuts.

Sorry, but you are going to have to do much better than a think tank that is overtly biased against regulations.

 

[JasperL]

It's a common misconception.
Reality may be a little counter-intuitive.

But study the Laffer Curve, and you will see the assertion is false, despite its air of superficial plausibility.

OK, but the claims in the OP are not about theory, but about specific tax cuts in 2017 from existing rates which are nowhere near 100% or the 70-80% rates that most economists believe is the top of the Laffer Curve.

So the common misperception only involves statistical outliers, conditions that are irrelevant for decision making as we sit here in this country in 2017. It's far more accurate to assume tax rate cuts lower revenue because they almost always DO. That's the 99% or better answer to tax policy in the U.S. for the past century. It's far more pernicious to spread a lie that we really don't know what a change in tax rates will do! We do KNOW. If the Trump/GOP plan cuts individual rates, we WILL see collections drop from where they would have been without the tax rate cuts.

 

[sear]

"While Trump plans to slash taxes (mainly on the rich) he doesn't seem to have any plan to cut spending at all" M #6

"What's pernicious about deficits for conservatives is this. It makes big government cheap. What we're doing, we're turning to the country, the "conservative" administration turns to the country and says: We're going to give you a dollar's worth of government, we're going to charge you seventy five cents for it. And we're going to let your kids pay the other quarter." George Will Nov 30, 2003

 

[sear]

"So the common misperception only involves statistical outliers, conditions that are irrelevant" J #193

Perhaps. But I don't know that, because I don't know to 3 decimal precision where the Laffer Curve peak is.

a) The claim was refuting was unqualified. It presented the case as an absolute rule; lower tax rate = less government revenue. That's false.

b) The Laffer Curve peak is not one fixed and unwavering numerical value. It's dynamic, and responds to undulations in the economy, the unemployment rate, supply and demand, and many other factors.

 

[Renae]

Egads. Where do you get this stuff?

For example, the article claims that rolling back Every Student Succeeds Act would save $86 billion -- over what time frame, by the way? The problem is, that's an act of Congress, and Trump cannot void it with a pen stroke. It's a bipartisan law, by the way, that basically fixes some of the problems caused by No Child Left Behind.

It also claims that Trump's revision to the eligibility for SNAP will save 40 million paperwork hours. Somehow, that seems a tad unlikely, given that is the equivalent of the full-time work of about 20,000 staffers.

This is the same group that claims Trump's vague promise to "cut 2 regulations for every new one" would save $181 billion.

But let's take this at face value. How much of the federal budget is $60 billion? Not much. Given that these changes are usually projected to take place over 10 years, that's $6 billion a year. Total federal spending for 2015 was $3.8 trillion; so we're looking at... 0.15% of federal spending.

Woah.

And of course, at some point we have to start counting revenue lost as a result of slashing regulations, let alone tax cuts.

Sorry, but you are going to have to do much better than a think tank that is overtly biased against regulations.

Regulations cost money to adhere too, repeal is good for the economy in most cases.

 

[Visbek]

That's actually a left wing talking point, not the truth. The right just believes that government shouldn't be too big and shouldn't be growing out of control and it is not the solution to every single problem that comes up, particularly when states know their own problems better than the federal government does. It is the solution to some problems and they never once said that it wasn't.

And yet, the right keeps picking political representatives who expand the reach of government as well as spending; who want the government to regulate behavior, such as religious practices and sexual conduct; and that fumbles management of government when it comes to critical functions, like disaster recovery.

As to the idea that states know their problems better than the federal government? Nice in theory, wrong in practice. Southern states didn't know better than the federal government when it came to civil rights laws. Kansas' government apparently doesn't know jack **** about fiscal discipline. Republican states request federal aid for disasters on a regular basis.

I've heard this "government out of control" line since the 80s. We've had 20 years of Republican Presidents during that time, with no sign of government pulling back. The latest chump makes no bones about government micromanaging businesses and screwing with tax policy to keep businesses inside the US, with expanding military spending, and putting forth a budget that cuts social spending -- only to have Republicans in Congress tell him "those cuts are DOA."

Sorry, but I don't buy it.

 

[Visbek]

Regulations cost money to adhere too, repeal is good for the economy in most cases.

So basically, you have no argument. Thanks for the sour persimmons.

 

[AlbqOwl]

Egads. Where do you get this stuff?

For example, the article claims that rolling back Every Student Succeeds Act would save $86 billion -- over what time frame, by the way? The problem is, that's an act of Congress, and Trump cannot void it with a pen stroke. It's a bipartisan law, by the way, that basically fixes some of the problems caused by No Child Left Behind.

It also claims that Trump's revision to the eligibility for SNAP will save 40 million paperwork hours. Somehow, that seems a tad unlikely, given that is the equivalent of the full-time work of about 20,000 staffers.

This is the same group that claims Trump's vague promise to "cut 2 regulations for every new one" would save $181 billion.

But let's take this at face value. How much of the federal budget is $60 billion? Not much. Given that these changes are usually projected to take place over 10 years, that's $6 billion a year. Total federal spending for 2015 was $3.8 trillion; so we're looking at... 0.15% of federal spending.

Woah.

And of course, at some point we have to start counting revenue lost as a result of slashing regulations, let alone tax cuts.

Sorry, but you are going to have to do much better than a think tank that is overtly biased against regulations.

And only somebody really REALLY hard core would argue that $60 billion dollars is 'not much'.

How do you get from a manageable and temporary national debt to one that is crowding $20 trillion dollars, well over the national GDP. And that isn't debt that is spread over 20 or 30 years like a home mortgage but can be called in at any time. And, unless we start finding ways to stop spending what we don't have to spend and start paying it off instead of increasing it by hundreds of billions every year, it will bury us. And that means saving a few thousand here, a million there, not spending the billion planned for that, posting the billions slotted for this, etc. The President is to be commended for that, not criticized.

As the venerable Everett Dirksen once said, "A billion here and a billion there and pretty soon you're talking about real money."

 

[Renae]

So basically, you have no argument. Thanks for the sour persimmons.

Not my fault you can't see past your own misconceptions.