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

[Visbek]

You are ignoring my question. What sort of economic activity is created by putting an extra 5 bucks a week in peoples pockets? That might net you a Happy Meal at McDonalds but not much more.

Let's say that 40% of the US population gets a $5/week from a tax cut. As we saw with the 2009 payroll tax cut, people just spend it, without even thinking about it.

That's $260/year, for 126 million Americans. That's $32 billion that goes to consumers per year. Let's also assume that the government makes up for it by borrowing from international lenders, i.e. the government side has no short-term impact on the economy.

So, that's $32b of consumer spending. It's not a huge impact -- even the Obama payroll cut, which was about 4x larger, didn't make a big dent in GDP. But it does spark a little growth.

Of course, few people actually notice tax cuts. As a nation we've been cutting taxes since the 1980s, but the average person doesn't feel that way. And only part of the reason is because the wealthy get most of the cuts.

 

[Renae]

LOL, no, Krugman is in fact an expert in economics, Nobel Prize winner in fact, and he's got a far better record than any conservative economists I've ever run across. He's a liberal - he calls his blog, "Conscience of a Liberal" but he bases his opinions in the data and the evidence and the current state of the economics profession.

No, he's a liberal hack whose answer to most economic problems are higher taxes and government spending. algore and bobama won Nobel's, they are a fashion accessory rather than anything of merit at this point.

 

[Fletch]

Let's say that 40% of the US population gets a $5/week from a tax cut. As we saw with the 2009 payroll tax cut, people just spend it, without even thinking about it.

That's $260/year, for 126 million Americans. That's $32 billion that goes to consumers per year. Let's also assume that the government makes up for it by borrowing from international lenders, i.e. the government side has no short-term impact on the economy.

So, that's $32b of consumer spending. It's not a huge impact -- even the Obama payroll cut, which was about 4x larger, didn't make a big dent in GDP. But it does spark a little growth.

Of course, few people actually notice tax cuts. As a nation we've been cutting taxes since the 1980s, but the average person doesn't feel that way. And only part of the reason is because the wealthy get most of the cuts.

$32 billion in an $18 trillion economy is insignificant.

 

[JasperL]

Not in the least did you. Krugman style economics we just went through for 8 years... worst recovery ever, highest debt load ever... huge taxes... worst level of unemployed... Trump and team are going in a direction that is the antithesis of the Krugman line of economics. Tax cuts, spending cuts, regulation rollback. We'll see where we are at the end of the Trump admin.

LOL, if you have tax cuts and less in spending cuts so the deficit increases (and I'd bet a nickel the GOP tax cuts will FAR exceed spending cuts), that's just Keynesian stimulus. So why would you think that's the 'antithesis of Krugman line of economics."

 

[Renae]

LOL, if you have tax cuts and less in spending cuts so the deficit increases (and I'd bet a nickel the GOP tax cuts will FAR exceed spending cuts), that's just Keynesian stimulus. So why would you think that's the 'antithesis of Krugman line of economics."

Trump's moved to cut billions in regulations, moving to cut billions in spending and we'll just have to see how deep his tax cuts will be. I for one am looking forward to reading the actual proposal.

 

[JasperL]

Tax cuts rarely cause a loss in revenue. In fact, they usually increase revenue. It's the spending.

False! :roll:

 

[countryboy]

False! :roll:

Ummm, let's see the tax tables from the IRS. I'll make it easy on ya, let's start with Reagan and Bush II.

 

[Mac77]

Uh, no, there is no Tax Fairy, Tax Santa Clause. Sorry...

Reduce taxes and the economy grows

And that means more tax revenue not less

 

[SenorXm/Sirius]

You realize that the left doesn't think the debt is a problem.

"Reagan proved deficits don't matter." ..............Dick Chaney.

GOD I wish Conservatives for ONCE would do their own homework and stop swallowing the Con medias BS hook, line and sinker. History shows it's the Republicans who run up the debt and deficits more, but the Con media spews the lies and their lemmings believe every word.

 

[Visbek]

$32 billion in an $18 trillion economy is insignificant.

Of course it's small. I doubt anyone suggested otherwise.

The bigger the tax cut to those who will actually spend it, the bigger this type of economic effect.

 

[Visbek]

Trump's moved to cut billions in regulations

Not yet, he hasn't

moving to cut billions in spending

Wrong

He proposed cutting $55 billion -- so that he could increase defense spending by $55 billion. Net result? No change in spending.

and we'll just have to see how deep his tax cuts will be.

He claims it will be yuge. We'll see in a few days.

 

[Fletch]

"Reagan proved deficits don't matter." ..............Dick Chaney.

GOD I wish Conservatives for ONCE would do their own homework and stop swallowing the Con medias BS hook, line and sinker. History shows it's the Republicans who run up the debt and deficits more, but the Con media spews the lies and their lemmings believe every word.

Obama was a Con??? Gosh, all I have heard for the last 8 years was that deficits don't matter and that, in fact, they weren't high enough

 

[Visbek]

Reduce taxes and the economy grows

And that means more tax revenue not less

sigh

Yes, usually tax cuts (if well crafted) will increase growth. However, they do NOT increase growth enough to offset the loss in tax revenue.

We've seen this dozens of times in recent US history, most notably in Kansas. Brownback cut state taxes in a particularly ineffective way, setting the stage for years of revenue shortfalls. As a result, Kansas -- which after years of conservative rule, has very little left to cut -- has cut education, raided highway funds, and decimated its rainy day fund.

 

[Renae]

Not yet, he hasn't



Wrong

He proposed cutting $55 billion -- so that he could increase defense spending by $55 billion. Net result? No change in spending.



He claims it will be yuge. We'll see in a few days.

President Donald Trump and Congress have saved an additional $60 billion in regulatory costs by rolling back Obama administration rules, according to a new report.

The American Action Forum, a center-right policy institute, released a report Tuesday documenting the most recent ways the administration and Congress have used the Congressional Review Act to repeal regulations.

The report found the recent repeal and delay of regulations could lead to $86 billion in net fiscal effects for taxpayers from deregulation.

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

Yeah, actually, he has.

 

[Renae]

"Reagan proved deficits don't matter." ..............Dick Chaney.

GOD I wish Conservatives for ONCE would do their own homework and stop swallowing the Con medias BS hook, line and sinker. History shows it's the Republicans who run up the debt and deficits more, but the Con media spews the lies and their lemmings believe every word.

Actually, Reagan didn't want the spending, but to get his real goal, destruction of the USSR through economic warfare (building up the military) he had to let the dem house/senate have their way, which was failed to do promised cuts and big spending increases.

 

[JasperL]

Ummm, let's see the tax tables from the IRS. I'll make it easy on ya, let's start with Reagan and Bush II.

I've done this a dozen times, and so have economists, and pretty much none believe tax cuts pay for themselves. Not conservatives, not liberals, not moderates. And it's because the data are clear - no Tax Santa Clause exists. He's as real as that other one that children believe delivers presents on Christmas day.

 

[MTAtech]

https://www.atr.org/full-list-ACA-tax-hikes-a6996

Nobody is denying that taxes, mainly on the wealthy, have increased under Obama. That's why the deficit is down by 75%.

 

[ttwtt78640]

Tax cuts rarely cause a loss in revenue. In fact, they usually increase revenue. It's the spending.

Nope, because the growth does not offset the need for safety net (or other) spending that is always predicted yet never seems to happen.

 

[JasperL]

Reduce taxes and the economy grows

And that means more tax revenue not less

It doesn't actually mean more revenue, not less. If this were true as a general rule, then we'd see socialist countries in Europe with tax rates around 1% or so, and low tax rate states in the U.S. would be the states that spent the most per capita. Wonder why we see the opposite - countries that spend a lot per capita have high tax rates - ALL OF THEM, there are NO EXCEPTIONS. And low tax rate states in the U.S. spend less per capita than their high tax rate neighbors. THERE ARE NO EXCEPTIONS.

It's amazing we have a political ideology in this country that believes in tax magic as legitimate fiscal policy....

It's true that lower tax rates do provide a small economic stimulus, more jobs, and there are other good reasons to cut tax rates - some people just prefer small government!! But one of those good reasons is just NOT so the government can get BIGGER and can spend MORE MONEY.

 

[JasperL]

Nobody is denying that taxes, mainly on the wealthy, have increased under Obama. That's why the deficit is down by 75%.

Yeah, amazing how that works isn't it? Tax rates go up and so do revenues and deficits come down!

 

[Winston]

Sure but it is possible to cut from what people term discretionary spending to reverse deficit spending. In fact it is pretty easy financially if not politically. It is scary that interest is in the top 5. You realize that the left doesn't think the debt is a problem. Looks like you are past that confusion.

The best way to fight deficits is not cutting spending. Cut defense, that's cutting people's salaries/careers. Cut SSC, that cuts our senior's purchasing power. Cut Medicaid, that puts people in a disadvantaged situation. They have no health care, if they get sick, they're crippled by debt, and they can't spend any money any longer, they may lose their job, eliminating a stable tax payer. In fact, if you want to increase revenue, I'd argue you need to increase spending in the educational sector. You must supply people with free college tuition. That will help stimulate you revenue. Because an educated workforce, full of graduates, who get great jobs, that pay more taxable income, which generates more revenue. Free college costs about 80 Billion, and it would pay out dividends.

You want to fight the deficit, cutting spending is not the holy grail of all solutions. You must stimulate the economy, and have a sensible tax policy, raise taxes on capital gains, raise taxes ACROSS THE BOARD, to collect revenue we've been missing out on since Reagan and Bush Jr.. in order to fight the deficit.

 

[Renae]

The best way to fight deficits is not cutting spending. Cut defense, that's cutting people's salaries/careers. Cut SSC, that cuts our senior's purchasing power. Cut Medicaid, that puts people in a disadvantaged situation. They have no health care, if they get sick, they're crippled by debt, and they can't spend any money any longer, they may lose their job, eliminating a stable tax payer. In fact, if you want to increase revenue, I'd argue you need to increase spending in the educational sector. You must supply people with free college tuition. That will help stimulate you revenue. Because an educated workforce, full of graduates, who get great jobs, that pay more taxable income, which generates more revenue. Free college costs about 80 Billion, and it would pay out dividends.

You want to fight the deficit, cutting spending is not the holy grail of all solutions. You must stimulate the economy, and have a sensible tax policy, raise taxes on capital gains, raise taxes ACROSS THE BOARD, to collect revenue we've been missing out on since Reagan and Bush Jr.. in order to fight the deficit.

Defense is less then 20% of the budget. Free College would be stupid, dumb and a runaway cost.

 

[Winston]

Defense is less then 20% of the budget. Free College would be stupid, dumb and a runaway cost.

Using the numbers 600 Billion for Defense and 80 Billion for free college..

Free college is 13% of the DoD. Definitely not a runaway cost. Stable and quantified cost. The Iraq War, the Afghanistan War, and the Libyan conflict, contribute to runaway cost, that towers over the cost of providing college to society. Right now, you have people discouraged from going to school, they settle for less. They settle for a crappy 30k a year job. When they could have a decent 50k+ a year job, but they need a degree. The ones who did go to school are stuck paying off loans, which doesn't stimulate the economy. The best way to stimulate the economy, is to put more money in the middle class' hands. Because the middle class has a higher velocity of money.

Anyway, here's the concept of free college. People with degrees get better paying jobs, than people without degrees. Besides that, I support free college based upon the idea that people should have absolute freedom to determine their destiny. Free college would expand freedom in this country, not constrict it. Also, Kalamazoo, MI offers Free College, although I think it's privately financed. The data available has seen graduation rates increase tremendously.

 

[Renae]

Using the numbers 600 Billion for Defense and 80 Billion for free college..

Free college is 13% of the DoD. Definitely not a runaway cost. Stable and quantified cost. The Iraq War, the Afghanistan War, and the Libyan conflict, contribute to runaway cost, that towers over the cost of providing college to society. Right now, you have people discouraged from going to school, they settle for less. They settle for a crappy 30k a year job. When they could have a decent 50k+ a year job, but they need a degree. The ones who did go to school are stuck paying off loans, which doesn't stimulate the economy. The best way to stimulate the economy, is to put more money in the middle class' hands. Because the middle class has a higher velocity of money.

Anyway, here's the concept of free college. People with degrees get better paying jobs, than people without degrees. Besides that, I support free college based upon the idea that people should have absolute freedom to determine their destiny. Free college would expand freedom in this country, not constrict it. Also, Kalamazoo, MI offers Free College, although I think it's privately financed. The data available has seen graduation rates increase tremendously.

80 Billion my ass. No Government entitlement has EVER stayed underbudget.

 

[Mac77]

80 Billion my ass. No Government entitlement has EVER stayed underbudget.

That idea is just another step toward the liberal dream of a socialist state

And you're right

As soon as the government starts paying the whole cost the greedy lib professors will just raise tuition