Tax Cuts don't lead to growth, study says - Page 2 - TigerDroppings.com

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N.O. via West-Cal
LSU Fan
New Orleans
Member since Aug 2004
4187 posts

re: Tax Cuts don't lead to growth, study says


The article is poorly titled given what it actually says, which is very sensible.

"The paper is a good reminder to be humble about taxes as a tool for growing the economy. They remain, above all, a tool for collecting revenue and tweaking incentives for specific economic behavior."

In short, don't expect tax rate cuts or increases to be a panacea for anything.

"Congress has cut tax rates repeatedly over the last 60 years, while the country and the global economy have undergone considerable changes that probably had a greater effect on growth. For years after World War II, the U.S. was a singular economic powerhouse with an enormous manufacturing base that employed nearly 40% of the economy."

The article acknowledges that there was much bigger stuff going on in the 1950's and you can't just isolate marginal tax rates.

One thing that bugs me is that the GOP has made the avoidance of taxes a matter of religious adherence. There is nothing magical about 25% vs. 27% vs. 31%, etc. Sure, the White House is engaging in demagoguery on the "taxing the rich" - it won't make any real difference in the debt and could be a marginal drain on the economy - but there is no need for the GOP to alienate the "non-rich" by being so steadfast in their support of the rich. The real issue is revenues (not rates) vs. outlays, and I really believe Americans could get behind the notion that outlays must be curtailed.






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90proofprofessional
LSU Fan
Member since Mar 2004
9042 posts

re: Tax Cuts don't lead to growth, study says


the most recent time this study was brought up here fwiw

eta: good post NOvWC



This post was edited on 11/13 at 3:24 pm


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Diamondawg
Mississippi St. Fan
Mississippi
Member since Oct 2006
11050 posts

re: Tax Cuts don't lead to growth, study says


quote:

Thoughts?
Looking at those graphs, looks like we need to let the Bush tax cuts expire and roll everyone back to Clinton tax levels. This needs to be accompanied by serious spending cuts, however.






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Interception
Providence Fan
Member since Nov 2008
11089 posts

re: Tax Cuts don't lead to growth, study says


quote:

Definition of 'Gross Domestic Product - GDP'
The monetary value of all the finished goods and services produced within a country's borders in a specific time period, though GDP is usually calculated on an annual basis. It includes all of private and public consumption, government outlays, investments and exports less imports that occur within a defined territory.

GDP = C + G + I + NX

where:

"C" is equal to all private consumption, or consumer spending, in a nation's economy
"G" is the sum of government spending
"I" is the sum of all the country's businesses spending on capital
"NX" is the nation's total net exports, calculated as total exports minus total imports. (NX = Exports - Imports)



Baloo

Your a smart person from threads I've read with you in them.

Focus on "G" the sum of government spending. You might as well stop reading right there. The study is flawed.

Now, here is what a study should do, it should compare apples to apple (receipts to receipts yoy) and oranges to oranges (spending to spending yoy).

When we do this we find find higher receipts as a result. Now, if the government spends more what correlation should we gather from that? Absolutely nothing because that is oranges and we are talking about apples.






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alajones
LSU Fan
Hell
Member since Oct 2005
22193 posts

re: Tax Cuts don't lead to growth, study says


I want to get rid of them just because I'm tired of hearing those words.





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BlackHelicopterPilot
LSU Fan
Top secret lab
Member since Feb 2004
32848 posts

re: Tax Cuts don't lead to growth, study says


quote:

Everyone is dismissing the study before lifting a solitary finger to try to learn something.




This board is primarily a conduit for opinions and discussions.

It is not a Graduate Level lecture e-course.


quote:

Seriously, frick all of you.







People do not fall all over ONE cited study, in the face of many learned people's statements over history, and its a travesty. I am glad that people are not so wishy-washy that one study does not knock down their world view.








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Interception
Providence Fan
Member since Nov 2008
11089 posts

re: Tax Cuts don't lead to growth, study says


quote:

GDP = private consumption + gross investment + government spending + (exports - imports).


The GDP therefore ALREADY includes INCREASED Government Spending! So you are including INCREASED GOVRERNMENT SPENDING on BOTH sides of the comparisons! For instance If Government Spending Goes UP in the GDP, Naturally Increased Income from Tax Cuts will no longer be as high - NOT WHEN COMPARED AGAINST the MUCH HIGHER INCREASED GOVERNMENT SPENDING!

1) Why not just perform a standard straight-Line comparison Of Revenues BEFORE the TAX CUTS and Revenues AFTER the TAX cuts. That would be a better way to comparing "apple to apples" here.

2) Next do a straight-line comparison of National Spending BEFORE the Tax Cuts verses National Spending AFTER the Tax cuts. Again that would compare "apple to apples" here.

3) Finally, Compare what the National Debt WOULD HAVE BEEN WITHOUT the INCREASED NATIONAL SPENDING and WITH the actual additional Revenues obtained after the National Tax Cuts. Makes a VERY BIG difference in your study.

ETA: 90Proof not directed at you



This post was edited on 11/13 at 3:32 pm


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90proofprofessional
LSU Fan
Member since Mar 2004
9042 posts

re: Tax Cuts don't lead to growth, study says


quote:

Everyone is dismissing the study before lifting a solitary finger to try to learn something.

I read it when it was released in september and distinctly recall criticizing both its wording of the headline (which was not supported by the paper) and the obvious items it neglected to include in its model

The paper was rightly withdrawn by CRS after criticism btw






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BugAC
LSU Fan
Baton Rouge
Member since Oct 2007
18604 posts

re: Tax Cuts don't lead to growth, study says


quote:

Everyone is dismissing the study before lifting a solitary finger to try to learn something.


Yeah... frick us who don't take the atlantic for gospel and want to learn from it.

Learning something from the Atlantic is like learning form tackling from Steven Hawking.






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LSURussian
LSU Fan
Baton Rouge
Member since Feb 2005
81691 posts
 Online 

re: Tax Cuts don't lead to growth, study says


83% of the statistics found on the internet are made up.





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Powerman
LSU Fan
Corpus Christi, TX
Member since Jan 2004
120640 posts

re: Tax Cuts don't lead to growth, study says


quote:


People do not fall all over ONE cited study, in the face of many learned people's statements over history, and its a travesty. I am glad that people are not so wishy-washy that one study does not knock down their world view.



It's not that

It's just that the responses are completely predictable. If something doesn't fit the conservative talking points around here it's immediately dismissed as bogus garbage and no one bothers with even reading it.

God forbid they would actually learn something or even read something that challenged their preconceived notions.






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90proofprofessional
LSU Fan
Member since Mar 2004
9042 posts

re: Tax Cuts don't lead to growth, study says


quote:

It's just that the responses are completely predictable.

none more so than yours






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crawdaddy52
Vanderbilt Fan
Member since Dec 2010
852 posts

re: Tax Cuts don't lead to growth, study says


If the numbers confirm my position or political point of view they must be right or as in the case of a landslide for my candidate I will just make them up. If they are contrary I will dismiss them - because I'm right and everybody else is an idiot, moron, moocher, free phoner(even though it was my idol who signed the legislation) - if anything conflicts with my world view I just stink my fingers in my ear and hum real loud.





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Archie Bengal Bunker
LSU Fan
Member since Jun 2008
15286 posts

re: Tax Cuts don't lead to growth, study says


This is why I have been arguing for tax increase via rate, deduction, or loophole closing. There is no guarantee that putting it in the market will lead to greater receipts. It is certain that taking the money up front will lead to receipt increases. Of course, this must coincide with spending cuts and reform.


quote:

Well into the 1950s, the top marginal tax rate was above 90%. Today it's 35%. But both real GDP and real per capita GDP were growing more than twice as fast in the 1950s as in the 2000s. At the same time, the average tax rate paid by the top tenth of a percent fell from about 50% to 25% in the last 60 years, while their share of income increased from 4.2% in 1945 to 12.3% before the recession.


And that is the Republican parties great presitge. They have convinced their constituents that we must protect the wealthy in order to have a functioning economy. Now, I realize people in the 50's likely paid a much lower rate than 90% due to loopholes and deductions, but point stands. Romney himself said the rich are doing fine in this economy. I feel confident that the top earners will continue to invest and play ball with marginal rate increases because A] they have the means, B] they want to grow their wealth.






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rsande2
LSU Fan
Member since Jan 2006
3423 posts

re: Tax Cuts don't lead to growth, study says


quote:

show me a study that says tax cuts lead to growth, and I'll provide the same thoughts


Check what happened under Reagan and Kennedy.....

Something that I have not seen mentioned on here is taxes work on a bell curve. There is a point where increasing taxes is good but you reach a point at the top where the more you raise taxes the less revenue is generated. A better study would be to see where we are on that curve and respond accordingly.






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Baloo
LSU Fan
Formerly MDGeaux
Member since Sep 2003
43922 posts
 Online 

re: Tax Cuts don't lead to growth, study says


quote:

"The paper is a good reminder to be humble about taxes as a tool for growing the economy. They remain, above all, a tool for collecting revenue and tweaking incentives for specific economic behavior."

In short, don't expect tax rate cuts or increases to be a panacea for anything.

I almost quoted that part instead. And I agree. I find the belief that tax cuts can solve everything from the debt to the common cold to be a truly bizarre belief. but of course other factors are determinative whether the economy grows. The article does not state that tax hikes lead to growth, but I don't think either party really suggests that.

But we do have greater income disparity between the very rich and the middle class than we've had in a century, and it by some coincidence is at the same time we've drastically cut taxes on the rich. I do agree that a 90% effective tax rate on the rich is absurd and oppressive. But tax cuts on the upper tax bracket does not lead to economic growth.

I do think we should continue the middle class tax cuts, but I honestly have no problem in letting the tax cut on the highest tax bracket expire.






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Interception
Providence Fan
Member since Nov 2008
11089 posts

re: Tax Cuts don't lead to growth, study says


quote:

If the numbers confirm my position or political point of view they must be right or as in the case of a landslide for my candidate I will just make them up. If they are contrary I will dismiss them - because I'm right and everybody else is an idiot, moron, moocher, free phoner(even though it was my idol who signed the legislation) - if anything conflicts with my world view I just stink my fingers in my ear and hum real loud.


I'm listening to your argument but there is none?

I don't believe anything in your post pertains to me so come up with some facts then maybe you can persuade me otherwise or just stay out of threads that are intellectually over your head. I mean it, if you can't compete in the arena of ideas then please don't jump into threads such as this that are not meant to demonize either side because some people want honest debate.







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Godfather1
Army Fan
SE Louisiana
Member since Oct 2006
31968 posts
 Online 

re: Tax Cuts don't lead to growth, study says


quote:

Thoughts?


Why is it the criminal can empty his pistol into Superman's chest and the Man of Steel never so much as flinches...yet when the criminal throws the empty weapon at Superman, THEN he ducks?






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boxcar willie
LSU Fan
kenner
Member since Mar 2011
4621 posts

re: Tax Cuts don't lead to growth, study says


tax cuts combined with a budget deficit do lead to growth. Increased spending combined with a budget deficit do lead to growth also. Deficits stimulate the economy untill you reach a point that they no longer stimulate the economy. We are at that point.





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lsutiger90
LSU Fan
Houston, TX
Member since May 2004
619 posts

re: Tax Cuts don't lead to growth, study says


quote:

I do think we should continue the middle class tax cuts, but I honestly have no problem in letting the tax cut on the highest tax bracket expire.


One thing I haven't heard is the definition of the Middle Class! I would have to assume that the top end of this bracket has risen over the last 10 years, so why is $250k ($200k single) considered rich still???






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