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Politics : Formerly About Advanced Micro Devices
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To: TopCat who wrote (359390)11/19/2007 4:17:08 PM
From: Taro  Read Replies (1) of 1587416
 
First of all, let's not ignore the fact we all - at least secretly for the sake of good arguments - prefer forgetting, that changes in taxation rates short term may well have the opposite effect as compared to longer term.

That said I believe we all can agree that hiking the tax rate by say 10% today instantly increases the tax revenues a lot, maybe even close to 10%.
Equally, if we cut the rates by 10% today, the instant effect no doubt is a decline in tax revenues of anything up to 10%.

The more interesting question being, however, how would the tax revenues develop medium and longer term as a result of same hikes or cuts?
Also, what kind of latency can we expect from the time of effect of the cut and until detecting the longer term effects caused?
Furthermore, will the longer term impact be a smooth non oscillating approach settling towards a new - higher or lower - level of tax "harvest" for the state - or will it be a fuzzy state of matters before reaching a state stability?

Anybody familiar with feed back systems and the stability - or lack of such - of those understand the complexity of this matter.

In my opinion, however, due to the limited time in office by any elected administration, we never will be in the position of being able to fully observe the longer term impacts of any deep cut or hike in taxation rates.

Thus we can happily proceed arguing about those the best we can in accordance with our political convictions.

Taro
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