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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: TigerPaw who wrote (211556)	11/12/2004 12:51:22 PM
From: Tenchusatsu	Read Replies (1) \| Respond to of 1583466

TP, but it is the largest fraction. According to the CBO analysis the tax cut accounts for 41% of the deficit. Link please. It'd be interesting to see what projection of the deficit they used to determine that, given that the deficit this year is actually smaller than once thought ($413B vs. $521B): Message 20647585 Can't wait to see that fraction "grow" as the deficit shrinks. Tenchusatsu

To: TigerPaw who wrote (211556)	11/12/2004 1:42:25 PM
From: TimF	Read Replies (2) \| Respond to of 1583466

According to the CBO analysis the tax cut accounts for 41% of the deficit. It pretty hard for anyone including the CBO to make an accurate analysis of this. They can do a static analysis and assume the tax cut has no effect on the economy and that the economic growth (or for some of the time reduced negative growth) doesn't function to increase revenue (or reduce revenue losses), but such analysis while easier to do don't reflect reality very accurately. To the extent that the tax cuts grew the economy (or kept the recession from being deeper) they contributed to an increase in revenue. I believe this increase is smaller (perhaps a lot smaller) than the direct revenue decrease the tax cuts cause but it needs to be considered. A static analysis doesn't directly consider it at all, and in fact to the extent that a static analysis does show the effect of growth it would show it backwards. The larger the economy gets, the larger the tax base gets. The larger the tax base is, the more revenue the government gets but also the greater the revenue reduction by lower rates. Thus economic growth caused by lower tax rates reduces the % of the deficit created by the tax cuts, but would show up as an increase in the % using the CBO's analysis methods. Tim