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

To: bentway who wrote (266320)	12/28/2005 7:13:34 PM
From: Road Walker	Respond to of 1575428

re: I think there's a point where cutting taxes generates more revenue, if taxes are too high to begin with. I don't go along with the supply side "all tax cuts raise more revenue" bushwa - that's just wishful thinking. It's the same as setting a price for a product. Too high, you don't sell enough. Too low, you don't make enough per unit sold. You try to find the RIGHT price that maximises your profits. Good post... but far too nuanced for the black/white crowd.

To: bentway who wrote (266320)	12/29/2005 10:54:49 AM
From: Taro	Respond to of 1575428

I fully agree with you on all points, Chris. Except... I don't believe anybody truly understanding supply side economics would ever claim that tax cutting at any point adds to the total tax income. Such a stupid claim could only be made by people who are utterly clueless. The example you bring comparing supply side economics and taxation (macro economics) with price elasticity and thus price/income relations of goods sold (micro economics) is right on. That is exactly what this is all about. It's just such a pity where never well explained to the public sector. Unfortunately I believe the media carries most of the blame for that for reasons well understood at least by realistic people. Taro

To: bentway who wrote (266320)	12/29/2005 11:37:07 AM
From: TigerPaw	Respond to of 1575428

The analogy for supply-side as practiced by the current administration would be a store that sells hammers and anvils. The store manager decides he really doesn't like lifting the anvils into the customer's wagon, so he cuts prices on all his merchandise until he can no longer afford the rent on the store. Then he can move into a closet and declare there is no room for anvils. TP

To: bentway who wrote (266320)	12/29/2005 4:15:13 PM
From: TimF	Read Replies (1) \| Respond to of 1575428

In the short run the supply side idea is pretty much what you are supporting, except that its likely that many people identified as "supply siders" might pick a lower tax rate at the point where tax cuts "maximise profits" than you do. The bigger difference is that "supply side economics" assumes that a lower tax rate, even if it reduces current tax revenue, can create conditions for higher growth and thus increase future tax revenue. I think that idea is basicaly true, but I think the idea that it always works out that way is a silly idea, the way the economy responds to a tax cut depends on a lot of factors, not just "how big was the cut". Tim