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

To: Road Walker who wrote (332049)	4/17/2007 7:15:38 PM
From: TimF	Read Replies (1) \| Respond to of 1574327

But today it is common to hear tax cutters claim, implausibly, that all tax cuts raise revenue. I wouldn't make or support that claim. The closest I would come to it is that cutting taxes tends to increase economic growth, and sustained economic growth will eventually result in higher revenue even with lower rates. However I wouldn't say that every tax cut automatically increases economic growth, that's just the general result not an absolute universal, every time result. Also while growth is typically increased it may be by a very small amount, and that amount can easily take longer than the usual life time of a tax policy to give enough additional growth to make make the resulting revenue higher than it would have been without the tax cut. If it takes a decade or even multiple decades, well the tax situation will probably have changed multiple times. From very high marginal rates, a tax cut can increase revenue almost immediately. From high rates, it can do so reasonably soon. From our current rates, cuts in individual ordinary income taxes may be unlikely to quickly produce higher revenue in the short run. If that's the case, it doesn't mean the cuts would be a bad thing. "The tax policy that raises the most revenue" does not equal "the ideal tax policy". But at least in the short run the benefits of tax cuts in terms of economic growth and greater individual freedom have to be balanced against the cost of lower government revenue. I don't have any major problem with lower government revenue but it should come with lower government spending. (Note: read "lower government revenue", and "lower government spending, as lower then they would have otherwise been, one or both might increase in nominal dollars or even in real dollars, while still being "lower" by this criteria)