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

To: TopCat who wrote (359016)	11/16/2007 11:37:42 PM
From: bentway	Read Replies (1) \| Respond to of 1578239

You show your ignorance. Nothing in what I said disagrees with anything you posted! Tax rates were HIGH in the 20's - to PAY for WWI. Tax rates were HIGH when Kennedy cut them - to pay for WWII. Deficits are paid down with revenues raised from TAXES. Today, tax rates are rather historically LOW. truthandpolitics.org en.wikipedia.org "Many critics of supply-side economics are actually critics of politicians and pundits who misunderstand the Laffer curve, typically claiming that every tax cut will increase revenues. For example, in 2006 Sebastian Mallaby of The Washington Post quoted George W. Bush, Dick Cheney, Bill Frist, Chuck Grassley, and Rick Santorum mistating the effect of the Bush Administration's tax cuts.[22] On January 3, 2007, George W. Bush wrote an article claiming "It is also a fact that our tax cuts have fueled robust economic growth and record revenues." [23] Andrew Samwick, who was Chief Economist on Bush's Council of Economic Advisers from 2003-2004 responded to the claim: You are smart people. You know that the tax cuts have not fueled record revenues. You know what it takes to establish causality. You know that the first order effect of cutting taxes is to lower tax revenues. We all agree that the ultimate reduction in tax revenues can be less than this first order effect, because lower tax rates encourage greater economic activity and thus expand the tax base. No thoughtful person believes that this possible offset more than compensated for the first effect for these tax cuts. Not a single one.[24] Only cutting tax rates to the right of the Laffer curve's peak rate will increase revenues. Cutting tax rates to the left of the peak rate will decrease revenues. Depending on the model and values of variables that are used, some have estimated the peak rate to be between 60-80% for labor tax and 50-60% for capital tax [25] Some politicians and supply-side advocates may misunderstand the Laffer curve[citation needed]. They claim that every tax cut will increase revenues, when the curve clearly shows that only cutting tax rates to the right of the peak rate will increase revenues. Cutting tax rates to the left of the peak rate will decrease revenues. Since Reagan's income tax cuts in the 1980s did not increase receipts, the Laffer curve would suggest that further tax cuts will not increase revenues either, since the economy is apparently to the left of the peak. The Bush administration has been reporting record revenues, however those are, once again, coming from FICA taxes, not the income taxes which were cut. Between 2000 and 2004, income tax revenues fell from $1,004.5 billion to $809 billion, while FICA tax revenues increased from $652.9 billion to $733.4. Since 1997, the US Treasury has been reporting the combination of income tax and FICA tax revenues, so decreases in income tax revenues are hidden by increases in FICA tax revenues. [26] Depending on the model and values of variables that are used, some have estimated the peak rate to be between 60-80% for labor tax and 50-60% for capital tax [27] The paradigm of a tax system which rewards investment over consumption was accepted across the political spectrum, and no plan not rooted in supply-side economic theories has been advanced in the United States since 1982 (with the exception of the Clinton tax increases of 1993) which had any serious chance of passage into law. In 1986, a tax overhaul, described by Mundell as "the completion of the supply-side revolution" was drafted. It included increases in payroll taxes, decreases in top marginal rates, and increases in capital gains taxes. Combined with the mortgage interest deduction and the regressive effects of state taxation, it produces closer to a flat-tax effect. Proponents, such as Mundell and Laffer, point to the dramatic rise in the stock market as a sign that the tax overhaul was effective, although they note that the hike in capital gains may be more trouble than it was worth."