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

To: TimF who wrote (530916)	11/20/2009 12:32:03 AM
From: i-node	Read Replies (1) \| Respond to of 1574547

Most would say we aren't on the far side of the Laffer curve, meaning tax increases (at least if their not particularly perverse, or if their not directed against investment) would likely increase revenue. It really depends on what you cut taxes on. Historically, when you cut capital gains rates, you trigger sales (e.g., gains) that would otherwise be "locked up" in appreciating assets. Smart (read: big) investors choose the time carefully as to when capital gains should be liquidated. Right now, the mess of expiration of the Bush Tax Cuts and the pending Estate Tax nightmare scenarios make it really difficult to have any sense of what rate cuts of any kind would do. Also, a lot of people who are normally believers in supply side are very concerned about runaway deficits just now, so it is unclear how that might impact Laffer. Obviously, tax increases right now would be a very serious mistake as you say -- without regard for what one thinks about the Laffer Curve. Personally, I think he is going to propose tax increases in the State of the Union. A "Read My Lips" moment.

To: TimF who wrote (530916)	11/21/2009 8:35:44 AM
From: RetiredNow	Read Replies (2) \| Respond to of 1574547

Very good point. I've argued the same myself in the past. The Laffer assumes as its objective that we want to maximize gov't revenues. I'd say that our real objective is make gov't as small as possible, while still ensuring it is as effective as possible. But that means the GOP and Dems are both wrong. The GOP's mantra of tax cuts are always good is stupid and the Dem solution of big gov't for everything is also stupid. The fact is that we're going to need a combination of tax increases and cuts in spending to get back to ZERO deficits. I always hate these goals of reducing the deficit by 50% in 10 years. WTF!!! Our goal should be to ELIMINATE the deficit and start paying down debt in 5 years. Fiscal discipline will do more for this country over the long run than anything else.