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MrRodgers -> RE: Kyl says you don;t have to pay for tax cuts (7/12/2010 6:22:51 PM)
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Look, for our study of the ideal, for a real conservative the Laffer curve is superfluous as there should be no income tax on labor/production...at all.
Only the highest income should now be asked to chip in on paying the debt and the debt service. Maybe the top 10% pay a 15% rate on everything, the rest...5% or 10% on everything. Then...only then do you add for wars as we also did in history or health care as we do for medicare.
All increases in revenue due to tax rate cuts is gradual and fleeting as very temporary because business and the economy returns to the previous status quo. All the while, revenues are lower in ensuing tax years and spending is the same or more. Economic growth is often discounted as a provider of additional tax revenues in order to suggest 'my' idea was the sole cause of whatever went right while your ideas get in my way.
Reagan's cuts were never to serve society but on proving a short term theory while cutting taxes mainly for his constituency. You decide but changes coming in 1982 did little. By 8/83, unemployment had risen to over 10%, a figure I think we have yet to see even now.
Furthermore, Reagan's eventual economic improvements were via a stimulus bill but almost exclusively built around a 600 ship Navy and SDI spending. He created a net $170,000 increase in federal debt for every job he created. In the mid-term elections...the repubs lost seats.
Investors and salaried professionals do not constantly consult the tax code for the economic or career decisions. For more than 30 years most investors have enjoyed a 15% cap gains tax rate anyway and many have tax free state and 'muny' bonds.
The debate here only dances in the fence. it is long since time we had a real major tax reform, one that will never come, the selling of the tax code is far too valuable...to the pols and investors.
Now for some of that objectivity. It wasn't until 1986 that Reagan finally got his real tax policies enacted. 1986 kinkroids.
On Oct. 22, 1986, President Reagan signed into law the Tax Reform Act of 1986, one of the most far-reaching reforms of the United States tax system since the adoption of the income tax. The top tax rate on individual income was lowered from 50% to 28%, the lowest it had been since 1916. Tax preferences were eliminated to make up most of the revenue. In an attempt to remain revenue neutral, the act called for a $120 billion increase in business taxation and a corresponding decrease in individual taxation over a five-year period.
(Note: The tax cuts of the 1920's was from rates necessary to pay for WWI, something a conservative does because you pay for your wars...Wilson or not. Furthermore, there was tremendous pent up demand in the US after WWI for the greatest technological breakthrough of the 20th century...public electricity. That more than any tax policies, was the reason for the tax revenue increases.)
There exists no grand economic unifying theory...except one. Taxes are to be on consumption, a small flat tax on profits from business and either short term (4-5 yrs) property or paper profits. various fees, excise and inheritance..period.
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