RE: Kyl says you don;t have to pay for tax cuts

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RE: Kyl says you don;t have to pay for tax cuts - 7/12/2010 5:02:23 PM

willbeurdaddy

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quote:

ORIGINAL: DomKen

quote:

ORIGINAL: willbeurdaddy

quote:

ORIGINAL: DomKen

quote:

ORIGINAL: Archer

Nothing relying on human behavior can ever hope to be instantaneous for all people.

Raise the rates and some folks will continue to work for a marginally lower pay rate.
Lower the rate and some folks will move their investments faster than others.

Should it really lag 5, 6 or 8 years behind?

The 1981 tax cuts are the supposed best example of supply side theory in application but it took until 1985 just to return to the 1981 level. Not to dramatically exceed. Just to get back to even.

You're not really claiming that it took half a decade for the upper income brackets that got the Reagan cuts to notice?

Wrong again. In 1984 revenues exceeded pre-tax cut levels. 377 vs 344.

You also play fast and loose with your "half a decade" bullshit. The first portion of the tax cut didnt take effect until October of 1981. Even if all of it took effect at that time, and even if you were correct that it was 1985 before revenues returned to pre-tax cut levels, thats about 3 1/2 years on average, not half a decade.
Then there is the fact that the tax cuts werent even fully implemented until mid-1983, 1984 being the first full year of the tax cuts, and revenues increased by 1984.

Real GDP growth for the 4 years before the tax cuts averaged .9%. For the 4 years after the tax cuts, 4.8%.

Don't know where you got your numbers.
1981 tax revenue 766.6 Billion
1984 tax revenue 730.4 Billion
(both in constant dollars (1987 dollars to be precise))

My numbers were personal income taxes, which is what the Laffer curve addresses.

And ROFL using "constant 1987 dollars" even if you want to look at total tax revenues.
First of all, constant dollars numbers make no sense in this discussion, since the Laffer curve doesn't address inflation. (although reduction in inflation is a side benefit of supply side).

Second of all by adjusting to dollars in a LATER year, you are overstating 1981 revenues by more than 1984 revenues. If youre so enamored with inapplicable constant dollar numbers, try using constant 1981 dollars, since thats the baseline pre-tax cuts. Assuming your numbers are correct and adjusting them to constant 1981 dollars 1981=635 1984=666. So even discounting for inflationary effects not addressed by the Laffer Curve, real revenues grew from 1981-1984.

You cant fool anyone any of the time...except yourself.

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RE: Kyl says you don;t have to pay for tax cuts - 7/12/2010 5:44:58 PM

DomKen

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What the fuck are you babbling about?

I used constant 1987 dollars because you always adjust for inflation when you compare money across time. By adjusting for inflation I of course do not overstate 1981 revenue but compare it accurately to 1984. BTW how preciesly do you think a change in what year the constant dollars is derived from can change both the scale and sign of the difference in revenue between 1981 and 1984?

You're claiming that somehow constant 1987 dollars and constant 1981 dollars are somehow mathematically unrelated entities since simply by a applying a multiplication ( a constant 1987 dollar is worth some percentage of a 1981 dollar) you cannot change the scale and the sign of a relationship.

< Message edited by DomKen -- 7/12/2010 5:46:24 PM >

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RE: Kyl says you don;t have to pay for tax cuts - 7/12/2010 6:04:09 PM

willbeurdaddy

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quote:

ORIGINAL: DomKen

What the fuck are you babbling about?

I used constant 1987 dollars because you always adjust for inflation when you compare money across time. By adjusting for inflation I of course do not overstate 1981 revenue but compare it accurately to 1984. BTW how preciesly do you think a change in what year the constant dollars is derived from can change both the scale and sign of the difference in revenue between 1981 and 1984?

You're claiming that somehow constant 1987 dollars and constant 1981 dollars are somehow mathematically unrelated entities since simply by a applying a multiplication ( a constant 1987 dollar is worth some percentage of a 1981 dollar) you cannot change the scale and the sign of a relationship.

No, you dont always adjust for inflation, it depends on the context. And yes, you distort the numbers by using a date after both dates to convert the dollars. Its a common statistical trick. They are related...like apples and oranges are both fruits. You can see that by your use of 1987 instead of constant 1981 dollars, as I did, which does change the relationship. Want to check my math?

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RE: Kyl says you don;t have to pay for tax cuts - 7/12/2010 6:22:51 PM

MrRodgers

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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.

< Message edited by MrRodgers -- 7/12/2010 6:34:01 PM >

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RE: Kyl says you don;t have to pay for tax cuts - 7/12/2010 6:47:14 PM

DomKen

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quote:

ORIGINAL: willbeurdaddy

quote:

ORIGINAL: DomKen

What the fuck are you babbling about?

I used constant 1987 dollars because you always adjust for inflation when you compare money across time. By adjusting for inflation I of course do not overstate 1981 revenue but compare it accurately to 1984. BTW how preciesly do you think a change in what year the constant dollars is derived from can change both the scale and sign of the difference in revenue between 1981 and 1984?

You're claiming that somehow constant 1987 dollars and constant 1981 dollars are somehow mathematically unrelated entities since simply by a applying a multiplication ( a constant 1987 dollar is worth some percentage of a 1981 dollar) you cannot change the scale and the sign of a relationship.

No, you dont always adjust for inflation, it depends on the context. And yes, you distort the numbers by using a date after both dates to convert the dollars. Its a common statistical trick. They are related...like apples and oranges are both fruits. You can see that by your use of 1987 instead of constant 1981 dollars, as I did, which does change the relationship. Want to check my math?

Ok then what is the adjustment from 1987 dollars to 1981? According to your claim above the factor is either 0.83 or 0.91. However since constant 1987 dollars convert to constant 1981 dollars by a constant both numbers cannot be right.

You always adjust for inflation when comparing money across time. Otherwise the comparison is skewed by the differential inflation between the two dates.

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RE: Kyl says you don;t have to pay for tax cuts - 7/14/2010 7:40:19 AM

Hippiekinkster

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quote:

"Akedah:
Taxes were cut marginally after WWII: real receipts in 1945 were $433.8bn. By 1950, real receipts were down to $306.5bn (2000FY $). Indeed, real revenues fell consistently for the first 5 years after the war, only picking up afterwards. (And, interestingly for the Laffer hypothesis, revenues rose during WWII despite taxes being raised...) Taxes were cut again in 1964 - and real revenues increased, though only marginally.

The top rate was cut for FY 1970. Real revenues promptly dropped for 1970 and 1971.
A further cut occurred in 1981. And real revenues declined from 1981 levels for the next 3 years, only catching up to the 1981 level in 1985.

There were further tax changes in 1986, but though the higher rate was cut, the lower rate was increased. Real revenues slightly increased for the next few years.

Taxes then rose again during the Clinton years and real revenues unambiguously rose. In fact, real revenues rose every year of the Clinton administration, which did not happen under Reagan or the Bushes.

Bush then cut taxes in 2001 (EGTRAA), and real revenues plummeted - real revenues were 18% lower in 2003 than they had been in 2000 (even in nominal terms they were somewhat lower !) and only marginally exceeded 2000's revenues in 2006.

So in sum, the historical record wrt major tax changes looks like this:

1945 cut: real revenues fell
1964 cut: real revenues rose
1970 cut: real revenues fell
1981 cut: real revenues fell
1986 regressive change: real revenues rose
90s raised: real revenues rose
2001 cut: real revenues fell

Source of revenue data: http://www.whitehouse.gov/omb/budget/fy2008/pdf/hist.pdf

Source of tax rate data:
http://www.truthandpolitics.org/top-rates.php

See table 1.3, using the real (constant 2000 dollars) column. (I surely need not explain to you why one uses real rather than nominal values in these discussions ?)"

< Message edited by Hippiekinkster -- 7/14/2010 7:43:05 AM >

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RE: Kyl says you don;t have to pay for tax cuts - 7/14/2010 7:44:08 AM

DomKen

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quote:

ORIGINAL: Hippiekinkster
See table 1.3, using the real (constant 2000 dollars) column. (I surely need not explain to you why one uses real rather than nominal values in these discussions ?)

I'm still waiting for the sockpuppet to explain how changing which year's constant dollars is chosen for comparison can turn 1981 > 1984 into 1981 < 1984.

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