Lower Taxes = More Federal Tax Revenue

A new estimate for the federal budget in FY 2006 was released today (7/11/2006), and it has great news for Americans and conservative interested in lowering the debt (like me). This is coming from the Office of Management and Budget. How did it happen?? A huge swell in tax collections from corporations and high earners who produce and makes things happen in this country. After all, you can't have employees until you have employers FIRST, no matter what liberals think!

First, a quick history lesson for our socialist liberal friends that believe you can tax yourself into prosperity. One of Bush's 2004 campaign pledges was to reduce the federal deficit down to $260 billion by 2009. At the beginning of 2004, the estimate deficit was $521 billion. When the official numbers came in September, it was only $421 billion.

Then when the 2005 budget was released, it forecast an increase up to $427 billion. When the numbers came in at the end of the year, though, the actual deficit was down again to $319 billion!

Back in February when the 2006 budget was released, an increase to $423 billion was forecast. Now, however, due to larger than anticipated tax revenue from corporations and tax paying producing Americans, the estimate has been decreased to just $296 billion.

Now...give the President a "line-item-veto" so that both branches of government HAVE to be fiscally responsible and GOOD things will happen. Congress has to remember that just because you have this additional money, you DON'T have to sepnd it!!

 

Too bad the tax and spend Republicans are incapable of remembering that

 

Actually, to be accurate,...it is the tax "cut" and spend republicans.

Republicans cut taxes, revenues INCREASED (in the same matter when Kennedy and Reagan cut taxes), but unfortunately congress spent these additional federal revenues like a sailor on shore leave (no disrespect to sailors, I am just trying to make a point).

 

Midas, keep in mind that it's very easy to show declining budget deficits by continuously increasing the number of expenditures that are considered "off budget." The only meaningful number is the year over year increase in the federal debt, including the IOUs in the Social Security fund. I didn't check before writing this, but I'll guarantee you that the increase in debt exceeds the reported budget deficit.

Declining deficits have little to do with traditional conservatism. Reducing expenditures on an absolute basis would be conservative, and the ultra-liberal republicans in power in Washington haven't come close to doing this.

We also don't need a presidential line item veto. The last thing any true conservative wants is a greater concentration of power in the executive branch than already exists.

I guess some people watch Fox news and think that is "conservatism" when it is really a combination of "corporatism" and far left radical political philosophy masquerading as modern conservatism to an uneducated public. The whole thing is discouraging to watch.

 

All things being equal and if you look at the voting records for the last 25 years, democrats do NOT vote or support tax cuts. Republicans do support and vote for tax cuts.

Liberal democrats believe in MORE taxes and transfer of income, most republicans don't.

Now if republicans followed a fiscal discipline of controlled spending in line with inflation, man would the world be great. Unfortunately, they have NOT spent our tax dollars wisely and their discretionary spending has been a disgrace.

 

Those numbers are as queer as a San Francisco parade. Bush has pushed the birth tax up to 30 grand .

 

But he cut the death (i.e. inheritance) tax, so it all comes out in the wash.

 

Midas, one other thing to keep in mind, or at least consider, is that most republican politicians don't really believe in "lower taxes" despite what they say. What they really mean is that they believe that lowering the marginal tax rate on inocme will maximize the tax revenue collected by the government to enable an ever-growing government to fund itself. This is a far cry from conservatism because their long term goal is to increase the number of tax dollars collected. Other than Ron Paul, there are few true conservatives in Washington anymore. There are none in the Bush administration. The only real fiscal difference between democrats and republicans is the disagreement they have over the best way to fund a huge and growing federal government; but the goal of both parties is to continue to have a huge and growing federal government.

 

Then I should have stated: Lower marginal tax rates = higher revenue for the government. I'll agree with your statement. Actually, I support a fair and flat tax...if you make 10 times more, you pay 10 times more tax. Liberals would NEVER go for this...NEVER! Otherwise you take away the power of liberals which is, spending other people's money.

I would to like to see how many liberal democrats would support a lower marginal tax rate. I would bet "zero". Liberal democrats believe in higher marginal rates to fund their programs and I'll give you this, today's republicans in congress believe in lower marginal rates to spur the economy (which it has been proven) which in fact provides more dollars coming in. The marginal tax cuts by Kennedy, Reagan and now Bush II all support this fact...which is...when marginal tax rates were cut, the economy responded with a dramatic increase in federal tax dollars pouring in. When you have more employers investing their capital and taking the risk (which is lower because of lower marginal rates), you will have more employees and more tax receipts.

Face it, you will never see a liberal democrat vote for a marginal tax cut. They still believe you can tax yourself into prosperity, when you can't.

 

Then I guess a zero tax rate = infinite revenue

 

It's the same principle as getting caught outside in a rainstorm. Some people say that if you run fast, you only get wetter than if you move slower. Presumably, if you stop completely you will stay perfectly dry.

 

I'm lovin' this thread folks. Cloudy is talking economics while Midas is talking politics. It's like listening to two deaf people debate the quality of digital sound verses analog sound. They may both have perfectly valid points but neither one has any idea what the other is talking about and they are too far apart to read lips.

If Midas old buddy would just leave the Conservative/Liberal nonsense out of the conversation, you guys would not necessarily be on the same page but at least you'd be reading the same book. The real differences between Republicans and Democrats are so insignificant that it doesn't merit consideration anymore. Each party still drags out their old platforms in an attempt to shore up support from those constituents that still hang on to outdated notions of real political differences. Most Americans have realized the meaninglessness of this deception and no longer speak in terms of Conservatives and Liberals in political conversations. Old beliefs die hard and entrenched viewpoints are tough to challenge.

Economic issues discussed without the blame game make much more sense and address the issues far more succinctly. Clouding the dialog with personal biases would appall any Economist worth his or her salt. But I guess none of you are Economists anyway.

 

o.1% of Americans benefit from that evil cut of the inheritance tax. Whereas EVERY newborn has to pay Haliburton $30,000 (deficit spending). Pretty sick and disgusting to compare them

 

So if only 0.1% of Americans benefit, the total amount of money involved can't be very large, right? That's only 300,000 people (give or take). However, if the sum is large (and we both know it is because they're the richest 300,000 people in America), than your comparison of 0.1% of Americans and $30,000 per child over a lifetime is comparing apples and oranges. It's like saying a MLB attendance is worse than my church league softball because the MLB team only had 45% of seats sold, while my church team sold 200 seats every week. You're using different statistics. Which is the sign of an intentional liar.

 

The way I read this (Danr can correct my interpretation if I'm wrong) is that he was pointing out the inequity of the fiscal burden as related to social class. I still don't see any comparative statistical anomaly here. They are separate but equally valid points that show an inconsistency in fiscal policy as put forth by the current administration. If it is any kind of incongruent comparison, it is on the one hand money paid out by the government (or actually never collected) compared to money taken in by the government. Bottom line, the rest of us will be paying more while the 300, 000 people that already have “old money” in their family will get to keep a lot more of it.

My personal view is that I’m more upset about the $30,000 per child than I am about the 300,000 people that will get an extra home in the Hamptons as a result of this legislation. It’s hard to deny that Republican legislators do everything in their power to keep the wealthy as wealthy as they can by passing legislation that benefits the top 1% in this country. Democrats fight for everyone that isn’t part of that 1%. Of course this is only one issue that differentiates the two parties. Republicans are a minority in this country but a very powerful minority because they control so much of the wealth in this country and they have formed an extremely cohesive voting bloc to champion their causes.

I’m of the view that if the majority doesn’t care enough to get out and exercise their freedom to change this dynamic by voting in more Democrats, then they are selling themselves down the river without a paddle and deserve the position they find themselves in today. On the other hand, if you are part of the majority and vote for the minority, you are undermining your own position again and also deserve your place in the social ladder. Hey, if I were a wealthy well-to-do, I’d vote Republican too. It only makes sense to enhance your own position especially if others don’t care enough to challenge the inequity of the situation.

 

"We contend that for a nation to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle." - Winston Churchill

You can't tax yourself into prosperity. You can't have employees without employers first! Lincoln said it the best when he said, "You can't make the poor rich by making the rich poor!"

Come on folks! This is basic logical stuff. Any business person will tell you that a continuing increase of sale revenues is far better for the business than cutting expenses to the bone and "hoping" for a profit. This argument comes down to two sides...one that believes the government is better at spending YOUR tax dollars and people like me that believe that the INDIVIDUAL is better at spending their OWN money.

There will always be people that work harder, study longer, make good sound decisions, and prosper. The idiots and "gimmee-gimmee-gimmee" people believe they are ENTITLED to everything at the expense of people that work. Now tell me that is fair! Now tell me that is right! Why should my tax dollars go to some loser (that doesn't work) that holds his hand out for somebody else's money??

This notion that the "rich" all inherited their wealth (like Ted Kennedy) is far from true. Guess what people? The vast majority worked and EARNED it! Imagine that? Hard work and smart decisions actually paid off!

John Weicher, as a senior fellow at the Hudson Institute and a visiting scholar at the Federal Reserve Bank, wrote in his February 13, 1997 Washington Post Op-Ed, "Most of the rich have earned their wealth... Looking at the Fortune 400, quite a few even of the very richest people came from a standing start, while others inherited a small business and turned it into a giant corporation." What's happening here is not that "the rich are getting richer and the poor are getting poorer." The numbers prove it.

Most of America's millionaires are first-generation rich. How is it possible for people from modest backgrounds to become millionaires in one generation? Why is it that so many people with similar socioeconomic backgrounds never accumulate even modest amounts of wealth?

Most people who become millionaires have confidence in their own abilities. They do not spend time worrying about whether or not their parents were wealthy. They do not believe that one must be born wealthy. Conversely, people of modest backgrounds who believe that only the wealthy produce millionaires are predetermined to remain non-affluent with a "gimmee-gimmee-gimmee" atitude. Have you always thought that most millionaires are born with silver spoons in their mouths? If so, consider the following facts about American millionaires:

* Only 19 percent receive any income or wealth of any kind from a trust fund or an estate.

* Fewer than 20 percent inherited 10 percent or more of their wealth.

* More than half never received as much as $1 in inheritance.

* Fewer than 25 percent ever received "an act of kindness" of $10,000 or more from their parents, grandparents, or other relatives.

* Ninety-one percent never received, as a gift, as much as $1 of the ownership of a family business.

* Nearly half never received any college tuition from their parents or other relatives.

* Fewer than 10 percent believe they will ever receive an inheritance in the future.

America continues to hold great prospects for those who wish to accumulate wealth in one generation. In fact, America has always been a land of opportunity for those who believe in the fluid nature of our nation's social system and economy.

More than one hundred years ago the same was true. In The American Economy, Stanley Lebergott reviews a study conducted in 1892 of the 4,047 American millionaires. He reports that 84 percent "were nouveau riche, having reached the top without the benefit of inherited wealth."

Source: The Surprising Secrets of America's Wealthy By Thomas J. Stanley, Ph. D. and William D. Danko, Ph. D.

So...if you socialist liberals are going to state that all rich people inherited their wealth (i.e., Paris Hilton) instead of rolling up their sleeves and WORKING for it, you better check your facts! Yeah, yeah, yeah...we know that the left has no agenda other than more class warfare (MUST tax the producers, MUST tax the producers, MUST tax the producers), race baiting and scaring seniors with social security.

Why don't you just come out and say it? I believe we need to tax the working producers MORE! Never mind that the top 50% wage earners PAY over 96% of all tax revenues collected. Come on, support your stand...tell everybody you want MORE taxes on people that work and produce! Be real for a change.

How much MORE do you want? When is enough, enough???

 

It is no surprise! Federal tax revenue INCREASED after marginal tax rates were REDUCED! The same happened to the treasury after John F. Kennedy cut marginal rates as well as Ronald Reagan. I would love to see what FACTS liberal democrats come up with to refuke this hostory! I bet they think that cutting marginal rates and more tax revenue was just a fluke!

How come it happened THREE times over the last 40 years??

 

Midas, you are confusing a coincidental occurance with cause and effect. During the time period you are measuring, the federal debt also increased by an enormous amount. Personal debt also went up by trillions of dollars. So it comes as no surprise that tax receipts should increase by the amount of tax paid on the interest payments. The same thing happened in Weimar Germany at the beginning of their great inflation. Tax receipts soared as the amount of money in circulation and credit expanded.

Nice charts though.

 

And why was that?

OVER SPENDING!!

I always stated that just because you double your revenue doesn't mean you triple your spending. No business would ever do that! I support a line-item-veto and all measures to keep discretionary spending in check!

As for the cause and effect you are speaking about...please enlighten me as to why you think federal revenues INCREASED coincidentially after marginal tax rates were DECREASED...THREE independent times over the last 40 years?!?

The facts are VERY CLEAR...lower marginal rates have generated MORE tax reveunies. What and how you spend that ADDITIONAL money is another issue. I am all for fiscal control, which nobody is Washington seems to care about anymore.

BTW...during the 80's interest rates FELL and hence, less money was collected as interest revenue compared to when Carter had us dealing with mortgage rates of 18%. Also, look at the low interest rates in the early 2000. Are your saying that all of this new revenue was the result of interest revenues? Come on! Get real!

 

Hey poop for brains the president does not set rates (DUH)
Your (mis)understanding of economics is only exceeded by your misunderstanding of international affairs.