Lower Taxes = More Federal Tax Revenue

Midas, it's the way the tax system works. Decreases in tax rates are generally accompanied by increases in the federal debt. This requires borrowing which is financed by issuing treasury securities through the federal reserve system. Many of the treasury securites become bank reserves, which enable banks to increase consumer lending through the magic of fractional reserve banking. All of this additional federal and consumer debt generates interest income, which is taxable. This generates much of the additional tax revenue your charts display in the years following a cut in the marginal tax rate.

I'm not arguing for higher taxes. I don't even thing an income tax should be levied on a free people. Larger government and higher tax rates are never a good thing for a variety of reasons that have nothing to do with maximizing federal tax revenue, which is not a legitimate goal for any thinking conservative. But your data is based on faulty logic, and is currently being used by a lot of pretend conservative republicans as the intellectual cover for their desire to expand the power of the federal government.

Some people can see it, some can't. Some will accept it as the truth, others never will.

 

From my reading CS is correct. I do not say that just because Midas and I go back and forth with our comments, CS's comments just make better sense.

 

As you may or may not know, I'm not a big fan of either political party. I don't say these things for any partisan reason, or even to try to "make sense." They're just true. There are frequently very ordinary explanations for things that either or both parties try to spin in a certain manner. They are so good at it that the American public can [almost] be excused for not having the time to put in the effort to think them through to find the flaws. We are bombarded daily with intellectual arguments for and against many government policies, foreign and domestic. It took me a long time to "break the code," but once broken the analysis becomes easier and the flaws become apparent. It also becomes easier to detect which party members know the code and which ones are just good soldiers. It's the ones who know, but who are intentinally deceptive, that are the most dangerous to the health of the Republic.

Midas is extremely well informed about the current republican arguments on a variety of complex topics. This isn't easy to accomplish, and he's done a fine job of it. It's just that some of them are wrong and meant to deceive. It is often more difficult to unlearn something that you deeply believe but isn't true than to learn something that is completely new. It's the things that you KNOW, but that are not true, that will cause the most problems.

 

Then the question is, how much is enough? 20-30-40-50-60-70-80-90? marginal tax rates??? Who is going to be fiscally responsible with our hard earned wages?

I am all for a flat/fair tax. If you earn 10 times more, you pay 10 times more tax, PERIOD. Progressive tax systems penalize hard work and achievement. What happens? You work harder and try to progress and the government comes in a says, "No fair...you made too much money so now you must pay more taxes.

I believe the individual is better versed to spend their OWN tax dollars than the government.

As for the federal debt...I am all for a balanced budget amendment with the exception of war or other NATIONAL emergencies. You cannot spend more than you take in...period...no matter how much additional revenue is coming in. If you received a raise from your employer of $10,000, surely you would not spend $15,000 more than you did before. Unfortunately, this is what congress does as their goal is to bring home the 'bacon" for their district that votes them in every two years. Every 2 years in itself is INSANE as one year they are spending our money and the other they are campaigning.

I have always been a fiscal conservative, which is to spend only the money you have at your disposal, not a nickel more.

 

All I was talking about were the ones that benefit from the inheritance tax legislation. A very small proportion of wealthy elites. Nothing more. No self-made millionaires, no working people, no small business owners, nothing other than those that get money handed to them by their dead relatives. They didn't earn it they got it by being born. :hatch:

 

This is probably the greatest understatement EVER put forth in a CT forum. I'm not trying to bad mouth Midas in the least. I agree that he is a master of the Republican Party mantra on every issue, platform, and argument they have ever dared to vocalize. I think he must be a highly intelligent person to be able to regurgitate that much information so consistently. Cloudy you have zeroed in on the only problem with his logic. He believes in the fallacy of absolutes. There is absolutely no middle ground to his arguments.

What was that line from Men in Black:

“A person is smart. People are dumb.
Everything they've ever "known" has been
proven to be wrong. A thousand years ago
everybody knew as a fact, that the earth
was the center of the universe. Five
hundred years ago, they knew it was flat.
Fifteen minutes ago, you knew we humans
were alone on it. Imagine what you'll know
tomorrow.”

 

Moen, good quote and very much on the mark. I know from your many posts that you completely understand the situation for what it is. I think Midas and Danr could get there if they would entertain the possibility that there is more going on than they are aware of. But once a person buys into the liberal-conservative philosophical struggle, it's very very tough to break out of it. They are like fans watching a sporting event and rooting hard for their teams, not quite realizing that the whole thing has been staged for the purpose of selling them the ticket, and that the ticket sellers really don't care who wins.

 

OK...so at what rate should people be taxed? How much do you want? 50% not enough? 60% not enough? 70% not enough? Come on, I want to know!

When you add up all of your federal, state, social security, local, sales, property, gas, phone, etc., taxes as a percentage of your earnings.

HOW MUCH IS ENOUGH??

BTW...Tax Freedom Day arrived on the 116th day of 2006 — Wednesday, April 26th. That's the day you start working for yourself as everything before April 26th was for the government! So again...

HOW MUCH IS ENOUGH??

 

Midas, I realize you started this thread, but you've also lost the thread. You say you want to know, but you won't do the work to find out. As soon as you ask the question, "How much is enough?" you've already lost the battle because you've let the opposition define the battlefield for you. This isn't something that can be given to you. It's something you must seek out. You're the hamster on the wheel asking how many revolutions you must run while praying for a low number, and we're the ones looking at you in the intellectual cage you've built around yourself, watching your owner grease the wheel and put food in your bowl. Good luck with your search, but I'm not that hopeful that you'll complete [or even begin] the journey. You seem unprepared for the trip.

 

I think you're asking the wrong question. Ostensively, there is no answer because the fiscal requirements of such a large entity as the US Government are indistinct, ever-changing, and often contain conflicting and ambiguous priorities. The real question should be how much is necessary and fair considering the diverse income range of the population and incredible financial responsibility and burden we bare maintaining OUR enormous US Government bureaucracy.

The basics are known; Less government costs less, More government costs more.
Less taxes means less government services. More taxes means less money in our pockets. More government spending means more taxes and/or higher deficits. The real unknown is; who will spend the enormous pot of taxpayer’s money and on what? Will they choose to make the wealthy wealthier? Will they choose to ease the suffering of the least of our citizenry? Will they spend more on new military hardware or public education?

Once a course of action has been decided the justifications and rationalizations for the appropriations begin. They still must convince the public that they are spending the tax dollars in our best interest. Now here is the rub. Every Tom, Dick and business owner shows up with their hands out. Whether it’s someone from the large military industrial complex, someone from a social service organization, or someone from a small town that wants to build a new jail in their community, they all want some of the pot. How is it decided who should get what? Well, there clearly isn’t enough for everyone so some system has to be used to determine who gets what. What we do is let a rotating leadership decide what to fund and how with all the favoritism, nepotism, and pandering that goes along with this type of system. This set up allows one political party to pander to it’s own special interests for a minimum of 4 years at a time without regard for consistency or long-term planning because the next party can waltz in and de-fund everything the previous party tried to accomplish, congress willing.

So, “How much is enough?”, is really an unanswerable question with little real meaning in the context of today’s fiscal ineptness and special interest pandering because there is never enough to satisfy everybody that wants something from the tax pot.

 

Look the type of thinking that Midas is demonstrating is what is putting GM out of business. If we bit the bullet and listened to Hillary on healthcare Gm would be able to compete with the Japanese. The Ford workers losing their jobs in the 14 plant shutdown can thank Midas.

 

That's just dopey Danr. Maybe Midas will make room for you on the wheel. The two of you can run in different directions and cancel each other out.

 

CS you are disappointing me, I thought you knew what was going on. Are you saying health care is not what is killing GM, if so you are just wrong. GM's helathcare expenses are greater than its manufacturing expenses. You should read about GM and healthcare, it will let you know about the coming healthcare crisis (which we could have averted if we listened to Hillary).

Sorry to tell ya but you are wrong on this on CS.

 

I can agree with some points within your post. Most believe "OUR" congressman is okay, but we hate the other 400 plus representatives who are taking OUR money for whatever government program.

I still believe that the individual is better suited to spend, save, and/or invest THEIR money than some government official that is pretty much going to waste it. Sure I want my government to provide a strong defense, a solid infrastructure, and decent services like fire and police, but other than that...I just believe that goverment has gotten way too large and out of control.

For instance, Jimmy Carter promised the teacher's union that he will make the Dept.of Education a cabinet position and since 1977, billions and billions have been spent by the feds for what? Have you seen our children's test scores? For the love of Pete, the Dept. of Education has this monster office complex in D.C. and when I walked by it, I wanted to 'stop by' and ask what in the world do all these people do? and for what? What was here BEFORE 1977? How in the world did we ever survive???

Me...I would have allocated this education money back to the states and local levels who, in my opinion, operate and run schools better than what some federal officals tells them to do from inside the D.C. beltway!

That's just ONE example, but my point is clear. Our government is way too big than what was happening during the 60's (and there was a WAR going on!) and even the 70's. That is just one generation ago, so I ask...convince me that this huge influx of government agenices and additional programs is actually better?

Agencies like the FTC , OSHA or the EPA have their good merits, but I believe they have gone too far and gotten too big as well. For instance, do you know that many medical practices have to have O.S.H.A. compliant documentation (M.S.D.S.) for items like Energizer batteries and even the TABLE SALT sitting on a lunch room table?

That's right...salt is actually sodium chloride (NaCl) and those two elements are "bad" IF they are independent. Together, they form a product we use to make french fries taste better! But wait...your local OSHA offical will fine you if you don't have all of this paperwork organized for an on-site inspection!

All of this reminds me of the old saying:

If a liberal democrat sees something moving, TAX it! If it continues to move, REGULATE it!, and if it stops moving, SUBSIDIZE it! Ahhhh...our government and taxes in action.

I will answer the question I posed. Government already has ENOUGH! Actually, they have too much and anybody that thinks we need MORE taxes for MORE government is not looking at dollars & sense.

 

Midas if the Feds raised taxes to provide health care it would help the economy and Ford and GM would not be on the verge of their demise. Your extreme views are so obviously wrong that it is hard to even entertain them.

 

I know the concept is difficult to grasp for people educated by a collectivist educational system, but it isn't a legitimate function of government to bail out a company and union that voluntarily enter into a contract that proves damaging to either or both parties.

 

I see that he is on his government healthcare (more taxes) kick. Like that's what this country needs is a 100% government healthcare system! I am sure that our government can run it as efficiently as they run medicaid and medicare! What a simple solution from our village idiot...just transfer and rasie MORE tax dollars from producing people to people and businesses that have failed or are failing!

I also see that he thinks it is the government's responsiblity to bail out a company (and the U.A.W.) who are in trouble for very bad decisions that were made in year's past. Well, if you do that...you need to be FAIR and bail out every business (large and small)and every corporation that didn't make it because of bad business decisions!

But he isn't about "fair", he is all about punishing the producers and acheivers of this country and giving that money to the "gimmee-gimmee-gimmee" crowd.

 

Again you are disappointing me, I thought you knew about this stuff

OUR COMPANIES CAN NOT COMPETE WITH COMPANIES THAT FUNCTION IN COUNTRIES THAT PROVIDE FREE HEALTH CARE, HEALTHCARE IS GM's NUMBER ONE EXPENSE, IT IS A SMALL EXPENSE FOR TOYOTA. IF WE HAD GOV'T PROVIDED HEALTHCARE IT WOULD LEVEL THE PLAYING FIELD


OUR COMPANIES CAN NOT COMPETE WITH COMPANIES THAT FUNCTION IN COUNTRIES THAT PROVIDE FREE HEALTH CARE, HEALTHCARE IS GM's NUMBER ONE EXPENSE, IT IS A SMALL EXPENSE FOR TOYOTA. IF WE HAD GOV'T PROVIDED HEALTHCARE IT WOULD LEVEL THE PLAYING FIELD


OUR COMPANIES CAN NOT COMPETE WITH COMPANIES THAT FUNCTION IN COUNTRIES THAT PROVIDE FREE HEALTH CARE, HEALTHCARE IS GM's NUMBER ONE EXPENSE, IT IS A SMALL EXPENSE FOR TOYOTA. IF WE HAD GOV'T PROVIDED HEALTHCARE IT WOULD LEVEL THE PLAYING FIELD. How can I make that more clear? I am not talking bailout here I am talking about Hillary's healthcare plan that would have prevented this huge problem for American business.

 

No I do not want a bail out, Gm should have kept the electric cars and dumped the SUV's. The combination of that bad decision and (more importantly) healthcare costs will kill GM. The same 2 factors just closed 14 Ford plants.

 

sorry double post