why would you raise taxes if lowering them brings in more revenue?

Answer 1

Because it only does that in the short term. The reason why more revenue is created is because as the economy grows, more of the growth is centered on the highest tax bracket. That's why we don't see median income growing. That erodes the consumer spending base. Once people exhaust all their credit options, their spending will slow, and henceforth the economy likewise.

Answer 2

That is politics at work. When President Bush lowered TAX RATES, TAXES collected actually went way up. The reason is very simple. When tax rates are high, people work extra hard to avoid paying taxes. When rates go down to a reasonable level, they pay the taxes.

That is proven economic theory, but politicians know that it sounds good to play to the voter about making the rich pay their fair share. You will note that they never define rich because for tax purposes, that includes lots of people in the middle class.

What we really needed here is common sense and not political opportunism. We don't need an increase in taxes, we need spending discipline. The revenue to state and federal government has DOUBLED in less than 20 years.

Answer 3

Taxing the rich is a way for liberals to buy the votes of the underprivileged classes.

From an economic and a historic stand point, it is a no-brainer. Twice in recent history, tax rates were cut to stimulate the economy. Both times it worked. More tax revenue was generated, we got out of recessions both times, but unfortunately Congress continues to spend faster than the rate of increased revenues.

Ronald Reagan made it work in the early 1980's. Our current President made it work after he was presented with a recession, the 9-11 disaster, back-stabbing liberal Democrats, Hurricane Katrina, the Iraq war, the Afghanistan war, the Indonesian tsunami and every other problem over the past six years.

Answer 4

The thing the people here are leaving out when they rave about Reagan-nomics is the only reason the economy prospered in the 80's is because Reagan leveraged the future generation with HUGE loan deficits to benefit the current generation. Lowering taxes resulted in less money to fund programs so he had to borrow money and then taxes had to be raised again to pay down that deficit. And it was the generation that had the money stolen from us that had to pay the higher taxes to pay it off. There has never been a period of lower taxation that did not coincide with high deficits. If you want a stable society, the funds to ensure it have to come from somewhere and most people don't have an issue paying a little more if they feel it is going to good places and not the pockets of rich people and politician pet projects. If we fail to provide the necessary funding for programs up front, we will pay them on the back end in crime rates, jails, and welfare programs.

Answer 5

To start with, I'm curious about Windwalker's answer. The question is to avoid raising taxes, meaning this guy is a conservative, not a liberal. If you think he doesn't understand the system, that would suggest Republicans don't understand (not the Democrats).

To the asker. You are trying to generalize about all taxes. Raising certain taxes while lowering other taxes depending on the situation is how you keep the economy moving. In essence, the economy only grows when there is money moving through it. But businesses are designed to hold onto money, they limit the amount of employees they have, the amount of hours they work (to avoid overtime), and the pay rate they give. They go with the cheapest materials in their products, and then charge as high a price as they can get away with on the market. Which is a surefire way to a recession because it limits the money moving in the economy.

On the other hand the worker/consumer (the middle and poor classes) have to spend money, because they need to feed and clothe themselves, and often there is also a competition between each of them to make themselves better ("keeping up with the Joneses"). All of this combines to "force" the middle and lower classes to spend money, therefore putting money into the system. From these two beginning points we form a conclusion.

That conclusion is that we must get the money to the ones who will spend it, the middle and poor classes. We tax the big businesses, to force some of that money (not all of it, we need them as well to keep the system going, but we need to limit their money since they won't spend it if they can avoid it) out of their hands and into the poor and middle class. We lower taxes on those groups so they can keep more money themselves (which will be spent on themselves and therefore put back into the economic system). This extra money will eventually get to the businesses (since they are the ones who provide the various services and goods), but will do so while helping the middle and poor classes. If you give it to the rich, it stays only with the rich. Give it to everyone else, it still goes to the rich, but after helping the poor and middle classes. So you raise it on the rich and the businesses, lower it on the middle and poor.

This raising on the businesses can be used. Offer them tax cuts if they provide services for their workers (like 401k, insurance, pay raises, hiring of convicts--which allows those convicts a chance to prove their rehabilitiation and gives them a chance to get off the streets and out of crime, but to do this in an intelligent way meaning no murderers or rapists but rather young ones or fathers who may have not been able to pay child support because of a lost job). If businesses give to charity offer them tax help so that more poor have chance. Tuition reimbursement plans for employees should earn some tax help as well. In this way we make helping others central to the businesses (rather than just making a profit for themselves we tie their profit to helping others).

Answer 6

The asker does understand real economics. Most of the voters do not. Reducing tax rates results in more tax revenue for the same reason reducing the price of gas results in more driving.

Answer 7

So that new people in the majority party can get a windfall before they screw up the economy. Then when there are less people paying taxes they can justify keeping the taxes higher to support the power base they have created for themselves.

Answer 8

Because "you're" a democrat/liberal who doesn't understand economics and forgets/ignores history.

Answer 9

To exercise more power.

Answer 10

you obviously have no grasp whatsoever of basic economic theory.