Please help me dispel the myth that tax cuts help improve govt revenue and balance budgets or yield surpluses.

Question

what about this?
http://www.nytimes.com/2003/09/14/magazine/14TAXES.html?ex=1378872000&en=134b892db9420f85&ei=5007&partner=USERLAND

or this?

http://economistsview.typepad.com/economistsview/2005/12/the_myth_that_t.html

or this?

http://www.ncpa.org/edo/bb/2003/bb010103.html

or this?

http://economistsview.typepad.com/economistsview/2007/09/paul-krugman-wh.html

Answer 1

You only need to prove that to the red states...the blue states already know this. We have been trying to convince the unwashed masses, but they just don't understand economics...real as opposed to voodoo.

Answer 2

Read FDR's Folly and how his tax increase prolonged the Great Depression. Every time there's a tax hike, jobs are lost, businesses fold or move over seas, and you will find people becoming more and more nomadic.

Tax cuts increase revenue, because they create more business expansion, which creates more jobs, more jobs, the more people that are not in the unemployment line. the more people that are working cause increased revenues.

I know about tax hikes, I live in the blue state of Michigan. With the hikes came the loss of Comerica, LaSalle Bank and others. Small businesses and large businesses folded or moved out of state, overseas, or to Mexico.

There has been a great exodus of many of the residents of this state, which leaves the higher tax burden on those of us who are left here to foot the bill.

The increases are staggering, especially on property taxes for those who have lost there jobs. It is tragic and you tell those stuck with the higher taxes, who no longer have jobs due to the increase that this is a myth!

.

Answer 3

economist view? He cherry-picks his comparisons (using today's tax rate and Reagan's 1st year in office...before the results!). NY Times? Please. How about 2007 receipts? Reduced deficit?

Bush should have cut spending! It would have worked.

it's not trickle down economics. It's having more cash circulating. Every time money exchanges hands, good old Uncle Sam is there with his hand out.

Where are your current links? You cite articles from 2003. The same year that taxes were cut.

Answer 4

Sure, here are the facts:

Since 1900, the U.S. government has implemented three major tax cuts.

Coolidge did it in the 1920's; Kennedy in the 1960's; and Reagan in the 1980's.

The results:

Following Coolidge's cuts of two-thirds, tax receipts nearly doubled.

Following Kennedy's cuts, tax receipts more than doubled.

Following Reagan's cuts of one-third, tax receipts more than doubled, from $517 billion to $1.035 trillion by 1990. That's an average yearly increase of 7 percent.

Each time, America's richest citizens actually paid more in taxes, even though their marginal tax rates were reduced.

Are you scratching your head?

How can revenues increase when rates decrease?? This seems to defy all laws of economics, if not physics.

Here's how.

Cutting taxes restores the incentives for work, saving, and investment. Instead of government gobbling up your money you have the freedom to use it as you see fit. This freedom encourages people to work more, save more and invest more.

The additional capital in the private sector produces more jobs and higher productivity. The additional economic activity produces more tax revenue.

Historically, tax rate reductions have stimulated economic rallies and created new wealth across the board.

More recenty the truth has been proved at both state and federal levels, including by President Bush's 2003 tax cuts on income, capital gains and dividends. Those reductions have raised federal tax receipts by $785 billion, the largest four-year revenue increase in U.S. history. In fiscal 2007, which ended last month, the government took in 6.7% more tax revenues than in 2006.

These increases in tax revenue have substantially reduced the federal budget deficits. In 2004 the deficit was $413 billion, or 3.5% of gross domestic product. It narrowed to $318 billion in 2005, $248 billion in 2006 and $163 billion in 2007. That last figure is just 1.2% of GDP, which is half of the average of the past 50 years.

Got it now?

Answer 5

Best Answer: Yes that is the most idiotic myth, it makes no sense on the face of it. You can't balance the budget with less revenue which is the only sure result of tax cuts. In principle these people would keep the money in circulation and others would be helped by investment and jobs BUT all they actually do is hoard more in huge bonuses, offshore accounts and outsourcing jobs. Surplus is just a stupid misnomer, like me saying if I put $100 a month in the bank then I expect a $1200 "surplus" nevermind that my bills aren't paid off or anything, plus the sacrifices(like taking $1200 worth of food of the table) make problems larger than the surplus. In government terms that means the same people who talk about balance budgets also want to cut spending on social improvement. They spend with reckless abandon on wars and crime fighting (caused by the social spending cuts, now costing twice as much in prisons and jails). You just have to refuse to accept it and not put anyone in power who espouses this bigoted outmoded stupidity.

Answer 6

Tax cuts are an increase to the fed. You take less money, people spend more. Thus more jobs are needed to take in the spending which is taxed.

Answer 7

Ideally, tax cuts do just what you describe. However when the additional profits are used not to hire new employees or buy new equipment, but instead to outsource and pay fat bonuses to executives, the economic benefits fail to materialize. But cons swear by this theory.

Answer 8

You only have to look at the record!

During Reagan's first campaign for president, he said over and over that our national debt was completely outrageous. Even if it was for defense, he said, it was unacceptable, because a nation with $900 billion in debt can't be strong. He said balancing the budget would be his top priority.

But once he got into office he acted as if debt simply doesn't matter. In one term he more than tripled the existing national debt. Yet well into his second term he was still insisting that his tax cuts would raise revenues enough to erase the new debt. It is a matter of history that this simply didn't happen. (BTW, GHW Bush also promised he could balance the budget in 3 years).

Republicans are pathologically unable to admit that Reagan's economic ideas were a spectacular failure. Consequently, the Republicans have abdicated their place as the party of fiscal responsibility. The only president since 1980 who's even come close to balancing the books was Clinton. He had us on track towards a balanced budget but GW Bush couldn't wait to give it away in a tax cut, of course sharply skewed towards the rich.

Answer 9

If you can't prove it yourself, why do you believe it's a myth?

Answer 10

Tax cuts are like a shot of adrenaline. If things are stagnant.. a small shot (tax cut) can get things moving again. But if it's not needed it just does long term damage. It also does long term damage if you have too much.

Answer 11

Call DNC headquarters.