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originally posted in:Liberty Hub
Edited by Stallcall:
7/11/2016 6:04:58 PM
32
Taxes: Less is More
Ages ago, I posted a similar topic. We're going to reevaluate the Laffer Curve, and how less taxes can actually increase revenue for the state.
The relationship between tax rates and state income is [i]not[/i] linear. If you double tax rates, you will not double the state's revenue. Higher taxes are a disincentive to earn more money.
Let's examine the Laffer Curve in action.
(http://object.cato.org/images/Mitchell_Forbes_1108.jpg)
In 1980, the top tax rate was a crippling 70%. In 1988, it was down to 28%. However, the IRS collected 5 times more from the rich (200k and above) when the top tax rate was just 28%.
This is, as Daniel Mitchell puts it, "the Laffer Curve on steroids." Now, there are other factors that explain this disparity in income, including inflation, population growth, and other policy changes under Reagan. However, it would be ridiculous to suggest that the Laffer Curve doesn't play a part in the disparity.
Here's a small clip from a Democratic Debate in 2008, between Clinton and Obama. It's 1:22 - not too long. It features a textbook example of leftist ideology - that taxes are meant to create "fairness," not growth or maximum revenue.
(https://www.youtube.com/watch?v=gJimLZRC9N8)
A question is directed towards Obama. It goes along the lines of, "We saw that a decrease in the capital gains tax actually increased tax revenue. If we assume that the lower rate will bring in more taxes, would you still support raising the rate from 15% to 28%?" Obama's answer is, surprisingly (or not), yes. Food for thought.
There are two important points on the Laffer Curve: the revenue-maximizing point and the growth-maximizing point. Policy-makers should ideally be arguing within the bounds of those two points. Instead, we sit far beyond them.
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33 RepliesOne of my relatives pays 50% in taxes cuz she just barely hit the $250k income mark and thus probably gets less than someone making a bit less She works 6 days a week 10 hours a day as a veterinarian....... I hate it when people say we should raise taxes......
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8 RepliesFirst off; your statistics are tainted because you're not using constant dollars. Adjusted for inflation, the "rich" people you talk about in 1980 would be making over $600,000 a year now. See http://taxfoundation.org/sites/taxfoundation.org/files/docs/fed_individual_rate_history_adjusted.pdf Second, the real GDP increased by approximately 33% in that decade, coming out of the recession of the late '70s. Incomes for the wealthy shot up, so they naturally paid more taxes, even at a lower rate. Imagine what the collection would have been had they been paying the tax rates we had under, for instance, Eisenhower, when the top marginal rate was 91% (and the economy was booming, by the way). The connection between taxation and the overall economy is tenuous at best, and exists mostly in the minds of the wealthy and in the minds of those they have persuaded to their point of view. The truth is, there's no such thing as "a disincentive to earn money". Money is its own incentive. Those who want to make money above all things will still strive to make money, no matter the tax rate. What's undeniable is that the top 5% has seen nearly a 900% increase in its real income since the 1960s, while the bottom 20% still makes less than $20,000 a year. That [i]is[/i] a fairness issue. The private sector has left so many behind that it is up to the government to step in somehow; not by a direct redistribution, but by funding education and health care, mandating a living wage, etc. These things are going to cost the rich money; they will have to pay more taxes; and they will complain. But if the gap between rich and poor continues as it is, then people like Trump will be first against the wall when the revolution comes.
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9 Replies[quote]Taxes: Less is More[/quote]I read this as Texas: Less is More and was very intrigued at the idea.
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13 RepliesSlim down government. Reduce taxes. Implement fair tax. Watch the economy grow. Watch jobs grow, watch pay grow.
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This is the truth
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I'm still trying to figure out why those that want higher taxes don't send in extra money to the IRS. Why must the government compel you to be so "generous"? Nothing's stopping you from giving the government more money so they can find all your precious social programs.
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Edited by Sethrey: 7/13/2016 2:11:33 AMI mean boo good ideas...
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2 RepliesI prefer to steal money from hard working people as my primary source of income. I then use that income to bribe and pass legislation to create more money to steal. I usually call it "taxation" but since I'm all but anonymous here I'll just call it what it is.
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1 ReplyIf we're being honest, a national sales tax at 5% would be more effective than an income tax.
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4 RepliesOk, so you're posting figures, but I don't understand how less tax gets the government more money?
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Flat tax and suppy side is so cringy i wish america does it after i move out so they can repeat history and learn why things are as they are today. [spoiler]libertarianism is a dead ideology[/spoiler]
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3 Replieswhy can't we just use trickle down economics across the board?
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i thought it was caboose meaning texas heh.
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1 ReplyEdited by TheMilkman: 7/12/2016 11:57:35 AMI can sum this up fast. Less taxes allow more poor and make the rich want to pay more so they feel they aren't loosing more. In the end we have more revenue for schools to make people overall intelligent by funding schools. The end. If we where in the 20s.... Now we have trade with China. And most of the world. And I still have grammar problems because my old teachers decided not to focus on writing rather than reading or feminism.
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3 RepliesEdited by Steve of Steves: 7/11/2016 7:06:02 PMGood luck with this post. There's far too many people on this forum who support raising taxes in the name of "helping society."
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Interesting post. I actually agree with most of it.
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4 RepliesEdited by Flee: 7/12/2016 12:38:41 AM+1 for a good informative post, but it is kind of flawed. The optimal Laffer Curve and desirable point thereon are highly disputed, depend on many variables and there exists no consensus among economists what the optimal rate would be. Many economists believe that the US is on the left side of the curve, meaning that higher taxes would still increase state revenue in the US. Good informative post, but pretty misleading and lacking. Your conclusion assumes we know what the curve looks like and where the points lie while we really don't. So your closing statement that we are far beyond these points is far from certain. Much more accurate and truthful would be: more can be less, but only past a certain point on a certain curve, neither of which we have yet determined.
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Size doesn't matter, it's how you use it
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Thank you i needed to fall asleep and this thread got me there real fast!
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Eye ball will smith pug poke cat til poke screamy man aah.
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There are a handful of giant companies that paid no taxes.
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1 ReplyAh, Mr. political posts!
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2 Replieshttps://en.m.wikipedia.org/wiki/Andrew_Mellon Check this guy out. He's a good example of more is less. He decreased taxes after WW1 to get tax dodgers to stop dodging taxes.
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3 Repliesjust came here to tell u more is more [spoiler] ...a casual loop within this toggler's mechanism suggests that the toggling process somehow binds space and time into... [/spoiler]
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20 RepliesThere's a big difference between the statutory rates and the effective rates.
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Make sure you are writing this in your notebooks kids. We are having a test on Friday and I don't want you complaining that I didn't go over it.
