[detbuch]

Originally Posted by spence

We can't solve this problem through spending cuts alone, and contrary to the assertion that the Bush Tax Cuts increased revenues...well, I think there plenty of analysis that shows they didn't.

FactCheck.org: Supply-side Spin

Factcheck seems more of an opinioncheck in this case. The article says that McCain's claim that the Bush tax cuts increased revenues is "highly misleading." Not false, just misleading? It then says that the half dozen years after the cuts "have shown us that we can't have both lower taxes and fatter government coffers." Yet, it shows that during that time government revenues rose 35%. So the gvt. coffers got 35% fatter after the tax cuts.

The quibble is that the increased revenue is not a "net increase." That revenues would have been even higher without the tax cuts. That the bulk of growth came from corporate tax revenue--a 134% rise since 2001. Also cited was a 5% rise in individual income tax revenue as well. But the source, Viard, couldn't find "a single, clear cut reason for that." He said that "Federal revenue is lower today (2007) than it would have been without the tax cuts," but he said that "nobody can absolutely prove that." Proof would require time travel and a reversal of tax policy." But among economists, there's no dispute." Of course, there is some dispute, but let us not clutter the simplicity of the article.

Although the article says "the impact of the tax cuts on economic growth is a matter of debate among economists", Viard says that tax cuts can be a sound economic move that spurs growth, and that economists would expect a boost to the economy if tax relief had been matched by spending cuts--which supports the Republican position in the debt ceiling debate.

Strangely, the Factcheck article refers to the JCT 2001 estimate that the tax cut would cause government revenues to be less in future years through 2006, yet they rose by 35%. WTF. I must be missing the significance of the projected loss of revenue. Did the JCT take into account the growth in revenue from an expanding economy or just base losses on the economic picture in 2001. The article also quotes the 2007 CBO budget outlook as saying "the expiration of tax provisions as scheduled . . . especially beyond 2010 when a number of revenue-reducing tax provisions enacted in the past several years are slated to expire," "almost all of the expiring provisions reduce revenues." Is this saying that the tax provisions reduce revenues or that the expiration of them does. In either case, this administration saw the wisdom of keeping the Bush tax cuts, depite this murky article's disputing that they raise tax revenue or that more would have been collected without them.

Bush Administration Tax Policy: Effects on Long-Term Growth - Brookings Institution
Etc...

This liberal think tank article says that "making the tax cuts permanent is likely to reduce, not increase, national income in the long term unless the reduction in revenues is matched by an equal reduction in government consumption." EXACTLY! That, again, is the Republican position--maintaining the tax cuts (not tax raises) and cut spending.

The defilcit/debt problem is fueled by SPENDING. Taxes are only necessary to pay for spending. To say more taxers are needed is to say spending should be maintained or raised. Raising the debt ceiling and raising taxes means getting deeper in debt both ways--more borrowing and more spending. If raising taxes would be used to pay off debt or to pay for current spending, the debt ceiling would not have to be raised. Raising taxes would be sufficient. But raising taxes would not be used to pay debt, and raising the ceiling as well would allow the higher taxes to be spent as usual, so the deficit would rise as well as the debt. HISTORY SHOWS THIS TO BE TRUE, and there is no evidence otherwise. The Brookings article complaint is the solution: make the tax cuts permanent and reduce government consumption. And if this could be done continuously on a gradual scale until we revert to the design of governance laid out in the Constitution, we might have another 100 years of fiscally responsible National Government.

And tragically, we also know that the mid-decade boom from 2003-2008 was being driven not by stable growth but rather a real estate bubble about to pop.

Reality check...

The Factcheck article said the boom was corporate profits--all those greedy corporations were making record profits. And personal income rose as attested by the 5% rise in income tax revenue. And wasn't the real estate bubble being inflated for a longer period than 2003-2008

Real wages continue to lag inflation for several decades now. Wealth generation appears to be more a product of speculation than productivity in the marketplace. Overall taxation in this country is at an historic low and effective tax rates allow the top earners to pay far below the top brackets while they bemoan progressive taxation (Warren Buffett excluded ). The wealth gap continues to grow. We have 15 trillion USD in Federal debt...and the topic of short-term revenue generation through taxation is OFF THE TABLE?

-spence

What has the 15 trillion in Federal debt have to do with the wealth gap? Should the money have been spent by the Government if it didn't have it? Isn't that what created the debt?