Quoted:
Quoted:
And most economists/accounting PhDs, based on economic data, don't support the contention that lowering taxes increases government revenue.
Most economists say the exact opposite of that. But then again based on your info above, I dont think your vetting skills are up to snuff.
I appreciate the education.
I believe McCain also stated something similar to that effect(tax cut=increased government revenue) but actual fact check came out the exact opposite here:
http://www.factcheck.org/taxes/supply-side_spin.html
In fact, I believe 2003 Economic Report of the President and some of the chairs of Bush’s Council of Economic Advisers via Hill 2006, Mankiw 2003, and Milbank 2003 also found that tax cut doesn't result in increased government revenue.
In fact, you can increase government deficit in 2 ways:
- by reducing government revenue by tax cut
- by increasing spending
Gregory Mankiw, former chairman of George W. Bush’s Council of Economic Advisers, did a study(published in The Journal of Public Economics in 2006) which showed that the economic growth caused by a tax cut can offset, at best possible scenario, only a portion of the revenues lost by the tax cut. That is in most scenario, tax cut results in increased budget deficit.
Not only that, in 2005, CBO head by GOP appointee, Douglas Holtz-Eakin, calculated that the 10% cut in income tax would offset only 1% to 22% of revenue loss during 1st 5 years. It would basically never pay for itself. About the only case it might be true is if the rate of taxation was extraordinarily high, like 100% but 100% rate is not normal nor is it representative of tax rate in general.
Basically, if you cut tax which is revenue to government, government revenue tend to decrease.
In fact, real(inflation adjusted) GDP growth rate was higher during 1950-1969 when rate of taxation was much higher than during last 20 years.
This is a
good article in Economix blog which explains it.
However, let's say that every one of these sources, including Bush's Council of Economic Advisers, CBO, etc. is lying and/or is wrong. You can do a rough equivalent of what if simulation(crude Monte Carlo simulation) by using a range of nominal historical GDP growth rate and taxation rate as percent of GDP and see under what circumstances, federal revenue(% GDP) grows.
Tax cuts do not raise revenue and nobody ever who knows anything has said that they do. Income tax rate cuts raise revenue because they reduce the marginal costs of being more productive, thus encouraging productivity, and a smaller piece of a much bigger pie means more pie for the government. The big flaw in the Bush tax cut was most of the $ was in tax credits, increasing deductions, and eliminating estate taxes, none of which reduce the marginal costs of being more productive. Productivity is a service that has a high elasticity of supply in that if people can take home more for being more productive, they will usually become more productive. People being more productive makes the equipment they operate and the floor space in their workplace more productive as well. Next thing you know, they are spending more because they took home more and the ecomony is growing.