Where Is The PROOF That The Conservative Agenda Works?

[Carl Spackler]

Ok. Liberals will tax the rich in order to stop our debt from building up. Simple enough?

Simply put, this is a myth.

 

[laughingduck]

Austerity? Trickle down? less is more (cutting taxes generate revenue)?

I understand the anecdotal arguments as justifications for these ideas... The problem is that - so far - I've seen no hard evidence to support any of those arguments. So now is your chance...




Where is the proof?

Google "The Laffer curve" it describe how there is a point that higher taxes nets lower returns...............

 

[Mr Neutron]

I guess it doesn't matter that 100% of tax revenues go to pay the INTEREST on the debt?
And if that doesn't matter, maybe the fact that the IRS is forcing people to comply with what they call "voluntary compliance" to a tax that has already been ruled NOT to include American's wages, does.
Want to rest control away from the elitists? Find the law that says any American has to pay a tax on wages paid in exchange for labor and when you have not found it, you will know the truth. The "We The People" Foundation had a $50,000 prize offered to anyone who could produce that very law and to my knowledge, no one has claimed it. Lawyers, accountants and even IRS agents have not found it.
The IRS and the Federal Reserve are the 2-headed monster that is dragging us to hell. Republicans and Democrats both know the truth and are
complicit in a crime against the American people.
What is the sense in arguing about "class"? If the yoke of tyranny were to be lifted from our shoulders, the wealth and prosperity this nation would enjoy cannot be measured.
If you truly care about the poor and less fortunate, giving them welfare only trains them to expect more. Give them the opportunity that a free country, free markets and a government that adheres to it's laws can make possible.

 

[canndo]

Google "The Laffer curve" it describe how there is a point that higher taxes nets lower returns...............

It isn't as simple as that, there are two points on the curve that show identical revenue, one is lower and the other is much higher and the curve itself is based upon specific economic conditions and expectations by the population being taxed.

 

[mame]

heh, forgot about this thread (I mostly only post from work... day off).

I know what the laffer curve is. The problem with that argument is that we aren't even anywhere near the point where lower tax rates would increase revenue - or visa versa - currently we are at a point that "up is up and down is down" in terms of taxes and revenue.

The renewal of claims that tax cuts pay for themselves has led to a revival of discussion about an old question: how high do taxes have to be before further increases actually reduce revenue? So I thought it might be worth thinking about this question in terms of a simple model of labor supply. Think of an individual facing a marginal tax rate t; and think of the amount this individual produces as depending on effort, which in turn depends on how much of his or her income the individual gets to keep at the margin, i.e., 1-t. Then a little calculus will show that whether a tax hike increase raises or lowers revenue depends on whether the elasticity of effort with respect to earnings — the percentage change in effort from a 1 percent rise in 1-t, the after-tax return to effort — is less or more than (1-t)/t.

An example may make the point clear. Suppose that the top marginal tax rate is 20 percent, so that high earners get to keep 80 percent of what they make. Now raise the rate to 21 percent. This is a 5 (100*1/20) percent increase in the proportion of income collected in taxes; revenue will only fall if effort falls more than 5 percent. Meanwhile, the after tax return to effort falls 1.25 percent (100*1/80). So the elasticity of effort with respect to earnings would have to be more than 4 for revenue to fall.

At a marginal tax rate of 50 percent, the break point is much lower; just 1. And so on.

So what do we know about the elasticity of effort with respect to earnings? Well, history suggests that if anything it’s negative: real wages have trended up over time, but working hours have fallen. That’s not a paradox, because rising wages have an income as well as a substitution effect. When you get richer, you want in general to consume more of everything, and among the things you want to consume is leisure. Against this,you can buy more goodies with an additional hour of work; but the net effect can go either way.

Now, someone might come along and point out that higher taxes aren’t the same thing as lower wages, because those taxes are generally used to finance a more generous welfare state — and this can wash out the income effect. That is, if you impose taxes that bring incomes after tax back to what they were in, say, 1960, but use the revenue to finance generous retirement benefits and free medical care, you should not expect people to work as hard as they did in 1960. And that’s a good point when we’re talking about the effects of high taxes/high benefits for people in the lower part of the income distribution.
But it’s not very relevant to high earners, for whom welfare-state benefits are inevitably small compared with their overall incomes.

So the way I see it, even quite high marginal tax rates on high earners — even rates in, say, the 70 percent range that prevailed pre-Reagan — are unlikely to put us on the wrong side of the Laffer curve by discouraging effort. High earners won’t work much less; they might even work harder, because it takes more effort to make enough to buy that fourth home.
That doesn’t mean, however, that it’s OK to go back to Eisenhower-era 91 percent top marginal rates. The problem with super-high rates isn’t so much that they reduce incentives to work; it’s that they create huge incentives to avoid or evade.

But we’re nowhere near Laffer country now. In terms of taxes and revenue, up is up, down is down.

The Laffer Test
So, in short - The Republicans argument assumes we are at point B when in fact, we are closer to point A in the following graph:

 

[laughingduck]

You can raise the taxes on the ultra rich all you want, they have the cash to buy there way out of them. The higher taxes end up paid by the upper middle class and at a 45% tax rate, i see no benefit to working anymore than necessary because more work equals less pay at the end of the year. I refuse to spend money to find ways out of the taxes, its a crooked game.

 

[NoDrama]

It isn't as simple as that, there are two points on the curve that show identical revenue, one is lower and the other is much higher and the curve itself is based upon specific economic conditions and expectations by the population being taxed.

Efficiency dictates you would use the lower tax rate then, why tax more and receive nothing extra? Kind of like willingly paying $10 a gallon for gas when the pump says it is $4.

 

[ilkhan]

If we got rid of the income tax all together we would still have more then enouph to cover President B.J. Lewinsky's budget.
What has happened sence then? (The Federal Reserve shinanagans happened)
Maybe if we were not invading 3 mid easter nations didn't have bases in 130-170 diffrent countries, well that would be a start. Then we shit-can the dept of education, commurce and energy, Privatize NASA. Then we would be in pretty good shape, IMHO.
BTW I would say 90% of what those Depts do is corprate welfare.
Corprate welfare is what is killing the free market and our economy.

 

[Rob Roy]

First it must be established what you mean by conservative. Do you mean a Libertarian conservative like Ron Paul or Barry Goldwater? No, it hasn't succeeded because it hasn't been tried since Jefferson.
If you mean a neo-con like W, no, but what's the difference between Bush and Obama, politically? They both have ignored the law, stolen people's wealth, invaded sovereign countries, increased the size of federal government, sacrificed American lives to advance the New World Order, not to mention that they lied their asses off to the American public. George W was much different as governor of Texas. Just as Obama was much different as a Senator or as a campaigner. They ALL lie to get elected.
Since what happened in Florida in 2000, what have either party done to ensure an accurate vote count? Instituted electronic voting machines. Gee, those ought to be more reliable... "Integrity of the 2006 elections cannot be ensured." GAO
I'd mention that both Republicans and Democrats have worked together in bi-partisan harmony and compromise to make it harder for a third party to compete in the election process but I don't think too many here are for competition.

The question could very well be asked:
"Where is the PROOF that the liberal agenda works?"

Mr. Neutron raises a good point.

 

[Dan Kone]

Simply put, this is a myth.

Really? It's a myth that if the government collected more money the result would be they would have more money? Amazing.

Well thanks for clearing that up for me.

 

[Dan Kone]

Google "The Laffer curve" it describe how there is a point that higher taxes nets lower returns...............

No it doesn't. It says that higher taxes nets a greater return until you tax above ~70%, then it nets a lower return.

Sounds good to me. Warren Buffet pays ~17% in taxes. So lets jack that up to 70% like the Laffer curve suggest in order to get maximum returns. Then we could afford socialized health insurance or pay off the national debt! Sounds like a good plan to me.

 

[Dan Kone]

I guess it doesn't matter that 100% of tax revenues go to pay the INTEREST on the debt?

I guess it doesn't matter that what you're saying is not true. From the CBO:

 

[Carthoris]

Well, now I have to go sifting through my old posts for my sources but...

Conservatives have pointed to Sweden as an example Austerity works - and then a couple of years later in turned out that Austerity didn't help them out of their recovery (it was actually a sizable trade surplus, which was already there without Austerity measures in place).

The "trickle down effect" has been debunked in part by the fact that since 1980 there has been a major redistribution of income towards the top 1% while the median income has remained stagnant (in 1982 the median income was $30,400, prior to the 08 recession the median income was $30,000 - the numbers are adjusted for inlfation of course - meaning no net increase in income for 30 years).

The less is more doctrine of tax cuts leading to generating more revenue via more reciepts has been disproven as well... Most tax cuts have also shown to be inneffective at creating jobs in comparison to stimulus spending when compared in terms of return on investment...

Lets see, what else is there?

I'll think of more.

That is not proof as much as it is you saying it doesn't work. This must be a use of the word 'proof' with which I was previously unaware of.

 

[Charlie Ventura]

Rather than read this entire thread, has anyone posting here defined what is meant by the term "conservative" and exactly what the "conservative agenda" is?

 

[Carthoris]

Ok. Liberals will tax the rich in order to stop our debt from building up. Simple enough?

IRS spread sheet of 2008 IRS returns. http://www.irs.gov/pub/irs-soi/08in11si.xls

If you look everyone in the country who makes over 200k made about 2.5 trillion all told. They are already paying about half of that to local, state, and federal taxes. How much was the deficit this year? 1.25 trillion or there abouts? So, if you took another 1.25 trillion from the people who make 200k that would be all of their money. That is the insane amount of money our government is spending. I am unsure why anyone would think that spending that much money is a workable plan or even believe that taxing the rich would fix the problem. Even if you took every bit of money from every person that makes over 200k it wouldn't fill the gap or pay for the programs we have. What part of that is hard to understand? Unless the goal is to spend debt money and then inflate it to the point where it isn't worth anything to pay it off I am unsure how they plan to deal with it long term.

And then God said let there be reality, and there was reality, and it was good.

 

[Mr Neutron]

I guess it doesn't matter that what you're saying is not true. From the CBO:

That's a real nice pie chart you got there, I'm not sure what it's supposed to represent or for what year but... I was NOT correct in that statement, I should have said "1/3 is eaten up by government inefficiency and waste, 1/3 by non compliance of the underground economy and the rest is swallowed up by the interest on the debt.
Grace Commission Report
about half way down, the paragraph that's underlined

 

[Carl Spackler]

Really? It's a myth that if the government collected more money the result would be they would have more money? Amazing.

Well thanks for clearing that up for me.

I think somehow you are under the illusion that if the government collected more money they wouldn't spend more money. This is the fatal flaw in your vain attempt at logic.

 

[Dan Kone]

That's a real nice pie chart you got there, I'm not sure what it's supposed to represent or for what year but...

It represents where our tax dollars go - stuff that accounts for 1% or less of the budget. The year was 2009. I've heard it is now up to 11%, but I've not been able to confirm that through the CBO.

Don't get me wrong, 11% of our tax dollars going to pay for the interest on our debt is a lot. That is a problem that should be addressed.

But the idea that 100% of our tax dollars goes towards paying off the interest on our debt is utter stupidity. When someone starts off a post by saying something that absurd they instantly lose all credibility. That's a big clue that people should just stop reading that post right there. Nothing said after that can be considered reliable information.

I was NOT correct in that statement, I should have said "1/3 is eaten up by government inefficiency and waste, 1/3 by non compliance of the underground economy and the rest is swallowed up by the interest on the debt.

Well that's not true either. I heard a great quote the other day. "The US government for all practical purposes is an insurance company with an army". And it's true! ~80% of our budget goes to the military and healthcare/elderly services. We can debate weather that is a good or bad thing till we are blue in the face, but it's not inefficiency and waste.

It's not like Obama went out and bought a trillion dollars worth of Soulja Boy ringtones.

If you want to consider interest on the debt waste, that's a valid characterization. You could say ~10% is waste. You may disagree with where the rest of the money goes, but it's not waste.

 

[Dan Kone]

I think somehow you are under the illusion that if the government collected more money they wouldn't spend more money. This is the fatal flaw in your vain attempt at logic.

Where is your evidence of that? It directly contradicts our countries post industrial history. The facts support that. When we taxed the rich at a higher rate, we had less debt. That is an indisputable fact.

The facts support my "vain attempt at logic", only far right rhetoric supports your conclusion.

 

[ink the world]

Are you old enough to remember the Reagan presidency? He reduced taxes, and the end result was that the tax system became waaaaaay MORE progressive, tax revenues to the federal government doubled, and full employment. Sure seems like it works to me!

Gotta disagree on one point. The Reagan presidency gave us "trickle down economics" after 3 decades of that Id have to say as an economic policy it is an utter failure in every respect.