Droopy's Myths Debunked

[_selek]

You present some good information which I don't have the energy to debate at the moment.

I hope you don't mind me changing the topic slightly. If so, I can start a new thread in another forum.

How much of a person's income is the government entitled to take?

Not bragging here, but with my base salary and bonuses, my income exceeds $300k per year. I guess that puts me in the evil "rich" category.

Just now, I estimated my total taxes to be at least $106,000 per year (about 35%). This includes federal income tax, state income tax, sales tax, medicare tax, medicaid tax, social security tax, and property tax. This doesn't include all of the other taxes I can't remember and the hidden taxes that is woven into the cost of goods and services that I purchase.

In your view, is 35% too much, too little, just right? (again, this doesn't include hidden taxes and the increased cost of goods and services to pay for other people's taxes).

I do believe that we have to have government and we have to fund government. But, given the choice, I would pay far less than 35% that I pay now. Unfortunately, I don't really have a choice. For some of these taxes, I am unable to not pay (auto deductions from my paycheck, for example). If I don't pay the legally owed amount, I could lose property or be thrown in jail or both. Yes, I can vote, but it makes little difference, especially if the majority (making less than $300k) want me to pay more. Frankly, I'm powerless to stop it.

At what point is it too much? 50% of my income? 60% of my income? 80% of my income?

Furthermore, when I see the vast programs and spending of the Federal government, then contrast it to the 10th amendment, I truly have to question the constitutionality of of much of what the Federal government does, and the taxes they collect to do it. If the Feds stayed within the enumeratated powers granted by the constitution, and funded it accordingly, my taxes would go WAY down.

Thoughts?

[_Kevin Graham]

Sure selek, go ahead and start your own thread about this and I'll probably comment.

I don't want to detract from Droops' upcoming graph presentation, which proves all the data I presented is inaccurate.

[_Droopy]

Nothing I could post is anything much different than the stuff I"ve been posting for years in this forum. But why bother since, no matter the prestige or scholarly reputation of my sources, so long as it's "right wing" you will dismiss it out of hand.

Since you clearly cannot argue your case rationally from principle and coherent theory, please continue to post graphs and charts.

As I said, for evey one you post, I can post one debunking it. I've been doing that since this board came on line, and its all been seen before.

Indeed, the long essay by Art Laffer I linked to contains a number of statistical charts demonstrating quite clearly the known effects of specific kinds of tax cuts on government revenue, as well as other indicators, going all the way back to the 20s.

But beyond this, I'd like to see you refute the conservative/libertarian position on principle; I'd like to see you provide a compelling argument, based in sound economic reasoning and logic, why higher tax rates, which discourage/depress private sector economic activity, produce more government revenue, and, conversely, why lower taxes on savings, risk, and investment, which increases economic activity, would not broaden the tax base and bring in higher tax revenues as businesses become more profitable, employment increases, and the general economy grows.

Laffer has already shown, in the essay I linked to, empirical data demonstrating that, in every case in which these most salient taxes are lowered or raised, government revenue is effected as private sector behavior is modified by the type and severity of taxes imposed.

Why is his analysis wrong?

[_The Nehor]

But beyond this, I'd like to see you refute the conservative/libertarian position on principle; I'd like to see you provide a compelling argument, based in sound economic reasoning and logic, why higher tax rates, which discourage/depress private sector economic activity, produce more government revenue, and, conversely, why lower taxes on savings, risk, and investment, which increases economic activity, would not broaden the tax base and bring in higher tax revenues as businesses become more profitable, employment increases, and the general economy grows.

Simple logic. There would have to be a point of diminishing returns even if you accept your premises that, ceteris paribus, lowering taxes always increases tax revenue. Otherwise, abolishing taxes completely would increase tax revenues which is clearly nonsense.

The question we are left with is: When do the returns diminish?

[_Kishkumen]

The general consensus in the scholarship is that a tax cut will boost the economy by about 1-2%, but not nearly enough to make up for lost revenues due to deep cuts in taxes.

[_Droopy]

But beyond this, I'd like to see you refute the conservative/libertarian position on principle; I'd like to see you provide a compelling argument, based in sound economic reasoning and logic, why higher tax rates, which discourage/depress private sector economic activity, produce more government revenue, and, conversely, why lower taxes on savings, risk, and investment, which increases economic activity, would not broaden the tax base and bring in higher tax revenues as businesses become more profitable, employment increases, and the general economy grows.

Simple logic. There would have to be a point of diminishing returns even if you accept your premises that, ceteris paribus, lowering taxes always increases tax revenue. Otherwise, abolishing taxes completely would increase tax revenues which is clearly nonsense.

The question we are left with is: When do the returns diminish?

This is a misdirection and misunderstanding of the supply side argument.

This is not a libertarian-anarchist argument. It is not an anti-government argument. The argument is that as tax rates decrease, economic activity increases, the tax base expands, and government revenues increase. Their is a realistic "set point" for these rates, all of which are substantially lower than at present.

The empirical facts of this matter have been long understood, but of course at some point, revenues decrease. At a zero tax rate, revenue ceases. At a 100% tax rate (which FDR actually proposed at one point), economic activity ceases.

There is a tax rate (or rates), or a range of rates, at which the basic constitutional functions of government can be undertaken adequately, and which allows the private sector and private individuals maximum economic freedom to work, save, invest, risk, and follow their own "pursuit of happiness".

The idea, I should say, is not to cut taxes to increase government revenue. That's just the inherent effect of lower rates. Without serious spending cuts, tax cuts themselves, while healthy for the economy, have the perverse effect of increasing the size of government by increasing its available revenues.

The idea in cutting taxes is to increase personal economic liberty, stimulate the economy, and support increased individual liberty generally. This, however, cannot by itself achieve what needs to be achieved, which is a significant reduction in the size, scope, and functions of the state. To do that, government must be forcibly restrained through legislation, including the abolishment and/or serious downsizing and reorganization of a number of government agencies and bureaucracies.

[_Droopy]

The general consensus in the scholarship is that a tax cut will boost the economy by about 1-2%, but not nearly enough to make up for lost revenues due to deep cuts in taxes.

Uh huh...

When any leftist like Kishkumen begins talking about "consensus" within "the scholarship" but fails to make an logical, substantive argument regarding the actual principles involved, you have prima facie evidence that this person has come to the discussion already running on fumes.

This is what's known, of course, as a "drive by " post, intended to create the impression of substantive knowledge by claiming a "consensus" among "the scholars" within "the scholarship".

There are several major schools of thought within economics, who strongly disagree with each other after the most rudimentary principles have been agreed upon (if they have).

One, the Keynesian school, long popular within government and mainstream academia but also long discredited both theoretically and empirically, contains a strong anti-private sector, pro-statist bias.

Other schools, such as the Austrian and Chicago schools, which concentrate on and describe the laws of economics vis-a-vis actual human behavior, motives, and incentives, is unpopular within academia and government, where a theory supportive of statism is desired, but highly successful both theoretically and empirically in elucidating actual economic dynamics.

[_Tarski]

One, the Keynesian school, long popular within government and mainstream academia but also long discredited both theoretically and empirically, contains a strong anti-private sector, pro-statist bias.

This is as good as it gets. Mere assertion.

[_Droopy]

One, the Keynesian school, long popular within government and mainstream academia but also long discredited both theoretically and empirically, contains a strong anti-private sector, pro-statist bias.

This is as good as it gets. Mere assertion.

How many sources would you like? How many dozen? How many score? Would you like a number of book references too?

You can probably do your own homework.

Probably.

[_Droopy]

Here's just a bare beginning; a digest and analysis by an eminant 20th century economist


http://mises.org/store/Critics-of-Keyne ... -P559.aspx