Mmmm....the laffer curve.

I wish people would just realize that there are ways to determine what is best for an economy. People always act like it's a great big stinkin' SHOCK when lowering taxes causes increased revenues and job growth.

It's not a news flash, people. It's just how things WORK. It's aXXXiomatic.

Worse people act like it's a great big stinkin' SHOCK when you suggest that they don't personally have to accept a tax cut if it is so offensive to them.

Use the NYT to line your bird cage its not worth reading anymore

Is that what your owner uses, Spurwing, the NYT to line your birdcage?

You hear this line a lot - Hannity, Rush, et al. Lower taxes = higher revenue. For the government.

Pardon me.

For just a second.

While I move the elephant into the next frickin' room.

Can someone take this down? The government needs to be smaller, not bigger. It needs to make less money, not more. American society needs to be less reliant on government, and government needs to be less reliable except on a few core issues.

And before anyone blows a gasket, I'm not a libertarian.

This is the mystery of conservative faith, this moral dichotomy - by lowering taxes (thus vesting individuals with more self-governance, more freedom, and more liberty) you are in the same step increasing the size of government (enlarging the bureaucratic mechanisms and legal structures that whittle down / outright confiscate individualism, liberty, and freedom).

You will know that the Republican party is serious when they can face this issue.

Not in my cgae bart SQUARK SQUARK

So Bush clearly did NOT "reduce" taxes. He reduced tax RATES. That is ho-hum for all but the left-wing ideologues. It's still incomprehensible to the left-wing ideologues.

Mark Twain once said that one word can make an enormous difference - for example, the difference between "horse" and "horse shit"

The argument that reducing tax rates will always reduce tax revenues has pretty definitively been demonstrated IRL as "horse shit". By Kennedy, by Reagan, and now by GWBs.

DeeDaGo,

Maybe you are trying to make the argument that taxes need to be further cut to one of the points on the laffer curve where a tax cut would actually decrease government revenue. But I don't think you are.

Instead I will be a bit of a smart ass and say yeah, you are right, conservatives and libertarians would be wise to start pushing policies that actually shrink the economy, since after all, it would also shrink the government.

I mean it's nice that a rising tide lifts all boats, but since one of the boats belongs to the government, better that we all drown.

BRING BACK RECESSION!!!!

Please. *eye roll*

Paul,

I'm not sure that you were making a point regarding my elephant, but ...

My elephant is still in the room. I did mis-speak - I meant tax rates, not taxes.

Let's see, $2.02T to $2.15T in 5 years...1.25%/year.

Meantime, inflation averaged 2.1% and the US population increased by an average annual rate of 0.85%.

Sounds to me like an inflation-adjusted, per capita revenue decrease of 1.7% per year for the last 5 years, totaling about 8.8% over those 5 years.

What's to celebrate?

Weedwald,
That buzzing noise that just flashed by was you missing the point. The actual numbers are not as important as the fact that after a tax rate decrease revenues increased. Federal revenues should never be expected to grow with inflation.
Now if we can just get rid of the pork.

DeeDaGo,
Why did you use a 5 year span instead of the 2 year span since the tax change? Going from 1.8T to 2.15T in two years is roughly 10%/year. You have to admit that the Left's claim that lower tax rates always result in lower revenues is suspect.

This is the mystery of conservative faith, this moral dichotomy - by lowering taxes [snip] you are in the same step increasing the size of government...

It's possible to both lower taxes (thus, when conditions are right, raising revenue) and reduce the size of government. The size of government isn't dependent on the annual revenue in any given year, although I agree that having more money available will tend to increase the size of government over time, other things being equal.

The way out of the "moral dichotomy" is to reduce the size and scope of government first, or at least simultaneously with the reduction in taxes. DeeDaGo is right that you can tell if a party is serious about reducing the size and scope of government if they tackle it in that order, rather than just going for the tax cuts first.

Sounds to me like an inflation-adjusted, per capita revenue decrease of 1.7% per year for the last 5 years, totaling about 8.8% over those 5 years.

Which also means that it's 14% real growth in the two years since the signing of the Jobs and Growth Act.

Two things that need to be isolated before supply siders can celebrate: first, there was a recovery, so revenue should've picked up regardless of tax cuts. Second, IIRC the tax holiday on repatriation of dividends from abroad resulted in a ton of revenue.

"First, there was a recovery..."

That's kind of the point here. Rate cuts lead to growth (recovery) and reciepts.

I'd like to see some numbers on those dividends, too, even though the principle remains the same--cut the tax and watch the dough roll in.

It's possible to both lower taxes (thus, when conditions are right, raising revenue) and reduce the size of government.

I'd have to do some research, but I'm not sure of a case where rates fell and revenues did not increase. Just sayin'.

The size of government isn't dependent on the annual revenue in any given year, although I agree that having more money available will tend to increase the size of government over time, other things being equal.

I do agree with you - there is nothing inherent about the size of goverment being tied to revenue. However, there is a heuristic cycle that I can point to, wherein a group / organization / directorate succeeds at [whatever] and then goes on to attract more money that is looking for a home.

In the meantime, each dollar passes through a host of hands who all make sure that nothing nefarious (oh the irony) is going on, and that it gets to where it needs to go, and that it is spent on what it was intended to be spent on.

All the while, other groups identify the inefficiencies involved with this process, and so they create other paths for money to flow through that are, get this, more efficient. But the original pipes are NEVER shut down - any realized efficiency in the process goes to pay for the inefficient original pipeline's workers.

It would be funny, but its our money.

What I would like to hear is a hypothetical wherein more money coming in actually reduces the size of government.

DeeDaGo,
Why did you use a 5 year span instead of the 2 year span since the tax change?

Twasn't me.

I think maybe Weedwald ....

Here's my $0.02 > to reduce the size of government, enact tax rate reductions of such magnitude that [a] federal revenues decline precipitously and [b] Ted "Aquaman" Kennedy's, Nancy "Hate Bush" Pelosi's, Howard "White Flag" Dean's, John "Genghis Khan" Kerry's and Hilary "I Don't Know Nuthin' 'bout No Ekonimix of Helth Kare" Klintoon's heads collectively spin, and that the Borg (otherwise known as the Repub-in-Name-Only majority party) is presented with a chance to live up to their supposed goals of smaller gubbimint.
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Now, before readers comment "but that will reduce spending for the poor, schools, healthcare, etc." please keep in mind that any $ amount spent on "Bridges to Nowhere" is not going to be spent on health education or general welfare.
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Our elected leaders are awash in out tax revenues, and there is ample waste to prove it.
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It is high time that we generously reduced the amount they can get their hands on.
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A few questions:

1) Why isn't this "growth" reported in real terms?

2) Does Alan Greenspan deserve more credit than the Bush admin?? Most of the GDP growth was due to new houses and new cars being purchased - not to mention the refinancing craze. That was arguably caused by LOWER INTEREST RATES,, not lower tax rates.

3) If wealth has been transferred from the poor to the rich, is it possible that government revenues would increase more quickly than real GDP per capita? (since the rich are being taxed at a higher bracket). Is that a good thing for the citizenry, or merely a good thing for the government?

This is known as the credibility thread, wherein we on the AOSHQ do not need to refer to body parts, misogyny, or homo-erotic impulses. It's good for the whole site, is my guess, although Ace might not think so.

A rising tide lifts all boats.

Hey, I just got a new credit card and I'm taking all my family and friends out for a really good time, want to join in? We are going to spend like there is no tomorrow. And while I'm doing this, I will pay only the interest on the principle for decades. All these places and people we see will benefit and they will make more money and they will spend too. Yes, this flood of borrowed money will make a lot of people happy and better off. All of them will get a lift. Money just grows on trees. Sounds so good, don’t it?
I bet in 5 years, when the national debt is at all time high of $11 trillion (about 25% of the current wealth of the United States), people will try to still argue that tax cuts, with out offsets in government spending, is the right thing to do. Yet they willfully don't speak about the fact that deficit spending is a deferred tax increase onto others that had no say in current "political policy" of tax cuts and drunk sailor spending. Get it while you can folks, before the bill comes due..

I'd have to do some research, but I'm not sure of a case where rates fell and revenues did not increase. Just sayin'.

Well let me help you Einsteins out. Try looking at tax revenues for for the years 2002, 2003, and 2004. Seriously, how many years of decline could have occurred before we had a year of growth without you righties bragging about it. You do realize, prior to this Presidency, revenues went up 85% of the time, no matter what was done. So in the first four years of Bush, we have one year of growth and you think that proves reducing taxes increased revenues? Do me a favor and list all the 3 year periods of decreasing revenue in US history. Also, since reducing taxes increases revenue, please enlighten me when tax rate increases reduced revenue. Perhaps you can show the negative effect during the Clinton tax increase.

Slight correction. The years are 2001, 2002 and 2003. By 2004 revenues were increasing, but still not to 2000 levels. Also, the original post does a common slight of hand used by the right. The cuts were inacted in 2001, not 2003.