WASHINGTON — Mitt Romney has added moderate-sounding ingredients recently to his campaign promise to cut personal tax rates by 20 percent, but the math still hinges to a significant degree on an assumption that has inspired conservative Republicans for decades.
The idea: Reduce taxes, especially for the wealthy and corporations, and America’s entrepreneurial fortunes will soar. The economy, unleashed from the drag of excess taxes, will grow. Government deficits will shrink.
Comments
Let's see, we've had Ronald Reagan (2 term), George H Bush (1 term), William Clinton (2 term), George W Bush (2 term), Barack Obama (1 term...so far). That makes 20 years of trickle down economics, vs 12 years of balanced budgets and/or rescuing the worldwide economy. Meanwhile, my dollar has been buying less and less every year, the middle class is joining the lower class in droves. I think the middle class has been getting golden showers instead of golden parachutes. Guess that makes me one of the 99% and not 47% (as some people like to fantasize)
Thirty-one years, but who's counting?
Clinton raided the defense budget to pay for his fantasies. Then you complained when Bush spent billions to rebuild it.
President Obama will raise the upper tax rate to 39.5%, raising 50 billion a year in revenue, he will raise the Estate tax to 55% (outrageous), to raise another 50 billion a year in revenue, of course people will be smart enough to make sure their estate is already taken care of before death, I know I will. Then what, instead of a 1.2 trillion deficit we'll have a 1.1 trillion deficit...............there isn't enough money to fund the beast.
According to Forbes, the net worth of the richest 400 Americans in 2010 was 1.37 trillion. That is more than the combined worth of around 50 million Americans (or Beast) as you so antiseptically call them.
It amazes methat people still question the basic premise of how tax rates effect behavior, amd how behavior is the biggest driving force in whether or not our economy grows. The left is simply incapable of recognixing that economic growth is the biggest factor in determinging the level of taxes collected by the treasury.
NEW PARAGRAPH: That is why the question of "how would you pay for the tax cuts" is so moronic. That question would only be meaningful if the size of our economy was fixed, and never changed. If that were the case, then one could say that lowering tax rates by 20% would equal loxering tax revenues by 20%. Then, how it would be paid for would be a legitimate question.
NEW PARAGRAPH: Of course, the economic pie is NOT a fixed level. It moves faster and slower based on thousands of variables. One of those variables is the tax rates. History has shown that lower tax rates tends to lead to a larger economy, and greater levels of tax revenue. This happened in the 1960s under Kennedy, in the 1980s under Reagan, and in the 2000s under Bush. Clearly, the Obama years has been of stagnant economic growth and flat tax revenue collections.
NEW PARAGRAPH: In 1986, President Reagan, with bipartisan support lowered the top marginal tax rate from 50% to 28%. How was this tax cut "paid for"? Yes, there were many loopholes and deductions closed, but that is not where all the revenue came from. It was from the growth that was unleashed by creating MORE tax payers. Tax collections surged over the next few years, as the economy surged.
NEW PARAGRAPH: The idea of questioning this basic truth is born of political posturing. By suggesting that the well off pay less in taxes because rates are lowered, many ignorant voters may be moved to vote Democratic. But the truth is that the aggregate collection of taxes from the wealthy has always INCREASED, under tax cuts, because more of them are paying.
Nothing makes you spin faster than a discussion of failed right-wing tax policies, Richmond12.
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Liberal Democrats faith unshaken in Tax and Spend policies... They rallying cry is: "Greece didn't borrow enough!"....
Reagan exploded the national debt from $700 billion to nearly $3 trillion, and Bush II doubled it from $5 trillion to over $10 trillion.
But neither Reagan (Greatest President ever) or Bush II (certainly not the greatest) are in office.
Barry is...and he's looking to spend. To the detrement of the country...
By the way.....I hope even the liberals who agree with this article understand that it is very much an opinion piece....and the Globe is showing its true colors putting "op-ed" on the front page..
No?
The herald is garbarge - best suited for lining birdcages....but the globe (and the times) being so in-the-bag for the lefties is not good news....
And I hope right-wingers who still agree with the concept of supply-side economics understand that your ideology and anti-Obama hatred have blinded you to the real-world failure that such discredited policies represent.
And what do Greece, Spain, Italy, the UK.... mean to you?
Supply side may not work all the time...Tax and Spend never works....
As I have commented before, I believe the electorate would benefit from seeing the full budget models of both candidates before the election.
The logic behind supply side economics fails on many fronts. First they do not invest the money with any consistent wisdon in amounts to ensure greater prosperity. As they participate in the economy they play a zero sum game. In other words instead of making the economic pie bigger they move almost all the medium of exchange producing nothing into their column. A positive sum game would create products that enrich both employer and employee at rates more in line with past times of economic growth. Another untold fact is the "up from their bootstraps" notion of those on top. Kevin Phillips, a true conservative economic analyst, pointed out two important factors that endanger our system. The top 2% of wealth holders inherited their holdings to the the tune of 90%. The other is that the financial industry that makes nothing occupies 20% of the economy when under more prosperous times it was 10%. Money is being taken out of circulation with little to show for it. If supply siders were right, then during a time of low interest rates, low taxes, low regulations, and high profits, businesses and jobs should have been created in the last decade. We all know it didn't happen and, in fact, we got the opposite. Time to throw the bums out(politically speaking).
"Faith" is certainly the right word to use in this headline, since there is no more evidence that supply side works than there is that humanity's various deities exist and behave the way their followers think they do.
It worked for Reagan, and it worked for Weld. Somebody needs to get a refund from the liberal arts college they wasted their money on and learn economics from a science program. 'If a person is taxed at a high rate for investing or working, they reason, that person is less likely to invest and work.'---- This is exactly true, unfortunately. I know a computer programmer who was making $300k per year killing himself working 60 hours per week. When Obama said he wanted to crush those over $250k, he planned to cut his hours to under 30 hours per week. The net after taxes would be very similar to him, but he would no longer be working an extra 30 hours per week. Now, guess what happens to America if everyone making over $250k does the same thing! You shouldn't need to be a PhD in ecnonomics to figure out these basics!!!!!!! Basics!!!!!! Get a refund from the liberal arts college you wasted your money on and grow-up children! Some of us DO understand basic economics! And we're voting for Romney!!!!!!!!!!
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I think from about 1970 onward, if people would plot the change in GDP growth against the change in oil prices, they'd find a near perfect relationship and a very *inverse* one at that.
Reagan's growth came after oil prices crashed from their late 1970s highs, thanks mainly to Alaskan and North Sea oil production coming online, for example.
Unless the world is going to bring huge, new oil supplies online, this history is not going to repeat itself.
It was never about taxes versus GDP.
maybe we should drill then
And where has the spending policcies of obama and other liberal causes gotten us? Mecn. How long was bush in office to produce that level of spending? Who controlled congress? Reagan actually was facing an unprecedented mess, unlike Obama
Obama was not facing an unprecedented mess? That's laughable. Unless we're discussing 1929, how can Bush's near-depression be anything but unprecedented? Two major wars on credit and the economy in free-fall combined with eight years of a failed presidency but things were just rosy in your book. You're not credible.
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Supply-side, trickle-down, neoliberalism, free-market fundamentalism..whatever you call it , it has failed both morally and empirically. After what we have seen of this theory put into practice, and the resulting collapse of Wall Street and actually all of the devastation wrought by disaster capitalism, we'd be ready to move on. From fungal meningitis, to endless wars, to catastrophic climate change, to SuperPacs and revolving doors, to oil subsidies, pipelines, and spills, debt and deficits, front groups and propaganda, cruel multi-billionaires and a rising oligarchy...it's not working. It leads to fascism. Deregulation. Privatization. Tax reduction on the wealthy and on corporations. Not. Working.
It worked for Reagan, and it worked for Weld. Somebody needs to get a refund from the liberal arts college they wasted their money on and learn economics from a science program. 'If a person is taxed at a high rate for investing or working, they reason, that person is less likely to invest and work.'---- This is exactly true, unfortunately. I know a computer programmer who was making $300k per year killing himself working 60 hours per week. When Obama said he wanted to crush those over $250k, he planned to cut his hours to under 30 hours per week. The net after taxes would be very similar to him, but he would no longer be working an extra 30 hours per week. Now, guess what happens to America if everyone making over $250k does the same thing! You shouldn't need to be a PhD in ecnonomics to figure out these basics!!!!!!! Basics!!!!!! Get a refund from the liberal arts college you wasted your money on and grow-up children! Some of us DO understand basic economics! And we're voting for Romney!!!!!!!!!!
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definition of insanity
We just need to give it more time. it hs only been 30 yers. It will kick in any seconed now.
Regan be praised. Regan bless you.
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I have to admit, I'm no economist, but how does saying how critical it is that we cut taxes on the wealthy, then insisting we'll just eliminate deductions so their tax burden doesn't change... actually do anything but attempt to suck up to everyone at once? Are the wealthy supposed to be "smart" enough to decide it's in their best interest to work less, invest less and make less money if taxes are high, but stupid enough not to notice they're paying the exact same amount elsewhere? In what conceivable way does this help the economy? Any brilliant economic minds out there want to clarify this one? Just sounds like magical thinking (aka campaigning) to me.
I've been wondering how Norquist feels about this whole 'revenue neutral' thing myself.
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Reaganomics Vs. Obamanomics: Facts And Figures
http://www.forbes.com/sites/peterferrara/2011/05/05/reaganomics-vs-obamanomics-facts-and-figures/
So um, begolfing, did you actually read that article?
so, um, esf, yes. your point?
Yeah...those Bush tax cuts were a dinger. 10 years old now.
i know........
Libs won't read because of the "source" but tis sums up why the worm has turned.
http://pjmedia.com/victordavishanson/the-obama-breaking-point/?singlepage=true
Hello!! Reagan RAISED taxes. The GOP needs to stop believing in all this make believe stuff.
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Here are the changes the Commerce Department made to the past 12 quarters:
(Figures in percentages) Period Revised figure Previous estimate 2009, 1st quarter -5.3 -6.7 2009, 2nd quarter -0.3 -0.7 2009, 3rd quarter 1.4 1.7 2009, 4th quarter 4.0 3.8 2010, 1st quarter 2.3 3.9 2010, 2nd quarter 2.2 3.8 2010, 3rd quarter 2.6 2.5 2010, 4th quarter 2.4 2.3 2011, 1st quarter 0.1 0.4 2011, 2nd quarter 2.5 1.3 2011, 3rd quarter 1.3 1.8 2011, 4th quarter 4.1 3.0The "misery index" — the inflation rate plus the unemployment rate — was 19.5 when Reagan took office, but only 7.8 when Obama assumed office.
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mhc90: now you've done it. begoofing will be forced to school you with a link to an unrelated article at a random right wing looney source. It's how he roles. Bless you if you can figure out what he's trying to say.
ESF and mecn1 - what is a "fair" tax rate? And why?
I've got a better idea. Today;s topic is trickle down. Please explain, in your own words, with backing information, why you think works. And no, cutting and pasting from random web sites is not allowed.
While you're at it, please explain how "Obama inheriting the biggest mess in history" has been "debunked" and why "deficits don't matter." You've made both of those claims. Surely you have some backing for them? Besides Breitbart, I mean.
deficits dont matter has been cited (mmt). my "debunked" claim is that he inheritred a bad situation, but so have others. bad wording which I will ake blame for.
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