The News continues to show sterling growth. Here is what Investor's Business Daily has to state about it. And if anyone had any doubts that Supply-Side economics is not King on Wall Street, this is a further proof.

Perhaps Grizzly would care to comment on this, should he bother to read such horrible news: if you are a Democrat, of course.

Note: While I am critical of the way graphs are presented, this graph deserves the same scrutiny. Stretching out one set of parameters, and shrinking the other, tends to produce a more exaggerated curve. It occurs here, as you will note when you compare "revenue" vs "time". Nevertheless, the curve is still very encouraging and should be lauded for what it represents.


Supply-Side Boom

Posted 12/9/2005

Fiscal Policy: A picture is worth a thousand words, and nowhere is that truer than in the debate over supply-side claims that tax cuts lead to higher revenues.

We were struck by a chart that Treasury Secretary John Snow used last week when he presented the administration's case for making the 2003 tax cuts permanent.

For Democrats opposed to the cuts, no argument has been more potent than that tax cuts somehow "cost" the government money — and thus make deficits worse. Snow's chart, shown below, puts the lie to that argument.




In fact, the supply-siders are right: Revenues rise after tax rates are reduced. Federal revenues bottomed at $1.8 trillion just as Bush signed his bill; since then, they've risen 19.4% to $2.15 trillion, an all-time high.

A big reason is that tax avoidance recedes along with rates. When top personal rates are high, the rich find ways to pay less. That's why our tax code is 55,000 pages thick. When rates are lower and flatter, such behavior disappears.

This also explains why the richest Americans' share of all income taxes paid has soared to 34.27% from 19.05% in 1980 even though their average income-tax rate has fallen by roughly a third — from 34.47% to 24.31% in 2003.

More important, however, is the impact tax cuts have on the economy. Since May 2003, when Bush's major plan of tax cuts on both capital and income took effect, the economy has been on a tear. It's virtually impossible to argue the two aren't linked.

In the nine quarters before the tax cuts, GDP grew at an average rate of 1.1%. In the nine quarters since, it's averaged 4.5% — even in the face of punishingly higher interest rates and oil prices.

We also hear how all the tax cuts are going to the "rich." Again, not true. A surge in entrepreneurship, jobs, income and wealth has made all of us richer and more secure.

As Snow noted in his speech Thursday, 57 million Americans now own stocks — or about half of all households. Yet, the median income for shareholders is a very un-Rockefeller-like $65,000.

Many of those investors are retired, and have seen their incomes go up along with dividends. This year, shareholders will deposit or reinvest $201 billion in payouts — up 36% from 2002, the year dividend tax cuts went into effect.

Entrepreneurs are doing well, too. Fed data out Friday showed Americans' net worth is now $51 trillion — about 4.6 times real GDP. What's most impressive is that includes $6.6 trillion of equity in "noncorporate" — or small, entrepreneurial — businesses, up 32% since the start of 2003.

The House passed legislation last week that will trim growth in federal spending by $50 billion but keep most of the 2003 tax cuts intact. The Senate has identified $36 billion in spending cuts but wants to let the tax cuts expire.

The House version must prevail. The economy is surging, and the budget deficit is now shrinking as a share of GDP. Getting rid of the tax cuts that made all this possible would be the height of folly.

U.S. NATIONAL DEBT CLOCK
The Outstanding Public Debt as of 10 Dec 2005 at 04:48:02 PM GMT is:

The estimated population of the United States is 297,937,118
so each citizen's share of this debt is $27,300.12.



$65,000.00 - $27,300.12 = $37,699.88 That doesn't look too good to me, John. But who cares. Just pass it on to your kids; its their problem!

As usual Griz, you obfuscate the theme of the thread, by using another subject as camouflage to mask the good news of another. Can't you do better than this?

I, for one, deplore the outlandish spending of the President and the Republican Congress. It is horrible what they are doing here.

YET,..............are you saying that cutting taxes to increase revenues is directly related to high spending? Are you? I see them as two different things.

NOW, are you implicitly stating that you have no rebuttal to the idea that lowering taxes produces increased revenue? Or are you willing to finally admit that the Laffer Curve is correct?

Come on Grizzly, lets not cloud up the argument here. Kindly address the subject: Lower taxes and increased revenue. We can talk about spending on another thread.

I am waiting to see your rebuttal here.

Grizz, that's in present value of $$, which is always more expensive than future value of the $$. I can remember when my sister bought her house for $10,000 in the 1950's when other houses were selling for $5,000. It was an ungodly amount of money for a house to cost then (and, my mother almost had kittens over it) , but by the time it was paid off 30 years later, $10,000 for a house was small, as other houses then were selling for five times that much.$ Additionally, the fact that with our yearly economic growth, this present-valued deficit will be reduced quicker than naysayers would like to admit. The deficit was reduced by how much last year by the growth of the economy?

I find it amazing that you guys enjoy talking about revenue. But debt should be ignored

*This is what happens when you don't OWN a pot to piss in, and a window to throw it out of.*

Untrue! But you must talk specifics, if you are going to seriously present a logical answer. And the specific point of the thread is "taxes" and "revenue", not "spending" and "debt". I will be happy to argue THAT point with you,.........on another thread.

But the point of this thread is again, "taxes" and "revenue". What part of that does not your vastly superior mind understand?

Please give us a detailed and reasonable argument against lower taxes and revenues. Or are you willing, by default, to concede the argument?

I wonder why your mother would be upset over the price of the house. If a house is taken care of it can go up in value. Although the same can not be said of a new car nowadays. Some things can just be expected I guess.

Oh well! I doubt to see the deficit go down for a while.

Here is a page that shows how fast the debt is growing. They probably will update it as higher somtime on Monday

The Debt To the Penny

Current Amount

12/08/2005 $8,131,033,535,598.31


Current
Month

12/07/2005 $8,121,651,809,807.04
12/06/2005 $8,122,710,788,511.92
12/05/2005 $8,119,496,424,139.25
12/02/2005 $8,118,319,301,298.54
12/01/2005 $8,107,952,560,719.68


Prior
Months

11/30/2005 $8,092,322,205,720.65
10/31/2005 $8,027,123,404,214.36


Prior Fiscal
Years

09/30/2005 $7,932,709,661,723.50
09/30/2004 $7,379,052,696,330.32
09/30/2003 $6,783,231,062,743.62
09/30/2002 $6,228,235,965,597.16
09/28/2001 $5,807,463,412,200.06
09/29/2000 $5,674,178,209,886.86
09/30/1999 $5,656,270,901,615.43
09/30/1998 $5,526,193,008,897.62
09/30/1997 $5,413,146,011,397.34
09/30/1996 $5,224,810,939,135.73
09/29/1995 $4,973,982,900,709.39
09/30/1994 $4,692,749,910,013.32
09/30/1993 $4,411,488,883,139.38
09/30/1992 $4,064,620,655,521.66
09/30/1991 $3,665,303,351,697.03
09/28/1990 $3,233,313,451,777.25
09/29/1989 $2,857,430,960,187.32
09/30/1988 $2,602,337,712,041.16
09/30/1987 $2,350,276,890,953.00


SOURCE: BUREAU OF THE PUBLIC DEBT

Revenue -- sheesh! -- boy that makes me feel good!

Very good Grizzly, this means that you agree with me that lowering taxes DOES create increased revenue. YOur desire NOT to address the subject shows that you cannot successfully agrue the finer point, and are willing to concede that argument.

Now, as a moderator, I must ask you to please remove your useless posts, as they are nothing but fluff that is overloading this thread, but posting things purposefully which do not pertain to the subject.

Would you please be kind enough to remove the posts that are not relevent, or I will ask Boon-Me remove it for me.

Sorry John.

But debt has alot to do with the subject. You just have not brought it up.

Griz, more than you can play the game here. When you come up with a thread that you are more than content with, then based upon your criteria, I will also have a free hand to deny a different subject jamming your thread, and if you display hyprocricy, I will petition Phil as to your heavyhandedness.

Now I will ask you one last time, please remove your posts that have no relation to the subject of the thread, since you pointedly REFUSE to address the subject I started.

John: I believe that debt has a lot to do with the subject in this thread. Sorry you do not.

Besides, can you show me any thread in here where ALL of us remain loyal to a particular subject at all times. I haven't seen one that stays on subject at all times since I been here.

And since it is easy to complicate ANY POLITICAL subject, I can not see how it would be easy to strictly enforce any idea whatsoever.

But if you feel that you need to contact Phil, or Boon Mee, and try to limit my freedoms, then feel free to do so. Sorry to see that you feel that way.

I have stated before, and now you are again proving me correct, that you are not interested in directly addressing a subject in which you are proven wrong, and have no successful rebuttal.

You either flood the post with links that give more than what is needed, and never give your own opinion. OR, you deviously change the subject and bloviate, which you are doing right here.

And as I have stated before, you are both a "Boor and a Boar". I suspect that you have been very frustrated here, as I have been hounding you with my position of late. With my presence, you no longer have a kingdom with which to prowl around. And since you have no real comeback with facts or substance, you are determined to use your position of power, how little it may be, to get a "leg up" on me.

But make no mistake, you are appearing little and tedious here, and you are not doing yourself any good, by exercising your authority in such a manner.

I have already sent a message to Greg. And if he is unable to follow through, I will contact Phil later.

Again, I ask you to remove your bloviation, and kindly address the subject of the thread, which is "taxes" and "revenue". And quit acting the smug baffoon.



And had you bothered to look, this is not within the Political Section. It is within the Economic Factors Section. So, again please have the decency to remove your wasted posts that have nothing to do with my subject. It is MY thread, not yours, so I am formally requesting that you do your duty as moderator.

IMHO: The same would go for this one as well. Economics is a broad subject and can branch off to many areas that need to be touched upon.

Then start your own thread on the deficit, and I will be more than happy to address it as the subject.

Again, please remove the posts that have no relation to the thread and move it to a thread that is talking about the deficit. As I have made clear, this is MY thread, not yours. You may participate IF you are willing to cover the subject. Otherwise, kindly remove your drivel and leave: or follow the rules.

Your job as Moderator is to Moderate. If you are unable to do so, then give up the position and simply become a member, as the OsMan. But your responsibilities are more important here. Please do your job!

John: the beginning of your thread indicated sterling growth. I felt that you left out the mention of the deficit as a gap in the discussion of this economic thread. I felt free to come in and address it.

Remember you said nothing political? Care to explain this?



It seems to me, you unknowingly made it semi-political and perhaps didn't realize it? Or are you a monarch over "freedom of speech"?

Free Speech has nothing to do with this. You are more than free to discuss the Tax Rates and Revenue all you wish, provided you are not outlandish. And granted, you may discuss the deficit, but it should only be fleeting, as it is definately not the subject.

You are simply trying to Jerk my Chain Griz, and frankly, that does not bother me. But you should follow the subject, when doing the "jerking". YOu are not addressing the subject. And you are trying to justify it by stating that "everyone else does it", which does not "cut it " with me. On those threads, they were someone else's threads.

This one is Mine, and I again request that you remove all this "junk" and address the subject, instead of making a collossal Jackass of yourself, by living "Down" to your image.

All of that stuff that you just spoke to me made no sense to me whatsoever.

John, you need to go somewhere and cool off -- seriously!

I am finished here. You have done a fine job of Intercoursing this thread, and you now have a new template to use on me, that will give you much "subadult" satisfaction, I'm sure. But it only makes you appear the smug little Bast@rd Child that you are.

Congratulations on your accomplishment. I still believe that you have no right being a Moderator on this forum, as you are not doing your job, even if you are going unpaid. You are setting a very poor example here, and were I Phil, I would ask you to step down. TQ is more than capable of performing in a far more mature positon than you.

You are not worth the time. And my evaluation of you, as expressed in the past is still mine now. YOu are every bit what I stated.

I'm going to close the topic for a bit to allow a 'cooling-off' period.

Not being an Economist or especially learned on the subject I'd say, from a layman's point of view, extending the tax cuts can only promote growth.

Basically, it's a philosophical point of view. You have the left with their entitlements and social give-aways and the right with free enterprise and a low tax (generally) point of view.

Heard the same sh!t back in the 80's when Reagan was winning the Cold War. WE'RE BANKRUPTING OUR CHILDREN!!. Didn't happen then and it's not gonna happen this time (unless we elect a Jimmy Carter clone).
The indisputable fact is the more economic activity there is the more the government takes in. Raising taxes decreases economic activity.

And John don't be a johnson here. Gizzards reply to this thread was relevent. He just didn't put it in the rigt context.

I'm not being a "Johnson" on this. I spend a lot of time going through economic factors, even though few participate, because I consider them to be important.

Now, I have no problem talking about the deficit, any time. But clearly, the subject of taxes and revenue are different from spending and deficits. Grizzly is very much aware of this, and is tying to steer the subject away from "good news" because it quite simply does not help his "Jackasses". At the same time he is making a monumental Jackass of himself, and he is doing this purposefully. If you doubt me, you will with time.

It is important to realize that when a person begins a thread, it is ultimately his/her responsibliity to keep it on track, because Moderators are not able to police everything. This was a thread started by me, and I attempted to steer it back on track. Yet Grizzly, a moderator no less, refused to honour my request and actually tried to "muck" up the subject in a blatant manner.

If you think that I am being a "Johnson", then you go and start a thread, that you want to enjoy, and then let me come behind you and deficate all over it. Then tell me what you think then, ok?

I still want his "crap" removed, and put on another thread that covers spending and deficits.


NOW, on to the subject. Does anyone think that the Laffer Curve has no relevence to the subject of tax rates, and the amount of revenue gathered from a lower rate?

What is interesting is that people can look at large retailers, such as Wal-Mart, see how they are able to undercut other's prices, through competition, yet still reap a huge profit. And it is done by the principle of "volume". But when it is applied to taxes, these same people go into a trance and refuse to recognize that it also applies to taxes. I suspect that there is more here than meets the eye. I also suspect that there is more punishment of the producers in mind here, and it is self-defeating.

I remember when I managed a Cracker Barrel, back in the 70s, in Sweetwater Tennessee. Danny Evans, the President stressed volume over "food" and "labour" cost percentages. He stressed keeping the stores clean, well running, and producing "Great food" that would keep the customers lined up out the front door. Forget the profit margin at the beginning. Get the customers, and the volume coming in. The profits will take care of themselves.

He was right! If the traffic comes pouring in, the increase in profit will follow. Then fine tune the system, but trying to become more efficient first, at the expense to volume is a recipe in eventual failure.

The same thing holds here with taxes. make the system more conducive to the taxpayer, and he/she will work harder and not be enticed to work within the "Hidden" economy.

Lower tax rates provide an incentive to be more productive right? Lower tax rates also provide an incentive to actually pay the taxes right? Then why have the tax rates for the lowest income people not been lowered even further. Low enough to actually make it more beneficial to get a job than to stay on welfare. Maybe these lower rates along with a reformed welfare system will actually encourage people on welfare to try to get off welfare and find employment. The current system actually makes it easier to be on welfare than to be a low income wage earner in this country. If revenues are indeed rising then we can afford to cut taxes a little further for the lowest income people.

True lower taxes as they are now benefit the entire country's economy as a whole but how does that directly help lower income people. Sure the lower rates help business expand and provide more jobs but it doesn't help lower income people get better job training. It doesn't provide money for childcare. It provides no incentive what-so-ever to get off welfare.

In conclusion I support the lower tax rates. In fact I would like to see them lower for the lowest income people, not to expand business, but to help lessen the need for welfare as we know it. These extremely low rates along with a welfare that is not just a government hand out but a program that trains, motivates, services, and actually helps people have better lives should be a positive for our revenues in the future. It seems this would, in the long run, allow us to spend less on welfare and increase our tax base as lower income people move into higher brackets.

Have you considered that the income tax rates for the lowest income people is already zero? The truth is that the lower income people you are worried about, are not paying ANY income tax, for that very reason. The government already hands out money to lower income families, called an "Earned Income Tax Credit" on the Income Tax form.

FICA taxes are not included here, because that is Social Security Tax, not income tax.



Brooklyn, do you believe in Individual Responsibility? Or do you believe that it is the State that is responsible for us? Because if you believe in the former, then it is up to the parent to provide for their children. Granted, we have programs to help those who are unable to help themselves, but if they cannot afford children, then why do they take on the burden of having children, with whom they cannot afford?

Now if you believe that the State is responsible, then tell TQ hello for me, ok?



I'm not trying to sound crass, but my Mother's younger brother, a lawyer and a real Bast@rd, had a plaque behind his desk that I will always remember. It says, " If you think the world owes you a living, then hustle out and collect it".

Okay good. I did not realize that the EIC actually eliminate all income tax for those who qualify. But why not just change the rate to zero? Wouldn't that be less work for everyone (the IRS included)?



Of course I believe in individual responsibility. My point is that our welfare system, as is, actually encourages people to use and abuse it. Why would any woman take less money (after taxes, transportation and childcare costs) to support herself and her child(ren). The current system is a handout, not a program that helps. If you are going to pay the money for a welfare system anyway you may as well pay for a system that works for the nation and the individual's benefit not one that uses up more cash to create a culture of dependence.



Unfortunately hustling is all most people on welfare have the skills to do. This nation created the welfare mess and we can fix it as well. It would benefit our nation financially and socially to do so.

You have to agree that fixing welfare would lead to larger revenues and less cost to our government. If it is here to stay it may as well work to everyone's benefit.

Actually the Earned Income Tax Credit gives the tax payer more back than the zero that they would pay.



Stop and think of this a moment. If your job relied on "more work", would you be in favour of "less work"?



If you think it is bad now, you should have been an adult ten years ago. That was before Bubba signed the Welfare Feform Bill that the Republican Congress had passed, and he had vetoed several times. Thank Dick Morris for talking him into signing it. The welfare rolls are now less than half what they were then.



Then, if they do such in a legal manner, then they can apply their skills, and make a good living.



You certainly got that one right!



Agreed! How would you eliminate this? Keep in mind that you will never get rid of ALL this. It is like standing in the middle of a large room. Start out going half way to the wall. Then again, go half way, and continue this. YOu will never reach the wall, but you will get close.

And remember, there si this thing called "The Law Of Diminishing Returns".

Wow even better. So there is no excuse not to reform welfare.



What if doing less paperwork and other similar BS allowed for more important duties (like audits) without increasing the cost of collecting the taxes?



Where I come from hustling is never referred to as a legal activity. I should have referred to it as hustlin' instead.



I know it can never be eliminated and it will always cost the tax payers a lot. But there is an easy way to add more services at the same cost at first. Then eventually there will be less of a need for it. Welfare services need to be privatized. Only with privatization will there actually be an incentive to put people into jobs by training, educating, and providing childcare coupons and mass transit coupons. Put people in careers or lose your contract. Notice I didn't say put case numbers in jobs. It would be very important for case workers at the community level to really be involved. I'm confident the private firms that would bid to win the contract would realize this as well (competition would force them to).

Of course the details of this (one large firm or mulitple firms? length of contracts? what are acceptable results? ) would have to be thought out very carefully but I believe it could work.



That will be for the private firms to worry about.

It applies to Everything! Unfortunately, the Burocreacy tends to overlook this, to the detriment of the taxpayers. That is why the smaller the State, the better, and the tenure of elected officials should be limited.

I'm not sure how long this topic has been closed, but I'm glad it's re-opened. Why? Because Grizz is pulling some PURE BS!

The topic of this thread is that lowering taxes increases revenue!

I'll say that again:
LOWERING TAXES INCREASES REVENUE!

Grizzly has not put ONE LETTER forward to repudiate this argument! Simply because debt goes up does not mean that revenue has gone down. He keeps saying that John is ignoring the debt. It is Grizzly who is ignoring a thing called SPENDING.

SPENDING is way up. It has increases faster than revenue. You are right Grizzly, as John said. However, it has NO BEARING on the topic of this thread:

LOWERING TAXES INCREASES REVENUE!

What Grizzly has said, basically, is:

Lowering taxes increases revenue! BUT, if spending goes up even faster, debt will increase!

You are 100% correct Grizz, and 100% off-topic. Let the books be closed.

Your ideas, and the ideas of the people who lead you, are bankrupt. Wake up.

I am well aware of that. That is why in this case the efficiency of private firms take the place of beurocracy.

John, one thing you will figure out about me, in time, is that I am a very big fan of privatization to help solve many economic problems facing our nations urban areas.

Excellent! We will make a certified Classic Liberal out of you yet.