President Norquist ru(i)ns the USA

[dgs49]

Fundamental point: When you start with a graduated tax scale, there is NEVER any reason to increase tax rates. Government revenues to up or down according to the relative prosperity of the country.

The idea that government cannot "flex" its spending the same way every private company in the world can is false. Some spending is fixed over time, but there is more than enough "fluff" to scale back when the country is in recession.

This is an oversimplification of Norquist's point, but the basic premise is valid.

[Grim Reaper]

But the point is well-taken. Depending on the myriad of other economic factors, marginal rates can be dropped a lot and yet tax revenues go up a lot over a reasonable time period (8 years). It is the revenue and % of tax burden we should be focused on, not the tax rate.

The point though is that when you look at every year and look at the whole picture for every year instead of just one portion of it, then his numbers don't look nearly so impressive.

Total income tax revenue had been climbing steadily over the years, it wasn't some big jump like when you look at a portion from two individual years.

[Econoline]

Fundamental point: When you start with a graduated tax scale, there is NEVER any reason to increase tax rates. Government revenues to up or down according to the relative prosperity of the country.

Using the same logic, there is NEVER a reason to cut taxes--especially not while increasing discretionary spending the way Bush Jr. did. And if those cuts were a mistake (as your reasoning, and that of many economists, seems to indicate) then why not try for at least a partial correction, starting with the taxpayers with the most wealth and discretionary income?

And you know, every time the idea of raising the minimum wage to keep up with inflation comes up, conservatives trot out the same old reductio ad absurdum arguments (e.g., well if raising the minimum wage is so good and doesn't hurt business, why not raise it to $20 or $50?). Well, by the same token, if cutting taxes is so good, and always increases revenues, why not cut tax rates to 5% or 1%???

Face it: Clinton (and the Republican congress, okay, okay) got it right; Bush (and the Republican congress) got it wrong. And correcting a mistake is usually better than doubling down and hoping for the best.

[rubato]

First, you have to be aware when evaluating the budget as a percentage of GDP that the numbers will go up if there is a recession because the spending is set but the overall GDP declines (plus there are recession driven spending increases) -- so it is misleading to compare percentages from a recession year with percentages from years when the economy is doing well.

Thanks for that Long Run, you saved me the trouble....

I have made the same point many times already w/ re to the deficit. I'm surprised you don't recall it.

yrs,
rubato

[rubato]

http://www.cbo.gov/publication/42911

Table F-4

About 60 % of Bush's increased discretionary spending was for defense. 40% for all else.

350.7 B per year vs 237.8 B over his whole term.

The first round of his tax cuts for the rich (not including capital gains and dividend tax cuts) was about 290 B/yr so you can see that cutting taxes was one of the largest contributions to the huge deficit-bomb he left.

yrs,
rubato

[rubato]

Clinton created surpluses by holding discretionary spending flat for defense'; 292B in 1993 vs 306 B in 2001. Other discretionary spending increased. And raising taxes on the top 20%.

If the Republicans had done nothing we would have paid down the federal debt by ca 200 Billion per year rather than running deficits and leaving an even worse "debt bomb" for Obama to clean up. Making the Republicans worse than nothing by > $1.6 Trillion dollars by 2009.

yrs,
rubato