Obama's and McCain's 10 Worst Ideas from Foreign Policy Magazine
Here Obama's 10 Worst Ideas .
Here's McCain's 10 Worst Ideas .
I think they are generally on the mark though I have some quibbles.
On Obama's, I'm not so sure how bad Number 4 is. Meeting with the Iranian President, by itself doesn't seem so bad to me. However, FP adds that Obama said he would do this "without precondition". Perhaps THAT isn't wise. I'm not sure. But according to a Carnegie Endowment expert on the matter:
“Only two things can rehabilitate Ahmadinejad politically: bombing Iran or major efforts to engage.”
While the effects of bombing Iran are incredibly obvious to all but the most chest-thumping hawks, efforts to engage seem a bit peculiar as a rehabilitation for Ahmadinejad. Like I said, I'm not sure. They could be right. I can think of much things Obama has said....but they are already on the list.
I agree that number 7 is bad...strangely enough.....but only because he seeks to favor one group over another. This is how special interest group BS starts.
Number 10 seems rather innocuous.
But the rest? Yeah. Kinda bad to REALLY bad.
On McCain's,
Number 2 on the gas tax holiday is bad only because it's stupid and ineffective. But harmful? no. Still, a dumb idea. I agree.
Number 3 seems bad only because it sounds better than it will work. Like FP says, such ideas at the state level haven't lowered any such burden. Congress simply circumvents it by legislating fees and other technically "non-tax" revenue generators. The only way to get the result is to eliminate certain taxes...flat out. Or, people must be willing push back at tax increases in a cross-ideological way and that isn't happening. Oh well.
"Drilling our way out" is not bad because it might work. It's bad because it WON'T work. The logic is simply flawed.
Making the Bush tax cuts permanent? No, not bad. FP simply believes the government "deserves this money" or something like that. And quoting someone from the pro-hyper-spending "Center for Budget and Policy Priorities" is hardly edifying....especially when they say:
“the tax cuts are more likely to reduce long-term growth than to increase it,”
That makes no sense unless you torture logic with a lot silly assumptions.
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Was JFK wrong to talk to Kruschev during the Cuban missle
crisis? Was Nixon wrong to talk to Mao during his term?
There were no pre-conditions placed then. Why would pre-conditions be useful now, aside from those that don't want the talks to happen to begin with.
As far as making the bush43 tax cuts permanent....You like the idea of almost doubling the National debt? That's not very fiscally conservative of you.
King of "Appeasement"
Kevin James has disagreed about it being ok to talk to Iran.
[That never gets old]
If there are renewed tax cuts, something large in the budget needs cut. $40 Billion of Pork isn't large enough.
In our society, people are rewarded for pretending to be certain about things they're clearly not certain about. -- Sam Harris,
Correct
The pork isn't enough.
We must go further. I'm on board. How about you?
Tying Medicare to increases in average life span is a tiny start
Just so long as the DoD gets to keep certain
things 
In our society, people are rewarded for pretending to be certain about things they're clearly not certain about. -- Sam Harris,
The military budget is the big one
Last I checked, Germany showed no signs of trying to invade its neighbors, so I think we can pull out of there. Same with Japan and just about all the countries in which we have troops stationed.
We should stay in S. Korea until we sign a peace treaty with the N. Koreans, but we may want to draw down some of our presence. I support our mission in Afghanistan and we should have troops in Iraq to train the Iraqi military.
Other than those exceptions, I don't see why we need troops anywhere else.
I never broke the law; I am the law! --
George W. BushJudge DreddI'm listening to...
Indeed...
but it can only realistically give about a quarter of the needed savings with any plausible decreases. I wish it could be more. Heck, even what I would want to cut will seem seem ludicrous to most.
Rammstein, die Sonne scheint
I highly doubt the US would lose all staging areas in any given major geographic location.
In our society, people are rewarded for pretending to be certain about things they're clearly not certain about. -- Sam Harris,
Assumptions, Assumptions
You just keep fillin' in the blanks there....
The blank was rather obvious:
You're the one who (rightly) says that economics is non-linear. Why is it suddenly linear now?
I never broke the law; I am the law! --
George W. BushJudge DreddI'm listening to...
I never said is was linear
I'm simply saying that you need to make a lot of silly assumptions for lower taxes to "likely reduce long-term growth".
Why?
You (again, rightly) point out that there are lots of unintended consequences for certain government programs or regulations. The same is true here unless you do believe you can know that lower taxes will always increase growth.
No taxes would decrease growth. Infrastructure would crumble, for one. I think universal health care would increase growth even with higher taxes. The productivity gains from people not spreading their illness at work would do wonders.
I never broke the law; I am the law! --
George W. BushJudge DreddI'm listening to...
Walking on a tight rope.
Please stay inside the lines. I'm simply saying that keeping the tax cuts in place, without some very plausible and complex explanation, will not lead to lower growth.
But the scenarios you point to in the second paragraph are either extreme (no taxes) or involving new spending (health care). Even the health care argument has nothing to do with leaving the taxes in place.
Even in France, universal health insurance is funded through a separate tax.
The tax cuts are about general spending.
You need demonstrate plausibly how NOT raising these taxes back up is going to lead to lower growth. I simply don't see it.
Actually, John, to be frank,
Actually, John, to be frank, one would have to make "silly assumptions" to assume that making the Bush tax cuts permanent (combined with continual patches on the AMT or eliminating the AMT) would not eventually lead to lower growth. Specifically, one would have to either assume an unrealistic GDP growth rate or assume politically unrealistic spending cuts.
We would be on a literally unsustainable course, due to the increased spending on entitlements, even if realistic levels of reductions in spending on those programs (vs. projections based on current law re: eligibility and benefits and based on realistic efficiency gains) were achieved. Eventually the interest expense (on the debt) would grow so large that we'd have to either default or monetize the debt (essentially print a ton of money) leading to very problematic inflation.
But before we got to that point, interest rates would rise very substantially (and would be much higher than they would have been had we raised taxes and produced a lower debt-to-GDP ratio), which would reduce GDP growth.
Do you have data to support your postulation...
...because it would appear history demonstrates that to be incorrect.
“Back in the thirties we were told we must collectivize the nation because the people were so poor. Now we are told we must collectivize the nation because the people are so rich.” ~ William F. Buckley, Jr.
Is there some element in
Is there some element in particular that you are questioning?
What are you saying that
What are you saying that "history demonstrates"?
Anyway, you can start with this, a GAO report by David M. Walker Comptroller General of the United States: http://www.gao.gov/new.items/d07389t.pdf
In particular, see pages 14-15, section entitled "Meeting the Long-Term Fiscal Challenge Requires Action on the Spending and Tax Sides of the Budget--Cooperation and Compromise Will Be Necessary"
Ok, well that is different than...
...what I thought you were saying.
Lowering taxes generates more revenues, and McCain will veto any legislation with pork attached, reform entitlements of all kinds, restrain spending to its constitutional limits, less any existing federal obligations.
Look, the Republican Congress balanced the budget with welfare reform and a conservative approach to government in the 90's despite having a democrat in the white house, and that after the Reagan deficit liberals howled would bind our children to economic debt for generations.
So, there is work ahead, but unleash the power of American enterprise and tread lightly as far as government goes and we can do this.
“Back in the thirties we were told we must collectivize the nation because the people were so poor. Now we are told we must collectivize the nation because the people are so rich.” ~ William F. Buckley, Jr.
Lowering taxes generates
Lowering taxes generates more revenues
Pardon me? Looks like someone has drunk the partisan Kool-Aid and is doing the partisan talking point machine thing again (and may be a bit analytically-challenged and fact-check-challenged).
No, lowering taxes, in general, has a net negative impact on revenues. There is almost universal agreement among well-credentialed economists on that point, even Bush's own current and former top economists.
the Republican Congress balanced the budget with welfare reform and a conservative approach to government in the 90's despite having a democrat in the white house
Where the heck do you get this stuff? Limbaugh? The budget ended up balanced because of revenue growth, which was mainly the result of GDP growth, not due to spending restraint, and the 1993 tax increases helped reduce the deficit.
Geez, man, you gotta get out (of the partisan echo chambers) more.
Sounds to me like that is not a bad idea for yourself...
Historically, less taxation results in increased revenues
.
So you can smirk and do gradeschool math in your head, or face the facts as they are.
And as for why the budget was balanced, ever hear of the Contract with America
?
“Back in the thirties we were told we must collectivize the nation because the people were so poor. Now we are told we must collectivize the nation because the people are so rich.” ~ William F. Buckley, Jr.
Yeesh, you are so far gone
Yeesh, you are so far gone it's ridiculous. Are you in high school, if you don't mind me asking? You really seem to just swallow whole whatever you hear from some partisan source like Limbaugh.
You say that "Lowering taxes generates more revenues" and that "Historically, less taxation results in increased revenues", and you back that up with:
(1) a link to Dan Mitchell, who, despite the fact that he was employed at that time by Heritage and now by Cato, has, on other occasions, explicitly disagreed with your assumption that cutting taxes from rates anywhere near current rates (or those prior to the Bush tax cuts) would likely have a net positive impact on revenues,
(2) an obvious theoretical (Laffer Curve) point about what would happen at the extremes of tax rates that has offers essentially zero support to the point you were making, and
(3) a quote and link to "newt.org", highlighting a statement that the budget was balanced -- um, yeah, so?
Again, you really need to diversify your information sources, consider the likely biases and agendas of your sources as well as their level of expertise, think more critically and objectively, and apply logic and sound analysis tot he extent that you can.
As for the matter of the impact of tax cuts on revenues, see these links, and educate yourself rather than continuing to spew ignorant, stupid, harmful, bullsh*t partisan myths:
http://logicizer.blogtownhall.com/2007/11/15/no,_the_bush_tax_cuts_have_...
http://logicizer.blogtownhall.com/2007/10/20/the_logic_of_the_laffer_cur...
Dan MItchell is very specific
about the matter of taxes and revenue. His POV is actually not incorrect at all. What can be incorrect at times are opinions that broad-brush what he says.
You have some nerve...
...maybe, as in this instance, you should wait and see how things develop before you rain your personal views down upon ideas you disagree with, and dismiss it as folly?
I'm afraid reality is greater than the sum of your recent time spent clicking around on the internet!
Certainly, as in the Kennedy tax cuts it was a winner for the government. Even the Reagan tax cuts were a net positive until they were eventually seen as a government fix all for out of control spending. Both Reagan and Bush43 were strapped with wars to win, one cold one not, so... In general...
I will say two things; 1) I am not saying under any circumstances tax reduction results in greater receipts, a tax cut now I agree it is pushing it, though I would advocate lowering corporate taxes as we have some of the worlds most oppressive corporate taxation. 2) Reducing taxes does stimulate the economy in a broad range of ways enough so that it can be a good thing regardless of if it is seen as a temporary federal spending package.
________________________________________________________________________
From Stephen Moore
at CATO;
Try to tone your rhetoric down, or have this discussion with someone else. I understand that sort of condescending BS coming from some here who lack the ability to articulate their position, I spend more than my share of time faced with that fact, I hold you to a higher standard.
“Back in the thirties we were told we must collectivize the nation because the people were so poor. Now we are told we must collectivize the nation because the people are so rich.” ~ William F. Buckley, Jr.
Yeesh, you may turn out to
Yeesh, you may turn out to be absolutely unshakable from your partisan myths and thus not worth much more of my time, but I'll try a bit more. And yes, you do seem like a high school kid who discovered Rush -- and through Rush, politics -- over his summer vacation, and can do no more than parrot GOP/conservative talking points. I realize that's insulting, but I'm really trying to get you to wake up, diversify your information sources, think more critically and objectively, etc.
And yes, I will dismiss your repetition of debunked partisan myths as "folly" and worse. It's not just something I "disagree with"; you are repeating a myth that conflicts with the nearly universal consensus of experts on the matter, and you have no basis for your belief other than whatever you've heard/read Rush or other mindless, ignorant, and/or disingenuous partisans say, combined with your own inability to apply even basic concepts of analysis -- as in, correlation does not necessarily imply causation, and certainly correlation among cherry-picked data points does not necessarily imply causation, or even a real correlation. Just because revenues go up in the years after a tax cut, it doesn't mean that the tax cut had a net positive impact on revenues. But you don't consider the other potential factors...unless someone asks you about the data points you left out, such as revenues rising after a tax increase, then you come out with other factors to which you attribute, with equal confidence, the revenue increase (e.g., the information technology advances and dotcom boom under Clinton, or cyclical emergence from a recession, rather than the 1993 tax increases).
And let's get this straight. In the context of a discussion of the impact of making permanent the Bush tax cuts and in response to my contention that doing so (along with continual patches on the AMT) would cause higher debt level as a percent of GDP, you said:
"Lowering taxes generates more revenues" and "Historically, less taxation results in increased revenues". Now you seem to be backtracking and trying to fundamentally change what you are asserting, saying now: "I am not saying under any circumstances tax reduction results in greater receipts, a tax cut now I agree it is pushing it". Listen, you made a statement that was either absolute or at least intended as a general rule. I've shown you that prominent conservative economists, including Bush's own current and former top economists, say the opposite: that as a general rule, and with regard to the Bush tax cuts in particular, tax cuts (from rates anywhere near where we are or were prior to the Bush cuts) have substantial net negative impact on revenues. Even your buddy Dan Mitchell who owes his paycheck to folks who want taxes as low as they can get them says that, albeit with weaselly additions he must know are misleading. Mitchell ackowledges that there is general agreement that tax cuts from current levels would generally be expected to have a net negative impact on revenues, but he adds a couple of weaselly points:
- First, after making that general point that tax cuts generally do NOT pay for themselves (let alone increase revenues), he puts up a bullet point slide saying only that "Not All Tax Cuts Pay for Themselves" (emphasis mine). That's like if I said I generally don't eat 5,000 calories in a day and then recapped with a bullet point saying "I don't eat 5,000 calories every day".
- Second, he points to revenue increases following capital gains tax cuts, and even alludes to the "unlocking effect", but doesn't point out that this is mostly a timing effect -- an acceleration of revenues that would have come later, rather than a permanent net positive effect. In fact, Greg Mankiw and others state their views on the long-term degree revenue feedback effect of cuts in capital gains tax rates on the list of quotes to which I linked, if you bothered to read it.
By the way, I had a long email exchange with Dan Mitchell on this matter in 2006 when he was with Heritage. One quote from one of his emails:
If the Bush tax rate reductions are made permanent, my personal guess (no science here, just a hunch) is that the revenue feedback would be about 50 percent. In other words, they would not pay for themselves, but a 50 percent feedback is still very impressive.
Regarding the budget coming into balance due to revenue increases vs. spending cuts/restraint, take a look at this chart and tell me if you still think the deficit was eliminated (and surplus generated) on the spending side rather than the revenue side http://www.heritage.org/research/features/BudgetChartBook/fed-rev-spend-...
As for Stephen Moore, former president of the Club for Growth, he is one of a handful of partisan hacks who have made a living by being contrarian -- that is, claiming the opposite of what almost all well-credentialed economists are saying -- on the question of the relationship between tax cuts and revenues, relating to individual taxes on labor and investment income in the range of tax rates we are in and have been in in recent history*. I'll save you some trouble by listing a few others who pop up often, some of whom have little to no economics education: Pete DuPont, Brian Wesbury, Larry Kudlow, Art Laffer.
Lastly, re:
I'm afraid reality is greater than the sum of your recent time spent clicking around on the internet!
That is a moronic statement. You make it sound like I'm basing my view on some obscure website or blogger on the Internet, whereas what I provided you in my futile attempt to educate you was a long list of quotes of prominent conservative economists on this very question.
* The relationship for corporate tax rates and revenues in the U.S. is apparently more complex and has not been the subject of as much study or stated conclusions among economists -- so there is no similar consensus, one way or another, on the direction of the relationship: whether a corporate tax cut from today's rates would likely have a net positive or negative impact on revenues. It is worth noting, though, that the Bush tax cuts pertained primariliy to individual income taxes (on labor and investment income), not to corporate taxes.
A small addition on Mitchell, BR
I hope it's clear to you (and all) that he is quite honest and accurate about how he judges the effects of tax cuts paying for themselves. He is not a peddler of propaganda or deception. If you watch his video series on taxes, it's clear that he never ASSERTS anything that isn't true and makes it a point to dispel any myths about all tax cuts being 100% revenue positive or better.
I don't consider Mitchell to be a hack or ditto head on this matter and it would be a shame if anyone got that impression.
He's obviously pro-tax cuts but he's honest about the effects on revenues. That said, as a matter of opinion, I would venture to say that tax cuts that have some positive feedback are a good option provided the gap left from the feedback is handled through spending cuts.
The one important thing I take from Mitchell's series on tax cuts and revenue that more people should consider is that it is simplistic to judge the loss of revenue as static 100% loss. IOW, a tax cut that would cut revenues by $50 Billion based on current income tax collections does NOT mean that the tax cut will bring in $50 Billion less in revenues for the government once enacted. It could $40 Billion less or $30 Billion less or $25 Billion less (at 50% feedback) but not $50 billion less. And that is just in the first year. The following year could be even a bit better and so on...while never totally paying for itself in anyway that can be measured. But I won't make any bolder claim than that. The rest is simply speculation at worst and complex yet suspect formulizing and calculating at best.
Yes, obviously there
Yes, obviously there generally are revenue feedback effects to tax cuts, and obviously static scoring ignores such effects and thus overstates the revenue loss from a tax cut. No serious person contends otherwise, although some reporting and partisan rhetoric fail to point that out and misuse calculations based on static scoring.
As for Mitchell, I didn't accuse him of saying anything dishonest or incorrect. I will say, though, that he has tried to spin matters and say things that are dliberately somewhat misleading and conducive to misinterpretation in a manner favorable to tax cuts. I gave a couple of examples in my comments related to the video I posted. Also, while he was at Heritage, he wrote something that led to an extended email exchange in which he told me that he was not implying that the Bush tax cuts (or tax cuts generally) had had, or would eventually have, a net positive impact on revenues. He wrote on 10/13/06, as a bullet point in a section of a column (post) with the heading: "Lessons from the 2006 Budget Numbers" (bolding/italics mine):
In the email exchange he denied that he was trying to create the impression that the Bush tax cuts had had a net positive impact on revenues, and claimed he could not even see why someone would interpret his statement above as implying that. I'll leave it up to you to judge the likelihood of those claims being sincere, and bear in mind who was paying his salary, and who is doing so today.
I don't see the problem
If you follow his wording, he doesn't say anything wrong. It's all in the interpretation. I don't see anything misleading.
You don't think that many or
You don't think that many or most people are likely to "interpret" that statement, in the context of "Lessons Learned from the 2006 Budget Numbers" as an assertion that the 2003 tax cut had a net positive impact on revenues? I think most people would, and I find it hard to believe that that was not the intent, while providing some wriggle room for deniability.
Honestly,
Some will, some won't.
Willing conservatives will gloss over it and use it as a validation for supply side tax cut logic under any and all circumstances. Willing liberals will gloss over it and assume the same thing from a negative "BAH!" standpoint.
Then people like you who are very sensitive about debunking the "tax cuts always pay for themselves" meme, will think he's trying to be sly without actually lying. People like me...who like tax cuts but don't believe in the universal supply-side meme will just take him at his word and appreciate the precise wording.
But leaving aside the
But leaving aside the question of his implication regarding tax cuts in general, don't you think a reasonable reading of that statement of his would be that he's (at least most likely) implying that (1) the 2003 Bush tax cuts in particular have had a positive net impact on revenues, and (2) those types of tax cuts will generally have such an effect?
Sure, he's saying it had a positive effect on revenues
But he's not claiming that they totally paid for themselves. He says they cuts led to savings and investment and the subsequent economic growth led to a boost in taxable income. It's true. No problem there.
Saying the tax cuts has a positive impact on revenues is not the same as saying that they paid for themselves. There's nothing ambiguous there. He said that they had a positive effect...but he doesn't say how much because it's tough to tell for sure. But tax revenues did climb and surpass the 2000 levels and with lower tax rates. Would they have been higher THAT YEAR had there been no tax cuts? Perhaps. We don't know. But the fact that the government got a good boost in its precious revenues that surpassed 2000 levels with lower rates is a success all by itself. What I think we CAN say for sure, however, is that we simply can't add up the taxable income from the year in question and apply the older tax rates and pretend that all that extra revenue would have been collected just the same. It may have been a tad more than what was collected with those rates in place...maybe the same....at a stretch maybe even less. It's hard to tell what those previous years would have been like without the tax cuts in place.
Like I said, I see no problem in what he said. The problem you seem to have with it is that he isn't presenting it the way the you want it presented. That's simply a preference on your part.
I think you're being extremely generous
with your interpretation of what he said.
My quick read very much agrees with B Rational's take, for whatever that's worth, based primarily on the parts he italicized.
I suppose if he emailed that he wasn't intending to give that impression one should take him at his word, but it frankly seems odd to me that he'd be surprised someone could read it that way.
Come, my friends. 'Tis not too late to seek a newer world -- Tennyson
I don't see that
The problem here comes with the implications that people choose to take from positive effect.
If you think that has to mean he's saying the tax cuts paid for themselves, then you have a problem with what he said...otherwise no.
And I don't see him saying that the tax cuts paid for themselves. If he wanted to claim that, he would have...but he didn't.
Ok
I guess we just interpreted it differently.
It would be interesting to see how most people read it, but unfortunately we don't have a large (and unbiased) sample to work from here at SC.
Come, my friends. 'Tis not too late to seek a newer world -- Tennyson
Read it closely
I'm actually being charitable when I talk about interpretation. His words are precise and clear.
Look again, Brendan:
Notice the first sentence is a general statement. The second sentence is where speaks specifically about the tax cuts.
Nothing is ambiguous there unless you want to suggest that he saying more than that. It's not there.
I dunno
Why would he say "can lead to a net result of more revenues" if he is not intending to suggest that such has occurred in this specific case?
It would be like me writing "A good football team needs a quarterback who can be counted upon to come through under pressure. The Eagles cannot be considered a good football team."
The first sentence is general, the second specific, but the combined effect gives the impression that I am suggesting McNabb can't be counted upon to come through under pressure, doesn't it?
Come, my friends. 'Tis not too late to seek a newer world -- Tennyson
My stab at it, "of the quote"
"Laffer Curve effect and can lead to a net result of more revenues"
"subsequent economic growth [due to the Bush43 tax cuts] led to the significant increase in taxable income, which resulted in the boost in tax revenues evident today."
"[The Bush43 tax cut was evidence of the Laffer Curve and a reduction in taxes increasing growth and increasing tax revenue]"
In our society, people are rewarded for pretending to be certain about things they're clearly not certain about. -- Sam Harris,
Actually, it's even clearer
Actually, it's even clearer than that.
I think you have higlighted the wrong word ...
In other words, SOME tax cuts CAN lead to a net result of more revenues. He then goes on to claim that the Bush 2003 tax cuts are an example of one that DID, and that the 2001 tax cuts are and example of one that DID NOT.
This seems unambiguous to me.
Republican Maverick at Large
-4:Strongly Disagree; 0:Meh; +4:Strongly Agree
Right, that is my
Right, that is my interpretation, but John for some reason doesn't think Mitchell was stating or implying that the 2003 tax cuts had a net impact of more revenues. Of course he was.
BR - In light of the direction this has gone...
...why was your initial reaction to me this - when I suggested that very thing?
“Back in the thirties we were told we must collectivize the nation because the people were so poor. Now we are told we must collectivize the nation because the people are so rich.” ~ William F. Buckley, Jr.
Oh geez, now I have to try
Oh geez, now I have to try to deconstruct what you said and explain your obvious misunderstanding. I guess you aren't distinguishing between what I'm saying Mitchell was saying vs. what I'm saying is valid. You should.
GR is also stating his opinion.
GR thinks the 2003 tax cuts paid for themselves. That opinion is mixed into and influences his reading of what Mitchell said. Now, Mitchell may or may not privately think that is true but he didn't say it at all. As I said earlier as an aside, I ALLOW FOR the idea that those tax cuts netted more tax revenue in the year that they spiked than we would have had otherwise (we can't be sure)...but that is a separate point in addition to what Mitchell said.
It is true that I believe the 2003 tax cuts ...
probably paid for themselves, but I don't think that I am letting that influence my reading of Mitchell's statement as quoted above.
I think a straight-forward reading of his statement pretty much indicates that Mitchell is saying that the 2003 tax cuts actually increased revenues, albeit indirectly by increasing the over-all taxable income base through increased production.
Of course we all seem to know that there is no way to PROVE that one way or the other. And there's the rub. The zealots on both sides can still claim they are right which is sort of John's point, I think.
Even if the tax cuts didn't completely pay for themselves in a total revenue sense, I am also open to other reasonable interpretations of "net positive effect". For example, how about maximizing the value of "Total Income per Unit of Burden" on the taxpayer. In other words try to get the most income with the least impact on the taxpayer.
If we equate "Unit of Burden" with "Percentage Point of Tax Rate" we have the situation we are discussing here. By that definition any delta (positive or negative) to the tax rate which increases the ratio of income to tax rate can be considered a "good thing" in the sense that it is seeking the sweet spot of the tax rates where you get the optimal amount of revenue. Any rate lower than that misses "cheap" revenue increases, and any rate over that merely becomes increasingly oppressive for diminishing gains.
I guess I am still assuming a Laffer like curve here where the sweet spot in at the maximum point on the curve.
While I admit I haven't thought this through so it may have plenty of holes, I think it illustrates another possible interpretation of "net positive effect" which doesn't necessarily imply "higher over-all revenues". Anyway, its too late to be thinking these things up.
Republican Maverick at Large
-4:Strongly Disagree; 0:Meh; +4:Strongly Agree
Not the same thing...
Yes. I agree but that's not necessarily the same thing as saying that the tax cuts paid for themselves and then some with a net increase in taxes over pre-tax cut rates.
I agree, revenues went up sharply after the tax cuts had their effect because the cuts contributed (led to..in part) economic growth that increased taxable income and led to, thus, a shapr increase in revenues from the year before and the year before that. That is what I clearly see Mitchell saying:
Tax cuts had a positive influence on growth and that growth dramatically increased taxable income which gave a sharp increase in tax revenues. That's what he said and that what I see.
I dunno, Brendan
He said what he said because tax cuts can lead to a net of more revenues in certain cases. He simply followed that by showing specifically that the tax cuts increased the amount of taxable income...which led to massive increase of tax revenues. It's a related point.
I've watched the whole video series and I never thought he was trying to hoodwink anyone. He's speaking positively about tax cuts and their positive effects when done properly. If you watch all the videos, I think he's quite clear about caveats to overstating the results from certain tax cuts.
But yes, the Bush tax cuts led to an increase in the taxable income base and that led to a sharp increase in revenue...increases that beat projections if you recall.
But most of this criticism of Mitchell is simply splitting hairs.
We are not talking about
We are not talking about anything Mitchell said in his videos or elsewhere, we are talking about what is a reasonable reading of that statement in the context in which it appeared, "Lessons of the 2006 Budget Numbers" in a Heritage Foundation piece
yes, the Bush tax cuts led to an increase in the taxable income base and that led to a sharp increase in revenue
John, I say this in a friendly way, but your use of "led to" is a very common "weasel word" tactic. "Led to" can mean either "was followed by chronologically" or "caused", and this ambiguity is why "led to" is appealing for anyone who wants to blur the matter. We are discussing Mitchell's implication of "caused" or at least "contributed to" as in "had a net positive impact on" revenues. So let's keep that clear.
...increases that beat projections if you recall.
Another tactic used (intentionally or not) by those who are blurring the issue. The question is "Are revenues higher than they would have been otherwise -- i.e., if the tax cuts had not taken place?" NOT "Are revenues higher than projected revenues?" Multi-year projections are not particularly accurate.
I'm not accusing you of deliberate obfuscation, but people often, either deliberately or due to confusion, make the arguments you've made above.
"Led to"
means that the cuts are positively correlated to the economic growth that followed to some degree which "led to" an increase in taxable income.
"Led to" appears with increase in taxable income that came from this growth.
Let's not get mixed up here.
No.
No. That's YOUR question..
ok, I'll just drop this
ok, I'll just drop this subject. It's getting unnecessarily tedious, and I don't want to keep trying to keep things focused and explain the logic of everything, at least not more tonight. I think it's all pretty clear, really.
Agreed.
It is very tedious. ;)
I think Brendan is being too
I think Brendan is being too nice. I have a hard time seeing even reasonable disagreement on this "interpretation" matter.
First, I assume we can agree that when someone says that a tax cut has had a net positive effect on revenues, then he is saying not only that the tax cut has "paid for itself", but that it has gone beyond that point -- that the revenue feedback effects have been sufficient not only for the tax cut to have paid for itself, but to have exceeded revenue-neutrality, right?
Now, again:
Mitchell is discussing (per the heading of the section of his piece) "Lessons from the 2006 Budget Numbers".
He says (my italics and capitalization):
"Good tax policy generates a Laffer Curve effect and can lead to a NET result of more revenues."
If all he meant was that there is some degree of revenue feedback effect, why would he include the word "net"??
"The 2003 tax bill ... The subsequent economic growth led to the significant increase in taxable income, which resulted in the boost in tax revenues evident today."
What "boost" is he referring to, if not the increases in revenue from 2003 to that point in 2006?
"The Laffer Curve-induced increase in tax revenue from the 2003 bill, however, is a mixed blessing ... politicians ... have less incentive to control spending."
So the Laffer Curve effect from the 2003 tax cut induced an increase in tax revenue, but it's a mixed blessing, because it leaves politicians with more revenue than they would have had without the 2003 tax cut. Pretty clear what he's saying, isn't it??
Really, John, I just don't see how you can content that he is not trying to give the impression that the 2003 tax cuts have had a net positive impact on revenues, and that the increase in revenues since then were at least partly attributable to those tax cuts. I don't know how to make it any clearer, so I guess we're at an impasse, but I won't consider this one of those "agree to disagree" cases, as if a reasonable interpretation could easily go either way.
I assume you're a fan of Cato, but try to be objective about this. If it makes it easier to be objective, Mitchell wrote this while he was with Heritage.
The "Good tax policy quote"
is a general statement. It does refer to specifically to the Bush Tax cuts. His direct comment on the Bush Tax cuts was that they helped boost economic growth which greatly increased the amount of taxable income.
Yes, tax revenues increased and they increased a lot. Look at revenues from the year following the tax cuts. Revenues increased not just a but dramatically. He isn't lying.
Yeah, no kidding that
Yeah, no kidding that revenues increased. I'm not disputing that fact. But what is your point in stating that fact as we discuss the meaning of Mitchell's statement?
Anyway, I just don't know how to make my point any clearer, and I've already made it so clear that I think any objective observer would conclude that Mitchell's statement was (at least most likely) an implication that the 2003 tax cuts had had a net positive impact on revenues. Therefore, I must conclude that you are not being objective and I can't get you to be objective on this matter, so I give up.
Relax, buddy :)
I'm just reading what's there. If you want say that some people take more from it than Mitchell intended, you may have a point. I'm simply reading it that way Mitchell intended it.
No, I think it's quite clear
No, I think it's quite clear that I'm not just saying that "some people take more from it than Mitchell intended", but that (1) most people will see Mitchell's statement as making the implication in question, (2) such is the reasonable and predictable reading of Mitchell's statement, (3) Mitchell most likely intended to give that false impression, and (4) #1 and #2, and probably #3, are not even matters on which there can be reasonable disagreement. As I've explained, they are quite obvious to an objective observer.
I'm relaxed, by the way :-)
To what are you attributing the revenue increases?
I agree that Mitchell is clearly stating that he attributes the revenue increase to the 2003 tax cuts. This is consistent with his opening statement that some tax cuts can result in revenue increases. He also states that the 2001 tax cuts did NOT result in revenue increases.
His primary point seems to be that not all tax cuts are created equal in terms of generating revenue increases and he contrasts the targets of the 2001 and 2003 tax cuts to illustrate that point. He is saying that tax cuts similar to the 2003 cuts which, for whatever reason, provided incentives for productive behavior are the "good tax cuts" because they result in more taxable income and therefore more revenue.
This all seems pretty common sensical to me. Isn't this just supply side economics 101 stuff? Mitchell is saying that the 2003 tax cuts serve, in his opinion, as an example of the validity of the supply side view.
What am I missing here?
Republican Maverick at Large
-4:Strongly Disagree; 0:Meh; +4:Strongly Agree
Ooooh.... Good Question!
“Back in the thirties we were told we must collectivize the nation because the people were so poor. Now we are told we must collectivize the nation because the people are so rich.” ~ William F. Buckley, Jr.
You are not missing
You are not missing anything. Your reading of Mitchell's statement is correct. John disagrees with you, not me.
As for the validity of Mitchell's statement, if you see my compilation of views of conservative economists http://logicizer.blogtownhall.com/2007/11/15/no,_the_bush_tax_cuts_have_...
, you'll see that even conservative economists do not agree. I can't lay out for you what did cause the increases in revenues following 2003 (I could speculate and I've seen explanations -- e.g., the Fed aggressively lowering interest rates; a normal cyclical rebound from recession; the fact that, in general, the economy is more often growing, even in real terms, than in recession, regardless of tax increases or decreases; etc., but I don't really know), but more importantly, I find the views of those conservative economists on this point credible.
Not at all. I have no problem with what GR said
It's a defensible point. I never specifically said anything to the contrary. If you go over what I said with a fine tooth comb, GR's take and what I've said to you are not necessarily mutually exclusive. Some points have overlap and gray area.
No need to be overly B&W about it.
Ugh, come on. GR and I are
Ugh, come on. GR and I are saying that clearly Mitchell was implying that the 2003 tax cuts had a net positive impact on revenues. You are denying that.