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| 5/24 |
| 2007/12/18-20 [Politics/Domestic/California, Reference/Tax] UID:48832 Activity:moderate |
12/18 Can anyone explain why so many Republicans keep claiming that tax
cuts raise government revenue, even when they know it is not true?
http://www.csua.org/u/ka9 (WashPo)
\_ Because in a high-tax environment, it's true? Tax RATES aren't the
same as tax REVENUE.
\- yes, "everybody" acknowledges this may have been true
in say the eisenhower era, but it's disingenuous to imply
this holds true today.
\_ Well the relationship between tax rates and GDP growth
isn't an exact science either.
\- "we dont know what 'causes cancer' ... how can you
say smoking is bad for you?" "evolutionary theory
cant explain fainting goats ... so it's 'merely'
a theory just like ID is a theory."
\_ You are a tool for two exciting reasons! Firstly,
science is powered by scepticism, so it is never a
vice. Secondly, you seem to think economic
causal theories are as well understood as an
extremely well-studied medical special case.
-- ilyas
\_ when was the last time you took a shower?
anyone ever asked you that?
\- no, it is more like second guessing a
jury verdict .. it could be wrong, but
substituting your opinion when you dont
know any of the details of the case and
havent heard the arguments is crazy.
so maybe decrasing tax rates increases
revenue down to 10% MRT, but if 95% of
the econ profession believes revenues go
negative somewhere between 80 and 40%, it's
seems some linear combinaion of arrogant and
dumb to decide those arent the numbers you
\_ 'linear combination of arrogant and dumb',
that's a good one. I think I'll borrow it.
-dans
will operate with. even if there are a couple
of smart guys here and there who (sincerely)
disagree. i am not saying it is TRUE, i am
saying it is what you must operate on unless
you have some extremely heavyweight reason
why you dont. peter duesberg might have some
"heavyweight" reason to disbelieve the
HIV->AIDS theory but for Thabo Mbeki to
disbelieve it require some explanation
other than "well as a world famous biologist,
in my opinion, here are the flaws in the
science ...". There are some questions where
there are truely split opinions among
experts ... like say on the mechanism of
planet formation [http://tinyurl.com/37oy55]
[rumor is you are an expert on "the stars"?]
but supply side econ not such an example as
applied to the US today. you also seem to be
unaware of the different quality of certain
econ predictions. there are econ predictions
about certain equillibium conditions that
are not speculative because there are clear
forcing functions [arbitrage] ... so while
there might be lots of competing theories
about the level of exchange rates [CIP, UIP,
PPP etc] the cross exchange rate parity
prediction is a strong one.
(one more thing: yes science is powered by
scempticism, e.g. the H PILORI example, but
these pols and motd posters arent DOING
SCIENCE, they are running for office or
trying to justify a policy. they arent being
sceptical. they are usually lying and some
some small number there may be some other
expedient explanation.). -danh (the planet)
\_ That last bit is 'high priest thinking.'
You don't need to be Doing Science to be
a sceptic. Criticism isn't a privilege of
the knowledge producing class. Now it is
true most criticism/scepticism of any given
theory that DOESN'T come from scientists
themselves will generally be silly or
misguided. However, this isn't always so,
and it is very important that there remain
outside channels for challenging the current
status quo in science. This is because
science, for a number of reasons, is
particularly susceptible to 'mafia effects.'
-- ilyas
\_ This is all well and good, but it's
orthogonal to the point that supply-side
economics is believed to be bunk by the
economic establishment, and while it may
not have the imprimatur of of the COBE
experiment, it's pretty damned good
science. -dans
\_ That's pretty funny considering what
"imprimatur" means. -lewis, nihil obstat
"imprimatur" means. -psb
\_ imprimatur: Official
approval; sanction.
I guess I just can't do funny.
-dans
\_ Historically from the Pope
giving out an official decree.
\_ See also http://csua.org/u/kaa (New Yorker)
\_ It's called faith based government -- tax cuts raise government
revenues because we believe they do. Tax cuts also cure cancer
and bring endangered species back to life.
\- IMHO: "they" do it because "they" can get away with it.
\_ Post a link to your blog, windbag.
so the question degenerates to "why can they get away with it?"
well aside from "there is a sucker born every minute" [e.g.
people who believe stupid rhetoric about "death taxes" or
"double taxation" etc] type explanations [and remember, in
america in 2007 we have three people running for president
who can say "i dont believe in evoluation" and not be sent
who can say "i dont believe in evolution" and not be sent
packing on the hayseedmobile], i believe there are two
pathologies in american journalism that leads to the pols
not being called on this: 1. fear of having "access" cut off
if you say "candidate X is either a moron or a liar". 2. many
journalists are experts at "journalism", not a subject area.
so they are trained in things like "objective/neutral view
points", "presenting both sides" rather than having subject
matter expertise and being able to render judgements. now they
kind of research they may be good at is "digging up connections,
influence, following the money" ... or maybe digging up gossipy
thigns like who'se campaign is in trouble when they present the
things like whose campaign is in trouble when they present the
election as a horserace ... but they are not good at evaluating
substance in areas like climate science, economic science etc.
those are trickier areas than say evolution where the two
postions are morons and scientists ... so they probably do
positions are morons and scientists ... so they probably do
ok there. now the nice part of "america 2007" is the blogosphere
contains many people who are not journalists but ARE subject
matter experts. these people are much better at holding the
journalists and pols feet to the fire. but of course they dont
generally have the giant podium the MSM journalists have.
of course some exceptions: paul kurgman has a big podium
of course some exceptions: paul krugman has a big podium
[but he isnt a journalist. i know many journos kvetch about
the blogosphere, but to the complain about giving a plum
column to a non-journo? i am glad the NYT gave it to PK and not
some random liberal journalist.]. james suroweiki also an
exception. i think his finance coverage is really good. one
reason the e'ists science coverage is decent is they look
for "science people" who have some writing talent, rather than
a journalist to has some interest in science. i guess the one
thing that might be worse than the "silly objectivism" of
some journalists might the the ones that forget they are
journalists, like gary taubes' pronouncements about "fat
research".
\_ Why don't you ever post your name, unreadable screed guy?
-jrleek
\_ If you don't know that's partha, you have better things to
do than motd. How exactly is it unreadable?
\_ Massive wall of text, lost interest and skiped the rest
\- supply side economics -> wall of voodoo
about 10 lines in. This is the motd, not a novel.
\_ You are too short for this motd thread....
\_ I don't care if higher taxes raise or lower government revenue
over time. My goal is not to maximize government income. My
tax goal is to pay as few taxes as possible while getting the
minimum government services required to run the country smoothly
and safely. (And I didn't need an unreadable 2 page rant to
explain).
\- "what do people owe each other" merits a longer answer than
say "what is your favorite color". a personal statement of
perference is a different beast than the search for the
explanation to a normative or empirical question. you have
have offered a 6line reply, but "your tax goal" provides
neither insight into accuracy of supply side economics nor
its "cost free" adoption by all the R candidates.
\_ I think this is a good and admirable goal (and one that I
share) but I think we should have that discussion honestly,
not lie to the voters and claim that tax cuts are "free"
which is where the Republican Party is now.
\_ Ron Paul doesn't say this. It's not "the Republican Party"
it is those particular men who say this.
\_ Okay fair enough. But it is stated as true by all the
other candidates. There is some economic sanity left
in the Party, but you have to admit it is in the
minority these days.
\- Brad de Long [ucb dept econ] heavily covers the gap between
economists and pols on supply side econ. of recent postings,
see this "straight from the laffer's mouth" article:
http://delong.typepad.com/sdj/2007/12/justin-fox-on-a.html |
| 5/24 |
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| www.csua.org/u/ka9 -> www.washingtonpost.com/wp-dyn/content/article/2007/11/30/AR2007113002190.html Rudolph Giuliani declares in a new television ad launched Thursday. No -- and no matter how many times Republican politicians caught up in the thrill of supply-side thinking pronounce that tax cuts pay for themselves, they cannot will it to be correct. CLOSE Comments that include profanity or personal attacks or other inappropriate comments or material will be removed from the site. Additionally, entries that are unsigned or contain "signatures" by someone other than the actual author will be removed. Finally, we will take steps to block users who violate any of our posting standards, terms of use or privacy policies or any other policies governing this site. Links to this article You don't have to turn to Democrats to refute this point; just read the studies and comments by Republican economists, including many from the Bush administration. President Bush's Treasury Department, analyzing the "dynamic" effects of making the Bush tax cuts permanent, found that even under favorable assumptions, the positive economic impact would make up for no more than 10 percent of the tax cuts' cost. In the 2003 Economic Report of the President, the council concluded that "although the economy grows in response to tax reductions (because of the higher consumption in the short run and improved incentives in the long run) it is unlikely to grow so much that lost revenue is completely recovered by the higher level of economic activity." White House, concluded in 2005 that cuts on capital gains taxes could generate enough extra growth to recoup half the lost revenue in the long run; cutting taxes on wages could recover just 17 percent of the costs. Congressional Budget Office under the direction of Douglas Holtz-Eakin, who had been an economic adviser in the Bush White House, found that, under the rosiest of scenarios, a 10 percent reduction in the personal income tax rate would generate enough economic growth to replace 22 percent of lost revenue in the first five years and 32 percent in the second five. numerous Republicans, including the president, have made similarly fanciful claims. But if he were to find himself in the White House and hoping to find that extra revenue he is convinced tax cuts produce, Mr Giuliani would discover only disappointment under the presidential pillow. Mr Musharraf's War THOUGH HE has formally ended the de facto state of siege he imposed on Pakistan six weeks ago, Pervez Musharraf remains at war with his country's secular, politically moderate elite. The press and private television have been hamstrung by a Musharraf-sponsored "code of conduct" that punishes crit... |
| tinyurl.com/37oy55] -> www.space.com/scienceastronomy/solarsystem/planet_formation_020709-1.html Robert Roy Britt Senior Science Writer posted: 07:00 am ET 09 July 2002 A radical and controversial new theory of planet formation suggests our solar system was created in a faraway, chaotic environment that has in recent years come to be viewed as largely inhospitable to planets. The idea is a wild one, and its originator is the first person to say so. Alan Boss of the Carnegie Institution of Washington is trying to plug two gaping holes in the standard model of planet formation by explaining how Uranus and Neptune could have formed. If correct, his theory would also help justify the growing population of known extrasolar planets, all of which are very massive. And it would also imply that solar systems like our own are common. The decades-old standard model holds that all planets begin as rocky objects, colliding and merging until a few reach the size of Mars or Earth. gas is drawn to the rocky core and a giant planet develops. At the heart of the Orion Nebula, new stars and maybe planets struggle to emerge from clouds of gas and dust, all sculpted and irradiated by ultraviolet light from the region's four hottest and most massive stars, called the Trapezium, near the center of the image. Disk instability: A computer model shows a gravitationally unstable disk forming a clump of material (white dot at 12 o'clock) in about 400 years. The clump contains several times the mass of Jupiter and is orbiting at roughly Saturn's distance from an unseen and still developing star at the center. Trailing spiral arms of medium density of material are seen in purple. This process, called core accretion, takes about 8 million years to build a gas giant. Unlike gaseous Jupiter and Saturn, however, Uranus and Neptune contain large cores of rock and ice and only a thin shell of gas. Theorists now agree that beyond Saturn there was never enough material to build such planets using the crash-and-stick approach. Uranus and Neptune either formed closer in and migrated outward, or they were created by some other means. Disk instability model Boss' process builds bloated precursors to Neptune and Uranus almost overnight. Clumps of material develop in regions of gravitational instability in the disk of gas and dust that orbited the newborn Sun, and the dust settles for form central cores. "You go from a smooth disk to a Jupiter-mass clump in 1,000 years," Boss explained in a recent telephone interview. At this stage, a planet-to-be would have been a loosely bound, rotating, banana-shaped object scrambling to condense into a smaller sphere. Meanwhile, another young star -- nearby, much larger and extremely hot -- bathed the outer regions of the nascent solar system in extreme ultraviolet radiation. Material was stripped from proto-Uranus and Neptune and "photo-evaporated" right out of the solar system. All the while, each of the two planets used its own gravity in a desperate attempt to gather its material into a denser object, a planet that would then become stable. At the finish line, two so-called ice-giants had formed, each with a relatively thin gaseous envelope, a core of rock and ice, and a mass several times less than Saturn. During these one million years, Earth and its rocky neighbors were unaffected as they crashed into each other and built their bulk (experts agree that collisional growth works for these so-called terrestrial planets). "They're kind of oblivious to what's happening in the outer reaches of the system," Boss said. Here's why: Out to somewhere beyond Jupiter, the Sun's gravity worked to retain a sphere of gas that served as a protective halo against the harsh external radiation. Jupiter and Saturn formed by the same disk instability process, Boss says, and Jupiter kept its original bulk as it condensed into its final shape inside the zone of protection. Saturn straddled the two zones and became a mid-size gas planet. From here, Boss' scenario plays out based on ideas put forth by other researchers. The hot nearby star dies and the Sun is kicked out of the intense star-forming region, sent to dwell in a calmer part of the Milky Way. Boss presented his theory for the formation of Uranus and Neptune in a paper in the March issue of the journal Icarus. It has since generated a lot of comment at meetings and some new calculations by other planet-formation theorists. One thing most of them seem to agree on: Alan Boss has infused their stale field with much-needed fresh thinking. |
| csua.org/u/kaa -> www.newyorker.com/online/2007/10/29/071029on_onlineonly_surowiecki McArdle, Megan In American politics, supply-side economics is the monster that will not die. The supply-side argument that, in the United States, tax-rate cuts pay for themselves--that, after cutting taxes, the government actually ends up with more revenue--has little or no support within the mainstream economic profession, and no hard empirical data to back it up. demonstrated that both the Reagan tax cuts of the nineteen-eighties and the tax cuts put through under the current Administration shrank government revenues and led to bigger budget deficits. Yet the absence of proof for supply-side theory has not dimmed Republicans' devotion to it. published a list of what "the Republican Party stands for." This supply-side orthodoxy is striking in a couple of ways. First, it requires Republican politicians to commit themselves publicly to a position that is wrong--and wrong not as a matter of ideology or faith but as a matter of fact. Saying today that tax cuts will increase tax revenues is not like saying that bombing Iran constitutes a sensible foreign policy, or that education vouchers will wreck the public schools. It's more like saying that the best way to treat sick people is to bleed them to let out the evil spirits. Megan McArdle wrote that she had a book review for an unnamed right-wing publication spiked because in it she dared suggest that, in the US, tax cuts decreased government revenues. The cynical explanation for the persistence of the supply-side dogma is that it's simply cover for cutting taxes for the rich. But the supply-side orthodoxy has flourished for other reasons, too. To begin with, the absurd idea that tax cuts pay for themselves is based on an idea that is not at all absurd, which is that tax rates can have an impact on people's behavior. Increase taxes too much, and people may work less (since they get to keep less of the income they earn) and invest less (since their gains will be taxed more heavily), and so the economy will grow more slowly. They're aided in that extrapolation by the simple fact that the American economy grows over time. As a result, even if you cut taxes the federal government will eventually take in more tax revenue than it once did. And that allows supply-siders to fashion a spurious syllogism: taxes were cut in 2001, government revenues are higher in 2007 than they were in 2001, therefore the tax cuts increased revenue. The comparison that really matters in analyzing the impact of the tax cuts, of course, is not between government revenue in 2001 and government revenue in 2007. It's the comparison between actual tax revenue in 2007 and what tax revenue would have been in 2007 had there been no tax cuts in 2001. one by Bush's own Treasury Department that looked at the tax cuts' impact on economic growth--find that government revenues would be greater had taxes not been cut. But that hasn't stopped President Bush from claiming victory. In one sense, of course, it's odd that a Republican President should treat higher government revenues as a point of pride. Historically, after all, Republicans have been the party of small government and fiscal restraint. talk a good game about the need for spending discipline, in practice it matters far less to them than tax cutting. After all, if tax cuts pay for themselves, then there's not much reason to worry about restraining government spending--we can afford it all. In fact, if government spending grows too big, you can cut taxes again to pay for it. com The material on this site may not be reproduced, distributed, transmitted, cached, or otherwise used, except with the prior written permission of CondNet Inc. This Site looks and works best when viewed using browsers enabled with JavaScript 15 and CSS, such as Firefox 2+ or Internet Explorer 6+. |
| delong.typepad.com/sdj/2007/12/justin-fox-on-a.html Tax Cuts Don't Boost Revenues: Virtually every economics PhD who has worked in the Bush Administration acknowledges that the tax cuts of the past six years haven't paid for themselves. If there's one thing that Republican politicians agree on, it's that slashing taxes brings the government more money.... If there's one thing that economists agree on, it's that these claims are false. Virtually every economics PhD who has worked in a prominent role in the Bush Administration.... The yawning chasm between Republican rhetoric on taxes and even informed conservative opinion is maddening to those of wonkish bent. But none of these screeds seem to have altered the political debate. So rather than write yet another, I decided to find out what Arthur Laffer thought.... About the best I could get out of him on the question of whether the Bush tax cuts have paid for themselves was "I don't know." The idea that high tax rates brought diminishing returns was not controversial or even new--Laffer traces it to 14th century Muslim philosopher Ibn Khaldun.... Laffer is convinced that the reduction of the top tax rate from 70% to 28% during the Reagan years paid for itself--in part by encouraging the rich to stop finagling--and the evidence mostly backs him up. "You find these enormous responses in the upper brackets," Laffer says. "These guys fire their lawyers and accountants and actually pay their taxes. But Reagan's tax cuts for the nonrich were big money losers, and it took the fiscal discipline of Bill Clinton to mop up the resulting red ink. Laffer gushes with praise for Clinton, but he's also a fan of Clinton's successor. "What Clinton did was, he gave Bush the fiscal flexibility to do what was right," Laffer says. In the face of the recession and terrorist attacks of 2001, Bush "needed to stimulate the economy and spend for defense, and Clinton gave him the ability to do that." In other words, the Bush tax cuts were meant to create big deficits. "The Laffer Curve should not be the reason you raise or lower taxes," he says. Perhaps not, but it does make for great campaign promises... Economist's View: "Its not True": I think this is a good sign. " Now, will the press make the connection between the willingness to make these claims and character? Those who say this are either making claims they know are false, or have economic advisors who don't know what they are talking about. In any case, whether its the willingness to mislead to promote an idea, or the incompetence in choosing advisors and the unwillingness to consider evidence at odds with their preconceived notions, it's worth noting. My own view is that their economic advisors know what the evidence really says, and the candidates are choosing to ignore what they are told. But a simple question, "Have your economic advisors informed you that there's no basis for that claim, and if so, why are you making it anyway" or something like that, would tell us the answer. It's not as though this is unimportant, the difference between the claim that the most recent tax cuts are self-financing and the actual evidence is hundreds of billions of dollars and it would seem that with so much at stake, we would hear more about those who mislead us about the true cost of the policies they advocate. Mr Giuliani and the Tax Fairy: "I KNOW THAT reducing taxes produces more revenues," Republican presidential candidate Rudolph Giuliani declares in a new television ad launched Thursday. No -- and no matter how many times Republican politicians caught up in the thrill of supply-side thinking pronounce that tax cuts pay for themselves, they cannot will it to be correct.... the positive economic impact would make up for no more than 10 percent of the tax cuts' cost. "I certainly would not claim that tax cuts pay for themselves," Edward P Lazear, chairman of the president's Council of Economic Advisers, testified.... N Gregory Mankiw, another former Council of Economic Advisers head in the Bush White House, concluded in 2005 that cuts on capital gains taxes could generate enough extra growth to recoup half the lost revenue in the long run; cutting taxes on wages could recover just 17 percent of the costs.... numerous Republicans, including the president, have made similarly fanciful claims. But if he were to find himself in the White House and hoping to find that extra revenue he is convinced tax cuts produce, Mr Giuliani would discover only disappointment under the presidential pillow. First, a lot of punches are pulled in the editorial--it's an anti-Giuliani editorial, but it is not a Giuliani-only doctrine: it is one he shares with every other senior Republican including all the other presidential candidates. org/papers/w11000 is not 50% but 33%, and applies only if all the revenue lost through the tax cut is neutralized by accompanying spending cuts: cut capital gains taxes and leave spending unchanged and you will find yourself losing more rather than less than 100% of the static revenue loss in short order. From 50% to 28% is, I think, very different: a big revenue loser. December 08, 2007 at 05:53 PM My recollection was that Austan Goolsbee at the University of Chicago had done some research which showed what our host cites above - moving the top marginal rates down from the 50%-70% level increased revenues up to a point, but the point where this reversed was somewhere in the high 30%-low 40% range - but can't seem to find the reference right now. December 08, 2007 at 06:46 PM Of course, you could also try to enforce the tax code at 70%. And get the money by making rich people abide by the laws that poor people do. December 08, 2007 at 08:01 PM Is there any research at the high end 70%->50% to break out the revenue increases due to economic stimulation vs that due to reduced non-payment of taxes? December 08, 2007 at 10:08 PM Well, the Laffer curve does does not imply that reductions in taxes always increase revenue, but what we must bear in mind is that many Republicans have moved on from supporting the Laffer curve to supporting the Lobster curve, developed by the economist Medium Lobster, which postulated that, while reduced marginal tax rates might not *apparently* produce sufficient growth to make up for lost revenue, they always produce the *idea* of increased economic activity sufficient to produce the *idea* of increased revenues. Although our limited phenomenal perceptions may err in leading us to believe that there is a certain point at which lower marginal rates do, in fact, lead to lower revenues, in the higher, truer realm, all marginal rate reductions lead to higher revenue. In fact, a marginal rate of -infinity will lead to infinite revenue. Gibletsian poli-sci, meanwhile, explains why the flaws of democracy mean that the negative infinite marginal tax rate will never be implemented. The Giblets-Satterthwaite theorem, for instance, demonstrates that for any social choice function with at least three possible outcomes over the preferences of at least two agents, the SCF is manipulable through misrepresentation of preferences unless the SCF BOWS DOWN BEFORE GIBLETS! Understanding Republican views sometimes requires going a bit outside of mainstream academic work and conventional wisdom in the relevant areas, you see. December 08, 2007 at 10:57 PM My only complaints with economists are: 1) a discussion of rates has limited value unless we discuss the changes in deductions/exemptions/credits over the same period - immensely complex. December 09, 2007 at 05:08 AM save_the_rustbelt wrote, "a discussion of rates has limited value unless we discuss the changes in deductions/exemptions/credits over the same period - immensely complex." A nice timeline summarizing not only rates and rate brackets but also what went into the definition of taxable income over the past century would be extremely helpful. If you believe in the second, and yet say that cutting taxes raises revenue, you are trying to con the wingnuts. I first had somebody senior in the Republican Party claim to me that the Republican High Politicians meant the second back in 1979. It's at least two decades too late to try to con us by claimi... |