There are plenty of debates discussing taxes, I don't know if this actually is a continuation, so I apologize in advance if it is.

I see a lot of people throwing numbers around regarding the people that benefit from the Bush Tax Cuts and who is suffering. One poster claims that the tax cuts affect anyone making over $200,000. Since that thread is not appropriate to continue that discussion, I decided to open a new thread.

From what I can see, regarding the tax cuts on federal income taxes, this isn't necessarily true. According to The Tax Foundation, repealing the Bush Tax Cuts would change the tax bracket for a married couple filing jointly making $16,050 in 2008 from 10% to 15%. The same couple making $65,100 would go from 15% tax to 28%. A couple making $131,450 would go from a tax bracket of 25% to 31%. Finally a couple making $200,300 would go from 28% to 36%. These are all just by taking the tax rates for 2008 and comparing them to the tax rates of 2000.

Question for debate

Who benefits the most by repealing the Bush Income Tax Cuts, and what evidence is supporting your answer?

Who benefits the most by repealing the Bush Income Tax Cuts, and what evidence is supporting your answer?

First, while this is a good topic to debate, your question is factually incorrect. Dubya's tax cuts will time-out; there is no repealing. To repeal means Congress would pass a law returning taxes to their previous levels. This is not the case. Dubya's tax cuts were always temporary; they always contained a sunset provision. The tax cuts will expire by law in 2010.

Now to the debate question...

1. The liberal objection

Dubya's tax cuts lowered both the income tax as well as the capital gains tax. When you include capital gains taxes as part of the income calculation, higher income earners will see a disproportionately lower effective tax rate than other income levels. (I don't find this objection very convincing but I thought I'd mention it).

2. The fiscal conservative objection

Lower tax rates means lower differential revenues for the federal government. If the federal government isn't curbing spending, then the government must borrow more to compensate which is precisely what has happened. Either we need to reduce spending commensurate with the reduction in taxes OR we need to increase taxes commensurate with our rate of spending. Note that supply-side economic theory (or "voodoo economics"), while having some positive economic effect, has never compensated for tax cuts with sufficient economic growth.

There are a couple of things I've liked about the Dubya's tax cut bill. It mostly fixed the marriage penalty. It addressed some of the problems associated with the AMT. It tried (unsuccessfully) to address the double taxation associated with dividends. I personally have benefited from the reduction in the capital gains tax. However, the tax cuts are fiscally irresponsible, particularly while we're occupying a couple of countries.

Who will benefit most from expiration of tax cuts? The answer is easy: the budgets of both federal government and state governments will see increased differential tax revenues.

You are correct, thank you for pointing out my error. However, isn't there a call by at least some of the presidential candidates to repeal the tax cuts if they get elected?


This is why I specifically focused this thread on the income tax cuts. I have not seen hard numbers that show exactly how the capital gains tax cut is going to hurt those making less than $200,000; let alone a reason why the capital gains tax cuts only benefits one group. Hard numbers have not been provided, and there are six tax years of information available.

Who benefits the most by repealing the Bush Income Tax Cuts, and what evidence is supporting your answer?

The government...they're the ones who would then be getting all the money. Everyone else loses, at least in the short term, as we'd all be paying more taxes.

Now, how the government might spend that money will probably really provide the answer, and that is almost certain to be those in the lower income groups, as they're generally the recipients of most government programs. However, if the money were to be used to *gasp* actually pay for current programs, then I would say we all benefit from a government not going so much in debt.

The flip side of the coin is what the extended impact on consumption might be from removing the tax cuts, and how that might effect production, and hence jobs. This would tend to have the opposite effect of the above, again impacting the lower income groups more, but this time in a negative fashion.

What's the net effect, then? No one knows. Economists should be able to help here, but, as the saying goes, if you lined up all the economists in the world end-to-end, you still wouldn't reach a conclusion.



Actually, there has been considerable debate about extending them, or making them permanent. So, simply substitute 'failing to extend' for 'repealing', and the question is the same.

The CBO estimated in 2003 that tax revenue from capital gains taxes would be $60 billion in 2004 and $65 billion in 2005. Then the tax cuts hit. The CBO revised its numbers to $46 billion adn $52 billion.

Fast forward to real-world receipts. 2004: $71 billion was received in capital gains taxes. 2005: $80 billion.

Instead of reducing receipts from capital gains, the tax cuts increased them. Dramatically increased them.

The "liberal" argument is bunk. The Bush tax cuts actually shifted more of the tax burden to the upper quintile while the lower two quintiles (lowest 40% of income earners) pay less than zero.

In 1980, the highest 1% of income earners paid 19% of the tax burden. Today (after the Reagan and Bush tax cuts) it is more than double that (39%). In 2000, that number was 37%.



Looking at recent data, tax receipts grew between 2003 and 2006 by 35%. Had there been no tax cuts, the government would have collected $252 billion less in that time period. After the tax cut, the tax receipts as a percentage of the GDP grew from 16.5% to 18.4%.

The fiscal argument is also bunk. More receipts, not less. More progressive, not less.

Who benefits the most by repealing the Bush Income Tax Cuts, and what evidence is supporting your answer?

Nobody. The economy will suffer, jobs will be lost, and everyone who pays taxes will have higher taxes.

No, you are turning a correlation into causation. You need to prove that tax cuts are the cause of increased revenue. This is simply an unproven assertion on your part.


Really? Can you provide a link to this?


I don't understand what you're saying here. Are you saying that the income of the 1% has grown so much since 1980 that they are paying 39% of total tax revenues? Does this include corporate taxes? Can you provide a link?



Sigh. I'm tired of this argument. Please prove this assertion. Also, if lower taxes mean increased revenues, then we shouldn't see decreased revenues in 2007 or 2008, correct? Finally, why not just drop taxes to zero? That way we will see infinite revenues by your logic.

You are correct in pointing out that AmLord has only provided correlation. However, you have offered no evidence contradicting that. Therefore the bulk of evidence is currently favoring AmLord's supposition.



Again, AmLord has offered evidence backing up his claim. This would require counter evidence to contradict it, and you haven't provided any.

As to your extreme case analogy, yes, indeed, that might be correct despite your assumption that it is ridiculous. The economy could grow so much that the government would receive more from other forms of taxes (import, export, etc) that tax revenues could grow. Keep in mind that the income tax indeed was zero for quite some time (most of our history, in fact), and the government continued just fine without it. However, the argument doesn't even need to extend that far, only within the margins being discussed here. In which case, it has been shown throughout history that lowering taxes improves the economy and therefore increases tax revenues, as demonstrated by the Laffer Curve. Some excerpts:

I used budget projections, revised budget projections based upon the estimated impact of capital gains tax cuts, and real outcomes. Of course we both know that economics is a blurry science. Even Alan Greenspan admits as much. What we do know is that tax rates went down and tax revenue grew faster than GDP.



http://www.taxpolicycenter.org/numbers/dis....cfm?DocID=1390



Here is the historical table from pre 1997.

http://www.cbo.gov/ftpdoc.cfm?index=3089&a...amp;sequence=11

Top 1% paid 15.5% in 1979. By 1997, that number was 19.9% (projected to rise to 23% by 2000).

In 2004, that number had reached 37%. By 2005, 38.8%. Source: CBO.


I never said a zero tax rate would equate to higher revenue. Lower taxes spur economic growth. They have done so in the past and will continue to. Whether or not the government benefits from this is another question. For the past five years, the government HAS benefited. I've provided the numbers. I have not advocated a further reduction in taxes, although I certainly would not be against it. Raising taxes at this point will slow an already slowing economy. That isn't good.

Huh? This makes no sense. There are two claims being made here:

Claim 1: Lowering taxes increases revenue.
Claim 2: (implied) Lower taxes grows the economy which increases revenue.

Claim 1 on its face is completely counter-intuitive. How do lower taxes increase revenue? The government's main source of income is taxation. It makes absolutely no sense.

Claim 2 on the other hand might be proven if and only if you can prove that lower taxes do in fact grow the economy. Edited to add: Taxes must grow the economy by greater than the revenue loss associated with the tax decrease. This is not my burden of proof. But let me offer some help.

A. Can you isolate lower taxes from other factors that might affect economic growth? Here are a few factors: foreign investment in the US (growth due to money coming into the system), increased exports (growth due to trade with foreign economies), borrowing (growth due to "more" money being injected into the domestic economy), lower energy costs (growth due to cheaper energy), increased efficiency (growth due to better automation/processes in the economy), US investment in foreign economies (exempt revenue helps grows international component for multinationals). There are many, many more factors.

B. If lower taxes do increase economy growth, then why are we seeing lower growth in 2007? http://www.bea.gov/newsreleases/national/gdp/gdp_glance.htm

Once again, this not my burden of proof. All Amlord has shown is that, yes, revenues increased. He has not shown why they increased. I don't disagree with the fact they increased. I disagree with his assertion as to why they increased. To reiterate I am not the one asserting that lower taxes = more revenue.

~~~ Response to Amlord ~~~



Yes, economics is a blurry science, yet you seem so willing to unblur it with assertions like "decreased taxes means increased revenue".


Thanks for the link. I noted that the source for this chart says: "Source: Urban-Brookings Tax Policy Center Microsimulation Model". These aren't real numbers but simulated numbers. I'd like to know what the real numbers are.


I'm not seeing the same numbers you are in your links.

......................Effective Individual Tax Rate ......... Total Effective Federal Tax Rate
1979: Top 1%: 22.4% ........................................ 37.3%
1997: Top 1%: 23.0% ........................................ 33.3%

I see the EITR going up by 0.6% but the TEFTR going down by 4.0%. BTW, what *do* these rates mean?


Yes, I agree that lower taxes can spur economic growth. I also might agree that there was some economic growth spurred by Dubya's tax cuts (if it could be proven to me). What I don't agree with is that Dubya's tax cuts increased growth in excess of the revenue loss associated with these tax decreases (but I'm willing to change my mind if this were proven).


The government has benefited from increased borrowing and not from decreased taxes.


So, you are tacitly admitting that lower taxes do not increase economic growth. We have a slowing economy AND we still have Dubya's tax cuts. Make the connection.

Here is where the debate gets blurred. Lowering tax rates doesn't necessarily mean lowering the volume of dollars collected in the form of revenue. If income tax rates are lower, which gives consumers more money to spend, businesses will need to hire more workers to meet the demand. By creating more jobs, more money will be collected.

If you have 100 workers making $100 and pay 20% tax, the government gets $2000. If income taxes get cut to 15%, the government only gets $1500. However, given the increased amount of money for consumers to spend, demand gets increased which needs to be filled with more workers. If the demand requires the business to add another 50 jobs, the government while charging 15% will actually recieve $2250. Lower tax rates, more revenue.

Actually, yes, at this point it is your burden of proof. AmLord has provided evidence and statistics, and you are basically just saying you disagree with them. As the Laffer curve (linked previously) shows, there is an expectation that lower taxes will increase revenue, which is what AmLord showed happened (and has happened in the past as well, fwiw). So, if you are going to claim that that is NOT what happened, you would need to offer something backing that up as well.

As to your question of why they dropped off in 2007, the economy still has cycles of ups and downs. Everyone knows we are in a down cycle now, hence lower revenue. This is irrelevant to the argument being made.



Please refer back to the article I linked on the Laffer Curve, which outlines the theory behind this.



The government revenue increased during the period of the tax decrease. Unless you can show that this wasn't due to the tax decreases, that would be the default cause. Are there many other factors which come into play? Certainly. So many in fact that isolating any one of them is simply impossible. So, we have the theory presented for the Laffer curve, which also has a great deal of historical backing. In the absence of anything specific to contradict that, it would remain the only viable conclusion.




Economies will rise and fall completely absent of any governmental interference. Again, this is irrelevant to the discussion. It would greatly aid the debate if you could come up with some evidence indicating that lowering taxes does not raise governmental revenue. Simply constantly asking the other side to prove more and more doesn't do anything to build up your own case. Currently, you have not provided any evidence at all. Until that changes, the evidence we have provided stands alone, leaving only one valid conclusion--that being that lowering taxes did cause the raising governmental revenue.

Quite so, scubatim. But your sums only work if demand increases by enough to warrant a 50% increase in jobs. In fact, on your figures, which I admit were deliberately simplistic to make a point, growth has to stimulate the economy such that jobs (or other taxable activities) grow by one third just to produce the same $2000 in tax revenue that you started out with.

Correct me if I'm wrong, but I don't think it's logophage's argument that the Bush tax cuts haven't stimulated the economy to a degree but only that they haven't stimulated the economy to a sufficient degree to recoup the revenue lost by cutting the taxes in the first place.

And that, in a complex economy that isn't a simple zero sum, in a globalised market, domestic taxation is only one factor that influences economic performance.

And anyway, there's a flipside to this - that taxation is a hygiene factor. If my job and career are going really well and I'm getting big bonuses and promotions every year, so my salary goes from $2000 to $4000 per month over the course of a year, what do I care that I'm paying 20% tax on the first $2000 and 50% tax on the next $2000? I'm still taking home $2800 evrry month now where a year ago it was $1800. That's an extra $1000 to play with (and I'm probably working stupid hours to have got that big a pay rise, so I have no leisure time to spend it in so it's alll gravy ! ). The rest of the economy can go hang - I'm winning.

But if my income stays about the same, with maybe a 3% "cost of living" increase (that totally ignores that inflation is running at 4% so it is, in effect, a pay cut), then I start to watch the pennies and look at the tax line on my pay slip and think "that's outrageous" or whatever.

Who benefits the most by repealing the Bush Income Tax Cuts, and what evidence is supporting your answer?

First off, I don't have much evidence and I don't think it would be sensible for me to use any - it's not my country.

But who benefited most by their implementation? I don't think it was the rich. I don't think it was the wider economy, or everyone. Sure, all those groups benefited, but I think the people who benefited the most were the ones directly working in and around the Bush administration and Republican party, and that benefit was largely electoral. It bought them some votes, for a time.

Who would benefit most from their lapsing? Well, it depends. Those whose taxes stay about the same but can see the national debt going down or their favourite programs getting better funding will probably side with whoever opposes extending them (probably Democrats). Those whose taxes go up would probably side with whoever was arguing for them to be maintained or extended (probably Republicans).

And they'll both point to the programs that they don't personally like while staying conveniently quiet about the ones they approve of (e.g. the Dems will condemn defence spending while implementing expensive healthcare reforms, while the Reps will pare welfare and medicare while turning a blind eye to burgeoning defence spending).

The trouble with taxation is that no matter who benefits, they soon get used to the new levels. Those that think they get taxed too much are never happy for long - any tax cent paid is a tax cent too many. And those that think someone else is paying too little tax are never happy either - any amount of money "they" get that is more than "me" should be taxed, but any amount of money that I incrementally gain is by dint of my own efforts alone and the government/council/state/county/etc. should leave it alone.

Overall, any change in taxation policy will have winners and losers, and the losers inevitably think the changes are a bad thing while the winners tend to think they are a good thing (though often they'll grumble that the changes don't go far enough).

There is this claim being made: lower taxes means increased revenue. Amlord has provided links that taxes have been lowered. Amlord has provided links that revenues have increased. Amlord has then asserted that lower taxes have caused increased revenues. He has not proven this causation. It is not my job to do his work for him.


Let me understand what you're saying here:

1. If the economy has grown while tax cuts are in play, then the assertion that tax cuts grow the economy is true.

2. If the economy has declined while tax cuts are in play, then the assertion that tax cuts grow the economy is true.

Either way, you get to have your cake and eat it too. Huzzah... Clearly, you have run rings around me logically.

Actually, since taxes are a part of the economy, and I don't think there are nearly as many factors influencing tax revenue as there is the entire nation's economy, you final conclusion above is inaccurate. But it does make for really good talking points!

What has been asserted by anyone that opposes the tax cuts is that the cuts were only benefiting the rich if you review other tax cut debates. This would logically imply that repealing them or letting them expire would only benefit the less fortunate. In my opening post I illustrated why I don't believe that. Amlord has posted links supporting the fact that lower taxes and increased revenue can coexist, and without anyone supplying evidence that this is because of any other major influence, the relation and causation is evident. Anyone that does not believe that should provide evidence supporting such a view, as well as explain to the rest of us why increasing the income tax rates would benefit anyone in this country, especially with the current economic conditions. Simply saying that someone has to prove more than you have doesn't really cut the mustard, if you know what I mean. It is time someone on the other side of the debate prove something.

This is all fine and well, and thoroughly debated here before, but the question still remains: Who would benefit if the tax cuts were either allowed to expire or to be repealed. When I opened this thread, I was intending on the debate to surround either the poor/middle class or the rich.

You're both kind of right. Supply-side economics only works because our tax burdens are so high currently. So today, you can in fact grow the pie substantially with tax cuts. Amlord. you have to agree that there are limits to it. If the income tax rate dropped to 0% across the board, receipts would go down right? The fiscal argument is not bunk. Without at least proportional decreases in spending to accompany tax cuts(lets just say $0.50 spending drop for every $1 tax cut), government borrowing will ensue which will undo any growth that you achieve. So while tax receipts rose 35% from 2003-2006, the value of the dollar vs the euro dropped 25%. How much progress did we actually make? You need both sides to truly strengthen the economy.

What talking points do you mean?


I agree with this. The tax cuts benefited the very low income earners as well as the high income earners; the middle class are paying proportionally more. Allowing the tax cuts to expire would not only cause everyone to pay more taxes but have the middle class pay less in proportion compared to low income vs. high income earners.


No one has ever denied that lower taxes and increased revenue can coexist. What has not been proven is that lower taxes have caused increased revenue.


This is not a question of belief. It is a question of proof. Believe me, I *would love* to believe that lowering taxes increases revenues. It would be such a simple solution to our problems. Economy in a bind? Just lower taxes! Voila!!! It would be awesome if it were true. But, there is no proof it works -- merely folks who want to turn correlation into causation. It doesn't fly. It's bad science. It's bad economics.


You want me to prove a negative? This isn't my assertion. I am not making the claim that "lower taxes = increase revenue". It's very simple. Just prove that this is true and the debate is over. I'll agree with you.


As I said before, the biggest beneficiaries of expiring tax cuts will be the federal and state governments.

Let me help here... Lowering prices increases sales. How can this be I'm getting less and decreasing profits? With volume of course. Same for taxes.

Maybe, you can help me out a smidgen more? Where is this increased volume coming from?

Edited to add: For those of you who clearly don't understand the difference between correlation and causation, I give you this: Post Hoc Fallacy. A few salient quotes:


AND this: Regressive Fallacy


Edited yet again to answer the less that informative one line post by BA:

Prove this line of reasoning. Then prove that reducing taxes sufficiently increases economic growth to compensate for the lost revenue.

The increased wealth promotes increased spending, thus increased jobs, more money to citizens == more taxes paid. This ain't rocket science.

I think a better answer is that there is a dead weight cost of taxation. For any economic transaction (transfer of goods, labor, whatever), there is a price that the seller is willing to accept, and a price the buyer is willing to pay. If the buyer is willing to pay at least as much as the seller demands, the transaction can occur. If not, it doesn't.

Now introduce a tax:


That's basically what the Laffer curve is about. When tax rates get high enough, they make many transactions unprofitable for anyone but the tax man, and the transactions don't happen. Cut the tax rate a bit, and you'll get enough extra transactions to "make it up in volume." Where that inflection point lies is an empirical question, which depends on the elasticity of demand. For income taxes, I've seen estimates as high as an 80% tax rate before you start getting those crazy Laffer-curve profits by cutting. But I don't have any cites handy, and would welcome any that point to a lower figure.

Below is a different tack from a thread I started. Rather than look at who "benefits most", lets look at it from this perspective: It is quite apparent that if you have almost any job, and/or any income, when the tax cuts expire, you will pay more tax.



One of the posters above said it was irresponsible to have tax cuts without spending cuts. While I would like both spending and tax cuts, if I cannot have both, I'll still take the tax cuts. Eventually, the spending cuts, of necessity, will follow....

2 points here:

1) Are we discussing taxes or debating?
2) Are you implying that Retail Sales Events do not increase Store Sales?

No, I want you to prove your assertion that lower taxes didn't increase revenue by providing any evidence that something else did. You seem to think that by someone asking you to prove them wrong is asking you to prove a negative. You must have some ideas as to why revenues increased that does not include tax cuts. Provide those. Don't prove us wrong, prove yourself right. Amlord has provided substantial evidence of the causation. If you disagree, provide substantial evidence of some other causation. That is what a debate is. If you do that, I might agree with you.


You obviously oppose the line of thinking that is being debated, yet you show no evidence that it is wrong. Simply demanding proof that has already been supplied is getting us nowhere. Find an alternative idea that you support and prove it by supplying evidence. If you can't do that, there is no sense in you actually participating in a debate.

My view that tax cuts increase growth, but probably not by enough to increase tax revenues, was made in a previous thread. Just wanted to chime in on something:

Most likely the housing bubble. As people cash in on their ethereal housing gains, the spending generates income which provides a boost to GDP, and therefore tax revenues.

When the price of homes increase there is a Wealth effect

So with that rationale, with the reduced income taxes, more money was available to spend on housing, along with the lowered interest rates. With the increased spending on housing from the added income from the reduced income taxes, tax revenue increased. This is exactly what many of us have been saying all long.

Once again, I am not trying to prove that lower taxes don't increase revenue. I've been showing how the claim that lower taxes do increase revenue is unproven. I presented a whole slew of other economic factors that might affect the economy. I've asked for evidence to directly corroborate this claim of yours (and Amlord's). Neither of you have provided evidence to support your claim of causation. You've just cited two undeniable facts: taxes were lowered AND revenues went up. You haven't demonstrated that lower taxes caused revenues to go up. Please do so.


I oppose unsupported claims and "magical" thinking. In principle, I support tax cuts if they are coupled with a commensurate revenue source and/or a drop in spending. You have not supplied support for your claim of causation.

Logophage,

I understand your interest in logical fallacies.

However, in this case, we know that something changed in 2003 and we have a measured, real world result. If it was not the change in income tax rates in 2003 that changed the income tax revenues to the federal government, then what was it? It isn't as if I claimed an unrelated occurance caused the change.

Even you are assuming that changing the income tax rate (to a higher level) will result in a higher revenue to the government. However, this ignores the larger economic effects that a tax change brings.

I've shown that after the '03 tax cuts, the federal income tax receipts rose as a percentage of GDP. They rose in absolute dollars. They rose at a rate faster than the GDP (same thing as the first, just restated). Capital gain tax revenues also rose (dramatically) after a severe cut in rates.

If it wasn't the tax rates that changed the tax receipts, what was it?

As far as the current slow down, the year over year tax rates have not changed. With a certain tax structure, we expect a certain amount of economic growth. But it is variable. I have never denied that there are ups and downs when it comes to the economy. The housing bubble has hurt the economy. More bankruptices mean housing prices are stagnant or dropping, which isn't good for people's economic outlook. They are cautious now, which is generally bad for the economy. A tax cut (or interest rate cut) may restore some confidence. Or it might lead to higher inflation. We just have to see.

Higher taxes will take money out of people's pockets, slowing the economy, and would be the wrong thing at this point.

I'm unable to follow your logic.

To clarify what I said in my previous post: the massive extension of credit resulted in a housing bubble, which caused myopic home owners to cash in on their housing gains, either in the form of reduced savings or loans back by housing. This, in turn, resulted in larger consumer spending (the wealth effect), higher GDP and greater taxable income.

Using this logic, it was the housing bubble, and not the tax cuts, which increased government tax revenue recently.

I interpret your post as crediting the tax breaks for the housing bubble (why anyone in favor of the tax cuts would want to do that is beyond me!). The connection is probably trivial in comparison to the credit expansion. It is more likely that people make home buying decisions upon credit factors rather than a $1000 tax rebate.

To be sure, the tax cut added some growth, just as the direct government spending from the war has. All things considered though, growth from the housing expansion was a more significant factor in consumer spending.

Maybe I am reading too much into this, but it appears that you can't provide any evidence that anything other than lower taxes has caused the increased tax revenue. This isn't magical thinking, this is evidential as provided in previous posts by multiple posters.

Now, maybe I missed it, but what is your opinon as to who (rich or not so rich) will benefit if these tax cuts are either allowed to expire or repealed by the next administration and why do you think that way?


I'm just trying to understand your post. So, what you are saying is the lowered interest rates that allowed people to refi mortgages is what caused the increased tax revenue, or did I misunderstand you again?

My assertion about the tax breaks allowing people to purchase homes. When people had more money to spend, they were able to afford mortgages instead of rent payments. Correct me if I am wrong, but the housing bubble was from the massive increase of people buying houses along with an increase in those refinancing.

First, thank you for addressing the actual point I have been making.

In order to make a claim of causation, you need to isolate (or at a minimum mitigate other factors). Let me re-post some factors that ought to be considered.

Once again, I am not claiming that tax cuts increase revenue NOR am I claiming that tax cuts don't increase revenue. I make no claim because neither have been proven. However, the intuitive position is that tax cuts don't increase revenue. Thus, the burden of proof is upon those that assert this claim. Demonstrate that the intuitive position is wrong.

But, of course, that's not enough. Once you demonstrate that the intuitive position is wrong, you are then making the claim that tax cuts increase revenue by growing the economy so much that it compensates for the lost revenue stream due to those tax cuts. Thus, you make two claims:

Claim 1: Tax cuts increase revenue by growing the economy
Claim 2: Tax cuts increase revenue by growing the economy in excess of the lost revenue from the tax cuts.

I can't say this any more succinctly. It is not my job to prove these assertions of yours. It is not my job to prove a counter assertion.


No, I am not assuming this. But, the burden of proof is less for claim 1 than it is for claim 2.


See above. There are many factors that play into economic growth. Once you address those factors (and others unnamed) and show how they don't sufficiently explain the economic growth we've seen since '03, then I'm perfectly willing to accept that tax cuts grow the economy.


This is where your entire premise fails. You take evidence of positive economic growth and attribute that to tax cuts. You take evidence of negative economic growth and attribute that to everything but tax cuts. This isn't logic; it's self-delusion.


As long as we either (1) don't borrow more to make up for the lack of revenue or (2) cut spending, then I agree that we don't need to raise taxes (or to let the current tax cuts expire). However, if we don't do either (1) or (2), then it's bad policy.

We have. We have shown that tax revenue increased after the tax cuts were implemented. We have shown that this has happened historically in the past. We have shown the reasoning for this, and shown the theory explaining it. You have shown nothing. Let me be as plain as possible. The burden on proof is now on you. If you think some other factor explains the tax revenue increase, prove it. If not, then this point is conceded, and we can move on.

Finally, who says that the intuitive position is that tax cuts don't increase revenue? It is intuitive that if you give people more money, then they will spend it, and the economy will grow, and that a growing economy provides more tax revenue. It is also intuitive, as I pointed out in the article I cited, that raising prices reduces sales, thus lowering overall revenue. So, if the only reason you keep thinking the burden of proof lies on us, that is also false reasoning. There is no reason prior to analysis to assume either position here...so the burden of proof does not start out on those arguing that tax revenue will increase--that burden is equal on both sides. So far, the only side of the scale that has any evidence on it is that favoring the claim that tax revenues will increase with a tax decrease. You have a fair amount of evidence to offer just to get the scale back to neutral, much less in favor of claiming that tax revenue does not increase.

Yes, you have shown that tax revenue increased after tax cuts. But, you have not shown that tax cuts caused a revenue increase. This is just magical thinking. The burden of proof is for you to show that tax cuts caused a revenue increase. Please show me this cause. Also, you have not shown tax cuts raised revenue historically.

You are engaging in a post hoc fallacy. The history of man is littered with post hoc fallacies. You see people using them all the time like: "I won the game by wearing this green shirt; thus, I'll continue wearing this green shirt so I'll continue to win". I don't know how else to put this. If you don't understand how you're engaging in a post hoc fallacy, I wonder how it's even possible for you to engage in any debate since you can just wave your "this happened before that thus this caused that" magic wand.


Quite to the contrary, I have shown the following:

1. Your claim that lower taxes caused increased revenue is unproven.
2. Your claim that lower taxes caused increased revenue by growing the economy in excess of the revenues lost is unproven
3. If the economy does grow while tax cuts are in play, then how come we're in an economic down turn?

The only point to concede here is the profoundly (and willfully) illogical stance you are taking on this matter. You want so much for tax cuts to be the cause of increased revenue that you intentionally disregard logical thinking AND you ignore the very real problem with your claim when presented with contravening economic data.

I've given you a starting point for your research to demonstrate your claim. I laid out a number of possible causes for economic growth that ought to be considered. These have been ignored. In fact, Amlord asked me "what else could it be?" and I provided other elses.

Finally, when I've asked you and others to show how tax cuts caused increased revenue, I don't get an answer. Instead, I get you (and others) asking me to show how this is not the case (asking me to prove a negative). It is not my claim. I do not claim that lower taxes increase revenue NOR do I claim that lower taxes don't increase revenue. I understand supply-side and demand-side economic theory. I understand the principles of logical argumentation and debate. Your position is untenable unless and until you can *prove* that tax cuts caused increased revenue.

logophage, you are arguing semantics, and you aren't winning the argument. Can anyone answer the question posed at the beginning of the debate, by chance? We have seen this line of debating waste debates before, in more appropriate debates. The question in this debate deal with the economic impact on people in this country. No matter what caused revenue increases, repealing or allowing the tax cuts to expire would increase income tax rates across the board, but who would it impact the most?

Whew- tough one Scuba- you see, what you have here is as much arcane philosophy and "magic" as science- because there are competing explanations between the differing schools of economic thought, and each gives a different causation to the correlated evidence- in this Logo is right- there is no hard proof that tax cuts either help or harm the economy, because there are too many variables- for instance, Clinton increased taxes in 1993, yet the economy boomed afterwards- giving credence to the idea " we have taxed ourselves into prosperity"- Amlord, going to buy this one?

Also- look at "Reaganomics" which has been mistaken as "supply side economics" in some discussions- which it is not. In fact, during Reagan's term PAYROLL TAXES WENT UP- and look at the "loopholes" Reagan 'closed"- he basically said that the lost revenue from waiters and waitresses on thier "tips" was the cause of a bad economy.

The tax code is so complex, and our economy as well, especially when taken into a global context- Amlord and others have to go on "belief" more than real, hard evidence. I ain't saying they are wrong, no more than Logo- I am just saying- the jury is not only out, it has never been seated.

Dudes make PHDs on thesis based on this debate, and it is more than a bit problematic for even a pretty reasonably educated economist, at the bachelor's level, to really make or understand the argument itself.

For instance- Milton Friedman was an economic genius- but he still had seriously big holes in his theories- mostly because it truly ignored two facts

1) Capitalism can thrive in a totalitarian regime (Singapore and Pinochet's Chile)

2) Big business interests may not even be in the best interests of Big business, but rather,