(no subject)

[farchivist.livejournal.com]

Comments

[wight1984.livejournal.com]

I feel like I may regret asking this but...

To my understanding, the idea of a deficit is where your spending more money than you're getting in.

Whether you do that by costly spending or cutting away at your revenue, that's still surely relevant to the discussion, right?

[badlydrawnjeff.livejournal.com]

To a point. The problem is always spending over revenues. Revenues are no guarantees, so the smart move is to always keep spending at or below. To blame a shifting target on tax rates when revenues are always fluid merely takes the blame off the spending, which is the bigger issue. We know, too, that spending is an issue because people are happy to blame war spending for it, so obviously the truth is out there.

If we were cutting spending as far as it could go, and revenues still weren't covering the gap, hand-wringing about tax rates would be legitimate. I doubt Bernie Sanders is upset about the social spending that far outpaces alleged tax cut costs and the cost of the wars, after all.

[wight1984.livejournal.com]

Even though tax revenue is fluid, a tax cut is pretty sure to reduce the amount of revenue you would have collected without making the cut... Given that a certain level of spending is only problematic releative to revenue, it seems a bit daft to ignore one side of the equation for purely ideological reasons.

[byrontengu.livejournal.com]

welcome to America in the 21st century. Daft is a goal for us, right now we have corrupt and insane. I'll take daft any day over that.

[badlydrawnjeff.livejournal.com]

I don't see how it's being ignored. At the end of the day, the level of taxation doesn't really impact the amount of revenue - we see that about how steady revenue has been as a share of GDP over the years even as tax rates shifted even more wildly over the last few decades.

To put it another way - even if we accept, for the sake of argument, that Bush's tax cuts cost what critics claim: $1.35 trillion over 10 years (http://www.washingtonpost.com/blogs/fact-checker/post/revisiting-the-cost-of-the-bush-tax-cuts/2011/05/09/AFxTFtbG_blog.html). The two wars - again, assuming Afghanistan wasn't a war we could elect not to wage - cost $1.3 trillion (http://costofwar.com/en/). So what this means is that the two things most people cite as the drivers of the deficit? $240b/year, tops, on average. Bush added nearly $5 trillion to the debt (http://www.politifact.com/truth-o-meter/statements/2009/jan/22/rahm-emanuel/5-trillion-added-national-debt-under-bush/) over 8 years, the wars and tax cuts accounting for less than $2 trillion of that number over his term.

Essentially, cherry-picking the programs and services we don't like in order to justify the position that "X caused the debt" is the ideological position. The use of tax cuts, which had a truly minimal impact on the deficit situation even if we accept the premise that the tax cuts represent a cost, is the true ideological argument, and ignores the cause of the other 80% or so of the increased deficit.

[wight1984.livejournal.com]

"the level of taxation doesn't really impact the amount of revenue"

That seems counter-intuitive to say the least. If true, it would also seem to imply that we could reduce the level of taxation to zero without affecting revenue.

If you want to argue that the tax cuts or wars alone don't account for the whole of the deficit, then I'm sure there is a sensible argument to be made for that position.

If you're really arguing that tax cuts don't affect the amount of revenue a state collects (and thus the deficit) then I think you're obviously off-base on that one.

[badlydrawnjeff.livejournal.com]

That seems counter-intuitive to say the least. If true, it would also seem to imply that we could reduce the level of taxation to zero without affecting revenue.

Hauser's Law (http://en.wikipedia.org/wiki/Hauser's_law) has persisted in spite of significant changes to the tax code. It is counter-intuitive, yes, but assuming there are tax rates (without extremes in the lower direction), this has appeared to persist.

[wight1984.livejournal.com]

I'm not familiar with Hauser's law, although it looks like it's not unanimously accepted as true.

[badlydrawnjeff.livejournal.com]

The history appears to speak for itself.

[wight1984.livejournal.com]

History has to be interpreted and it seems there's conflict over how it's correctly interpreted.

[badlydrawnjeff.livejournal.com]

There's not a ton of real conflict on it, however. The revenues have been remarkably steady.

[badlydrawnjeff.livejournal.com]

Because?

[goumindong.livejournal.com]

Houser's law is a lie. Its a clever graphical way to arrange data and use statistics that makes the wide variations in revenue as a result of tax policy changes look inconsequential.

Specifically they only look at one tax rate and ignore the increase in other tax rates.

There are pretty much no tax economists who believe it. As in, the people who spend their entire lives studying the effects of tax policy on revenue do not believe in Hauser's Law.

<- Actual Economist (not a tax economist though)

[badlydrawnjeff.livejournal.com]

As I didn't see this before, I pretty much address those points here (http://politicartoons.livejournal.com/2830926.html?thread=67667022#t67667022). Those who are "tax economists" probably care less about historical data, I would assume, since they cannot look at the historical data and say otherwise.

[wight1984.livejournal.com]

Thank you for your input.

I rather suspected that the line I was given was at least controversial and contested.

[goumindong.livejournal.com]

We have been over this before. Hauser's law is a lie. You know its a lie. Stop lying.

[badlydrawnjeff.livejournal.com]

No it isn't, so I'm not lying. Etc etc.

[farchivist.livejournal.com]

Since goumindong is an economist, wouldn't he actually know if Hauser's Law was true and used by economists? Or is he lying in this comment? (http://politicartoons.livejournal.com/2830926.html?thread=67673422#t67673422)

[badlydrawnjeff.livejournal.com]

How so?

[badlydrawnjeff.livejournal.com]

Firstly revenue generated from income taxes hasn't been steady.

Hauser's Law doesn't concern itself only with income tax revenue, so this is not a rational rebuttal.

Secondly you ignore revenue from corporate taxation and other forms of taxation.

You're arguing against a WSJ editorial that I didn't link, not anything I've said.

Thirdly, there are myriad examples of other nations capable of taxing significantly higher levels of GDP than we do (incidentally with similar standards of living).

The argument is solely about the US here. I made no commentary about foreign nations.

Fourthly, since you refer to it as a law it implies some sort of physical limit on revenues and as such we simply can't generate the revenues we need and need to reduce our spending accordingly.

Historically, it is shown that we cannot. You have yet to refute this.

So yeah Hauser's law isn't a law, it wasn't derived from economics, and is in fact complete bullshit.

When you prove this, then you can call it bullshit, not before.

[pacotelic.livejournal.com]

This is a good answer. Thank you.

I'm still not convinced that restoring tax rates to Reagan era levels would be a bad thing, but thank you for being specific.