The Whirlpool

4 Comments:

At 7:09 PM,  Anonymous said...

I agree with the need to engage in the arena of ideas but what do you say when the president gives the following quotes? They sound reasonable in a way.

"Our ... tax system ... exerts too heavy a drag on growth ... It reduces the financial incentives for personal effort, investment, and risk-taking ... The present tax load ... distorts economic judgments and channels an undue amount of energy into efforts to avoid tax liabilities."

"The ... tax codes ... inhibit the mobility and formation of capital, add complexities and inequities which undermine the morale of the taxpayer, and make tax avoidance rather than market factors a prime consideration in too many economic decisions."

"In short, it is a paradoxical truth that ... the soundest way to raise the revenues in the long run is to cut the rates now. ... And the reason is that only full employment can balance the budget, and tax reduction can pave the way to that employment. The purpose of cutting taxes now is not to incur a budget deficit, but to achieve the more prosperous, expanding economy which can bring a budget surplus."

"The largest single barrier to full employment of our manpower and resources and to a higher rate of economic growth is the unrealistically heavy drag of federal income taxes on private purchasing power, initiative and incentive."

"Expansion and modernization of the nation's productive plant is essential to accelerate economic growth and to improve the international competitive position of American industry ... An early stimulus to business investment will promote recovery and increase employment."

"We must start now to provide additional stimulus to the modernization of American industrial plants ... I shall propose to the Congress a new tax incentive for businesses to expand their normal investment in plant and equipment."

"A bill will be presented to the Congress for action next year. It will include an across-the-board, top-to-bottom cut in both corporate and personal income taxes. It will include long-needed tax reform that logic and equity demand ... The billions of dollars this bill will place in the hands of the consumer and our businessmen will have both immediate and permanent benefits to our economy. Every dollar released from taxation that is spent or invested will help create a new job and a new salary. And these new jobs and new salaries can create other jobs and other salaries and more customers and more growth for an expanding American economy."

"This administration pledged itself last summer to an across-the-board, top-to-bottom cut in personal and corporate income taxes ... Next year's tax bill should reduce personal as well as corporate income taxes, for those in the lower brackets, who are certain to spend their additional take-home pay, and for those in the middle and upper brackets, who can thereby be encouraged to undertake additional efforts and enabled to invest more capital ... I am confident that the enactment of the right bill next year will in due course increase our gross national product by several times the amount of taxes actually cut."

Your insight might help me to counter the continued GOP'ers call for tax cuts.

 

At 9:03 AM,  Stash said...

Friend,
The whole premise of your posts is based on the missinformation that RayGunOmics worked: in other words, he lowered taxes and revenues increased. This concept was called by Bush the Elder “voodoo economics”. Of course, that was before he became a Wrong Wing suck-up and taught his kid to be one also.

RayGun lowered the income tax rates. This meant that his friends got big tax cuts. The middle class got a slight tax cut. The poverty class got little if any, because they didn’t pay taxes. This resulted in a drastic and predictable reduction of revenue to the government.

This is the first have of the equation: lower taxes.

RayGun increased the Social Security Tax 3 times during his administration. Who pays into Social Security? The answer: people earning $90,000 or less. This means that RayGun’s friends got a slight increase on the pittance amount of $90,000, but no increase on the millions earned afterwards. But, you and I got 3 increases on 100% of our earnings, because 100% of my earning fell under the $90,000 mark.
The result: You guessed it! Increased revenue to the US Coffers.

This is the second half of the equation: increases revenues.

So, “Lower taxes increases revenues” is only part of the picture. You have to “lower taxes on the upper portion of American wealth” while “increasing the financial contribution to the government coffers by taking it from the middle class”. If you can do all that, voodoo economics works.

 

At 11:58 AM,  Anonymous said...

Oh, I forgot to mention which president gave these quotes. They are from John F. Kennedy. Why would you disparage the great democrat John Kennedy? Don't you think he was a good president with good ideas? Was his economic ideas 'voodoo economics'? After considering your opposition to John Kennedy I still think he made some good points.

 

At 1:36 PM,  Stash said...

I disparage the thought that shifting tax burdens is the same as cutting taxes. While John Kennedy is touted as "a great Democrat", he wasn't President long enough to find out how good he would be. Johnson was able to get most of his "ideas" through. Kennedy didn't propose to shift taxes like RayGun did. He proposed reducing taxes.....AND reducing spending. Neither RayGun nor Bush did that.

 

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