Wingnuts always say that government revenues increase as taxes decrease.

[Gabi Hayes]

So....logically, doesn't it follow that, as one keeps cutting taxes, revenues will increase commensurately forever?

That means that if we eliminate taxes altogether, government revenues will increase to infinity?

Or, more realistically, if taxes are reduced to, say, 10% on those brazillionaires who supposedly pay 95% of US taxes, shouldn't we be in fat city as far as getting back in the black?

how come nobody ever talks about this?

[MercutioATC]

1. If I read correctly, Snow debunked this at the last press conference.

He admitted that tax revenues have fallen as taxes have decreased.

Sorry, no link...I read it someplace.

[The_Casual_Observer]

2. They keep promising that the debt will be reduced "soon".

[BlueManDude]

4. "Soon" actually means the next time we have a Democrat in the WH.

[bbinacan]

3. Many Pugs believe in the Laffer Curve

(appropriate name don't' you think). Anyway, Laffer says a 0% tax rate = 0 revenue while a 100% rate = 0 revenue because nobody would work. The question is to find the optimum equilibrium. That is if one believes his theory.

edited for spelling

[Gabi Hayes]

5. active word being "believe", as in Easter Bunny

what an idiot Laffer is....bookmark this link for a succinct backslap to your supersititious wingnut pals, when they bring up this massive fairy tale

http://www.mydd.com/story/2006/2/13/81426/9950

Tax Cuts Pay for Themselves is perhaps the greatest Republican canard. It's popular because at the root of the message is an easy sell; you can get something for nothing. Compounding the degree of obfuscation is that RWNM pundits continually rewrite the history, usually "forgetting" key facts.


The editorial pages of the Wall Street Journal originally started to advance this idea in the mid to late 1970s. The idea is based on a graph drawn by Paul Laffer (reportedly on a cocktail napkin) and is usually represented by a simple semi-circle. The horizontal line represents tax rates and the vertical line represents tax revenue. The curve's central idea is there is an optimal level of taxation, represented by the semicircle's apex. It the level of taxation is above or below the apex, tax revenue will be lower than the theoretical optimal level.


There are several problems with this idea and its implementation.

There is no way to derive this model from any set of existing data. Supply and Demand, marginal cost equaling marginal revenue and all other bedrock economic concepts can be derived from existing data. The Laffer Curve can't be derived from existing data. Ever notice that whenever the Republicans start talking about tax cuts they never say "according to the data, a cut of this magnitude will increase revenue this much"? That's because they can't. Theories are nice, but if reality can't back-up the theory, the theory probably doesn't exist in reality. The scientific method prevents the acceptance of a theory which reality cannot substantiate.


The underlying assumption is taxes are always too high. The assumption of all Republican ideologues is taxes are always to the right of the semicircle's apex. Therefore, lowering taxes will increase revenue. What they forget to mention is according to the Laffer curve, if tax rates are left of the apex, lowering taxes could also decrease revenue. Because there is no way to extrapolate any "laffer" curve from any data there is no way prove or disprove the underlying assumptions of any tax increase or decrease. Because it is easier to sell tax cuts instead of tax increases, the assumption that rates are to the right of the apex fits in with a marketing plan, but has no basis in any actual evidence.

...........

in other words, Laffer, like snakeoilers Charles Murray and John Lott, just MAKE STUFF UP!
surprised?

[Gabi Hayes]

6. plenty more interesting links here

http://www.google.com/search?q=laffer%20debunked&btnG=Search&svnum=10&hl=en&lr=&safe=off&sa=N&tab=iw

[bbinacan]

7. Thanks for the info. n/t