GOP Claim That Tax Cuts Raise Revenues Rated ‘False’ - RawStory

[WillyT]

GOP claim that tax cuts raise revenues rated ‘False’
By Sahil Kapur - RawStory
Wednesday, April 20th, 2011 -- 9:36 am

<snip>

WASHINGTON – The Pulitzer Prize-winning fact-checker PolitiFact took on the Republican claim that reducing tax rates has always produced higher federal revenues, rating it "false."

"Every time we've cut taxes, revenues have gone up, the economy has grown," Rep. Joe Walsh (R-IL) said Sunday on ABC's This Week, making the case for keeping taxes low as a way of reducing the federal deficit.

"We should first note that on its face, Walsh’s statement is not accurate," PolitiFact declared on Tuesday. "There was a small dip in 1983, after President Ronald Reagan signed off on a tax cut in 1981, though tax revenues increased the next year and all through the 1980s. More significantly, income tax revenues fell in 2001, 2002 and 2003, as President George W. Bush successfully pursued tax cuts."

The fact-checking website said that Walsh's central justification -- that the federal government eventually took in higher revenues years after the Bush tax cuts -- was an inappropriate causation, given that revenue increases are typically attributed by economists to economic growth.

"So saying 'revenues have gone up' isn't particularly meaningful in that context," PolitiFact wrote, noting that the Clinton-era tax hikes also led to higher revenues...

<snip>

More: http://www.rawstory.com/rs/2011/04/20/gop-claim-that-tax-cuts-raise-revenues-rated-false/

:kick:

[louis-t]

1. Do a search for "Laffer Curve"

It really is a laugh.

[gratuitous]

3. My understanding of the Laffer Curve

I'm no economist, but my understanding of the Laffer Curve is that tax cuts on the high income brackets can result in higher revenues, but the tax rate has to be high to begin with (well above 50%). With a tax rate of 35% for the wealthy, cuts in the tax rate will result in lower revenues, which is exactly what one would expect. Everyone who espouses supply side, or "voodoo", economics seems to think that the tax rate on the wealthy is above the bulge, when it's clearly on the low side of Laffer's parabola.

[HereSince1628]

4. The Laffer Curve is an 'optimization curve'

To say that with street talk...it's the Goldilocks Principle.

Too much tax results in lost revenue

Too little tax results in lost revenue

Just the right amount of tax results in optimal revenue from taxes.

The graph is a parabola on its side. It's not a differentiable function...the same point on the x-axis has 2 Y points associated with it, one on the high side and one on the low side of revenue.

If it were true, and it probably ISN'T, there is the problem of not knowing which side of the optimization you are on.
The R's act as if they are ALWAYS on the too much tax side. Of course that is just ideological crap.

[louis-t]

5. You explained it better than I could.

:dunce:

[SpiralHawk]

2. Lying is a way of life for Republicons

Republicons crapped the cred bed long ago.

These facts will not stop Republicons from repeating the lie.

[crickets]

6. K&R

[TatonkaJames]

7. This is still debated ?

Any politician telling me tax cuts raise revenues had better have a solid chin.
Reagan raised taxes eight times while president, that's what made him but we
don't hear the media espousing that.
The poor take any extra money they have and buy food with it.
The middle-class take any extra money they have and pay bills with it.
The wealthy take any extra money they have and put it offshore to avoid taxes.
It doesn't work, never has, never will. Yet, misinformed people elect reps that believe in it.