Originally posted by Wookie06:
Higher taxes does not always equal greater government revenue raised. Also, I think it is important to note that "tax" is another term like "rich" or "wealth" that we all ascribe our own meaning to. For most of this discussion it appears that we're visualizing income tax but that's certainly not the only tax but let's stay with it generally.
If higher taxes raise more revenue why should we be concerned with corporations moving in whole or part to other parts of the world? I mean if we have a higher corporate tax rate, we'll lose money if we lower it. We don't lose money if we choose not to and corporations leave, right?
If we want to raise revenue by choosing to tax an economic activity such as income, clearly a higher tax rate will result in the most revenue raised, right? Generally speaking, if you want less of a thing, tax it more. The more money we remove from people, the less money they have to participate in economic activity, the less money being taxed. To a point, that is. Lower taxes too far and the revenue raised is negligible. Raise them too high and you discourage activity.
These things aren't linear, they're curves. I'm not saying Trump's tax plan is great. I don't care about it in the least because it's not even his plan and it hasn't been through the process where it will likely morph into God knows what anyway.
But let's explore this idea that his tax plan will "cost" money. To even try to make that idea work we have to visualize that all tax payers are the employer, government is the employee, and our tax cut is a pay reduction to our employee. This still doesn't make sense but it's about as close as we can get it to. So our pay reduction, now considered an expense, means that our employee, the government, is going to go deeper in debt by running higher deficits (because we just can't ever even consider living within the boundaries of an income). Problem is that happens anyway. The national debt is a curve growing faster and ever steeper by the year. I'm pretty sure if we go back four and eight years McCain's and Romney's plans were supposed to cost trillions more than Obama's and I'm also pretty sure that Obama wasn't running on the promise that under his plan the national debt was only going to double to about twenty trillion dollars by the end of his second term.
If higher taxes raise more revenue why should we be concerned with corporations moving in whole or part to other parts of the world? I mean if we have a higher corporate tax rate, we'll lose money if we lower it. We don't lose money if we choose not to and corporations leave, right?
If we want to raise revenue by choosing to tax an economic activity such as income, clearly a higher tax rate will result in the most revenue raised, right? Generally speaking, if you want less of a thing, tax it more. The more money we remove from people, the less money they have to participate in economic activity, the less money being taxed. To a point, that is. Lower taxes too far and the revenue raised is negligible. Raise them too high and you discourage activity.
These things aren't linear, they're curves. I'm not saying Trump's tax plan is great. I don't care about it in the least because it's not even his plan and it hasn't been through the process where it will likely morph into God knows what anyway.
But let's explore this idea that his tax plan will "cost" money. To even try to make that idea work we have to visualize that all tax payers are the employer, government is the employee, and our tax cut is a pay reduction to our employee. This still doesn't make sense but it's about as close as we can get it to. So our pay reduction, now considered an expense, means that our employee, the government, is going to go deeper in debt by running higher deficits (because we just can't ever even consider living within the boundaries of an income). Problem is that happens anyway. The national debt is a curve growing faster and ever steeper by the year. I'm pretty sure if we go back four and eight years McCain's and Romney's plans were supposed to cost trillions more than Obama's and I'm also pretty sure that Obama wasn't running on the promise that under his plan the national debt was only going to double to about twenty trillion dollars by the end of his second term.
Summary: Wookie06 thinks US is on the right side of the Laffer Curve, even though all evidence suggests the curve either doesn't exist or the US is very far to the left side.
![[http://i.imgur.com/GRhzJvz.jpg]](http://i.imgur.com/GRhzJvz.jpg "http://i.imgur.com/GRhzJvz.jpg")
