Originally Posted by Botnst
Maybe. remember when the current tax cuts were being argued? Many Dems on the hill argued that cutting taxes would lower tax receipts. that is plainly incorrect as tax receipts are at an all-time high.
I have a feeling that taxes receipts have a somewhat parabolic response curve to tax rates. On either limb (extremely low tax rates or extremely high tax rates), tax receipts are low. Then there is a broad hump in the middle in which the tax rates are not so odious as to drive folks into an underground economy. Receipts drop-off when the burden is too great or when the tax rate is suboptimal.
The tax cuts that we have in place now are very small, and the economy growth is fueled by many factors, most of which have nothing to do with the tax cut. If its purpose was to spur spending by the common man, the traditional reason for a tax cut, it worked but also partnered with a 16% rise in credit card debt over the past 2 years [and resultant record bankruptcies]. So we got the rise in revenue but also some downside as well.
Tax cuts [ala Reagan] made very good sense when the rates went as high as 70%+. I was all for them and they needed to come down to more practical levels, where working and paying tax seemed fair. But now, with most paying 28-35%, a 1-2% cut is much less important in the BIG picture.
IF we, as a society, were providing a solid infrastructure for all citizens, and had budget surpluses, a tax cut would continue to make sense, across the board. But we have too many gaps. Air Traffic Control is failing to keep up with growth, Highways and bridges are not keeping up with traffic, the wars on Drugs, Stupidity, Gangs, etc are being lost. While for profit hospitals continue to grow, government funded hospitals and health facilities are lagging behind, Veterans health services are appalling [Gov seems to just hope they would just die quickly]. Education [No Child Left Behind] is failing, test scores at many schools are dropping, many children are being left behind.
As long as that INFRASTRUCTURE that we all depend on for our daily existence [flying to vacation, driving to dinner, hopping that the clerk at the video store can add] is sub par, and we as a society have no choice but to pay for its upkeep, tax cuts are just wrong-headed. They sound nice but in fact are just desires of greedy short sited people who prefer short term gains to long term planning. It makes it easier to blame someone else.