keegs
Veteran Member
Mike,
Apparently even N. Gregory Mankiw, George W. Bush's chairman of economic advisors disagrees.
Greg Mankiw's Blog: On Charlatans and Cranks
Has the economy affected you and your tractors?
- Thread starter Tred Boyota
- Start date
- Views: 14590
- Status
Mike,
Apparently even N. Gregory Mankiw, George W. Bush's chairman of economic advisors disagrees.
Greg Mankiw's Blog: On Charlatans and Cranks
FallbrookFarmer
Platinum Member
You should re-read the article, The line about him disagreeing with Bush is ascribed to Jared Bernstein not
Mankiw.
Nice try though
MikePA
Super Moderator
Here are the facts. GDP and Total Revenue increased each year. So much for the myth that cutting tax rates reduces revenue, but like Easter bunnies and unicorns, facts are irrelevant to those who prefer fiction. Increasing tax rates is not about revenue, it's about power.
Year GDP-US Total Revenue-total
1960 526.4 153.10
1961 544.8 158.74
1962 585.7 161.30
1963 617.8 172.31
1964 663.6 184.07
1965 719.1 193.57
1966 787.7 215.33
1967 832.4 240.03
1968 909.8 253.37
1969 984.4 299.88
1970 1038.3 321.05
Year GDP-US Total Revenue-total
1980 2788.1 885.62
1981 3126.8 1015.71
1982 3253.2 1076.72
1983 3534.6 1104.02
1984 3930.9 1221.55
1985 4217.5 1347.54
1986 4460.1 1439.36
1987 4736.4 1581.95
1988 5100.4 1676.22
1989 5482.1 1822.30
1990 5800.5 1927.40
dcyrilc
Elite Member
Hi Dave,
The tax laws benefit anyone who has investment income, like Warren. My CER (Class Envy Radar) alerts whenever I see the phrase 'benefit the wealthy'.
EDIT: I agree with having social safety nets, like welfare, unemployment, etc. The problem is, we don't have safety nets we have safety sofas.
I think I would classify them more as safety beds.
keegs
Veteran Member
It makes perfect sense that there's revenue growth with GDP growth. But the issue is whether tax cuts produce enough additional revenue to offset their cost. That is to say, do they pay for themselves. There isn't a reputable economist who will advocate that position. Not even the man who administered President Bush's policy on the matter, his cheif economic advisor.
I just read somewhere recently that having debates like this, regarless of the empirical evidence on one side of an argument or another will only strengthen one's position. If you agree, then there's likely nothing more we can say to each other about this Mike.
I just read somewhere recently that having debates like this, regarless of the empirical evidence on one side of an argument or another will only strengthen one's position. If you agree, then there's likely nothing more we can say to each other about this Mike.
keegs
Veteran Member
You should re-read the article, The line about him disagreeing with Bush is ascribed to Jared Bernstein not
Mankiw.
Nice try though
Fallbrook...maybe you should re-read it.
MikePA
Super Moderator
Some people like making government bigger and more powerful by feeding more and more money into its insatiable maw, I don't.
dave1949
Super Star Member
You should re-read the article, The line about him disagreeing with Bush is ascribed to Jared Bernstein not
Mankiw.
Nice try though
These are Mankiw's words in rebuttal to Bernstein:
I used the phrase "charlatans and cranks" in the first edition of my principles textbook to describe some of the economic advisers to Ronald Reagan, who told him that broad-based income tax cuts would have such large supply-side effects that the tax cuts would raise tax revenue. I did not find such a claim credible, based on the available evidence. I never have, and I still don't.
The book made clear that the critique applied to a particular reason to favor the tax cuts, not necessarily to the policy of cutting taxes. There are many reasons a person might favor tax cuts besides the belief that tax cuts are self-financing. I hope it is not too pedantic to point out that there is a big difference between rejecting a policy and rejecting one argument made by some proponents of the policy.
As I read it, Mankiw is saying tax cuts do not raise more revenue than is lost. Later in the article, he gives some estimates of 25% to 50% depending upon the type of tax (labor or capital) being reduced. He favors tax cuts, but not because they are self financing.
It is an interesting article. He neglects to mention that the largest point he was wrong about is real wage growth under a supply-side tax policy. Economics is part voodoo anyways. There are so many variables, some of which only become apparent in their significance years later.
Dave.
dave1949
Super Star Member
The ratio of revenue to GDP in this list ranges from about 29% to 34% for the eight or so years I checked. Just looking at them, that ratio seems pretty consistent. Yes, it shows that as the GDP grew, more taxes were collected. I don't think anyone is saying or would expect otherwise.
The list doesn't show any tax rates to be correlated to the GDP-revenue ratios.
Even if tax rates were included, we don't know from which marginal brackets the tax revenue was derived or any trends that may be apparent in the tax collected by bracket.
It isn't enough to say the top rate was xx% in a given year if we don't know what part of the total revenue that bracket accounted for - as an example. The same would be true of all brackets, not just the top.
We also don't have any tax code change history which could account for some variations. The IRS/Congress are always messing with tax rules and rates. We would have to track any changes by tax year and have some idea of their effect on revenue by bracket.
The list is good as far as it goes, but it leaves many questions unanswered that are being discussed here.
I am not suggesting you should find the information. It looks like it would be a full time job for about 6-12 months to find the info, do the correlations and make sure it is correct
Dave.
FallbrookFarmer
Platinum Member
The ratio of revenue to GDP in this list ranges from about 29% to 34% for the eight or so years I checked. Just looking at them, that ratio seems pretty consistent. Yes, it shows that as the GDP grew, more taxes were collected. I don't think anyone is saying or would expect otherwise.
The list doesn't show any tax rates to be correlated to the GDP-revenue ratios.
Even if tax rates were included, we don't know from which marginal brackets the tax revenue was derived or any trends that may be apparent in the tax collected by bracket.
It isn't enough to say the top rate was xx% in a given year if we don't know what part of the total revenue that bracket accounted for - as an example. The same would be true of all brackets, not just the top.
We also don't have any tax code change history which could account for some variations. The IRS/Congress are always messing with tax rules and rates. We would have to track any changes by tax year and have some idea of their effect on revenue by bracket.
The list is good as far as it goes, but it leaves many questions unanswered that are being discussed here.
I am not suggesting you should find the information. It looks like it would be a full time job for about 6-12 months to find the info, do the correlations and make sure it is correct
Dave.
How about CBO numbers? Would you trust them?
If so: Washington Times yesterday "President Obama's fiscal 2011 budget will generate nearly $10 Trillion in cumulative budget deficits over the next ten years, 1.2 trillion more than the administration projected, and raise the federal debt to 90% of the nations economic output by 2020, the Congressional Budget Office reported Thursday"
I don't know myself, but to use a technical term that somebody else used before, I think that's a lot of "irresponsible poop"
- Status
