Reuters: House Republican rules ease way for tax cuts

[Predicto]

It worked under Reagan, It worked under Clinton.

The problem is ALWAYS spending.

Remembering also that the amount of the defecit is one problem, but the current issue is how large it is as a percentage of GDP.

If we dont cut the defecit one penny, but triple our GDP (huge exageration) we'd be fine.

Slogans are always more compelling than actual economics and accounting.

[Kilmer17]

Tax increases would lead to less revenue.

---------- Post added January-6th-2011 at 12:44 PM ----------

Slogans are always more compelling than actual economics and accounting.

Tell that to the Hope and Change that just tripled the defecit.

[Tulane Skins Fan]

Tax increases would lead to less revenue.

---------- Post added January-6th-2011 at 12:44 PM ----------

Tell that to the Hope and Change that just tripled the defecit.

You mean by actually counting things, right?

[Burgold]

Tax increases would lead to less revenue.

---------- Post added January-6th-2011 at 12:44 PM ----------

Tell that to the Hope and Change that just tripled the defecit.

... partly because he refused to increase taxes or continued the tax cuts. In effect as our dear friend Snyder Shrugged would say, Obama continued Bush's policies of tax cuts and spending increases. Remember, Obama actually did cut taxes on the middle class in his first two years in office.

[Kilmer17]

Yes he did. Spending and cutting is bad. It was bad when Bush and the GOP house then Dem house did it, and it got worse when Obama and the Dem house continued it and increased spending.

Obama and the Dems made the first correct move by extending the Bush tax cuts. The next part though will take the GOP's knife to cut the spending.

[DjTj]

Tax increases would lead to less revenue.

Well, you better tell that to all the state legislatures, because many are raising sales taxes to to increase their revenue. When Clinton raised income taxes, revenue grew exponentially.

It's simply not true that tax increases lead to less revenue. Some tax increases lead to less revenue (particularly those that can be avoided by changing economic activities), but most tax increases, especially in small amounts, will increase revenue.

[Kilmer17]

Well, you better tell that to all the state legislatures, because many are raising sales taxes to to increase their revenue. When Clinton raised income taxes, revenue grew exponentially.

It's simply not true that tax increases lead to less revenue. Some tax increases lead to less revenue (particularly those that can be avoided by changing economic activities), but most tax increases, especially in small amounts, will increase revenue.

"Some" and "Small" are the key words here.

I agree with that.

Just like SOME tax cuts can lead to revenue increases. And SOME spending is good. And SMALL growth is not enough to justify tax increases.

Obama and the Dems apparently agree with me on the tax issue as they cut some taxes and extended some other existing rates.

[DjTj]

"Some" and "Small" are the key words here.

I agree with that.

Just like SOME tax cuts can lead to revenue increases. And SOME spending is good. And SMALL growth is not enough to justify tax increases.

I agree with that, but we should be mindful that when we are trying to balance the budget, the government works like any other business. Increasing taxes generally reduces the deficit because it increases revenue. Decreasing spending generally reduces the deficit because it decreases expenditures. More money coming than coming out. That is the starting point.

Obama and the Dems apparently agree with me on the tax issue as they cut some taxes and extended some other existing rates.

I don't think Obama and the Dems were really trying to balance the budget. They were trying to appease the masses by keeping the tax cuts. They made a half-hearted attempt to address the deficit by raising taxes on the wealthy, but they ultimately caved to the Republicans.

[Hubbs]

Kilmer, how can you reconcile what you just said in your last post with your generalized statement that "tax increases will lead to less revenue"?

[Popeman38]

I didn't work under Reagan. When Reagan left the economy was in shambles. His VP become President promised never to raise taxes, but it got so bad he was left with no choice. Reaganomics was a failure. More Reaganomics was the same principle that George W. Bush and the current Republicans follow. Cut taxes, increase spending, push problems until tomorrow, and don't look back.

George H W Bush looked the American people in the eye and told them the country needed to raise taxes to reduce the deficit, despite what he claimed in the campaign and knowing he would pay politically. What did the American people do as a result? Vote him out, because "he lied". The Dems seized on the line, "Read my lips: No New Taxes". Obama gets elected promising change. Reps seize on lack of change, poof, mid term election blood bath. Both sides have the skids greased. They are both political machines. They will spend hundreds of millions of dollars to gain/retain power. What do you think they will want in return on their investment?

[Kilmer17]

Kilmer, how can you reconcile what you just said in your last post with your generalized statement that "tax increases will lead to less revenue"?

The proposed expiring of the Bush tax cuts are the basis of the phrase "tax increases".

Those arent SMALL.

[Popeman38]

Increase taxes, decrease spending. Revenues go up faster. Deficit goes down faster.

This. The problem is, you generally don't increase taxes in the midst of a recession. It is funny, the govt expects the people to tighten their belts and spend money at the same time to keep the economy moving. Yet the govt refuses to do the same. The govt could cut spending in half if they weren't all worried about maintaining their power. Show me a politician who will act on behalf of the country instead of on behalf of his own good, and I will show you a vote.

[JMS]

Nobody believes the Democrat lie that the HC bill will reduce deficits.

It's not the Democrats numbers. I quoted the Congressional budget office which is a non partisan Congressional resource. Frankly it has nearly gold standard credibility for very conservative estimates.

Also I think you are confused. I didn't say the GOP didn't believe the HC bill would save us hundreds of billions in deficit spending over the next ten years. I said the GOP expressly wrote into their laws an exception so the new spending incured by rolling back healthcare reform would not count. So evidently the GOP believes the congressional budget office; Why else would they write themselves an exemption?

The GOP is taking a principalled fiscally conservative stance. Exactly what they said they would do if elected, and one they are actually doing.

It's why the people voted them in in landslide fashion.

No they aren't. The gop is taking a partisan political stance designed to put more money in the hands of hteir supporters and take money out of the hands of tax payers; while continuing their decades old policy of expanding the budget and deficit.

---------- Post added January-6th-2011 at 01:31 PM ----------

The CBO has always been crap as they have to base it on the "word" of Congress to actually follow through on their promises.

The CBO is a non partisan congressional resource. It's considered the gold standard for financial estimates and budget issues. They don't rely on congressional projections from either party; they do their own research and come to their own conclusions. typically very conservative projections which neither Republicans or Democrates agree with.

---------- Post added January-6th-2011 at 01:35 PM ----------

Where did Cantor say that?

Todays WaPost says-

House Majority Leader Eric Cantor, R-Va., disputed the CBO estimate this week, but Republicans have yet to produce one of their own.

Cantor asserted in a nationally broadcast interview Thursday that the health care overhaul has spurred a host of new federal regulations that have had the effect of impeding private-sector hiring.

http://www.washingtonpost.com/wp-dyn/content/article/2011/01/06/AR2011010601700.html

So then why did Cantor write into his new house rules an exception. If he doesn't think Obama's healthcare reform will save the country hundreds of billions over ten years; as the CBO projects; Why would Cantor explicitely exclude healthcare from his policy of offsetting any new spending increases with other spending reductions?

It's how you know he's lieing; cause his mouth is moving.

---------- Post added January-6th-2011 at 01:48 PM ----------

Tax increases would lead to less revenue.

Actually if we extended the bush tax cuts for 70 years; the resulting costs would be 3 times more expensive than the projected social security deficit over that same time period.

Bush's tax cuts didn't result in a stronger economy than under Clinton.

Tell that to the Hope and Change that just tripled the defecit.

Ronald Reagan left offfice with a national debt 2.6 times what he inherited from Carter eight years ealier.. At the time Reagan was the hank Aron of federal spenders.

Bush senior who further increased that debt by 60% over 4 years. broke Reagan's record for real spending; just not in relative terms.

Bush Junior outspent both of them combined in real dollars by about 2-1 resulting in an additonal 6.5 trillion in debt and about a 12 trillion dollars overall after his last financial budget of 2009.

Currently the financial debt is 14 trillion; of which Obama is responsible for less than 2 trillion; None of it new spending. In obama's first fiscal budget of 2010 he actually cut the deficite from about 2 trillion he inherited from Bush, to about 1.4 trillion.. Saying he trippled the deficit is a rediculous overstatement..

http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt_histo5.htm

[Hubbs]

The proposed expiring of the Bush tax cuts are the basis of the phrase "tax increases".

Those arent SMALL.

What's your definition of small?

[Larry]

The proposed expiring of the Bush tax cuts are the basis of the phrase "tax increases".

Those arent SMALL.

Really? The numbers I keep looking at say that if all of those cuts expire, the people supposedly hardest hit (the top 1%) would see their taxes go up by 1-2%. (1-2% of their income, not 1% of their taxes.)

What's your definition of SMALL?

---------- Post added January-6th-2011 at 03:11 PM ----------

Tax increases would lead to less revenue.

According to historically-disproven Republican Myth.

Tell that to the Hope and Change that just tripled the defecit.

And speaking of Myth, there's another one.

[JMS]

Really? The numbers I keep looking at say that if all of those cuts expire, the people supposedly hardest hit (the top 1%) would see their taxes go up by 1-2%. (1-2% of their income, not 1% of their taxes.)

What's your definition of SMALL.

Larry I think you are missing the entire point. Small isn't a quantitative description for the GOP but rather a partisan one. Thus the social security deficit over 70 years is big; but the cost of maintaining the bush tax cuts over the same period of time is 3 time larger; but Kilmer is perfectly correct in calling it small. See how that works?

The worst possible thing for the country would be to retreat from the fiscal policies of the Bush administration which left us in such prime position to respond to these latest cyclical economic troubles; and regress to the dark ages of what we mistakenly thought was prosperity under Bill Clinton.

How dare you suggest the upper 1% of earners sacrifice 2% of their income to keep the government solvent. I mean it's not like the wealthiest Americans even pay that much taxes on their capital gains income.

[Thiebear]

The "always" part of your statement is just false. In reality, until the health care bill was submitted, the CBO was something both parties agreed was non-partisan and reliable.

They got Medicaid, Medicare, Prescription Drug Plan D right?

okay then

[Popeman38]

Really? The numbers I keep looking at say that if all of those cuts expire, the people supposedly hardest hit (the top 1%) would see their taxes go up by 1-2%. (1-2% of their income, not 1% of their taxes.)

What's your definition of SMALL?

If all the Bush tax cuts had expired, it would have cost the average family 3% in taxes. That is essentially a 3% cut in pay, plus the 10-20% increase already in place for the cost of healthcare.

[Predicto]

If all the Bush tax cuts had expired, it would have cost the average family 3% in taxes. That is essentially a 3% cut in pay, plus the 10-20% increase already in place for the cost of healthcare.

Where did you get that figure? Actaually, where did you get both of those figures?

As far as I can tell, they have zero basis in reality.

[Larry]

Where did you get that figure? Actaually, where did you get both of those figures?

As far as I can tell, they have zero basis in reality.

Hey, we both know where he got the second one. It's from the "take the health insurance industry's traditional, annual, rate hike, for the last two years, and claim that 100% of it is Obama's fault" method.

(Although I'm not certain that his first number is incorrect. I can look at what the effect on the top 1%, the marginal tax rate has. But those tax cuts had a lot more in them than just changes to the rate tables. He may be right, at least as far as I know.)

[Stadium-Armory]

By cutting taxes Govt will make more money because the Revenue base will increase. The mistake is thinking that raising taxes per person is the only way to increase revenue.

I think that's generally true as long as you don't cut corporate tax rates at the same time. Presumably, the influx of money that enters the economy from the tax cuts, is used by businesses to make more money. As long as you tax that money at the same rate, your premise holds up. The problem comes when we also cut tax rates on businesses, and they pocket more of the money they make -- in which case the government does not "make" more money. You could argue that the businesses would then reinvest the money and make even more money, a share of which would go to the government in taxes, but I think we learned during the Regan era that this didn't actually happen.

I think the answer is somewhere in the middle, with tax and spending cuts -- although I would personally pay more taxes if it would help us out of debt.