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Does Raising Taxes Lead to More Gov’t Revenue? Professor Shows How the ‘Laffer Curve’ Debunks Liberal Myths

Sep. 10, 2012 2:10pm Billy Hallowell

Will raising taxes on America’s wealthy actually bring in more revenue? While liberals would argue — and, quite definitively — that it does, UCLA professor and author of “Left Turn” Dr. Tim Groseclose makes a very different case. In a new course for Prager University, radio host Dennis Prager’s unique, online “college” for conservatives, the educator explains the revered Laffer Curve (an economic chart and theory created by famed economist Arthur Laffer).

Tim Groseclose Tackles the Laffer Curve in New Prager University Course

Photo Credit: YouTube/Prager University

TheBlaze connected with Groseclose last week in anticipation of the course to speak further about taxation and the potential dangers of raising tax levels above a certain breaking point. To begin, we asked Groseclose to explain, in layman’s terms, the purpose of the Laffer Curve.

“It shows the relationship between the tax rate that a government charges and the tax revenue that it actually gets,” he explained. “And one of the most unintuitive parts…is that it shows that with very high tax rates, it’s got to be the case that when you increase the rate, you actually decrease revenue.”

This, of course, is the exact opposite of what many liberals claim will happen when tax rates are increased. Despite the vast majority of Democratic opinion that rails against the Laffer Curve’s theoretical constructs (at least when it comes to lower-level tax rates), Groseclose claims that its tenets are “very uncontroversial among economists.”

Photo Credit: YouTube/Prager University

According to the professor, at least one study shows that Laffer Curve’s breaking point for taxation is 33 percent. Thus, increasing the tax proportion above this rate could, in theory, become counter-productive, leading to decreased revenues, despite an elevated tax rate.

“So, [the curve] says that if we want to decrease the deficit, it actually might be impossible through increasing taxes,” Groseclose told TheBlaze. “It might be the case that the only way to do that is decreasing spending.”

Watch Groseclose’s five-minute course, below, to learn more about the curve’s history and practical application:

Click here to learn more about this course and others on the Prager University web site.

–

Related:

Radio Host Dennis Prager Has a New Online ‘College’ to Combat Liberal Bias and Teach Judeo-Christian Values

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Comments (160)

COFemale
Posted on September 10, 2012 at 4:16pm
Here is my no nonsense economics 101. The more I make and have left over from the necessities, the more likely I will spend some money on the retail items and support the economy. If I make more and get taxed more with NO discretionary monies left over, I will save what little I have rather than spend on the open market.

I really don’t understand why Liberals are too dumb to know this. It really does not take that much common sense to figure it out. Come on Liberals give it a try.

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- Jaycen
  Posted on September 10, 2012 at 4:39pm
  Saving is simply delaying your purchase. The assumption that all people will save, and that the percentage of income they’ll save will be the same, is rediculous.
  
  The biggest problem with Socialists, is they make blanket assumptions about people’s spending habits. Just because I’m saving up for a new car, doesn’t mean everyone will. Some people will spend any extra income they receive on lifestyle choices. Some people will save extra income.
  
  Some will do a mix of saving and spending. You can’t know how someone will behave, and in a free society, it’s none of your business what someone else chooses to do with their money, unless and until they want to negotiate with you.
  
  Report this comment
- one.dakine.howlie
  Posted on September 10, 2012 at 5:22pm
  How about the government taxes a flat tax of 10% for EVERYONE that covers the only thing the government needs to worry about, defense of our country, and we won’t have to worry about who gets taxed what anymore or whether the government can spend more. Any other taxes can be made by the states to provide for state services and extra revenue during times of war.
  
  Report this comment
- US-First
  Posted on September 10, 2012 at 5:58pm
  Liberals are not that dumb. They only want to tax wealthy persons income because they think the wealthy are so tax sheltered on their income that the effective rate is much lower than 33%. They figure they can get support for doing this through class envy and to a large extent they are correct. Now the dirty little secret is in the fact that you said that if you have more income left in your pocket you will spend it. Liberals know that the middle class support the retail economy and so they will effect tax increases in the things you purchase and the services you use not the income you get. In north carolina that takes the effect of food tax, gas tax, FCC tax in phones, energy tax in power and water bills, property tax, luxury tax, alcohol tax, tobacco tax, soon to come Obamacare tax, and all retail taxes you can think of.
  
  Report this comment
- DOra Glasberg
  Posted on September 10, 2012 at 6:20pm
  Simple.
  Running a country IS NOT like a running a business or a family budget.
- QuincySmith
  Posted on September 10, 2012 at 6:30pm
  COFemale;
  
  Actually they know it, but it interferes with their agenda. They, for the most part, are not interested in increasing government revenues, only in advancing (FORWARD.) their progressives policies.
  
  Report this comment
- Walkabout
  Posted on September 10, 2012 at 6:37pm
  DOra Glasberg
  You are such a good little commie/socialist/liberal/progressive/democrat or whatever
  
  As such you believe in evolution & that people are animals. Well all elements have a limit to what they can do. Draft animals have a physical limit that they will pull. There is a limit to the work they will do unless you whip them. Are you going to whip people dear Dora?
  
  I bet you think psychological fear such as sending people to a Gulag is much more sophisticated than physically whipping them.
  
  Or maybe you want to make 80% of the population into epsilons like in Brave New World. You would have to. Monkeys of all sorts show that they are wired for fairness. It isn’t fair to make people to work for others that won’t. Like people that won’t provide for their own children. When there is an unwed mother there is a “biological” father that is getting away with shirking work for not providing for that kid. Other people in society do not like paying for other people’s kids since the dawn of time. That is why you have the culture that was depicted in the Scarlet Letter. If the man is already married so what. He must be brought to account. It is also unfair when people look to limit family size to provide for their family & then have to pay for welfare mothers who neither work no limit their family size.
  
  Yes Dora you cannot defend your position IRL.
  
  Report this comment
- Walkabout
  Posted on September 10, 2012 at 6:44pm
  DOra Glasberg
  
  My spouse grew up in a communist country. I think they know more about communism & all that leftists crap than you. They lived it.
  
  They came here & less than 7 years here they are like “why work more than 40 hours a week, the harder you work the greater percentage they take.”
  
  So the laffer curve is real. It is scalable for large groups. Unless you can change human psychology you can;t change the reality of the laffter curve. They use calculus & economics to prove it. I assume you know calculus. Or did you just read Mao little red book & Das Kapital & said “The HeII with math, Math is hard”? You can’t change it. Economics after all is applied psychology. To change such basic psychology you would have to changer some very basic biology. But you keep pi$$ing into the wind with you mouth open 7 see what happens.
  
  Report this comment
- The_Cabrito_Goat
  Posted on September 10, 2012 at 6:58pm
  That halfway point is deceiving, it’s really closer to 20% when people say “enough with taking my money!” and decide to cut back on labor or hide their money. When you have the highest corporate tax rate in the world, I can’t really blame big business for doing this.
  
  Not to mention that income tax is not the only expense you pay to the government. Property taxes are another, and hidden loopholes in many states as well.
  
  Report this comment
- Flyingfish
  Posted on September 10, 2012 at 7:06pm
  You wouldn’t even need a 10% flat tax to cover the military. A flat tax of 2-3% would be more than enough.
  
  Report this comment
- cbrown
  Posted on September 10, 2012 at 7:32pm
  @COFemale
  
  It’s not complicated. I find it quite easy to understand reasonable conservatives and liberals.
  
  The disagreement is about the tax rates. For e.g. for incomes above $250K – should be rate be 35% or 39%. With deductions the effective tax rates tend to be 20% for many families in that income range.
  
  Now the additional revenue is collected for reducing the deficit – it might help economy. spent on “bridge to nowhere” – it will hurt the economy, invested in science for inventing the internet – it may immensely help the economy.
  
  Progressive tax system has generally helped us but wasteful government spending (including pork, unnecessary wars,..) have created a big debt and is hurting us. Tax reform that will get rid of offshore accounts, farm subsidy, … with a lower rate may be best solution. It will take a compromise between the liberals and conservatives to achieve this.
  
  Report this comment
- therealconservative
  Posted on September 10, 2012 at 7:48pm
  @Dora The Explorer
  
  “Running a country IS NOT like a running a business or a family budget.”
  
  That thinking is why your bosses at the DNC are 15 mil is the whole after your convention.
  
  Report this comment
- Walkabout
  Posted on September 10, 2012 at 7:49pm
  The_Cabrito_Goat
  
  The Wall Street Journal (WSJ) ran an editorial where they said it was between 18 to 21 %. They based it on analysis/observation of federal revenue as percentage of GDP over the last several decades under various tax rates.
  
  Report this comment
- Walkabout
  Posted on September 10, 2012 at 7:54pm
  cbrown
  
  How is war unnecessary? You punch a bully back hard enough he respects you however grudgingly & either reforms or looks for another target. Same thing with groups of people?
  
  How was the war in Afghanistan unnecessary? We tried not to go to war. We made a simple demand. Extradite Usama bin Laden. If you don’t get bin Laden at that point or go to war. There ain’t sheisse that is going to help you at that point. You are just marking time waiting for the end.
  
  Report this comment
- jzs
  Posted on September 10, 2012 at 8:00pm
  Nice theory, but the national debt tripled under Reagan, who cut taxes – only to raise them later increase revenue. And the debt doubled under Bush (with a much higher starting debt than Reagan). Taxes were far higher under Clinton than now, and the budget was balanced.
  
  So in practice, why did lowering taxes, increase the national debt?
  
  Report this comment
- therealconservative
  Posted on September 10, 2012 at 8:14pm
  @jzs
  
  Nice theory, but that didn’t happen.
  
  Report this comment
- Walkabout
  Posted on September 10, 2012 at 8:28pm
  Nice theory, but the national debt tripled under Reagan, … blah, blah, blah.
  
  And I guess that Congress is not a coequal branch of government, who approves of the appropriation bills & actually spends the the money.
  
  Too bad teacher can be ignorant.
  
  Report this comment
- Walkabout
  Posted on September 10, 2012 at 8:43pm
  therealconservative
  
  That thinking is why your bosses at the DNC are 15 mil is the hole after your convention.
  ***
  Really? 15 million in the red? I knew Obama gave NOTHING, because he needs to raise & spend more money Romney if he is going to win.
  
  Report this comment
- jzs
  Posted on September 10, 2012 at 8:50pm
  Walkabout, not sure what you’re comment has to do with the “voodoo economics” claim, the “trickle down” theory (did it trickle on you? It didn’t anyone else) but if you’re going to blame the top guy now, well you got to blame the top guy the then. Are you telling me Reagan and Bush didn’t sign all those bills?
  
  Report this comment
- therealconservative
  Posted on September 10, 2012 at 9:00pm
  @walk
  
  http://www.theblaze.com/stories/democrats-end-dnc-15-million-in-the-hole/
  
  Report this comment
- therealconservative
  Posted on September 10, 2012 at 9:03pm
  @jzs
  
  “did it trickle on you? It didn’t anyone else”
  
  Answer: yes and yes. Could it be that your too young?
  
  Report this comment
- jzs
  Posted on September 10, 2012 at 9:07pm
  WALKABOUT, we should actually give Democrats the credit for anything that happened during the Reagan administration. Or do you give Reagan the credit for the positives, and Democrats for the negatives? Does that make sense to you?
  
  Report this comment
- cbrown
  Posted on September 10, 2012 at 9:12pm
  @Walkabout
  
  Unnecessary wars – Come on you have seen smarter ways to get rid of dictators. Why send our proud foot soldiers and do nation building.
  
  BTW is it time for us get our troops home from Germany, Japan and 100+ countries around the world.
  
  Report this comment
- bpuryea
  Posted on September 10, 2012 at 9:18pm
  Dora
  Let’s see if you can spot the problem! (All values in constant 2005 dollars)
  
  First four years under Clinton combined total revenue was 6.596.1 trillion. Combined total spending was 7527.8 trillion which yielded a 931.7 billion combined deficit or 12.4% at an effective overall tax rate of 36.6%
  
  First four years under Bush combined total revenue was 8094.5 trillion. Combined total spending was 8955.4 trillion which yielded a 860.9 billion combined deficit or 9.6% at an effective overall tax rate of 33.9%
  
  First four years under Obama combined total revenue was 7915.0 trillion. Combined total spending was 12593.2 trillion which yielded a 4678.2 trillion combined deficit or 37.1% at an effective overall tax rate of 33.9%
  
  Clearly, lower taxes ins’t the problem, spending is.
  
  Report this comment
- Secret Squirrel
  Posted on September 10, 2012 at 9:18pm
  .
  Libs don’t get it.
  They think if you double the tax rate you will double the revenue.
  They forget people will change their actions based on tax rate.
  Reagan proved that if you CUT taxes you increase the revenue.
  Did I say libs don’t get it? They never will. They must be defeated.
  
  Report this comment
- Secret Squirrel
  Posted on September 10, 2012 at 9:22pm
  .
  Let me remind you of Obama’s 2008 promise.
  Reporter: “Sen. Obama, if raising taxes resulted in LESS revenue, would you still do it?”
  O: “Yes, because it’s the right thing to do.”
  
  So Obama is only interested in punishing the rich, not balancing the budget.
  It’s not rocket surgery, folks.
  
  Report this comment
- Wango
  Posted on September 10, 2012 at 9:26pm
  DORA . . .yes, be a good little whatever and listen to WALKABOUT – I think he’s on to something big here. From now on, I’m basing all my economic thinking on the experience of his lazy in-laws.
  
  Finally!
  
  Report this comment
- SteveNC
  Posted on September 10, 2012 at 9:43pm
  CM – As you say, its all simple economics. The more you tax someone the less incentive they have to produce. The less they produce the smaller the tax payments and the fewer dollars they spend in the economy.
  Libs (At least some) do understand this, but money empowers people. If you are allowed to keep more than the tax man has less power. The more they can take from those who have……the more power they have over all. The libs who don’t understand the reality are mostly just interested in taking for the sake of taking. As though the world just owes them.
  Just my thoughts and opinions.
  SJ in Hickory, NC
  
  Report this comment
- U.N.hater
  Posted on September 10, 2012 at 10:09pm
  They collect over 2T a year in taxes. I would say they allready tax us to death. How about putting a cap on how much the government can collect? Cut them down to 1T a year. Add up all the cash we have given away to other country’s and if we owe them cash deduct it from what they should owe us. We give our money to them but we have to borrow from them. Anyone else find this f – - cked up to?
  
  Report this comment
- cbrown
  Posted on September 10, 2012 at 10:25pm
  @SteveNC
  
  Using your logic Apple should relocate to Texas (low state tax) form California (high state tax). In fact Steve Jobs was really stupid to start a business in the 70s when the tax rates were very high. I hope you see fallacy.
  
  Starting or growing a business has very little to do with tax rates.
  
  Report this comment
- SpeckChaser
  Posted on September 10, 2012 at 10:40pm
  JZS asks the softball question of “why did lowering taxes, increase the national debt?”
  
  You see JZS, a deficit is what you get when you spend more than you receive. If one makes $100 and spends $50 they have a surplus. If one makes 1 trillion and spends 2 trillion they have a deficit. Income is not the only factor. You would have already known that had you known the definition of deficit.
  
  You are not intelligent enough to know the value of C in A + B = C without knowing the value of B, which is spending in this example. Continuously stating lowing taxes increases the deficit as a standalone statement is asinine. Repeating it doesn’t make it true.
  
  How about this question? If the government raises taxes and has an increase in income from $100 to $110 while spending goes from $90 to $120, how much did your tax increase reduce the deficit?
  
  Oh yea, I offered $100 to a charity of your choice for answering the following question. You never answered so I got to know, why do you hate charity so much?
  
  JZS Request #10: Please answer the following question.
  
  How will raising taxes on businesses grow the economy?
  
  Report this comment
- SpeckChaser
  Posted on September 10, 2012 at 10:55pm
  CBROWN,You have never owned a successful business have you?
  
  Apple would have grown at the exact same pace had they been in Texas receiving lower taxes giving them a bigger bottom line?
  
  By your logic, a company with a 1% profit margin could hypothetically expand at the same rate as if they have a 90% profit margin, because, you know, “growing a business has very little to do with tax rates.” Hmmm.
  
  Sounds stupid to me but you could probably sell that to JZS.
  
  Report this comment
- cbrown
  Posted on September 10, 2012 at 11:25pm
  @SpeckChaser
  
  For Apple eco-system of the bay area is more important for them. Innovation is most important thing for them. They will not move to Texas to take advantage of its 5% tax rate advantage .
  
  Really silly to take some extreme examples of 90% to 1%. We are talking about 4%-5% tax rate differences. The key for business is customer demand for its product. Taxes make some difference but is very low in their priority list. Most small business will not be able to tell what their tax rates are. At the end of the year their accountant tells them what it is.
  
  Yes, I have run two successful business.
  
  Report this comment
- SpeckChaser
  Posted on September 11, 2012 at 12:45am
  CBROWN said, “Starting or growing a business has very little to do with tax rates”
  
  If your intent was to present that statement as fact then the 90% to 1% example is not silly or extreme. If I say speed limits have very little to do with traffic deaths then I can’t say a 200 MPH zone is silly or extreme. That is unless I do not believe what I originally said.
  
  Then you said, “Taxes make some difference but is very low in their priority list”
  
  All other factors being the same, a business will be capable of growing quicker paying 5% less in taxes. A five percent reduction in taxes would result in a savings of 1.5M on 30M revenue, which is classified as a small business. Chump change?
  
  If you’re just spouting off to see yourself post, okay, whatever. If you actually believe what you’re saying and you see the bottom line as irrelevant, maybe you should work for the government. Your ideas will be well received.
  
  Report this comment
- cbrown
  Posted on September 11, 2012 at 11:13am
  @SpeckChaser
  
  I believe we are talking past each other. Everyone (individuals and business) wants to keep every dime they have earned. The question is: On taxable income of 300K should the Government tax the last 50K (300K-250K) at 39% or 35%. The additional tax can help bring down debt( leads to lower interest rate), invest in science (help invent the Internet) or infrastructure, not waste it.
  
  In general, business hiring/firing decision are not based on taxes. A Salon will not hire a new hairdresser when their tax rate is 5% less on a portion of their taxable income. They will do that when there is more demand for their service.
  
  Report this comment
- cantstandlibs
  Posted on September 11, 2012 at 4:24pm
  @us-first your statement is a contradiction.
  
  1) Liberals only want to tax the rich.
  vs
  2) Liberals raise taxes on purchases to get it from the middle class.
  
  Correction, they only want to say they are taxing the rich. They want to increase taxes in order to stomp out the middle class, buy off the rich. Then the non-rich will be subjects of government programs, handouts, class action lawsuits (victims) due to the rich “corporations.” Eventually, the corporations are run (and owned) by govt bureaucrats and the executive branch.
  
  Report this comment
- SpeckChaser
  Posted on September 11, 2012 at 5:48pm
  CBROWN
  
  Let’s use real world, common sense examples so we do not talk past each other.
  
  Which would you do first if you were in debt? Continue your current spending level while looking for a higher paying job or reduce your spending levels.
  
  Responsible people would first cut spending, but liberals rarely mention cuts in spending when addressing the deficit. Why? Do they not know the definition of deficit is spending more than you earn? Why do liberals omit cuts in spending, the most important factor, when addressing the deficit? It doesn’t make since.
  
  It’s intellectually dishonest to use your salon shop example as an across the board definitive outcome of potential tax cuts. It would be like saying seatbelts don’t save lives because some can still die while wearing one. Seatbelts are not a guaranteed life saver, job creator in this example, but they do give you a better chance, just like tax cuts.
  
  Some businesses will hire due to tax cuts/lack of tax increases and some won’t. Anyone saying 100% of all businesses will hire/not hire is lying.
  
  The solution to our problem is a three letter word… J O B S! So answer this question.
  
  When job growth is essential to get the economy back on track what would make it easier on businesses to do their part? A) Raise taxes on them B) Not raise taxes on them. It is a simple question. If you owned a business which option would make it easier, A or B?
  
  Report this comment
progressiveslayer
Posted on September 10, 2012 at 3:49pm
Milton Friedman was correct about taxes IMO. https://www.youtube.com/watch?v=TruCIPy79w8

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- mtncougar
  Posted on September 10, 2012 at 5:08pm
  Yes. I watched both Ryan and Romney being interviewed yesterday and neither one gave ANY explanation of how a better economy = more jobs = more paychecks = more taxes collected.
  
  The liberal journalist actually interrupted Romney when Romney started to explain this as if the journalist seriously didn’t want Romney to make this point clear. And Romney didn’t press ahead.
  
  Ryan said something about increasing “revenue” through economic growth which is waaay too ambiguous for most people.
  
  Someone needs to start YELLING this to journalists and independents!
  
  Report this comment
- WEBWITHDEB
  Posted on September 10, 2012 at 6:45pm
  The more people working, the more people paying into the tax system. The less people working, the more being taken out to pay for entitlements from the tax system.
  
  It’s a volume game. The volume we need to be paying attention to should not be the tax rate increasing on the most wealthy but INCREASING THE AMOUNT OF PEOPLE PAYING TAXES.
  
  Report this comment
marcus_arealius
Posted on September 10, 2012 at 3:38pm
It is not and never has been about revenue to the US government. It’s about envy and hate from the left for the successful.. To them. taxation is a revenge weapon. I’m dead serious.

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- TexasCommonSense
  Posted on September 10, 2012 at 4:04pm
  You’re right, Marcus. Obama said it himself. http://www.youtube.com/watch?v=__L5DOxghD4
  
  Report this comment
- turkey13
  Posted on September 10, 2012 at 4:05pm
  There is only one problem with those refund checks we get. When I got mine I had a TV go out so I went and bought a new TV. I provided income to someone in Japan. We folks here in the good old USA are just consumers, we dont make anything anymore. There are kids that think when they run out and get the latest E-reader, I-Phone or new lap top they are providing jobs for the USA. I know people that get welfare and work nearly everyday for cash. There are friends that believe they pay this person and thye turn it into the IRS. One of these people runs all the checks she gets through her fathers church and she just adds that to her cash payments. Doing housecleaning she can afford a new car every two years.
  
  Report this comment
- seeker9
  Posted on September 10, 2012 at 4:07pm
  You got that right. The left could care less about revenue. They think the wealth is “in the wrong hands”, and by golly they are going to “fix” it.
  
  Report this comment
- soybomb315_II
  Posted on September 10, 2012 at 5:20pm
  yup, the more money the government gets – the more people will DIE. Seriously. And it is not just because of war, but because of coercion and all the progress that WOULD have been made in the private sector
  
  Report this comment
- pizzaman87
  Posted on September 10, 2012 at 5:26pm
  Turkey, I kind of agree and disagree with you. When you go out and buy that tv say at best buy, you are providing job for the trucker that bring it to the store, the sales person that work there, the cleaning crew that clean the building, the manager, the contractor that build the building, the utilities provider that employee thousands. Now when you start taxing people more and more there less money to support that chain of people it take to build and provide that tv. and if we had lower taxes and friendlier bussiness regulation that tv could of been made in america, providing even more jobs. Meaning the jappenees provided the job in america instead of american. Oh I am sure there are plently gramer and spelling error, i just too busy to fix it or pay attention to it.
  
  Report this comment
soybomb315_II
Posted on September 10, 2012 at 3:32pm
The most important question is where that ‘breaking point” is. I would propose that it changes every year and depends on the strength of the economy. In general, economics is a dark science anyways

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DOra Glasberg
Posted on September 10, 2012 at 3:23pm
Let’s not get silly -WHO NEEDS A CHART?
How can raising taxes NOT increase revenue? hell-O
We have seen what reducing taxes does.

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- devallsbluff
  Posted on September 10, 2012 at 3:55pm
  There is a point where the economy “moves off the books”. Its called the “underground economy”. The Govt. gets no tax revenue when this happens. Why pay the Govt. 40% when I can offer my services at 20% discount if paid in cash?
  
  Report this comment
- contkmi
  Posted on September 10, 2012 at 4:15pm
  Dora isn’t very smart. She thinks that people will continue to spend the same amount of money if the fed.gov takes more money out of their pockets.
  
  Poor Dora. She needs Civics 101 and Econ 101.
  
  Report this comment
- suttonea76
  Posted on September 10, 2012 at 4:16pm
  @devallsbluff – Once again human nature and math stump the moron liberal again and this time Obama cannot refute this as he hired someone who supports the Laffer Curve. Since people will always was the is my time worth the taxes I pay, I see no way in boosting this economy with a stupid notion of raising taxes to 40%. Good call on the underground portion of the issue as people would gladly pay under the table to avoid taxes regardless of Social Security implications.
  
  Report this comment
- Jaycen
  Posted on September 10, 2012 at 4:28pm
  Have we seen what reducing taxes does? I think the last time the income tax rates were reduced was 12 years ago. Since that time, the reduction in income tax rate has been replaced by increases in other areas, and new taxes (primarily the not-so-affordable-health-care-act).
  
  That word. You keep using it. I do not think it means what you think it means.
  
  Report this comment
- TheBurningTruth
  Posted on September 10, 2012 at 4:52pm
  Well, Dora, here’s how. In 2008 I was a director in Silicon Valley pulling in 175k and my wife ran her own consulting business (by herself) pulling in as much as $350k. In our highest tax year we paid $164k in Fed and $41k in CA state tax, and add in another $11k in Medicare and FICA for us. This year our income is $22k and next year it will be ZERO. Why, we’d saved enough and after watching how this criminal president has wasted OUR efforts, we’ve retired. Try taxing THAT.
  
  We’re a bit of a rare case, but all many dual income people in their 50′s with the kids gone, house paid for and no debt need do is scale back their income and drop out of those higher brackets and you’ll see tax revenue take a real nose-dive. At that point, the spenders be around to see YOU and everybody else. See, what lower income people don’t understand is the FREE RIDE they get at the expense of the high income earners. Well, when Barry said, “sometimes you’ve made enough” he was too stupid to realize he was also saying “sometimes you’ve paid enough tax” as well.
  
  The high income earners are exactly who can scale back their income and owe less tax. They can work less, retire (as we did) or if they own a shop simply take weekends or some week nights off. Of course, their lower income employees will pay the price as well…
  
  My wife and I are enjoying purely recreational activies. They can tax your income, but not your time.
  
  Report this comment
- Jaycen
  Posted on September 10, 2012 at 5:01pm
  @TheBurningTruth
  
  “They can tax your income, but not your time.”
  
  Nice job, jerk. Now that you mentioned it, they’ll be taxing that, too!
  
  Report this comment
- Capitalist Mama
  Posted on September 10, 2012 at 6:16pm
  Um, actually RAISING TAXES lowers REVENUE.
  
  When taxes are high, people find loopholes to avoid paying taxes. The last, great loophole is NOT WORKING.
  
  When taxes are low, people find ways to earn money during the low tax periods.
  
  Have you ever had any money? Ever paid taxes? How does this not make sense?
  
  Report this comment
- DOra Glasberg
  Posted on September 10, 2012 at 6:20pm
  Like UNPAID FOR WARS?
  
  Report this comment
- oregon scott
  Posted on September 10, 2012 at 6:23pm
  DOra Glasberg
  Posted on September 10, 2012 at 3:23pm
  
  Let’s not get silly -WHO NEEDS A CHART?
  How can raising taxes NOT increase revenue? hell-O
  We have seen what reducing taxes does.
  *******************************************************************
  Reducing Taxes has increased revenue twice during Reagan and during Bush. When you lower taxes, Business owners put more people to work. lower unemployment means more revenue. It really is that simple. If you raise taxes, Corporations and business owners will lay off people to maintain profit levels. Less people working means less taxes. The problem has never been a revenue issue. it is a spending issue for the federal Government. Less spending is what will get this country back on it;s feet. 2.3 trillion a year in revenue should be more then enough to pay for the defense in this country. and soc sec. and any thing else. The interest on the debt is really killing us. reduce the debt, reduce the interest. it all starts with cutting spending on horrible programs that should never be in place. Run the Government on a trillion a year and put a trillion toward the debt.
  
  Report this comment
- fixer
  Posted on September 10, 2012 at 6:48pm
  you are a total idiot,dora..you need to move back to the huffington post or whatever rock you crawled out from under.
  
  Report this comment
- The_Cabrito_Goat
  Posted on September 10, 2012 at 7:01pm
  If you truly were for the little guy, you would be for tax cuts on the top 50%. This allows small/large business owners more money to keep, more money to pay their employees for their healthcare, labor, and insurance.
  
  Report this comment
- Wango
  Posted on September 11, 2012 at 10:17am
  BURNIG TRUTH . . . So you make no income from all that money you saved? You buried it in the yard, did you? Why do you hate capitalism?
  
  Report this comment
marybethelizabeth
Posted on September 10, 2012 at 3:19pm
http://econlog.econlib.org/archives/2012/06/where_are_we_on.html

The Question:
A cut in federal income tax rates in the US right now would raise taxable income enough so that the annual total tax revenue would be higher within five years than without the tax cut.

This is one of the questions on the IGM Forum, a forum in which many of the country’s leading economists give their responses and, if they so desire, their reasons.
Not one economist surveyed agrees with this claim. I don’t either. Cutting marginal tax rates will somewhat increase taxable income. But the odds are very high that it wouldn’t increase nearly enough to increase tax revenue. Whereas one can make a case that cutting some marginal tax rates would increase revenue–I have in mind the corporate income tax, for example–it is hard to make a case that cutting marginal tax rates on individuals would increase revenue.

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- soybomb315_II
  Posted on September 10, 2012 at 3:45pm
  @Mary
  Thats why those of us who truely believe in small government always point out that the problem is not taxation – it is SPENDING
  
  Report this comment
- AvengerK
  Posted on September 10, 2012 at 4:11pm
  HAIRYBETH…do you think that if we had more people working we’d have more tax revenue? Just a thought sweetie….
  
  Report this comment
- Jaycen
  Posted on September 10, 2012 at 4:26pm
  This is a logical fallacy known as “appeal to authority”.
  
  When someone lacks facts, they will often appeal to “an expert’s opinion”. Experts aren’t necessarily “correct”.
  
  In this case, most of the commenter’s experts are Keynsian economists. They believe that a central authority comprised of one person, or a committee of just a few people, can accurately know and predict the hundreds of millions of individual transactions that take place between free people on a day-to-day basis.
  
  It’s a very simplistic view of something gigantic (the economy). Moreover, it’s a utopian (which tends to be simplistic) view.
  
  Report this comment
- MONICNE
  Posted on September 10, 2012 at 4:33pm
  @A parasitiK ApparatchiK: No one needs to respond to a paid Australian troll, no matter how offensive the little long-haired poser is.
  
  TEA
  
  Report this comment
- Bikkiboo
  Posted on September 10, 2012 at 4:41pm
  Liberals don’t believe that reducing tax rates will increase tax revenue because they fail to believe that the extra spending money from those reductions gets spent, which increases jobs, which increases tax revenue. Liberals think everything will stay the same. Even Steve and Cokie Roberts don’t believe tax reductions will increase tax revenues in this way according to their recent newspaper column. These “educated” people should know better!
  
  Report this comment
- vox_populi
  Posted on September 10, 2012 at 4:49pm
  “According to the professor, at least one study shows that Laffer Curve’s breaking point for taxation is 33 percent.”
  
  Is there a citation for this? Because the papers I’ve seen have agreed on upwards of 70% as the breaking point. Furthermore, if this were true then the original Bush Tax Cuts should have easily paid for themselves, instead of costing the nation hundreds of billions in lost revenues – adding significantly to the deficit.
  
  Report this comment
- Jaycen
  Posted on September 10, 2012 at 4:51pm
  @Bikkiboo
  
  They might not even care. For many Socialists, taxation is less about “funding the government” and more about “making people pay their fair share”. Many see taxation as a way of “leveling the playing field”.
  
  When they see someone’s wealth stacked higher than another person’s, instead of encouraging the person with the short stack to build his wealth, they’d prefer to bring in a bull dozer to push the tall stack down. In this way, Socialists are destroyers, not creators.
  
  They don’t believe in creating new wealth through human effort. They beleive in The Law Of Conservation of Economics, which states: “Wealth can neither be created nor destroyed, only redistributed. The amount of wealth that exists in the world today is the same amount of wealth that has always existed and will always exist.”
  
  It’s not a scientific law, as much as it’s a philosophical one. In either case, I don’t subscribe to it. Just look around. If it were true, we’d be scratching these messages to each other on tree bark.
  
  Report this comment
- Jaycen
  Posted on September 10, 2012 at 4:57pm
  @douche_populi
  
  President Bush reduced the income tax 12 years ago. By now, I think it’s safe to say “the current tax rate”, so as to avoid sounding like a rigid ideologue.
  
  In any event, spending more than you take in, and borrowing money to do it, adds more significantly to the deficit – in fact, that’s the DEFINITION of ‘deficit spending’ – than any perceived “tax cut”.
  
  Your statement is beyond moronic.
  
  Regards.
  
  Report this comment
- vox_populi
  Posted on September 10, 2012 at 5:40pm
  “@douche_populi”
  
  Wow man, you’re way too intellectual for me. Touche, brah.
  
  “President Bush reduced the income tax 12 years ago. By now, I think it’s safe to say ‘the current tax rate’, so as to avoid sounding like a rigid ideologue.”
  
  Sure, but I specifically wanted to draw attention to the difference between the current tax rate and the previous one. Despite familiar promises that the cut would increase government revenues, it did no such thing and reduced income by tens of billions thus far and potentially tens of billions more.
  
  “In any event, spending more than you take in, and borrowing money to do it, adds more significantly to the deficit – in fact, that‘s the DEFINITION of ’deficit spending’ – than any perceived ‘tax cut’.”
  
  Not if the tax cut is bigger than the spending increase. You say it yourself – ‘spending more than you take in’ – well if you reduce what you take in, then you’re adding to the deficit, aren’t you? The point is, the alteration of federal tax rates had significantly reduced revenues for the US government and contributed strongly to the current fiscal deficit. This isn’t some kind of debatable Communist propaganda, it’s the factual reality.
  
  http://www.cbpp.org/files/5-10-11bud.pdf
  
  The ‘Laffer Curve’ exists, certainly, but based on empirical data I think it’s ludicrous to state that the equilibrium point is as low as 33% when policies and studies heavily show otherwise.
  
  Report this comment
- chalkdust
  Posted on September 10, 2012 at 7:01pm
  The concept of lower tax rates increasing revenue is absolutely true. It is well known amongst economists and politicians alike. It’s not even complicated. Democrats know this and you need not look further than sin taxes. Want more of something, tax less. Want less, tax it more.
  
  Democrats have always pretended it’s not true to cater to the more “emotional” voter. It go’s to the ugly, darker base emotion of envy and greed. Yes, wanting what others have earned is GREED. Wanting what others earned is also envy. This, in my opinion, is what democrats appeal to; the most immature and darkest of human emotions. And there’s no shortage of these types of voters.
  
  Democratic National Party–King of the stupid vote!
  Republican National Party–Sub par alternative.
  Third Party Johnson etc.–A vote for one of the above parties.
  
  But the above is what we have. Depressing!
  
  Report this comment
- The Third Archon
  Posted on September 10, 2012 at 8:42pm
  @VOX
  Vox populi, vox dei est.
  
  Report this comment
- marybethelizabeth
  Posted on September 10, 2012 at 10:16pm
  Jaycen you are wrong
  
  Since the economists are not Keynsians you are just blowing smoke.
  
  Human behavior
  
  People don’t refuse to make more money because someone else might make some money too.
  
  All businesses, and all states for that matter, have business plans. Some American state economies are bigger than most country’s economies.
  
  The assumption that underlies Austrian economics, that human behavior is unpredictable is disproved by the advertising industry, among other things.
  
  Report this comment
- marybethelizabeth
  Posted on September 10, 2012 at 10:26pm
  Chalkdust,
  
  President Obama lowered everyone’s taxes his first year in office. What Happened?
  
  Where’s the economic benefit?
  
  Report this comment
- SquidVetOhio
  Posted on September 11, 2012 at 1:07pm
  @MaryBeth
  
  Seriously, take 1 Micro-economics class. You seriously need to learn the mathematical functions (not theories) about laws of diminishing returns. You need to learn about profits, what a profit actually is, how it’s used as capital to grow business. This leads to more workers or as liberals call them (cash cows). You are just embarrassing yourself. I actually pity you.
  
  It’s been proven that the Bush tax cuts raised revenue. The problem was the spending was greater than the revenues collected. We ALWAYS run deficits during wars which are generally repaid during the prosperity that follows the war. SEE WWII, KOREA. But there are variables like vote buying programs that you have to factor in. They are the monkey wrench in the whole system.
  
  Report this comment
Bill Wallace
Posted on September 10, 2012 at 3:17pm
Plenty of examples of this.

Rudy lowered taxes for hotels in NY. Increased the revenues because people actually started to come back to NY to visit.

Is a plain cost/benefit analysis. At some point, the costs means less revenue because the product is no longer worth it. Only fitting that the same thing happens with taxes.

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The Third Archon
Posted on September 10, 2012 at 3:14pm
“According to the professor, at least one study shows that Laffer Curve’s breaking point for taxation is 33 percent. Thus, increasing the tax proportion above this rate could, in theory, become counter-productive, leading to decreased revenues, despite an elevated tax rate.”
1) Which is completely contradictory to every other study on the Laffer Curve which estimates the actual rate of optimal efficiency is between 60 and 70% tax rate.
2) Raising taxes will ALWAYS increase revenue, in the short term at the very least–it’s simple mathematics; a greater proportion of the same principle is a higher amount. What the Laffer Curve PROPERLY reflects is that the MARGINAL increase in revenue (that is, the marginal dollar amount increase from each marginal gain in tax rate) only increases to a certain point–i.e. beyond a certain point, each increase in tax rate is less and less efficient with respect to the revenue gained as a proportion of the total revenue. But again, that’s HARDLY applicable to the current status of American tax rates where the HIGHEST rate is ~35% and few, if any, ACTUALLY pay that rate given a variety of exemptions which (surprise, surprise) those with the most resources are the best equipped to take advantage thereof.

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- gwilliams290
  Posted on September 10, 2012 at 3:54pm
  You actually have the answer to your statement in your post; “a greater proportion of the same principle is a higher amount”, the key being “the same principle”. When people see a higher tax rate they realize that they have less to spend. When they have less to spend then the”principle” amount changes. Therefore tax revenues GO DOWN because the “principle amount” went down.
  
  Report this comment
- Zipit
  Posted on September 10, 2012 at 5:27pm
  Yeah dumb a$$, 60-70%. Thats about where France is at! AND LOOK WHERE FRANCE IS AT!!!!!!!!!
  
  Report this comment
- The Third Archon
  Posted on September 10, 2012 at 8:09pm
  @GWILLIAMS290
  You misunderstand the constraints–in a theoretical consideration of what tax rate to apply to any given subsection of the economy, the total wealth represented by the same subsection does not change. Over a duration of time, analysis of the feedback between taxation and principle (i.e. the wealth within the taxed subsection) become more complicated, but that is not what is at consideration (or what is considered by the Laffer curve). What is at consideration (and what the Laffer curve describes), is a time static, theoretical comparison of the effects of differing tax rates (the spectrum of possible tax rates) upon any given fixed principle (i.e. the subsection of the economy taxed at the given tax rate). Moreover, revenue generation is not the sole purpose of taxation–taxation is also applied punitively, and possibly for other reasons which do not occur to me at the moment. That’s just a side point though that attacks the underlying assumption of arguments that use the Laffer Curve to support the proposition that it is a cardinal sin to violate tax “inefficiently”–sometimes the IDEA is to tax inefficiently in order to penalize a practice that is considered harmful to the public good. Whether or not that’s always the best way, or even rightly applicable, is another matter entirely–I’m merely making a descriptive statement, and not pretending to know the ENTIRETY of the tax code as to comment on the wisdom of EVERY provision.
  
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- The Third Archon
  Posted on September 10, 2012 at 8:35pm
  @ZIP
  1) I never suggested we should tax everyone, or anyone, at 60-70%; what I DID say is that the authority cited by this article is grossly contradictory to every other authority on the subject I’ve ever read or heard of.
  2) France is doing fine–France doesn’t have 15.1% of its citizens living below the poverty line; France doesn’t have the highest per capita incarceration rate in the world; France isn’t rated 37th (by the WHO) in healthcare; France doesn’t require hydrocarbons to generate the majority of its energy, to name just a few things; France is one of the few European states that DIDN’T adopt a policy of austerity, and guess what–unlike EVERY OTHER EUROPEAN STATE THAT DID, France didn’t suffer a double dip recession with respect to GDP.
  
  Yeah, France is DEFINITELY such a third-world country; must be AWFUL to live in a state with better healthcare, lower incarceration rates, and lower poverty rates than the UNITED STATES OF AMERICA, the WEALTHIEST SINGLE NATION ON EARTH.
  
  Report this comment
- Zipit
  Posted on September 10, 2012 at 9:54pm
  Third! If you really believe all the crap that you just spewed makes France a better place to live, than by all means leave. We won’t miss you!
  
  Report this comment
- Mr.-FreeMarket
  Posted on September 11, 2012 at 2:40am
  “…in a theoretical consideration of what tax rate to apply to any given subsection of the economy, the total wealth represented by the same subsection does not change.”
  
  Two points. Wealth does not remain static. Every day you engage in productive work, you potentially create more wealth. Every day you don’t work, or your work is not productive, wealth is not only not created but is consumed.
  
  Second point: We use tax policy all the time to effect social change. People speed on the freeway; what do we do to discourage speeding…assess a financial penality.
  Most politicians have decided that people should stop smoking. Their approach is to increase taxes on tobacco to decrease smoking.
  Increasing tax on productive people is clearly punishing them for being productive. What would you predict will result from punishing productive people?
  
  (Hint: Back in the 1970s, tax rates on the productive were at 70%. Accountants would tell doctors when to stop working and go on vacation each year, since any additional work they performed was at such a low level of compensation that it wasn’t worth their time).
  
  Report this comment
lefty5005
Posted on September 10, 2012 at 3:09pm
In the 90′s as we all know we had the dotcom boom along with the welfare changes that took place in 1995. We also had no wars to speak of. Because of all this “extra” money as the progressives thought they piled on “everyone deserves a home” no matter whether you can pay for it or not. Yes, despite what anyone thinks, Christoper Dodd and Barney Frank along with some RINO republicans built this Edsel. Of course Bill Clinton signed off on it. Dramatic cuts were made during the 90′s to the military and some of our intelligence agencies because we did not some war going on for a couple of years we were going to have prosperity like you have never seen. Bush got elected in 2000 because and only because Clinton killed the Democratic party by spooging all over Miss Lewinsky’s top. She saved the mess, who needs enemies with friends like these and the rest is history. Bush got elected, inaugurated in January and in September of 2001 we had a “man made disaster” happen in New York. Americans wanted justice, revenge, some heads. The dotcom boom was drying up, all those people found out you can’t pay for a 200k mortgage making 30k a year and the government, thinking we were made of money established the DHS (huge mistake) passed the Patriot Act (an even more huge mistake) and got us involved in Afghanistan (sounded good at the time, obviously a huge mistake.) What was supposed to be done and over in a year turned into currently 11 years of lives, money into a bottomle

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TheBigMike
Posted on September 10, 2012 at 2:56pm
The only legitimate argument regarding the Laffer Curve is at what rate of taxation is the top of the curve, or whether the taxed entity (eg, a nation) is on the left side or right side of the top of the curve.

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- TheBigMike
  Posted on September 10, 2012 at 3:03pm
  Duh, I should have watched the video first. That was its entire point. Doh!
  
  Report this comment
- wvernon1981
  Posted on September 10, 2012 at 3:04pm
  That part is lost on a lot of people.
  
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- sWampy
  Posted on September 10, 2012 at 3:18pm
  Carnage of Carnage/Mellon did the mathematical prof in the 20′s, it’s somewhere around 27%, I remember having to do the proof in a graduate level econ class in the 80′s.
  
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JayDick
Posted on September 10, 2012 at 2:52pm
The video is really good. Even your average liberal should be able to understand it.

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- TMunson
  Posted on September 10, 2012 at 4:18pm
  Boy are you optimistic….
  
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Sirfoldallot
Posted on September 10, 2012 at 2:51pm
Duuuuuhhhh

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762x51
Posted on September 10, 2012 at 2:51pm
Decreasing spend?? What a radical concept!

Only brainless morons and liberals (redundant, I know), does not understand this. Watch as this guy gets canned from UCLA for going against their liberal doctrine. Maybe they can hire Ward Curchill to replace him, he’s looking for a job.

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- DOra Glasberg
  Posted on September 10, 2012 at 3:29pm
  But the Republican won’t touch THE BIGGEST SPENDER/WASTER -the Military.
  
  Report this comment
- soybomb315_II
  Posted on September 10, 2012 at 4:06pm
  @Dora
  They are happy to ‘touch’ it. In fact, they want to GROW it
  
  Report this comment
- contkmi
  Posted on September 10, 2012 at 4:14pm
  Hey Dora: Go brush up on your Constitution. What are the things explicitly allowed there? It ain’t Soc. Sec. It ain’t Medicaid. It ain’t Medicare. One of the only Constitutional outlays of public money is THE MILITARY. Imagine that.
  
  Civics 101. Probably offered at your local community college. Go try it.
  
  Report this comment
- DOra Glasberg
  Posted on September 10, 2012 at 6:23pm
  @Cont
  What a stupid answer. really.
  
  Report this comment
- pudssweetie
  Posted on September 10, 2012 at 10:05pm
  Hey Dora read this and learn something.
  
  http://1787-1.blogspot.com/2007/05/constitution-part-xii-military.html
  
  Funding our Military is in the Constitution under Article 1, Section 8
  
  Congress therefor provides funding, for every aspect of military existence from operations to equipment. The specific responsibility , ” raise and support Armies,” and , “provide and maintain a Navy, ” are specifically out lines in Section 8. Additionally appropriating funding for this provision is stated as not to exceed a period of, “two years, ” without review by the Congress for the appropriation of funding.
  
  It is your comment that is stupid if you do not know your Constitution.
  
  Report this comment
The Jewish Avenger
Posted on September 10, 2012 at 2:45pm
oh good since were at about 27% right now I can now expect to lose another 6 for its now “justified”
bring home 2/3 of my check… lovely…

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- soybomb315_II
  Posted on September 10, 2012 at 4:32pm
  true
  
  and it turns out that the government is ‘only’ taking about 22% of the economy….So it’s great news for the progressives – they can get another 11% out of it
  
  Report this comment
republic2011
Posted on September 10, 2012 at 2:43pm
It baffles me that people are still arguing this point. We need to stop pandering to the village idiots (those that believe in higher taxation and stealing money from one person to distribute it to others) and just shut them down. We need to simplify our tax system (flat tax is preferable), and decrease the spending. I think I saw someone post that we should decrease spending by $3 for every $1 we bring in. That is a nice start. Sorry entitlement junkies…

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- huey6367
  Posted on September 10, 2012 at 2:55pm
  It’s all simple and you don’t need a PhD in economcs to see it. Lower taxes = more money in your pcket. More money in your pocket = more money to spend. More money to spend = people buy more stuff. People buy more stuff = better economy. Using simple substitution – Less taxes = better economy.
  
  Back to the story, it is not hard to understand that the more money that is generated through tax increase, the more the government needs to over see it and EVERYTHING the government oversees costs more money.
  
  Report this comment
- 1TrueOne55
  Posted on September 10, 2012 at 3:11pm
  That’s what the Democrats Promised Ronald Reagan in the 80′s for the small tax increase he allowed on a Democrat sponsored bill. Ronald Reagan’s still waiting for that spending cut to take affect.
  
  Remember that a smaller spending increase is a cut in spending for Democrats.
  
  If you also look at the Laffer Curve, that when you decrease taxes bellow the 33% mark you also begin to decrease revenue.
  
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- Capitalist Mama
  Posted on September 10, 2012 at 6:23pm
  Now let’s find the politicians who can actually say no.
  
  I thought the democrats were a Nanny/ Mommy state?
  
  Me as a kid: Mom, can I have an ice cream?
  Mom: No
  Me as a kid: Mom, can I have an toy?
  Mom: No
  Me as a kid: Mom, can I have a bike?
  Mom: No
  Me as a kid: Mom, can I have a car?
  Mom: No, buy it yourself!
  
  And mothers today can outlaw refined sugar, processed food, tv, and most forms of sports. They force kids into car seats, helmets, to eat vegetables, go to school starting at 2.
  
  Seriously, Moms for President!
  
  Report this comment
grayling646
Posted on September 10, 2012 at 2:42pm
I hope this guy is tenured.

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progressiveslayer
Posted on September 10, 2012 at 2:36pm
Trying to explain this concept to Obamazombies is impossible,it simply doesn’t fit their indoctrination that the ‘rich’ aren’t paying their ‘fair share’ and need to pay more.These people are insane and unfortunately for us they procreate and vote.

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Rothbardian_in_the_Cleve
Posted on September 10, 2012 at 2:33pm
If you’d like to even move past the somewhat theoretical concept of the Laffer Curve you can simply look at the empirical evidence of historical tax rates as a % of GDP. Despite all of the social engineering done through fiscal policy from the Post WWII punitive rates to Kennedy and Reagan cuts and so on; basically federal tax revenue runs about 18% of GDP no matter the fiscal policy. The key is to A) remove regulations and constraints to give business competitive advantage globally to grow GDP and B) SPEND LESS THAN 18% OF GDP!!

It really is that simple when it all comes down to it.

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- woodyee
  Posted on September 10, 2012 at 2:41pm
  Who could have said it better than Sir Rothbardian?
  
  Brevity – the soul of wit…and understanding.
  
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- progressiveslayer
  Posted on September 10, 2012 at 2:42pm
  There you go injecting facts and logic and the worshipers of big government,of which there are many unfortunately for us simply can’t grasp that logic.When I encounter an Obamazombie I don’t even try to explain it anymore because well they’re Obamazombies.
  
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watashbuddyfriend
Posted on September 10, 2012 at 2:32pm
Gotta cut the expenditure down $3 for each $1 of revenue!

Tax Gross Income, and forget about ALL deductions to get government out of Bookkeeping.

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- Pomona
  Posted on September 10, 2012 at 3:53pm
  Brave post.
  
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- soybomb315_II
  Posted on September 10, 2012 at 4:18pm
  yup. We need the Ron Paul budget plus a flat tax
  
  that would solve 90% of the problems
  
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- therealconservative
  Posted on September 10, 2012 at 7:53pm
  @soy
  
  ” We need the Ron Paul budget”
  
  What budget? When did he intro it to the house? When was it voted on?
  
  Report this comment
keraz
Posted on September 10, 2012 at 2:31pm
From what I understand, France has increased their tax rate on the wealthy to 75%. The wealthy have begun leaving the building, thus proving that increasing the tax rate doesn’t increase revenue.

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Just_Us2
Posted on September 10, 2012 at 2:30pm
For liberals, it is not about more tax revenue, it’s about, “FAIRNESS”. To them, it is not fair that anyone is richer than his neighbor. At least this is what they say. The goal is the have a majority living off government and voting Democrat. As long as the producers fund this, they stay in power. We get to work our arse off for less and less while they get to grow fat off the govt teet. It is about power, not economics.

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- Chrison
  Posted on September 10, 2012 at 3:18pm
  How true! Although Obama occasionally mouths the “we have to cut the deficit” line, his actions (i.e. INCREASING the deficit by $5T in 3 years!) show that he has NO intention of actually doing this. Obama’s agenda is to garner as much POWER to the Government as he possibly can. Period! End of story!
  
  Btw, it’s been proven time and time again that increasing taxes on the wealthy is a PITTANCE compared to Government spending! IIRC, the proposed Obama “tax the rich” increases covers a day or two of the deficit. Big deal!
  
  There’s only ONE solution to reducing the deficit and, at the same time improve the economy… CUT SPENDING and get Government OUT of the way of businesses!
  
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wvernon1981
Posted on September 10, 2012 at 2:29pm
““So, [the curve] says that if we want to decrease the deficit, it actually might be impossible through increasing taxes,” Groseclose told TheBlaze. “It might be the case that the only way to do that is decreasing spending.””

This is dependent on whether or not current tax rates have maximized revenues.

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- Rothbardian_in_the_Cleve
  Posted on September 10, 2012 at 2:36pm
  Maximized tax revenue is one objective function. I’d argue that it is suboptimal from a macro sense however. The idea that the government should maximize it’s revenue means that there is that much less money in the free market. Essentially, they are confiscating it, applying an overhead of government bureaucracy and then putting the difference into the market on projects. The issue at that point is whether a suit in DC knows better how to spend your money than you do.
  
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- grayling646
  Posted on September 10, 2012 at 3:04pm
  Vern:
  I’m not nearly as well informed as Roth but my gut tells me we’re on the wrong side of the hump.
  
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- wvernon1981
  Posted on September 10, 2012 at 3:06pm
  It depends on the project.
  
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- wvernon1981
  Posted on September 10, 2012 at 3:14pm
  I’ve seen some reports of empirical research that show there is quite a sustainable range of taxation before it begins to hurt revenue.
  
  revenue maximization tax rate
  
  https://www.google.com/search?q=revenue+maximization&btnG=Google+Search&domains=http%3A%2F%2Feconomistsview.typepad.com&sitesearch=http%3A%2F%2Feconomistsview.typepad.com#hl=en&safe=off&domains=http:%2F%2Feconomistsview.typepad.com&sclient=psy-ab&q=revenue+maximization+tax+rate&oq=revenue+maximization+tax+rate&gs_l=serp.3..0i13j0i13i5i30.25382.28473.0.28619.20.15.5.0.0.1.157.1096.13j2.15.0.les%3Bcqn%2Crate_low%3D0-030%2Crate_high%3D0-030%2Cmin_length%3D2%2Ccconf%3D1-0%2Csecond_pass%3Dfalse%2Cnum_suggestions%3D1%2Cignore_bad_origquery%3Dtrue..0.0…1c.1.2Gr2THWCao4&pbx=1&bav=on.2,or.r_gc.r_pw.r_qf.&fp=bf525e541b623bda&biw=1139&bih=679
  
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- Rothbardian_in_the_Cleve
  Posted on September 10, 2012 at 4:59pm
  @WV,
  
  If you want to increase revenue just engage in wealth confiscation and monetization. The marginal tax game is just for the sheep. The idea that any taxation is positive is rejectable, frankly. You can’t take money out of people’s pockets and send it to DC and say that it has any “maximizing” impact.
  
  QE4 will be here shortly. It will pave the way for QE Infinity. We will monetize and we will regressively get it from the bottom. On top, we will start confiscation through forced 401K annuitizations through US Treasuries.
  
  Enjoy Comrade.
  
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- Mr.-FreeMarket
  Posted on September 10, 2012 at 7:39pm
  The amount of tax revenue collected by the federal government has averaged at about 18.5% of GDP since WWII, almost independent of the marginal tax rate. We are currently spending about 25% of GDP. Simply put, we have not developed a method in the US of collecting 25% of GDP as tax revenue. The only thing that higher tax rates do is slow economic growth.
  
  Democrats and some republicans fail to understand/believe that we simply cannot collect as much revenue as they wish to spend.
  
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Palmer1943
Posted on September 10, 2012 at 2:26pm
Common sense and proof concerning the tax issue has no meaning to liberals. As long as it sounds good to the other extremist, that’s all that matters.

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Snowleopard {gallery of cat folks}
Posted on September 10, 2012 at 2:19pm
Understand the main problem: Liberals do not live in reality; they have their own insane view of the world, due to the sickness of Liberalitis.

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- wvernon1981
  Posted on September 10, 2012 at 2:30pm
  Most people do not attempt to live in reality. I’m not even sure they have the cognitive faculties to be able to. I’ve seen just as much garbage coming from the right as I have the left.
  
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- DOra Glasberg
  Posted on September 10, 2012 at 3:37pm
  The military budget must be cut 25%.
  You are ALL jerking off to ignore ANY cuts in the MIC’s bloated budget, building planes and ships that don’t work and nobody wants just to please big campaign donors.
  You Conservatives are ALL hot air.
  
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- The_Cabrito_Goat
  Posted on September 10, 2012 at 7:03pm
  Oh blah blah, I’m sick of hearing this. Your folks at media matters and the huffpo have been screeching the same talking points for the last 9 years. I’m not listening to it anymore.
  
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- UnsilentMajority
  Posted on September 10, 2012 at 7:16pm
  Dora you are a troll and a twit. You really don’t pay attention do you? You MUST get out of the basement at least once a week.
  
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BOMUSTGO
Posted on September 10, 2012 at 2:14pm
Rush has explained this more than once.

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