The Tire-Gauge Solution: No Joke

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Re: The Tire-Gauge Solution: No Joke

Postby RD » Sat Aug 09, 2008 9:36 pm

Michael Pelletier wrote:Image


Where are we on this curve? If we are below point m on the y axis, do you agree we should raise taxes in order to raise revenue? The Clinton Administration (budget surplus), among others, have shown that we have always been below point m.

Every time you post the Laffer Curve, I point this out to you, and you always fail to respond.
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Re: The Tire-Gauge Solution: No Joke

Postby RBarnes » Mon Aug 11, 2008 1:53 pm

RD wrote:
Michael Pelletier wrote:Image


Where are we on this curve? If we are below point m on the y axis, do you agree we should raise taxes in order to raise revenue? The Clinton Administration (budget surplus), among others, have shown that we have always been below point m.

Every time you post the Laffer Curve, I point this out to you, and you always fail to respond.


RD, Clinton was able to take in more money through tax CUTS. That implies we are well past m.

That said, surplus vs deficit has NOTHING to do with where we are on the curve but instead how much is being spend vs what is taken in.

For sake of ease let's say the very top red line just shy of 100% is 90% and lets say it translates to $100 million tax revenue. Where as at the point of m we could take in $500 million in revenue. If the total budget is only $90 million you can still pat yourself on the back that you've achieved a surplus by taxing at 90% but you could have likewise achieved a larger surplus with only 80 or 60 percent taxation.

So you're statement is mixing apples and oranges.
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Re: The Tire-Gauge Solution: No Joke

Postby Michael Pelletier » Mon Aug 11, 2008 5:11 pm

The Clinton Administration (budget surplus), among others, have shown that we have always been below point m.

You're entitled to your own opinion, but you're not entitled to your own facts.

The larger economic growth in the Clinton years followed not the 1993 tax hikes, but the 1997 tax cuts - cutting the capital gains rate from 28 to 20%, adding the $500 child tax credit, increasing education tax credits, pushing the estate tax exemption from $600k to $1 million, etc.

http://www.heritage.org/Research/Taxes/wm1835.cfm
The average growth rate over his first term was a solid 3.2 percent. In 1997, at a time when the expansion was well along and economic growth should have slowed, Congress passed a modest net tax cut. The economy grew by a full percentage point-per-year faster over his second term than over Clinton's first term.
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