Quote:
Originally Posted by TheGame
"We watched Bush do tax cut after tax cut after tax cut, and we see how perfectly it worked."
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It seems the popular thing today to blame all the country's woes on Bush. Now, I wasn't his biggest fan either, but this is unfair. In this hypothetical and highly unrealistic situation, you have held all other factors but tax cuts constant. America's economy is far more complex than this, as is its interaction with the world economy.
Also, the recent banking collapse has nothing to do with Bush's tax cuts. Please see
this ten-page New York Times article for the main cause behind the collapse (which, in short, was due to out-dated risk management software).
Quote:
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That should be answer enough. But, ask yourself this. If the country is in huge debt to the fed and to other countries, where is money supposed to be generated to pay off this debt? Give me an example of how a tax cut will make the government more money, and I'll gladly disarm it.
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Here is a fundamental misunderstanding of tax cuts. The recent dramatic rise in debt is not due to tax cuts. It is due to increased spending, above and beyond tax revenue generated by the government.
Remember, there is little correlation between tax rates and tax revenue:
However, there is a strong correlation between tax revenue and GDP:
Since tax revenue increases with ever-increasing GDP, it makes sense to facilitate private economic growth, through smart tax policies. So, no matter the tax rate, tax revenue (what matters), remains largely the same percentage of overall GDP:
Unfortunately, that's all I have time for today. I hope this makes things a little clearer.