Originally posted by: LegendKiller
Originally posted by: Pabster
Originally posted by: LegendKiller
The tax cuts did nothing.
Your opinion is definitely a minority one. The vast majority of economists and experts agree that the tax cuts have been a huge success. How do you downplay the fact that the U.S. Treasury is receiving record tax revenues? Government has never taken in more $$$ than it is currently.
There is plenty of debate about who the cuts have helped, etc. but I don't think there is any real disagreement that they have been successful overall.
I don't care what most MS economists say. Almost every economic study I have read for my MBA and CFA charter has shown convincing data that tax cuts almost always do nothing. Why?
1. They are almost always poorly timed. They come too far after the problem or too much before it.
2. They stifle economic development during the downturn because the government crowds out cheaper bonds by issuing it's own debt, this causes debt costs to raise for non-government entities. This is when all tax cuts are financed through debt, which they are now.
3. Tax cuts financed through debt issuance result in further debt, not just for this year, but for every other year until the debt is paid off. What can tax cuts be attributed for? 200bn in additional GDP over the last 3 years? Great, that $100bn tax cut will cost federal taxpayers approximately 4bn for the next 30 years in just debt payments. Good job, you just went nowhere. Especially considering #2.
The increase in tax revenue can be attributed to a few major items.
1. Economic growth through debt issuance and using houses as ATMs has caused the economy to grow significantly and stock prices to appreciate dramatically. The CapGains taxed are a direct result from this "growth", the GDP excluding MEW (mean equity withdraw) would have been about 50% of current.
2. Because of #1's debt fueled consumption and growth the stock market increased. Driving capital gains. However, what it doesn't consider that measurement of years before, during similar economic booms, say 1999-2000, the tax "increase" doesn't look as impressive. Sure, you could say that taxes are much higher than 2000, but then you'd still be lying, because on an inflation adjusted basis, they are *LOWER*.
3. Keep in mind that cash-outs from houses also are taxed if you just sell an investment property, this also caused more tax revenues.
4. Tax losses from stocks are not considered in the equation, since these *decrease* revenues, but aren't going to be factored in to tax receipts until this year. Furthermore, housing declines cannot be removed from taxes, thus the positive effects of capital gains from houses are felt in tax receipt, but not losses that we are feeling now. Thus it's an asymetrical effect, one that you cannot deny.
All in, those numbers are bullshit. They exclude several biases, including time period selection, alternate independent variables which have tremendous influence on the dependent variable.
However, I don't doubt you're going to come back with the same bullshit reply as always..."But but but...THEY SAY YOU ARE WRONG! EXPLAIN!", which I will explain until I am blue in the face, but that won't change the *fact* that you are blissfully ignorant to statistical testing methodologies of multiple regression and how R2 determines effects on the dependent variable. Since you are unable to grasp this you are unable to grasp points 1-4 and how they have a much larger effect on the dependent variable (tax receipts). Instead, you attribute everything to one variable, tax cuts, which is a stupid argument for reasons listed above (1-3).
Have fun refuting what I typed with a lame-ass 2-3 sentence reply that has to include something about "experts" and everything else. You'll never come up with your own proof against 1a-3a, nor 1b-4b. That's because you listen to sound bites, propaganda, and foolish idiots who like to control you and you love to be controlled.