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The problem with the Taxes section is it doesn't account for the unintended consequences of raising taxes. Historically when taxes are raised, revenues tend to
by dustintownsend 16y ago
The problem with the Taxes section is it doesn't account for the unintended consequences of raising taxes.
Historically when taxes are raised, revenues tend to never get close to projections. Why you might ask? Well, because an increase in taxes usually leads to less investment (startups, expanding existing business, etc). In the extreme case an increase an taxes could even lead to companies moving to other locations to shelter themselves from the added tax burden. Something we are seeing happen in the US now, because of fear of increased taxes. Many large corporations are making structural changes and moving assets out of the country.
We need to cut spending and cut taxes. Reduce, simplify, eliminate.
- dustintownsend 16y agoMy plan for the deficit http://t.co/FZkXRuz http://t.co/FZkXRuz (0% from tax increases, 100% from Spending Cuts)
- kenjackson 16y agoHistorically when taxes are raised, revenues tend to never get close to projections. That needs a citation (projections vs reality). I've never heard the claim you've made before. I suspect it is no different than the inaccuracy of projections on tax revenue from conservatives that cutting taxes to the wealthy will provide.
- gsmaverick 16y agoLaffer Curve is the more general concept. http://en.wikipedia.org/wiki/Laffer_Curve http://en.wikipedia.org/wiki/Laffer_Curve
- kenjackson 16y agoThe Laffer Curve also says that there is an optimal tax rate for which tax revenue will be maximized. It doesn't say that reducing taxes increases revenue, as this requires the tax rate to be sufficiently high that it is higher than the optimal tax rate.
- natnat 16y agoThere are two sides to that coin, though. Cutting government spending often reduces tax revenue as well. Government workers and contractors pay tax like everyone else, but accounts of the money saved by cutting the program never takes into account how much revenue will be lost when the taxable portion of their income disappears.