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The Clinton Surplus Myth...

Discussion in 'Budget & Taxes' started by onalandline, Aug 22, 2012.

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  1. Anikdote

    Anikdote Well-Known Member

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    Oh yea! I think you're both wrong and that changes in marginal tax rates can't be definitively linked to either increases in revenues or and especially to changes in GDP, positive or negative. Trying to boil down a massive multivariate problem down to a single metric is insane.
     
    Anikdote, Oct 29, 2012
    #476
  2. Iriemon

    Iriemon Well-Known Member Past Donor

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    You might have had a point, but I didn't say anything about marginal tax rates. I've been discussing the effective tax rate, i.e. the percentage of gross national income actually collected in taxes.
     
    Iriemon, Oct 29, 2012
    #477
  3. OldManOnFire

    OldManOnFire Well-Known Member

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    Ridiculous argument??

    The FACT is we cannot enforce laws as they exist today. It would be stupid to modify laws to create more need for enforcement when we cannot enforce today!

    Why do you suppose, from the poor to the wealthy, that tens of thousands of Americans cheat the IRS? It's an enforcement issue.

    Regarding cops, there are plenty of stupid laws created all the time that in parallel DO NOT increase the enforcement budgets or personnel...how stupid is this?
     
    OldManOnFire, Oct 29, 2012
    #478
  4. Iriemon

    Iriemon Well-Known Member Past Donor

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    What is?

    The FACT is we do enforce laws as they exist today. But why can't you modify the laws to make them mroe enforceable? You make the laws clearer, simplier, and easier to enforce.

    Why do you suppose the IRS brings tens of thousands of enforcement actions. It's enforcement.

    So because enforcement and laws are not perfect we should just legitimize the harm? How stupid is that?
     
    Iriemon, Oct 29, 2012
    #479
  5. OldManOnFire

    OldManOnFire Well-Known Member

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    We already legitimize the harm by not being able to provide enforcement. You can't seem to rationalize reality? How about this; please explain why on freeways, in which the posted speed 'limit' is 65 mph, that 90% of the cars travel at speeds greater than 65 mph with zero consequences? Now rationalize this; on these same freeways, change the laws so the speed limit is 60 mph and the cars will still travel at speeds greater than 65 mph...why is this? It's because when the law is changed nothing is put in place for enforcement!

    If you create IRS laws which tens of millions will violate, how can you ever justify or provide enforcement?
     
    OldManOnFire, Oct 29, 2012
    #480
  6. Iriemon

    Iriemon Well-Known Member Past Donor

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    So .... if a rape happens and the law is not enforced because the perpetrator is not caught, that is "legitimizing" rape?

    And you were saying something about a ridiculous argument and reality?

    So why aren't they going 100?

    Same way you do when someone speeds at 100 MPH.
     
    Iriemon, Oct 29, 2012
    #481
  7. squidward

    squidward Well-Known Member

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    I didn't.
    I said you can't predict.

    that revenues would increase if tax rates increased.
     
    squidward, Oct 29, 2012
    #482
  8. squidward

    squidward Well-Known Member

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    that's what I've been saying.

    obviously one cannot define our position on the curve, as the curve has yet to be defined.
     
    squidward, Oct 29, 2012
    #483
  9. Iriemon

    Iriemon Well-Known Member Past Donor

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    Then you have no point.

    I didn't.

    They do compared to what would be collected at a lower effective tax rate.
     
    Iriemon, Oct 29, 2012
    #484
  10. OldManOnFire

    OldManOnFire Well-Known Member

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    Many do go 100 mph or excessive speeds and never get caught.

    I didn't think you would answer the question again because the answers deal too much with reality...
     
    OldManOnFire, Oct 29, 2012
    #485
  11. Iriemon

    Iriemon Well-Known Member Past Donor

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    OK. So therefore we should just eliminate speed limits?

    What question?

    Why didn't you answer my questions?

    So .... if a rape happens and the law is not enforced because the perpetrator is not caught, that is "legitimizing" rape?

    So why aren't they going 100?
     
    Iriemon, Oct 29, 2012
    #486
  12. squidward

    squidward Well-Known Member

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    Ok then, tell me the relationship between taxes and incomes that allows you to establish this.
     
    squidward, Oct 29, 2012
    #487
  13. Ethereal

    Ethereal Well-Known Member

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    This is the most convoluted and asinine thing you've ever written.
     
    Ethereal, Oct 29, 2012
    #488
  14. Iriemon

    Iriemon Well-Known Member Past Donor

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    It may be not the best sentence I've crafted. What part of it confuses you and why do you say it is asinine?
     
    Iriemon, Oct 29, 2012
    #489
  15. Ethereal

    Ethereal Well-Known Member

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    Why should he have to demonstrate anything? You made the claim about revenues going up because of tax increases. His ability to demonstrate or not demonstrate anything is totally irrelevant. Either you can define the function for revenues or you can't and clearly you cannot. You cannot claim with any quantifiable level of certainty that increasing tax rates will cause tax revenues to increase.
     
    Ethereal, Oct 29, 2012
    #490
  16. Meta777

    Meta777 Moderator Staff Member

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    I already defined the function for revenues a few pages back. R = ET * I
    I'm not exactly sure what you folks are still arguing about.
     
    Meta777, Oct 29, 2012
    #491
  17. Iriemon

    Iriemon Well-Known Member Past Donor

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    Sure you can. It is a mathematical function. It has been defined numerous times in this thread already. Revenues = Gross income * effective tax rate.

    The amount of taxes collected do increase if the effective tax rates are increased for any given level of gross income. That is a mathematical function.
     
    Iriemon, Oct 29, 2012
    #492
  18. hiimjered

    hiimjered Well-Known Member Past Donor

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    That response is either intentionally obtuse or shortsighted. Yes, increasing the effective tax rate will increase the revenue for a given gross income amount. But the formula he was looking for is the one that shows what the over time change to gross income will be for a given change in effective tax rates. Most economists seem to agree that changing effective tax rates will affect gross income, they all disagree in how much the impact will be or what it will be. Yet, you are implying that changing the effective tax rate will have no effect on gross income over time. Do you believe that changing the tax rate will have no impact on gross income?
     
    hiimjered, Oct 29, 2012
    #493
  19. Ethereal

    Ethereal Well-Known Member

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    Go back to the chalkboard.
     
    Ethereal, Oct 29, 2012
    #494
  20. Meta777

    Meta777 Moderator Staff Member

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    I personally believe that the ET's affect on I can be difficult to measure when looking at it by itself, but I also believe that what ever reduction there is in I due to tax revenues from ET can be balanced out by an equivalent amount of spending back into the economy, thus creating new additional income. Or at least in theory, that should be the case, in practice however, it really does depend upon where the money comes from, and where exactly it is spent as to what the net change in overall income will be.

    For example, taking money from where it is not being used and spending it where it will in an instant be spent again will create more overall income than will taking money from where it would have been used and spending it in the same place.

    So by bringing spending into the mix, and taking this assumption which I believe should be more than sound, as well as an assumption that all revenues are spent back into the economy which it is taken from at one point or another (which may or may not be guaranteed) we can not only create a scenario in which I is kept constant, but also ones in which I increases or decreases based upon how the money is spent and from which parts of the economy it comes from.

    -Meta
     
    Meta777, Oct 30, 2012
    #495
  21. squidward

    squidward Well-Known Member

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    Too bad you can't describe the relationship between tax rates and income. You could have been on to something, but you're not.
     
    squidward, Oct 30, 2012
    #496
  22. squidward

    squidward Well-Known Member

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    OK, lets go with that.
    Assuming Revenues is a function of Income, or R = f(I) = ET * I, can you tell me the function that describes the relationship between ET and I ?
     
    squidward, Oct 30, 2012
    #497
  23. Meta777

    Meta777 Moderator Staff Member

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    Like I said, quantifying the exact amount that I is affected by ET is difficult, due in most part to what's known as, the Multiplier Effect.
    ...Or the Reverse Multiplier Effect, ie: taxing away money from person A of which person A would have otherwise spent on person B's goods,
    not only takes away person B's income, but if B would have subsequently spent that money on a person C's goods, they lose income as well, and, as can be guessed, the reverse is also true, person A having more money may mean that person B and C, D, E etc. all have more income, and this relationship can affect any number of people and their incomes.

    Its difficult to predict just how many people might be affected by such a relationship, and therefore again difficult to predict how much income will be affected, but what we can say is that taxing or inserting money from or into ares where it is or will be spent will have more of an affect (positive or negative, depending on which) on incomes than taxing or inserting from or into areas where the money is not likely to be spent. The other thing I believe we can assume is that if money is taken out of the economy through taxes, what ever affect on income that may have can be nullified by reinserting the same amount back into the economy, or even improved, again, depending on where the money is spent and where it was taken from. (in other words, depending on how likely it is to be spent before being taxed, and how likely it is to be spent after being reinserted (assuming that it is reinserted))

    To put that into an equation:
    S = Spending back into the economy
    f(I) = I - f(ET*I) + f(S)

    where f(ET*I) is taxed revenues impact on incomes and f(S) is government spending's affect on incomes,
    both are unknown, but it is assumed that f(ET*I) has a negative impact on incomes and f(S) has positive impact.
    I in this case would be the income during the previous year (under same tax rates), and f(I) would be the current income.

    so if f(ET*I) = f(S) then f(I) = I and R = ET * I
    else, R = ET * f(I)
    if f(ET*I) < f(S) then f(I) > I
    if f(ET*I) > f(S) then f(I) < I

    I know, there's a lot there. Let me know if there are questions.

    -Meta
     
    Meta777, Oct 30, 2012
    #498
  24. Iriemon

    Iriemon Well-Known Member Past Donor

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    Finally.

    "Define the formula for revenues"

    They can come here and defend their positions. Over the past 60 years there has been no correlation between lower tax rates and better economic performance, nor can I see any particularly strong argument for why that should be the case if we are not talking about extremes. So I believe, based on the data, that tax rates have no significant effect on the economy.

    But they have a large effect on revenues, as any objective person would expect.
     
    Iriemon, Oct 30, 2012
    #499
  25. Iriemon

    Iriemon Well-Known Member Past Donor

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    I can't dumb it down for you any further. I'm sorry.
     
    Iriemon, Oct 30, 2012
    #500
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