Wednesday, September 20, 2006

Who's retarded?

Some liberal moron (a redundant phrase) called me "fucking retarded." Well, let's see who's really retarded.

Fact: the Laffer Curve exists. When taxes are cut significantly to have an effect (i.e. the 1920s, the early 1960s, the 1980s and 2003), economic booms result.

Fact: a rich person facing heavier taxes won't work as hard, meaning less tax revenue than expected. If you scroll down through this, you'll see my explanation that the 1990 tax hike failed to achieve its stated objective of balancing the federal budget. Clinton's 1993 tax hike also failed, as Don Luskin explained:
As you can see, from 1993 (the first year of the Clinton tax hike) to 1996 the increase in revenue is somewhere between negative and negligable -- the increased revenues Clinton hoped for from his tax hike simply did not materialize. The positive surprise versus expectations started in 1997 and the years after. What happened in 1997? A Republican congress cut the capital gains tax. So it all went just perfectly according to supply-side theory.
And federal spending didn't exactly go down, either. The budget deficit was reduced more because of increased tax revenues than any sort of "fiscal responsibility."

Fact: a rich person taxed more will have less money to spend (on goods and services that other people produce, almost always people of far lower incomes). This means lost jobs. A rich person taxed more will have less money to save, meaning less money for businesses to borrow, meaning reduced business expansion. This also means lost jobs. Also, higher taxes on the rich means less money available for the rest of us to borrow in the form of mortgages/home equity loans, auto loans, even credit card and store debt. Interest rates will therefore go up, meaning "the poor" won't be able to afford loans they previously could, or the Fed will pump more money into the economy, causing inflation that hurts "the poor" the most.

Do liberals honestly think it's better to have high taxes so that a government bureaucrat can make a cut for himself, waste some more on "overhead," and return pennies on the dollar to you? They must, because no matter how benevolent the purpose behind their beloved "social spending," that is the inevitable result. It's like forcing someone in an apartment building to keep his front door open, so that heat can flow out and into the open apartment of his neighbor across the way. Yeah, it'll work a little, but not as well as the other neighbor getting his own source of heat. Who actually thinks the neighbor with heat will want to keep his running as strongly, knowing so much is going to waste?

To make another analogy, I don't know about the rest of you, but I'd rather get out there and earn my wages honestly so that I can earn entire loaves, instead of relying on government to seize others' loaves but give me only breadcrumbs.

8 Comments:

Anonymous mstahl16 said...

For some reason liberals view the productive members of society as a wellspring of revenue for the government. They also do not seem to believe that when you get taxed more you work less. Well, here is the deal. I am a physician who every year has a huge amount of taxes confiscated from me. Between that and the incredible bureaucracy you deal with in order to deliver quality health care I find my work to provide ever diminishing returns. As soon as I can save enough money to live off of low risk and low tax investments I will quit. and trust me it will be long before the ordinary retirement age. Not only will I not be working but I will thoroughly enjoy paying as little taxes as possible.

Wednesday, September 20, 2006 2:58:00 AM  
Anonymous Brad Warbiany said...

Perry,

As an econ guy, what do you think of this post on the Laffer Curve. I believe in supply-side economics, but I think the laffer curve confuses things quite a bit.

From what I can see, the Laffer Curve is often presented as a static curve, where if you reduce taxes in one year, you'll see an increase in revenue that year (as long as you're on the right side of the curve). But I don't think that's necessarily true, because the need to work is usually fairly inelastic. What I do think is that lower tax rates lead to higher levels of economic growth, which increase future tax revenues because it's a smaller share of a much bigger pie.

Reducing tax rates increase the incentive to try to grow your business and wealth by reducing the risk of investments. If every dollar I make on an investment costs me $0.40 to the government, but I'm liable to lose the full dollar if the investment goes south, I may make different investment choices than if $0.10 of a profit goes to the government. And economic growth (for a supply-sider) doesn't come from more people working, it comes from more capital being provided as investment to people creating new jobs, companies, and industries.

What do you think? Should we start quoting the Warbiany Curve instead of the Laffer Curve?

Wednesday, September 20, 2006 11:13:00 AM  
Blogger septagon said...

I think Leftist view confiscating our hard earned dollars and running it through the government till like a drug dealer laundering their ill gotten gain. This psychosis affects the “rich” and the “poor’ since FICA starts at dollar one. The leftist political demigod FDR attempted to raise marginal tax rates to 99.5% on every dollar earned over $25,000! What drives leftist to impose a new stealth slavery regardless of the 13th amendment?!? Two big reasons are elitism and control.

Us mere mortals are too stupid to spend our money so the government must take your money from you a spend it for you for the “greater good”. Individuals are too stupid to know what is best for them The government (read leftist) we have focus groups, research, and superior intellect will tell you where, when, on what, and how much to spend to support your miserable existence. Our government programs will make your life better because you cannot do that yourself.

Since they are of superior intelligence they must direct our economic discourse for they know better than the mindless free market. In addition, by making us dependent on their useless government programs they gain control over our lives. This then requires us to petition them for a few more crumbs as the subservient population they know we are. This comes right out of the Machiavelli’s The Prince:

” Therefore a wise prince will seek means by which his subjects will always and in every possible condition have need of his government, and then they will always be faithful to him.”

Wednesday, September 20, 2006 1:35:00 PM  
Blogger TKC said...

I think alot of what liberals miss on taxes is driven by the question, "What is not seen." The example I like to use is this: Joe wins a million dollars in the lottery. Joe, being an odd fellow, decides to buy a million dollars worth of ice just to watch it melt. What a complete waste. The money could have been better used to feed the homeless or for education or whatever the pet project of the day is. This is why government should tax the rich, right?

Wrong. What of the ice maker who is pleased as punch to just have sold a million dollars worth of his product.

Liberals seem to consistently miss what is not seen. For me, their view on taxes confirms this.

Wednesday, September 20, 2006 5:01:00 PM  
Anonymous Brad Warbiany said...

TKC,

That's a waste, at least to me. Let's say the icemaker spent $400K in energy costs to make that $1M in ice. Joe basically let that $400K evaporate, turning $1M of his money into $600K of profit to the icemaker.

The point is that there is a subjective value on a whole bunch of things. For Joe, there was > $1M in value to watching ice melt. For me, if I'm buying $1M in ice, I want to get > $1M in value of keeping things cold. The problem is that government replaces our widely-varying subjective values, which result in a market economy, with their subjective values, and constrains us all by the values they've so wonderfully decided for us.

At least the government has it right. They'll seize that $1M in taxes, pay it to the icemaker *NOT* to produce the ice, and call it a "price support"... :-)

Thursday, September 21, 2006 11:17:00 AM  
Blogger septagon said...

Brad,

Your elitism is showing. It would truly be a waste to pay some one for not producing. The only way to rasie standards of living is by adding to the capital structure and the only way to do that is by producing.

Empowering the government to "seize" (read steal) some else's property because you think they are wasting it is dangerous. It is just a matter of time until you become the object of the seizure.

Thursday, September 21, 2006 1:05:00 PM  
Anonymous Brad Warbiany said...

septagon,

I guess sarcasm doesn't come across that well over a blog comment, huh?

Thursday, September 21, 2006 5:26:00 PM  
Blogger septagon said...

Brad,

Hard to tell sometimes but I would gives someone a ;-) if I was not serious. My eyes are bad. I could not tell if your :-) was a smile or a grimace.

Thursday, September 21, 2006 9:14:00 PM  

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