Obama calls for increase in Federal Gas Tax

[GenSeneca]

I already did support it by showing that revenues as a % of GDP went from around 21% in 2000 to about 17% now.

Let's go slowly so that I can get you on record for each of your claims...

Are you claiming that it was Clinton's tax rates, and not some other factor, which CAUSED revenue as a % of GDP to reach it's record high of 20.9% in FY'00? Yes or No

Are you claiming that it was Bush's lower tax rates, and not some other factor, which CAUSED revenue as a % of GDP to plummet to 16.5% in FY'03? Yes or No

Are you claiming that if we return to the Clinton tax rates that revenue as a % of GDP will return to record highs? Yes or No

Do you admit that revenue, as a % of GDP, has an historical average of about 18% regardless of tax rates (as your graph shows)? Yes or No

After you answer each of those, feel free to ask me whatever questions you like so that I may go on record... Of course, I'm only making one claim: There is no causal link between tax rates and revenue (as a % of GDP).

 

[PLC1]

Let's go slowly so that I can get you on record for each of your claims...

Are you claiming that it was Clinton's tax rates, and not some other factor, which CAUSED revenue as a % of GDP to reach it's record high of 20.9% in FY'00? Yes or No

Are you claiming that it was Bush's lower tax rates, and not some other factor, which CAUSED revenue as a % of GDP to plummet to 16.5% in FY'03? Yes or No

Are you claiming that if we return to the Clinton tax rates that revenue as a % of GDP will return to record highs? Yes or No

Do you admit that revenue, as a % of GDP, has an historical average of about 18% regardless of tax rates (as your graph shows)? Yes or No

After you answer each of those, feel free to ask me whatever questions you like so that I may go on record... Of course, I'm only making one claim: There is no causal link between tax rates and revenue (as a % of GDP).

you've made that claim before, but not supported it.

Yes, I'm aware that the average revenue has been about 18% of the GDP. I'm also aware that the percent has fluctuated, that 18% is an average over time.

Further, the tax rates that were in effect in 2000 weren't the "Clinton tax rates." The president doesn't set tax rates. Congress does that.

Yes, when Congress passed a tax rate reduction, the percentage dropped. Do we know for sure that revenues dropped because of the rate reduction? No, we don't. There is always some possibility that dropping tax rates didn't make the percentage drop, that there may be some other factor as yet undetermined. The probability is that lowering rates caused a drop in revenue. It is intuitive that less taxes = less revenue.

So, are you going to argue that it was simply coincidence, or is there another factor?


So, what other factor could have led to the correlation between reducing taxes, and less revenue?

 

[pocketfullofshells]

you've made that claim before, but not supported it.

Yes, I'm aware that the average revenue has been about 18% of the GDP. I'm also aware that the percent has fluctuated, that 18% is an average over time.

Further, the tax rates that were in effect in 2000 weren't the "Clinton tax rates." The president doesn't set tax rates. Congress does that.

Yes, when Congress passed a tax rate reduction, the percentage dropped. Do we know for sure that revenues dropped because of the rate reduction? No, we don't. There is always some possibility that dropping tax rates didn't make the percentage drop, that there may be some other factor as yet undetermined. The probability is that lowering rates caused a drop in revenue. It is intuitive that less taxes = less revenue.

So, are you going to argue that it was simply coincidence, or is there another factor?


So, what other factor could have led to the correlation between reducing taxes, and less revenue?

Republican logic is...if you raised taxes the day the banks went under...and the econ tanks...its do to the taxes...

If the taxes go up and then the econ skyrockets....then its in spite of them.

the econ of the 90's was better then that of the 00's....The Debt was much better in the 90's then the 00's....but of course they are not related...


Also if you lower taxes...this now means you will take in more...( so I guess tax cuts grow goverment)

If you raise taxes, you take in less.

thus zero taxes brings in more then 30% tax rate.

I love republican math

 

[Gipper]

Libs (like Pockets) and Dems (like THC1) believe raising taxes on the wealthy will fix all our problems....blah...blah...blah....if only we could go back to Clinton's tax rates...silliness. They think their wonderful welfare state will continue unabated if only the wealthy pay more. This is a fools game.

The real problem is the growth in SPENDING by the feds. That is the problem not tax revenues. But, to cut the spending means the end of the welfare state and libs and dems HATE that.

Solutions include cut spending, regulations, and fix the tax code so that the wealthy and big corporations no longer get unfair advantages.

 

[GenSeneca]

you've made that claim before, but not supported it.

You're right, I can't prove something doesn't exist, the best I can do is point out all the facts which contradict your theory of it's existence, so let me rephrase my statement: There is no evidence of a causal link between rates and revenue.

You're the one claiming that a causal link does exist between rates and revenue, so it's on you to make the case that such a causal link exists... But try to remember:

Correlation does not imply causation (cum hoc ergo propter hoc): a faulty assumption that correlation between two variables implies that one causes the other. ​

A causal link between rates and revenue would mean the following are true:

• When rates are increased, revenue always goes up.
• When rates are lowered, revenue always falls.
• While rates remain unchanged, revenue never fluctuates.

Further, the tax rates that were in effect in 2000 weren't the "Clinton tax rates." The president doesn't set tax rates. Congress does that.

The rates we had under Clinton are commonly referred to as the "Clinton tax rates" and tossing in that particular red herring, to avoid answering my questions, just shows the weakness of your argument.

Yes, when Congress passed a tax rate reduction, the percentage dropped. Do we know for sure that revenues dropped because of the rate reduction? No, we don't.

A Nasdaq graph for the DOTCOM bubble...

What year did revenue reach its record high of 20.9% of GDP?
What year did revenue begin to fall?

But it was all due to tax rates, not a market bubble and the subsequent collapse of the stock market... That is what you're arguing here.

There is always some possibility that dropping tax rates didn't make the percentage drop, that there may be some other factor as yet undetermined.

Causal means that A causes B... Are you arguing that there is a causal link between rates and revenue or not?

For a causal link between rates and revenue to exist would mean that revenue increases only when rates are increased and vice versa, additionaly, there would be no fluctuation of revenue while rates are static.

The probability is that lowering rates caused a drop in revenue. It is intuitive that less taxes = less revenue.

Correlation does not imply causation.

 

[PLC1]

You're right, I can't prove something doesn't exist, the best I can do is point out all the facts which contradict your theory of it's existence, so let me rephrase my statement: There is no evidence of a causal link between rates and revenue.

If you increase the price of something, then, there is no evidence that additional income is generated. OK, you do have a point. As I said before, there is a price at which profits are maximized. There is a tax rate at which revenues are maximized also. The evidence that such a rate is more than what prevailed after the "Bush tax cuts" is that income went down.

Income as a percentage of GDP, that is.

If the argument is that higher taxes decreases the GDP, then revenues as a percent of GDP would go up, not down.

You're the one claiming that a causal link does exist between rates and revenue, so it's on you to make the case that such a causal link exists... But try to remember:

Correlation does not imply causation (cum hoc ergo propter hoc): a faulty assumption that correlation between two variables implies that one causes the other. ​

A causal link between rates and revenue would mean the following are true:

• When rates are increased, revenue always goes up.
  
  
• When rates are lowered, revenue always falls.
• While rates remain unchanged, revenue never fluctuates.

Smoking does not cause lung cancer, then. Smokers don't always die of lung cancer.

The rates we had under Clinton are commonly referred to as the "Clinton tax rates" and tossing in that particular red herring, to avoid answering my questions, just shows the weakness of your argument.

Yes, I'm aware that we inaccurately ascribe tax rates to the president. We ascribe a whole lot of powers that the president doesn't actually enjoy.

A Nasdaq graph for the DOTCOM bubble...

What year did revenue reach its record high of 20.9% of GDP?
What year did revenue begin to fall?

But it was all due to tax rates, not a market bubble and the subsequent collapse of the stock market... That is what you're arguing here.

A market bubble would affect the GDP, would it not? The figures are revenue as a percent of GDP, not in absolute dollars.

Causal means that A causes B... Are you arguing that there is a causal link between rates and revenue or not?

For a causal link between rates and revenue to exist would mean that revenue increases only when rates are increased and vice versa, additionaly, there would be no fluctuation of revenue while rates are static.

Correlation does not imply causation.

Correlation does not prove causation.

Of course, if we lowered the tax rates to zero, that just might cause the revenue to also drop to zero.

But, that doesn't mean that failing to collect taxes at all caused revenues to drop to zero.

or would it?

 

[GenSeneca]

The evidence that such a rate is more than what prevailed after the "Bush tax cuts" is that income went down.

That's not evidence of a causal link between rates and revenue. The first year the Clinton tax rates went into effect revenue was 17.5% - which is exactly what revenue was the previous year prior to the rate increase. That 17.5% is well below the 20.9% record. So once again you're cherry picking data by pointing to a fall in revenue AFTER the record breaking 20.9% while ignoring the fact that revenue started out much lower under the exact same tax rate.

If the tax rates under Clinton were the actual CAUSE of our record 20.9%, then we should have seen 20.9% every single year the rates were in effect, with no fluctuation whatsoever. That would be evidence of a causal link.

A market bubble would affect the GDP, would it not? The figures are revenue as a percent of GDP, not in absolute dollars.

As the bubble rose, revenue as a % of GDP rose along with it. When the bubble burst, revenue as a % of GDP fell along with it. Before the bubble began, and after the higher tax rates went into effect, revenue remained at 17.5% of GDP, the exact same amount it had been the year before the tax rate increase. According to your trickle up theory of economics, revenue as a % of GDP should have gone up as the rates went up, but that's not what happened. Revenue as a % of GDP didn't actually begin to increase until a market bubble formed and revenue didn't begin to decline until after that market bubble had burst.

Correlation does not prove causation.

Correlation does not imply causation (cum hoc ergo propter hoc):

Imply: In logic, the technical use of the word "implies" means "to be a sufficient circumstance". This is the meaning intended by statisticians when they say causation is not certain.​

Don't feel bad, it's a common mistake among people with no experience in logic.

The cum hoc ergo propter hoc logical fallacy can be expressed as follows:

A occurs in correlation with B.
Therefore, A causes B.

In this type of logical fallacy, one makes a premature conclusion about causality after observing only a correlation between two or more factors. Generally, if one factor (A) is observed to only be correlated with another factor (B), it is sometimes taken for granted that A is causing B even when no evidence supports it.​

That is the fallacy upon which your entire argument is based.

 

[Gipper]

That's not evidence of a causal link between rates and revenue. The first year the Clinton tax rates went into effect revenue was 17.5% - which is exactly what revenue was the previous year prior to the rate increase. That 17.5% is well below the 20.9% record. So once again you're cherry picking data by pointing to a fall in revenue AFTER the record breaking 20.9% while ignoring the fact that revenue started out much lower under the exact same tax rate.

If the tax rates under Clinton were the actual CAUSE of our record 20.9%, then we should have seen 20.9% every single year the rates were in effect, with no fluctuation whatsoever. That would be evidence of a causal link.


As the bubble rose, revenue as a % of GDP rose along with it. When the bubble burst, revenue as a % of GDP fell along with it. Before the bubble began, and after the higher tax rates went into effect, revenue remained at 17.5% of GDP, the exact same amount it had been the year before the tax rate increase. According to your trickle up theory of economics, revenue as a % of GDP should have gone up as the rates went up, but that's not what happened. Revenue as a % of GDP didn't actually begin to increase until a market bubble formed and revenue didn't begin to decline until after that market bubble had burst.

BINGO! Gen just completely destroyed THC's argument. But, will THC accept losing? I am guessing not.

Libs and Dems like to claim cons and Rs think cutting taxes will ALWAYS result in raising GDP and revenues to the treasury...as always they are mistaken, most of us do not believe this. But, libs and Dems ALWAYS believe that raising tax rates will always generate more revenue to the Treasury. You just proved them wrong, but will they ever accept the truth?

When you refuse to accept the truth, what have you become?

 

[Dr.Who]

According to this graph of tax rates versus revenue which rate provides the most revenue?

http://reason.com/blog/2010/11/29/the-remarkably-stable-amount-o

 

[PLC1]

BINGO! Gen just completely destroyed THC's argument. But, will THC accept losing? I am guessing not.

Libs and Dems like to claim cons and Rs think cutting taxes will ALWAYS result in raising GDP and revenues to the treasury...as always they are mistaken, most of us do not believe this. But, libs and Dems ALWAYS believe that raising tax rates will always generate more revenue to the Treasury. You just proved them wrong, but will they ever accept the truth?

When you refuse to accept the truth, what have you become?

That's not what I've said. Please read before responding.

 

[PLC1]

That's not evidence of a causal link between rates and revenue. The first year the Clinton tax rates went into effect revenue was 17.5% - which is exactly what revenue was the previous year prior to the rate increase. That 17.5% is well below the 20.9% record. So once again you're cherry picking data by pointing to a fall in revenue AFTER the record breaking 20.9% while ignoring the fact that revenue started out much lower under the exact same tax rate.

If the tax rates under Clinton were the actual CAUSE of our record 20.9%, then we should have seen 20.9% every single year the rates were in effect, with no fluctuation whatsoever. That would be evidence of a causal link.


As the bubble rose, revenue as a % of GDP rose along with it. When the bubble burst, revenue as a % of GDP fell along with it. Before the bubble began, and after the higher tax rates went into effect, revenue remained at 17.5% of GDP, the exact same amount it had been the year before the tax rate increase. According to your trickle up theory of economics, revenue as a % of GDP should have gone up as the rates went up, but that's not what happened. Revenue as a % of GDP didn't actually begin to increase until a market bubble formed and revenue didn't begin to decline until after that market bubble had burst.


Correlation does not imply causation (cum hoc ergo propter hoc):

Imply: In logic, the technical use of the word "implies" means "to be a sufficient circumstance". This is the meaning intended by statisticians when they say causation is not certain.​

Don't feel bad, it's a common mistake among people with no experience in logic.

The cum hoc ergo propter hoc logical fallacy can be expressed as follows:

A occurs in correlation with B.
Therefore, A causes B.

In this type of logical fallacy, one makes a premature conclusion about causality after observing only a correlation between two or more factors. Generally, if one factor (A) is observed to only be correlated with another factor (B), it is sometimes taken for granted that A is causing B even when no evidence supports it.​

That is the fallacy upon which your entire argument is based.

If A and B occur together, that doesn't prove that A causes B.

It could be that B causes A, or that there is a third factor, C, that causes both A and B, or perhaps that it is merely a coincidence.

Now, I don't think anyone is suggesting that revenue as a percent of GDP is a cause of raising taxes, so the B causing A is absurd.

Nor is there a known third factor.

So, either it is a coincidence, or A causes B.

You are arguing that raising taxes and increased revenue is a coincidence, correct?

or is there some other position that relies on logic that I, in my poor befuddled mind, don't understand?

or do you just like to argue.. no, don't answer that one. We all like to argue, or we wouldn't be on this board.

 

[Lagboltz]

... A causal link between rates and revenue would mean the following are true:

• When rates are increased, revenue always goes up.
• When rates are lowered, revenue always falls.
• While rates remain unchanged, revenue never fluctuates.

...
For a causal link between rates and revenue to exist would mean that revenue increases only when rates are increased and vice versa, additionaly, there would be no fluctuation of revenue while rates are static.

In economics causality is not as simple as you are assuming. There are many influences on revenue, and they all must be considered when looking at only one independent variable such as tax rate. Multivariate analysis is essential for discussing something that complex. See this for details.
In short, causative variables can only be understood when all other causative variables are considered, and their influence is eliminated.

If tax revenue variations were only caused by tax rates, you would be correct, but in actuality revenues are also influenced by tax compliance, joblessness, salary levels, auditing levels, etc. So your above statements are too simplistic for economics. For example revenue would fluctuate if there was an increase or decrease of IRS auditors and/or cheating increased.


Another simple example is that childhood obesity has a strong link with drinking lots of soda pop, which can be considered a cause for obesity. But not all children that drink that will become obese because of other causative factors like exercise, genetics, metabolism, etc.

 

[GenSeneca]

If A and B occur together, that doesn't prove that A causes B.

Correct.

I don't think anyone is suggesting that revenue as a percent of GDP is a cause of raising taxes, so the B causing A is absurd.

That has been your argument all along, raising tax rates will have the causal effect of increasing revenue while decreasing them has the opposite effect. You even cherry picked a period in history where tax rates were lowered and revenue as a % of GDP went down as your evidence that higher tax rates = greater revenue as a % of GDP.

If you're now trying to pretend you were not claiming that higher tax rates = greater revenue as a % of GDP, then what argument were you trying to make? Your "smoking gun" was the fact that we went from 20.9% to 19.5% after lowering taxes... What other possible argument could you have been making?

 

[GenSeneca]

In economics causality is not as simple as you are assuming.

It is the people who claim that Higher Tax Rates = Greater Revenue* that are assuming an overly simplistic economic causality. So you're post actually echoes what I've been saying, that people who make such claims are basing their entire argument on a fallacy which excludes all other factors and focuses only on rates (A) and revenue (B).

PLC's argument has been centered around the fact that revenue was at 20.9%, we lowered taxes and revenue fell to 19.5%, and from this he concludes that lowering tax rates reduced revenue as a % of GDP, he further concludes that raising tax rates must have the opposite effect. So he's not looking at any factors other than rates and revenue to reach his fallacious conclusions.

 

[Lagboltz]

....So you're post actually echoes what I've been saying,....

In your post that I cited, I definitely was not echoing what you were saying. You seem to be backing off that claim now, and that is a more reasonable approach.

I still think that increased taxes is a causative factor in increasing revenue. And further I believe that if every other factor remained invariant, revenue would indeed increase with increased taxes.