"Don't raise Fed debt ceiling" means "Balance the Fed budget INSTANTLY"

[pocketfullofshells]

Well, if you don't buy that 2+2 =4, or that 16% is more than 15%, then i have to admit there is no proof. So, let's by all means continue to believe that basic arithmetic is bogus, and that we don't have to raise taxes in order to balance the budget. That is, after all, what most of us want to believe anyway.

In fact, since there seems to be no relationship between tax rates and revenues, let's just cut taxes, cut them some more, then sprinkle that pixie dust around. Who needs math anyway?

or lets just make it 100% since it has no effect...right?

 

[GenSeneca]

i have to admit there is no proof.

At least you admit it.

Yet you continue to believe that historical data is bogus, that raising taxes will increase revenue, that raising taxes has zero affect on the growth or decline of GDP, that you can simply raise taxes to get more revenue then raise them some more with no ill affect on GDP and, with a few sprinkles of fairy dust, the government will magically become financially solvent.

After all, who needs facts when you have popular political rhetoric?

 

[GenSeneca]

or lets just make it 100% since it has no effect...right?

As usual, you cannot see the forest through the trees. The point of the CBO data shows that increased revenue comes from a larger GDP, so if you wish to have greater revenue, there needs to be growth in the GDP.

Since you believe that raising taxes causes GDP growth, i.e. greater revenue, then feel free to offer the proof that PLC has just admitted does not exist.

 

[BigRob]

Well, if you don't buy that 2+2 =4, or that 16% is more than 15%, then i have to admit there is no proof. So, let's by all means continue to believe that basic arithmetic is bogus, and that we don't have to raise taxes in order to balance the budget. That is, after all, what most of us want to believe anyway.

In fact, since there seems to be no relationship between tax rates and revenues, let's just cut taxes, cut them some more, then sprinkle that pixie dust around. Who needs math anyway?

The point is that raising taxes does not equate to more revenue unless you are able to grow GDP at the same time.

Since tax revenues sit historically around 18% of GDP, the way to raise more revenue is to grow GDP, not simply raise tax rates.

Increased tax rates do equate to more revenue, if you are growing GDP by a proportional amount.. if GDP is shrinking or not growing at the rate you raise taxes, then an increase in tax rates will not mean an increase in revenue as a percentage of GDP.

 

[GenSeneca]

Increased tax rates do equate to more revenue, if you are growing GDP by a proportional amount..

Careful... The same statement could be said of lowering taxes, or even keeping taxes right where they are, so long as there is sufficient growth in GDP the result will be greater revenue as it remains a relatively constant 18% of GDP.

 

[BigRob]

Careful... The same statement could be said of lowering taxes, or even keeping taxes right where they are, so long as there is sufficient growth in GDP the result will be greater revenue as it remains a relatively constant 18% of GDP.

Well yes, your revenues will be around 18% of GDP more or less regardless of your tax rates.. the key is growing GDP.

The argument that those who are in favor of tax hikes need to make is that an increase in tax rates will expand GDP, otherwise the argument makes little sense.

 

[GenSeneca]

The argument that those who are in favor of tax hikes need to make is that an increase in tax rates will expand GDP, otherwise the argument makes little sense.

Agreed...

 

[Gipper]

Well yes, your revenues will be around 18% of GDP more or less regardless of your tax rates.. the key is growing GDP.

The argument that those who are in favor of tax hikes need to make is that an increase in tax rates will expand GDP, otherwise the argument makes little sense.

The problem is lefties like our two friends here, do not understand this.

They truly believe that raising tax rates will generate more revenue. No amount of proof will change their opinion. This is how liberal elites get away with their class warfare tax policies.

Like I said, it has to be some kind of mental problem.

 

[PLC1]

At least you admit it.

I do. Basic math, like other empirical evidence, has no effect on any political debate.

Yet you continue to believe that historical data is bogus, that raising taxes will increase revenue, that raising taxes has zero affect on the growth or decline of GDP, that you can simply raise taxes to get more revenue then raise them some more with no ill affect on GDP and, with a few sprinkles of fairy dust, the government will magically become financially solvent.

I didn't say that. I did, in fact, point out the economic reality of the '50s, when taxes were somewhat higher than they are not. I could point to the '80s, too, when cutting taxes brought on the beginning of the overwhelming national debt we currently have.

After all, who needs facts when you have popular political rhetoric?

It's proven day in and day out, in Congress as well as on this forum.

 

[GenSeneca]

I do. Basic math, like other empirical evidence, has no effect on any political debate.

Clearly it does not... You reject the empirical evidence I have offered and persist in the belief that Higher Taxes = Greater Revenue without a single shred of evidence to support such a theory.

I did, in fact, point out the economic reality of the '50s, when taxes were somewhat higher than they are not. I could point to the '80s, too...

You pointing to periods of higher taxation and claiming higher taxation to be the cause of greater revenue is as absurd as someone pointing to periods of lower taxation and claiming it to be the cause of higher revenue. In both cases it was the GDP that ultimately determined revenue, a larger GDP, whether in periods of higher or lower tax rates, generated greater revenue than periods of lower GDP. That kind of math seems pretty basic to me, 18% of a larger number is more revenue than 18% of a smaller number.

The real goal should be focusing on ways to maximize the growth of our GDP - since that is the only historically and statistically proven way to increase revenue - But if you believe that Higher Taxes cause growth in the GDP then we'd like to hear you make that argument.

...cutting taxes brought on the beginning of the overwhelming national debt we currently have.

So spending more than we actually bring in has nothing to do with it? It seems that if I spend more than I make, that is the cause of my debt, even if I make half as much money, as long as I do not spend more than I make I will not go into debt.

However, if you believe that debts are caused by lowering taxes, rather than overspending, I can see why you would also believe that raising taxes will magically increase revenue and reduce the debt. It's not a logical or rational belief but few political beliefs are.

 

[PLC1]

Clearly it does not... You reject the empirical evidence I have offered and persist in the belief that Higher Taxes = Greater Revenue without a single shred of evidence to support such a theory.

Other than basic math, I have no evidence. It is entirely possible that 2 + 2 = 5. I can prove nothing different, not to your satisfaction.

You pointing to periods of higher taxation and claiming higher taxation to be the cause of greater revenue is as absurd as someone pointing to periods of lower taxation and claiming it to be the cause of higher revenue. In both cases it was the GDP that ultimately determined revenue, a larger GDP, whether in periods of higher or lower tax rates, generated greater revenue than periods of lower GDP. That kind of math seems pretty basic to me, 18% of a larger number is more revenue than 18% of a smaller number.

Yes, if you believe that lowering taxes increases GDP, if you think that there is a cause and effect there, then you have a point, but you already rejected that idea. The question is, then, how do we get that higher number?

The real goal should be focusing on ways to maximize the growth of our GDP - since that is the only historically and statistically proven way to increase revenue - But if you believe that Higher Taxes cause growth in the GDP then we'd like to hear you make that argument.

I believe I already did, but perhaps not. Maybe 2 + 2 really =3. I'm not sure any longer.

Just how would you increase GDP? Perhaps sending jobs to China.. no we tried that already.

So spending more than we actually bring in has nothing to do with it? It seems that if I spend more than I make, that is the cause of my debt, even if I make half as much money, as long as I do not spend more than I make I will not go into debt.

Of course spending more than we take in has everything to do with it. That's why I said we need to take in more, and spend less.

However, if you believe that debts are caused by lowering taxes, rather than overspending, I can see why you would also believe that raising taxes will magically increase revenue and reduce the debt. It's not a logical or rational belief but few political beliefs are.

Lowering taxes while not cutting spending did cause a deficit. But, you do have a point: Few political beliefs are rational. Trickle down economics is high on the list of political beliefs that are not rational (just as a wild example, since you've already said you don't believe in trickle down... or did you?)

 

[GenSeneca]

Other than basic math, I have no evidence.

Prove your basic math skills by grasping what I'm about to explain to you.

It is entirely possible that 2 + 2 = 5.

You must believe that if you persist in the belief that Higher Taxes = Greater Revenue while ignoring the imperical data showing that Higher GDP = Higher Revenue.

Yes, if you believe that lowering taxes increases GDP, if you think that there is a cause and effect there, then you have a point

Again you are going on the attack rather than defending your own "voodoo" economic theory that Higher Taxes = Greater Revenue. Since you clearly believe that Raising Taxes = Higher GDP, then we are asking that you make that argument. That doesn't mean attack "trickle down" theory, that means explain and defend your "trickle up" theory.

I believe I already did, but perhaps not.

Are you referring to the post about 16% of X being larger than 15% of X in regards to raising tax rates? The underlying problem with your "simple math" is that empirical data shows it to be false. X is always GDP (the factor which determines higher or lower revenue) and that is the only real variable, the percentage is almost always static at 18%. Your equation treats GDP as static and the percentage as the variable, that is incorrect.

So if you can understand that 16% of X is larger than 15% of X, why are you having such a problem understanding that - regardless of the tax rates - revenue remains 18% of GDP? It's pretty simple to grasp once you realize that tax rates are not the determining factor and accept that GDP is the determining factor.

Just how would you increase GDP?

According to your "trickle up" theory, raising taxes increases revenue, and since revenue is always 18% of GDP, raising taxes must magically increase GDP. We are waiting for you to make that argument and explain to us how that is possible.

Of course spending more than we take in has everything to do with it.

That isn't what you said, you claimed lowering taxes caused the debt. Whether taxes are higher or lower, and whether revenue is larger or smaller, makes zero difference so long as we do not spend more than we take in... Therefore messing with the tax rates is not the cause of debt, spending is the sole determining factor.

Lowering taxes while not cutting spending did cause a deficit.

Raising taxes and still spending more money than is brought in through revenue will also cause a deficit... In that scenario, according to your fallacy of confusing correlation with causation, raising taxes caused the deficit. Again, whether taxes are raised or lowered does not matter so long as spending does not excede revenue. I don't know much simpler the math could be on that point but you still don't seem to grasp it.

 

[PLC1]

Prove your basic math skills by grasping what I'm about to explain to you.


You must believe that if you persist in the belief that Higher Taxes = Greater Revenue while ignoring the imperical data showing that Higher GDP = Higher Revenue.


Again you are going on the attack rather than defending your own "voodoo" economic theory that Higher Taxes = Greater Revenue. Since you clearly believe that Raising Taxes = Higher GDP, then we are asking that you make that argument. That doesn't mean attack "trickle down" theory, that means explain and defend your "trickle up" theory.


Are you referring to the post about 16% of X being larger than 15% of X in regards to raising tax rates? The underlying problem with your "simple math" is that empirical data shows it to be false. X is always GDP (the factor which determines higher or lower revenue) and that is the only real variable, the percentage is almost always static at 18%. Your equation treats GDP as static and the percentage as the variable, that is incorrect.

So if you can understand that 16% of X is larger than 15% of X, why are you having such a problem understanding that - regardless of the tax rates - revenue remains 18% of GDP? It's pretty simple to grasp once you realize that tax rates are not the determining factor and accept that GDP is the determining factor.


According to your "trickle up" theory, raising taxes increases revenue, and since revenue is always 18% of GDP, raising taxes must magically increase GDP. We are waiting for you to make that argument and explain to us how that is possible.


That isn't what you said, you claimed lowering taxes caused the debt. Whether taxes are higher or lower, and whether revenue is larger or smaller, makes zero difference so long as we do not spend more than we take in... Therefore messing with the tax rates is not the cause of debt, spending is the sole determining factor.


Raising taxes and still spending more money than is brought in through revenue will also cause a deficit... In that scenario, according to your fallacy of confusing correlation with causation, raising taxes caused the deficit. Again, whether taxes are raised or lowered does not matter so long as spending does not excede revenue. I don't know much simpler the math could be on that point but you still don't seem to grasp it.

My original statement was that we need to cut spending and increase taxes. There is no magic formula for balancing the federal budget without pain.

Now, you come back with increasing GDP, rather than increasing taxes, as the way to fiscal sanity.

OK, now that's a great idea. I still think we need to cut spending, but increasing GDP instead of increasing taxes sounds like a very attractive idea.

So, how do we increase GDP? That seems to be the crux of the matter.

 

[GenSeneca]

My original statement was that we need to cut spending and increase taxes.

We need to decrease spending and increase revenue so that our spending is less than our revenue, would you agree? If that's the case then you need to realize that raising taxes does not equate to greater revenue, greater revenue only comes from a higher GDP - since revenue is a relatively static 18% of GDP.

Had your original statement been that we need to "cut spending and increase revenue", I would've probably just agreed but the common misconception that 'increasing taxes causes an increase in revenue' is the fallacy I took issue with and sought to correct.

Now as to how to grow GDP, that's quite a discussion.

 

[PLC1]

We need to decrease spending and increase revenue so that our spending is less than our revenue, would you agree? If that's the case then you need to realize that raising taxes does not equate to greater revenue, greater revenue only comes from a higher GDP - since revenue is a relatively static 18% of GDP.

Had your original statement been that we need to "cut spending and increase revenue", I would've probably just agreed but the common misconception that 'increasing taxes causes an increase in revenue' is the fallacy I took issue with and sought to correct.

Now as to how to grow GDP, that's quite a discussion.

Yes,it is.

And yes, what we need to do is to decrease spending and increase revenue. So, if your assertion that revenue remains a static 18% of GDP regardless of tax rates is correct, then it follows that it really doesn't matter what the tax rates are, only what the GDP is.

The next logical question, then, is, how do you know that revenue remains static as a percent of GDP regardless of tax rates?