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The Wisdom and Folly of the Bush Tax Cuts

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Tom Aug 6, 2010 4:39 PM GMT I concur with Tim. The argument that we increase taxes because otherwise we will have to tax the future with out deficits is misleading. Taxes and spending are separate matters. We have taxes to collect revenues and time and again its shown that lowering rates from rates too high will increase revenues. Clearly there is some point where this ceases to be true but we have not gotten to that point. Spending, however, accelerates on its own (Congress' favorite vote getting tool is new spending). Congress' argument would be to forever continue increasing taxes to support uncontrolled increases in spending. Limit the tax rates, encoruage capital investing and hope we don't go broke at the state or federal levels as our representatives continue to spend without control. I dont see how to control them. Someone wiser will have to answer that one at a practical level
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Tim Aug 6, 2010 3:59 PM GMT When we have a deficit problem during an economic downturn, the solution obvious to all but the most ardent worshippers of Keynes is to cut spending, not raise taxes. Examine the Bush years. Look at the GDP and the income tax revenues. See how both growth and tax revenue are better by 2005. Would this have happened without the cuts? Examine Harding's strategy for avoiding the depression that nearly happened in 1920. Look at the outcome of FDR's New Deal and its effect on unemployment between 1933 and 1938, and its effect on the debt. Stop spending!
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Joe the plumber Aug 6, 2010 3:22 PM GMT What economist not already hired in the 0bama administration is not behind extending the tax cuts? Check the numbers folks. The tax cuts actually increased revenues to the treasury and unemployment was at or below 5%. Once the biggest tax increases in the nation's history go through January 2011, unemployment will go even higher and revenues at the Treasury will fall. 0bama is trying to destroy the economy and he is doing a great job of that. Cut taxes and you will increase employment and increase revenues for the Treasury. Oh yeah, the reason the deficits have increased to about $1.4 trillion from a couple hundred billion at the end of 2008 is crazy spending of taxpayer money. Be fiscally responsible, spend less, tax less and the economy will be strong.
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gzuckier Aug 6, 2010 3:17 PM GMT 'Hubbard is especially proud of the 2003 cut in taxes on dividends and capital gains, which he calls "the most pro-growth tax reform that anybody did since Kennedy." 'Well, can't argue with success, eh? Helluvajob, Brownie! Mission Accomplished!
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Scott Aug 6, 2010 2:57 PM GMT Terry, you are a fool. Go research the Laffer curve. Just cutting rates does not mean revenues increase. It all depends upon where the current rate is. A cut from 80% to 50% might well increase revenues. A cut from 35% to 30% might decrease revenues. I assume you are not an economist who has actually done the calculation to determine where we are on the curve, so don't act like one.
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byron Aug 6, 2010 2:35 PM GMT Pretty fair article, give's kudos and faults to the Bush Administration. Tax cuts and his spending caused the deficit. Letting the Bush cuts expire will help lower the deficit, you should not borrow money to give a tax cut, the interest is eating us alive. We also need to cut spending on programs. Personally I prefer to cut military, we spend twice as much, GDP%, as any other country in the world. Terrorists are the new evil, we need intelligence not tanks, missiles or carriers.
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David D. Aug 6, 2010 1:54 PM GMT Tax cuts increase deficits. Income tax revenues did not regain their 2000 peak until 2006 (the peak of the housing bubble) and have yet to regain their peak as a %GDP. Post-crisis, tax revenues are at a 50-year low of only 15% of GDP, versus the average of 18.2% of GDP.CBO and Pew Center estimate the Bush tax cuts increase the deficit by about $300 billion per year. As long as we are the World Police and have 77 million Boomers retiring, workers will have to pay more. We had 5 workers per retiree in 1960; now we have 3.3 and by 2040 we will have 2.1. Taxes have to go up, period, but spending must also be cut. Ideally, these would go together--no tax hikes without spending cuts.
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Terry Aug 6, 2010 12:03 PM GMT When will people learn that Cutting taxes INCREASES revenue to the government? JFK said "A rising tide floats all boats".Nuf said.
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aaron underwood Aug 6, 2010 12:00 PM GMT On top of all this, the article makes the best point in the very beginning.."The cuts, he says, have been undermined by years of deficits. Until the trajectory of spending changes..." STOP SPENDING THEN AND WE WOULDN'T BE HAVING THIS DISCUSSION!
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Andrew Aug 6, 2010 11:56 AM GMT "The nonpartisan Congressional Budget Office ranked continuation of the Bush tax cuts last for effectiveness among stimulus options, partly because rich people tend not to go out and spend their tax cuts. They invest them...". -Is that so terrible? How else can a company afford to employ, without investment dollars?! The Fed, CBO, and Geithner all need to be replaced.
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