Republicans plan massive tax code overhaul

[stinkcat_14]

Lower tax rates mean higher revenues.
It works : see JFK and RWR

Do you mean in inflation adjusted terms or in nominal terms? Also, we know from Clinton that higher taxes means higher revenues. Also, when George Bush lowered tax rates, tax revenues fell. So the question is, what makes you think that lowering tax rates will increase revenues like Reagan rather than lowering them like what happened under Bush?

 

[stinkcat_14]

It does indeed, but you’ll never convince the liberals of that. They are all for taxing “the rich” and having people pay their fair share (whatever that is, you can never get an answer on that one.)

Actually, one does not have to be liberal to be skeptical of the claim that lower tax rates are the cause of higher revenues. For example, inflation was much higher during the early days of Reagan and that certainly had an impact on tax revenues as well. While there certainly can be behavioral effects of tax law changes, whether tax rates are so high that we can lower rates and raise revenue is debatable.

 

[ProVobis]

The top 10% of income earners pay 68% of all federal income taxes. It seems obvious that any tax reductions will go disproportionately to the people paying the most taxes.

Not necessarily. I understand many of the deductions will be going away. Tax rates aren’t everything.

 

[ProVobis]

That issue could be solved by cutting spending enough to balance the budget and provide revenue to refund the social security trust fund and pay off the debt.

Good luck with trying to hold spending down when unexpected disasters or wars take higher priorities. Congress would not ever think about imposing a surtax of say 10% to pay for that.

 

[LeafByNiggle]

Lower tax rates mean higher revenues.
It works : see JFK and RWR

Of course this cannot work when applied to the extreme case of reducing the tax rate to zero. Therefore the best you can claim is that the tax rate that produces the highest revenue is somewhere below the the tax rates we have now. That is a claim that cannot be argued on general principles, but must be argued in the details. So let’s look at some details.

The history of the income tax rates is complicated by the fact that there are numerous rates and brackets, all of which could be said to comprise the “tax rate” in general. But let’s just pick one benchmark - the marginal tax rate of the highest bracket. Here is what has happened over the years:

1980: top rate was 70%
1982: top rate reduced to 50% (Reagan)
1987: top rate reduced to 38.5% (Reagan)
1988: top rate reduced to 28% (Reagan)
1991: top rate increased to 31%
1993: top rate increased to 39.6%
2008: top rate slightly reduced to 35%
2013: top rate slightly increased to 39.6% where it stands today.

Now compare this with the tax revenue over time as shown in the attached graph, shown revenue in trillions. (Data from OMB, Table 1.1—Summary of Receipts, Outlays, and Surpluses or Deficits (-): 1789–2018)

So while the revenue did increase during the Reagan years when the top income tax rate was cut dramatically, they also increased even more dramatically in the years that followed the Reagan cuts when the top rate was gradually raised (although never back to the highs of the pre-Reagan years). So it is hard to make the case that now, with the top rate at a relatively low 39.6%, that rates should be cut now to increase revenue. In any case, the burden is on those who claim the correlation to demonstrate it. I have at least cast doubt on that correlation.

 

[Michael68]

It is worse than that. The report says:

The “common sense” conclusion you stated above would explain why the reductions in dollar amounts would go disproportionately to the people paying the most taxes. But it does not explain why reductions as a percentage of income should also go to this group. Doing so not only reduces taxes but also reduces the progressive tax structure, making it more like a flat rate tax. Now maybe an argument could be made why a flat tax is preferable to tax brackets. But that argument should at least be made out in the open where everyone can see what is being done, instead of trying to hide this retreat from long-standing policy in a tax cut.

When did the richest’s money become yours? Did you earn it? What gives you the right to confiscate it?

 

[stinkcat_14]

When did the richest’s money become yours? Did you earn it? What gives you the right to confiscate it?

Where does the Church teach that taxation is immoral?

 

[Michael68]

Where does the Church teach that taxation is immoral?

Where does the church teach it is ok to steal rich people’s money?

 

[Michael68]

Taxation should be fair. How we tax the rich is unfair and immoral IMO

 

[Michael68]

Where does the Church teach that taxation is immoral?

I believe the church teaches on this by saying it is not ok to rob Peter to pay Paul.

 

[J_Peterson]

Where does the church teach it is ok to steal rich people’s money?

The Church teaches that the right private property is not absolute. If you have an abundance and someone else has nothing, you are stealing from the man that has nothing.

 

[Michael68]

The Church teaches that the right private property is not absolute. If you have an abundance and someone else has nothing, you are stealing from the man that has nothing.

Isn’t that a peronal decision? Not all the rich are Christians.

 

[LeafByNiggle]

When did the richest’s money become yours? Did you earn it? What gives you the right to confiscate it?

It’s just taxation. Exactly how it is done is always up for debate, since people have different opinions on what is fair. But they are just opinions.

 

[LeafByNiggle]

I believe the church teaches on this by saying it is not ok to rob Peter to pay Paul.

It is a popularly used phrase, but it is not Church teaching. Nor is it objectively established that graduated income tax is robbing anyone. It is just a hyperbole.

 

[stinkcat_14]

Where does the church teach it is ok to steal rich people’s money?

The Church does not teach that it is ok to steal. The Church also teaches that it is morally appropriate for governments to levy taxes.

 

[Michael68]

The Church does not teach that it is ok to steal. The Church also teaches that it is morally appropriate for governments to levy taxes.

Unfair taxes?

 

[LeafByNiggle]

Unfair taxes?

Unfair in one person’s opinion is not necessarily unfair objectively.

 

[Michael68]

Unfair in one person’s opinion is not necessarily unfair objectively.

When you look at who actually pays most of the taxes, I say it is not fair by any way you want to stretch that word.

 

[stinkcat_14]

Unfair taxes?

Who decides whether taxes are unfair?

 

[Michael68]

Who decides whether taxes are unfair?

I believe the voters have decided this tax system is unfair. The “stick it to the rich” paradigm doesn’t work anymore. Besides, are we to be so jealous as to take their money? I think that is the root of all of this!