Re: Excellent News - Bush Approval Slumps

In article <r_i7f.4739$_31.3338@xxxxxxxxxxxxxxxxxxxxxx>,
TheLetterK <theletterk@xxxxxxxxxxxxxxxxxx> wrote:

> B.B. wrote:
> > In article <pCR5f.39020$Lp.20758@xxxxxxxxxxxxxxxxxxxxxx>,
> > TheLetterK <theletterk@xxxxxxxxxxxxxxxxx> wrote:
> >
> >
> >>> Well, regardless of the justifications offered, I'm talking about the
> >>>net effect of those tax cuts plus other policy decisions.
> >>> To a degree, yes, tax cuts will stimulate the economy, but at some
> >>>point you'll have a tax cut that won't actually stimulate much of
> >>>anything, but will still cost. Diminishing returns and all that. Many
> >>>people believe we're past that point already. Just as a tax cut now
> >>>won't help the economy appreciably, a tax increase won't hurt the
> >>>economy appreciably.
> >>
> >>Diminishing returns only applies to microadjustments in a
> >>'socio-capitalist' economy like the current US economy. Cutting the
> >>average tax rate to <10% would dramatically improve the economy--but
> >>it's not feasible with all of the big ticket budget items we currently have.
> >
> >
> > No, diminishing returns applies in anything that diminishes as you
> > use more of it. Tax cuts are included in that. We're talking about
> > cutting taxes enough to stimulate the economy, causing enough growth
> > that the lower tax rate will yield a bigger return come tax season.
> > Think about it this way: a 100% cut in taxes will not cause the economy
> > to grow enough to make up the difference, regardless of the actual
> > growth, because you still wind up with no taxes. Somewhere between 100%
> > taxes and 0% taxes there's a line where a further cut in the tax rate
> > isn't gonna grow the economy enough to pay for itself.
>
> And we are nowhere near that line. Well, not if you make more than
> $70,000 a year. A 30% average *income* tax rate is insane.
>
> Also, the idea that the economy will not grow enough to cover the
> difference in lost income only applies to systems like the US--it makes
> the assumption that you are *trying* to equalize government income
> through the taxation of business, rather than the population. Thus, it
> only really applies to microadjustments in tax code for
> 'socio-capitalist' nations (or worse) like the US, where the government
> actually needs a high level of income. In a nation with a purely free
> market (or, at least mostly free market), the 'law 'of diminishing
> returns is meaningless (in relation to taxation) simply because the goal
> and scope of taxation in a government that fosters a free market econom
> is different. That type of government does not provide anyhere near the
> same level of services, so dramatically reduced income is perfectly
> acceptable.

The world has not yet furnished us with an example of a modern
first-world nation without a large, expensive government. You'll
probably argue this is because government will grab whatever it can get,
and in large, rich economies it can get quite a lot. But while that
might not be entirely off the mark, I'd argue it's closer to the truth
to say that large, rich economies can only be built on a framework of
public infrastructure and services that costs a lot of money to run.

[snip]

--
"It's in our country's interests to find those who would do harm to us and get
them out of harm's way."
-- George W. Bush in Washington, D.C., April 28, 2005
.

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