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Rick Abell: Lower taxes, lower revenue

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Ms. Schubert-Akin has stated the tax burden is high and being spent by "far-off bureaucrats.” Almost half of all federal expenditures go to entitlements like Social Security and Medicare/Medicaid, and another large chunk goes to payments on the national debt and defense. 



While it easy to point out that taxes might be high, it would be interesting what Ms. Schubert-Akin would cut to make up for the loss in revenue at the federal, state and local level.

There's no such thing as a free lunch. If revenue goes down, expenditures must be reduced unless one desires to continually increase the national debt until all revenue is used to pay interest to federal, state and local bond holders.

Rick Abell

Steamboat Springs

Comments

Eric Morris 1 week, 1 day ago

Lower government "revenue" equals higher personal net. How is that bad? Repudiate these debts; bond buyers have enabled many immoral things like war and crony corporatism. Let the idiot bond buyers suffer, just like North Koreans, Cubans, Iraqis, Afghans, Vietnamese, Syrians, Laotians, Cambodians, and Libyans have suffered on the other end of those bombs paid for with those bonds.

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Fred Duckels 1 week, 1 day ago

The Laffer curve is always valid.

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Dan Kuechenmeister 1 week, 1 day ago

"It is a paradoxical truth that tax rates are too high today and tax revenues are too low, and the soundest way to raise the tax revenues in the long run is to cut the tax rates." John F. Kennedy

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Scott Wedel 1 week, 1 day ago

Revenues can rise when tax rates are so high that financial decisions are being made primarily to avoid paying taxes. JFK lowered the top marginal rate from 91% to 70%.

The Laffer Curve does not state that lowering taxes always increases revenues. It argues that tax rates above some level reduces economic activity more than it increases tax revenues. It also acknowledges that when rates are below that critical level than lowering tax rates then also reduces revenues.

For instance, the amount of overseas earnings that corporations are leaving overseas instead of repatriating serves as strong evidence that tax rate is too high. In contrast, there is much less evidence that US citizens are declining to earn money because it is tax too highly.

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Dan Kuechenmeister 1 week ago

no need for further discussion on this topic. The great and powerful Oz has spoken. https://www.youtube.com/watch?v=YWyCCJ6B2WE&app=desktop

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Scott Wedel 1 week ago

Plenty of room to dispute me if you have facts, research or just opinion.

All I did in my post is point out the fact that the Laffer Curve does not claim that lowering tax rates always increases revenues. Apparently, that creates too much of an obstacle for some to consider discussing the topic.

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Dan Kuechenmeister 1 week ago

A wise person once told me not to use the terms always or never.

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Lock McShane 1 week ago

The problem with the Laffer Curve is that it is extremely difficult to determine where we are on the curve. Kansas cut taxes and revenues decreased, so they were on the wrong side of the peak for tax cuts to increase revenue. I think that most jurisdictions lie on the same side of the peak as Kansas and that increasing revenues will require growth and/or increased taxes.

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Dan Kuechenmeister 1 week ago

Raising taxes seems to often be the "easy" answer. It may not be the right answer. Lock, do you have an optimal income tax percentage that should be imposed.

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Lock McShane 5 days, 10 hours ago

I would say the optimal tax rate is that which pays all of the government's bills. Congress can establish a budget, and then determine the tax rates required to pay for that budget.

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Dan Kuechenmeister 5 days, 9 hours ago

Lock, thanks for the reply. I may be missing something so I apologize, but it appears that you are saying the government has a blank check and we the taxpayer are responsible to pay the tab regardless of the cost. I guess I didn't ask my question correctly. Is there a point at which you would say enough, no more taxes, it's time to cut spending.

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Lock McShane 3 days, 15 hours ago

Determine how much you are going to spend, the Federal Budget, then set the rates to pay for the spending. This covers both decreases and increases in spending. Plus, the rates can be set a little high, so as to pay down the debt.

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Scott Wedel 1 week ago

Kansas appears to have hurt the state's economy by cutting taxes as it reduced services enjoyed by the public. The cuts to public education appears to discouraged professional people that care about their children's education from moving to Kansas and instead encourage some of them to leave. It also appears that some of the government spending in Kansas was stimulative.

I will not be so bold to propose that taxes should be set to get the maximum tax revenues according to the Laffer Curve. Maximum revenues for government is not something that I see as a worthwhile goal.

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