CBO refutes/disproves long standing GOP claim that tax cuts increase income

[niceypoo]

The GOP lie about tax cuts for the rich, surprised. If I can find this in five minutes of research why can't the congressional democrats find and use it? The Democrats in congress need to make a huge chart out of this and stick it in the republicans faces every time they lie and claim that tax cuts for the rich increase revenue. On the contrary, they reduce revenue:

*Note the massive plunge when Bush takes office



Revenue has nosedived since the Bush tax cuts. So does this mean that 3 - 1 doesn't = 4?

Here is the document that this chart comes from

[fasttense]

1. Well they are certainly being optimistic in their projections.

The Congressional Budget Office has absolutely no evidence that revenues will increase yet that is exactly what they projected from 2004 and onward. This must have been made before the 2004 elections by the neocon congress.

Notice the revenue peak in 2000 and the continued downward trend after 2000. Yet in the CBO's projections, they have Revenues making a sudden upward turn. Wasn't 2000 when the neocons and the bushes decided to complete a hostile takeover of America?

[NYVet]

2. Your table is a little misleading

The title shows revenue and outlays as a percentage of GNP, NOT the total revenue.

Furthermore, if you read a little more into the report, you will see that the CBO projects that income tax revenue will increase. (Page 22 to be specific)

[niceypoo]

3. This isnt "my" chart, for one...

and revenue, in the projection, never reaches the level it was at in Clintons last year. We are continually told by the republicans that income has increased due to the tax cuts for the rich. That is a total lie. It always has been a lie and always will be a lie.

[Blue Meany]

4. Anyone, who think that cutting taxes will increase revenues

is like the businessman who loses money on every sale but thinks he makeing a profit because he has a high volume of sales. Come to think of it, Bush lost money on all his business ventures, so maybe he actually believes this nonsense.

[NYVet]

5. Do you have the tax revenue from the clinton years to post in comparison?

Because I did the routine google search and could not find it.

[niceypoo]

17. See the chart:

It's pretty blatant.

[NYVet]

18. The chart shows revenue in relation to GNP, it does NOT show revenue.

Look at the title of the chart please...

[riqster]

6. Small Correction...

Bush never lost money on those ventures. Others did, but he was always bailed out.

[The Backlash Cometh]

7. The reason why the Republicans failed is because we are all now

paying more for everything, and since the essentials have to be paid first, all those entrepeneurs who started their little businesses that sell non-essential things, are screwed.

[pampango]

8. Only if the initial tax rate was 100% would cutting the rate generate more revenue.

At 100% no one would want to work (without a whip on their back) because all of their wages would go to the government, so there would be no income to tax hence no revenue.

At a 0% tax rate obviously the government has no revenue. The question really is at what tax rate under 100% does cutting the tax rate stop increasing revenue. My WAG is that it is at around 70 or 80%, but I admit I base that on absolutely no research at all. ;)

[EVDebs]

9. $300 billion in repatriated earnings could be what is 'paying' for the Iraq adventure

...begging the question what were all those foreign profits doing just sitting offshore there anyhow ? This is what the article below states,

" Due to the surge in repatriations, companies are flush with cash, which is being used for capital investment, job creation, M&A activity, dividends, and share repurchases.
The U.S. government will receive $17 billion of corporate tax revenue collections in addition to the less quantifiable, indirect impact of higher income, payroll, and corporate tax collections."

http://taxprof.typepad.com/taxprof_blog/2006/03/asa_calls_tax_c.html



Job creation ? The economy lately hasn't created a net new job,

Job creation showed virtually no growth
http://www.fxstreet.com/fundamental/market-view/us-weekly-recap/2007-09-12.html

and as this thread shows, if there were any profits or tax cuts they went to 'Bush's Base' the richest 1 and 1/2 percenters

Surge in profits and jobs, or a surge in paying for the Iraq Occupation, at least 3/4ths of it ?

$453,000,000,000 +/- so far
http://www.nationalpriorities.org/Cost-of-War/Cost-of-War-3.html

The 'globalization' beggar-thy-neighbor policies and a rising cost of oil, which will doom globalization in the long run anyway, are waking businessmen up to their own foolishness. Destroying the economy here at home in order to create false profits, while always pocketing most for their own coffers, isn't smart or moral. But what goes around comes around.

Beware of False Profits !

[gaspee]

10. Everyone knows it

On an instinctual level, yet they continue to believe the lies. Sigh.

[Pawel K]

11. Yes, that's what american people want to see...more charts.

And to think we have been losing all those elections.

[EVDebs]

12. Eh, that 1997 balancing of the budget shows up on that chart

Maybe the American People needz an edication, and the 'projected' area of this chart is from Area 51 Dreamland !

Care to discuss this with the American People ? Didn't think so. Back to readin' bumper stickers.

And CEO war profits should keep the hoi polloi somnambulized,

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x1846533#1846654

[hughee99]

13. They reduce revenue?

If I understand this chart http://www.irs.gov/pub/irs-soi/histab18.xls correctly, it looks like tax revenues have gone up every year, with the exception of 2002 to 2003. I'm not saying they were good, just that it's a very tough sell to try to convince someone they will reduce revenue.

[NYVet]

14. Thank you Hughee for that chart

I spent time looking for that and I must not have looked in the right spot.

[neoteric lefty]

15. here is the actual chart from the link you cited that is includes

2005 and 2006



Looks like revenues have increased, but I give this more credit to the economy "rebounding" and it is still nothing compared to the Clinton years. Still pretty shocking that over the last 40 years, our gov't has spent an average of 3% more than it took in in taxes. I don't even know if this includes ALL gov't spending.

[niceypoo]

16. Increased? lol

They have barely made up half of what they lost after Clinton's last year, I hardly call that an, 'increase.' *Hint: everything after the dotted line is PROJECTED!

[neoteric lefty]

19. well

the original chart was data up to 2004 (plus projections) which shows that a big dip in revenue as % of GDP. The chart I found in the CBO document that includes up to 2006, which does show an increase as % of GDP. Now, I'm no economist and I'm not sure if revenue/outlays as % of GDP is a valid economic comparison, but there is an increase in the two years after the original chart ended actual numbers in the updated chart. I'm not making any conclusions, just saying that there is a chart that is more updated than the original one.

[pampango]

20. Looking at that chart what jumps out at me is that the main determinant

of revenue is the health of the economy.

It also seems to be true that current revenue seem to be about 19% of GDP, while it peaked at about 21% in 2000 under Clinton. That difference of 2% of GDP means that if GDP has grown by more than 2% since 2000, then there is more revenue now than in 2000. It is obvious that revenue did decline in 2001 to 2003, but 2001 was before the tax cut was effective and my guess is the GOP would just say that it takes a while for cuts to improve the economy.

Even if that is true, however, it does not excuse tax cutting for at least two reasons. One is on grounds that it is immoral to increase the inequity of the tax structure and put more of the burden on the middle class. The second is that, even if revenue can increase in the face of a tax cut (justifiable only if there is a causal link between the tax cut and an improved economy), it would have increased even more if not for the tax cut (assuming the economy would have improved anyway.)

The cons would spin this as "See. Cut taxes and revenues increase. It just takes a while." We would respond "Revenue would have increased much faster without the cuts. And it is immoral to shift the tax burden from the wealthy to the middle class."