What don't you like about John F. Kenndy? Yes, a Democratic President proposed tax cuts and they ended up increasing revenue. Reagan proposed tax cuts and Republicans and Democrats in Conggress passed them; revenue shot up as a result. What was the problem? Spending went up even faster because Democrats in Congress would not agree to spending cuts or even holding the line on spending. Fast forward to Bush II's tax cuts; after a lag time revenue has also shot up, but again spending has skyrocketed upward. Now here, Republicans deserve most of the blame as they control Congress and Bush has so far failed to veto a single spending bill or any bill for that matter.

Mr. Sheketoff would cancelling the tax cuts(in a affect a tax increase), put one more penny in a poor or lower middle class pocket? I'm afraid not. More likely, it would cause inflation which notoriously affects the poor and lower incomes groups more that the rich. Do we need to get ahold of spending and balance the budget? yes, most definitely. But reduced spending and a tighter labor market so poor Americans can bargain more effectively is a sounder approach.
Whats your position on illegal aliens because they are what depress the labor market and take jobs from American workers. Illegal aliens take money for social services which wasn't spent on them would leave more money for the social safety net for truly needy Americans.

So whats your position Mr. Shetekoff?

Let me get this straight, Jim. If we were even to publicly debate the contents of the Tax Expenditure Report, it "would cause inflation which notoriously affects the poor and lower incomes groups more that the rich"?

I don't think so.

I was in high school when JFK was shot, and the economy is SO much diff. now than it was then that I think anyone who uses JFK tax cuts in a debate is really one of those anti-tax activists who I don't trust.

You can't say:

Taxes were cut Government income then increased Therefore, tax cuts increased income.

Unless you're David ThinkNotTooHard. It's patently ridiculous. You could also say: pickle purchasing increased. Government income increased. Therefore, pickles cause the economy to improve and government to get more income.

You have to do a regression analysis and surveys; most surveys find the marginal influence of tax rates on investment is minimal.

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Lets take these issues one at a time. 1. Tax cuts don't stimulate the economy. What is human nature? Answer: the more a person gets rewarded the harder they work. If you want to seriously challenge that assertion I will wip out chapter and verse. But it is so clear on its face as I don't feel it is necessary. Why do center/left folks try and deny human nature? Because it doesn't fit their ideology. 2. Is there a point where the cuts would never stimulate enough additional revenue to overcome lost revenue from the tax cut? Yes, do we know exactly where that point is located? No. 3. Look at the numbers; there is a very substantial corollation between tax cuts and revenue increase. 4. Why is John F. Kennedy's tax cut not instructive? Whats so different today from his era? 5. Why do center/left folks always seem to like tax increases? 6. How high would center/left folks like to raise taxes, in other words, how much is enough? 7. No challenges to my labor analysis regarding illegal aliens, or that they take money, otherwise, which would be available for a social safety net for truly needy Americans?

The strong refutation that is attempted against my assertion (about beneficial affects of tax cuts) tells me that there is something which strikes at the very heart of the center/left's ideology. What element is so threatened?

1. Tax cuts don't stimulate the economy. What is human nature? Answer: the more a person gets rewarded the harder they work. If you want to seriously challenge that assertion I will wip out chapter and verse. But it is so clear on its face as I don't feel it is necessary. Why do center/left folks try and deny human nature? Because it doesn't fit their ideology.

This is a very interesting answer to what is human nature?

But, the equally logical thing to argue would be that humans are looking to raise a certain amount of money to live a certain way. If taxes are cut, they will work less, and government will get less revenue. If taxes are increased, they will work harder, to bring in the same amount of money, and the government will get more revenue.

Therefore, tax increases spark the economy.

It depends on whether you believe that people (a) have set their leisure v. work balance perfectly; or (b) have set their income level perfectly; or (c) are dissauded from working harder because a tax is at 31% instead of 28%.

All are interesting assertions, and I think all are incorrect.

Mr. Cheketoff: I did go and look at the graph you provided. Thank you. 1. The graph does not look at revenue, but deficits. I would submit if you provided a graph of revenue it would be going up reflecting increased revenue. 2. The graph reflects current spending projections which at this point would continue the skyrocketing increases in the last years under Bush. Bush has not been a limited government type spender. 3. To take the assertion that people do not work harder if rewarded more, but work for a certain comfort level as a given(for this answer only), I would say: Each person sets their comfort level, why sould government make it harder to reach that comfort level by taking more income off the top. 4. Of couse, it is a balancing act because we need a basic level of government, limited government does not mean(at least to me)no government, but because I believe people are most happy when they are able to persue their own interests and act independently directly with other people without a third party(government)involved I look to a level of government which allows as much freedom of action as possible. The more money a person is left with the more freedom of action is left(money equals freedom of action).

"What is human nature? Answer: the more a person gets rewarded the harder they work. If you want to seriously challenge that assertion I will wip out chapter and verse. But it is so clear on its face as I don't feel it is necessary."

Some of the hardest working people I know are working for minimum wage. Financial rewards are very recent accross the breadth of human history. The respect of one's peers has always been the most important reward.

Our economy does best when people buy stuff. Rich people have all the stuff they need. Giving them more money isn't going to do much for the economy. When the lower and middle class have more money, they spend it and everybody does better. The tax cuts are helping to cut off money that can help the lower and middle classes. Our middle class is getting wiped out(with help from outsourcing, GAT, NAFTA, and WTO) and that is killing our whole economy.

Fiscal conservative Chuck Sheketoff thinks that high deficits resulting from the proposed federal budget will be harmful to our economy and our future. I agree on the latter, not sure on the first. Deficits typically stimulate economic activity in the short run, and sometimes longer. Why do they not ensure long run prosperity? I think they sometimes do help the long run. Deficit spending in the depths of a recession can, in theory, restore an economy to normal growth. During the resulting prosperity, the economy, again theoretically, can then run a surplus and pay back the borrowed money. Doing so might help quell inflationary pressures. We are not following that traditional Keynesian model.

Contrary to the scene just described, we are in a recovering economy that continues to accumulate large deficits. In addition, we have record breaking external deficits. I believe that no combination of tax cuts, or higher taxes on the rich for that matter, can shield us from the power of historic changes in our circumstances. Our diminishing energy reserves demand high energy imports to maintain a strong economy. Yet, cutting oil use would also cut production and perhaps bring even greater problems. The American and British industrial revolutions have now spread to other nations, China, India, and Taiwan being just three. We may never be able to reclaim our post-WW2 production edge. Higher taxes on the rich? Maybe, but the very rich now provide most of our domestic savings and investment capital. Perhaps higher taxes would not affect savings or investment, but where is the analysis?

For the first time in our history, people have negative savings. Most people's incomes are down. They are tapping out their credit cards or borrowing against their home equity to try to maintain their standard of living I am a small business man who makes and sells non-essential items. I see my customer base shrinking and most of those who do buy, buy less. My costs are rising rapidly mostly due to increased energy costs. I am not alone. The same is true for most of the people I know in similar circumstances. Here is my question. I keep hearing that we are in a "recovering economy". Just what makes this a "recovering economy"? Is it oil company and haliburton profits?

The Laffer curve is good theory. At some point increasing taxes will no longer increase revenue (i.e. 90% tax brackets). Also, tax cuts will some times increase revenue (i.e. cutting taxes from 90% to 50%). The question has always been -- "where are we on the Laffer curve?" That question would be difficult to answer even in a very simple economy with a very simple tax structure. The tax structure in the US draws from so many sources (payroll, income, property, sales, capital gains, etc.), has so many collectors (federal, state, local), and has so many adjustments to income (home mortgage deduction, medical expenses, etc.) that it's probably impossible to draw a connection between decreases/increases in federal tax rates and microeconomic behavior on the part of taxpayers. So, arguing about the tax policies of Kennedy, Regan, Bush, Clinton, etc. probably sheds more light on the economic assumptions of the authors than the economics of tax policy.

What really confounds me about these tax debates is the whole-hearted support from the left for increasing government revenue. Think about all the bad things that the government does. Really, it's easy (international wars, drug war, oppressive educational system, over-regulation of small businesses, etc.). Why do people on the left continue to believe that more government is the answer?

First of all, when there are too many taxes then YES tax cuts do stimulate the economy, but only when they are given to those who need it. I voted for Reagan and bought into the trickle down economics. It proved to be bullshit as making the rich even wealthier ends up with them having more money in the banks, not buying more. They same amount of money divided by 1000 low or middle class workers would stimulate the economy in a far greater way.

Reagan did spread it out a little better than Bush 2 and the revenue coming into the government more than doubled. To finance the Cold War even harder, spending also increased in defense spending. Along with the dems in congress, the recovery was fueled more by defecit spending than a real boom.

Defecit spending in times of need is great. That idiot FDR wouldn't do it, while other countries did, and the U.S. had two recessions almost in the middle of a depression.

The secret is that you can't keep spending money you don't have. The magic wears off and like Bush SR, you are forced to deal with it by raising taxes.

So, Bush Jr comes along and wants to stimulate the economy. So, he cuts taxes and interest rates and does a lot of deficit spending. Anyone want to guess if he applied the taxes correctly, spent the money wisely, or understads it can't be forever? I voted for the turd twice and can't believe how stupid he is.

Whichever Democrat wins in 2008 will inherit the biggest and ugliest cat box in the history of the world. All our jobs are being given away. There is no recovery that can be made. Look around because other than a few hiccups this is the best it will ever be. Children today will grow up and ask, "Who stole my future?"

because I believe people are most happy when they are able to persue their own interests and act independently directly with other people without a third party(government)involved I look to a level of government which allows as much freedom of action as possible.

Jim, I hope that view is not confined to economics. On the radio show Marketplace, during the "coming up " segment at the end of today's show, they announced a future story on the plight of a single mother whose child care arrangements fell through (or maybe the kids are sick and child care won't accept them until they get well). Should the mother go to work or risk losing her job? Or should she stay home with the kids because they need her and/ or because leaving them home alone could cause her prosecution for child endangerment? Or is that just between the woman and her employer and economics is about theory and statistics, anyway, not about real life situations?

The problem some of us have with your economic independence argument is that not everyone has choices (people laid off due to downsizing or restructuring who have to take whatever job they find, for instance) and very often the politicians who voice that economic independence argument also oppose abortion rights, wanted to tell Terri Schaivo's husband what medical decisions to make, etc. Economic freedom but not personal freedom? And do you support non-discrimination laws? Or should gays or people of a certain nationality or skin color or whatever just be told they have "independence" and should just never get upset if they are discrimated against in employment?

Hey regulars, I've liked reading your posts over the past few weeks, and forgive me, but my first post is going to be a gripe. Why let yourselves get distracted by a ding-dong like Jim Evans? Chuck Sheketoff provided a cool starting point, Jim Evans hijacked the discussion with the first reply, and everyone responded to Jim's rant instead of Chuck's starting piece. I'm all for back and forth discussion, but does anyone think they are going to convince this guy? He strikes me as craving attention. There's a trick my mom taught me to deal with obnoxious kids on the playground -- ignore them and they will go away. Sorry, Jim, but I think you're on the wrong site.

The strong refutation that is attempted against my assertion (about beneficial affects of tax cuts) tells me that there is something which strikes at the very heart of the center/left's ideology. What element is so threatened?

See what I mean? No one responded to his provocative rant on immigrants and social services, so he followed up with a psychoanalasys of the "center/left."

Let's get back to Chuck Sheketoff. The OCPP is cool.

oops -- psychoanalysis.

You must remember this -- Davey "I'm Cutting and Pasting This Crapola As Fast As I Can" Reinhard was, is, and will always be, a James Watt waterboy.

But no one hits the Greedy Old People buffet like Davey -- probably stuffed a couple of muffins in his new Dockers suit for the long ride home.

BTW, cuffs are out, Davey. So is orange.

We can have our cake and eat it too... Tax what we don't want and don't tax what we do want. Income is a good thing, so don't tax it. Pollution is a bad thing, so tax the hell out of it. Recently the NYTs had an article regarding tax shifting. Any income tax cut would be accompanied by a concurrent and revenue neutral tax increase on gasoline or some sort of carbon taxing regime. Sure, some individuals and industries would be hurt, but we could use some Schumpeterian creative destruction. We could also tax the heck out of mercury and any consumer poisons sold to make our lawns greener etc. The possibilities are endless, we just need creative and intelligent leaders to make the case. I'm neither a leader nor that intelligent so I'm out.

There are ways to tax smarter, not harder. A tax cut doesn't necessarily mean that something else has to go up to neutralize revenue... Look at Oregon's tax system -- anyone who doesn't get a W-2 doesn't have much of an incentive to declare their 1099's with the income tax the way it is.

Westlund's Tax Plan raises revenue and gives out tax cuts (except to tax cheats and tourists). Info seems backed by the Legislative Revenue Office.

I'd link to another candidate's plan, but everyone else just has platitudes.

I Like what Ron said: Tax Bad's not Goods. Tax what you do not want more of. Such as oil dependency. Such as traffic congestion because everybody shows up at the same time. Such as degrading political advertising.

I am an olde fashioned Republican, a Wayne Morse Republican. From the independent side.... That is the thinking side, and I confess I am lonely. I am olde but I can still remember. I am so olde I remember when Republican's were Capitalists... as is Adam Smith. That theory stated how wealth would be multiplied by comparitive advantage.... thus we would get richer if we could all trade with one another... like the middle class did in the late 40's and 50's. We multiplied Each Others wealth. We did not need to pay the transportation costs of gobblization.

There is a lot of non-sense about theoretical people following economist's assumptions. Some folks really believe in the prostitute logic of incentivation: namely people will do anything for money. The more money the more the incentive. Balderdash... just watch folks. There are all different kinds of 'em. Some think, some just react, some worship money, and a lot of Oregonian's would rather go fishin'.

I have observed this: If people are desperate, they will do anything... and money usually plays a part in that. The more money folks have, the more choices, the less desperate, the less 'incentivised' they are. The Laffer Curve is laughable and I thought all Republican's threw is out in Reagan's second term like Reagan did.

Now about the tax cuts. Taxes are like laws. Nobody likes 'em, but without 'em things get ornry. When do we have too many taxes? When you cain't figure them out. When do we have too many tax cuts? When we are going into the hole paying interest on the debt they are creating. Republican Commerce Secretary, Nebraska's Peter Peterson of the Concord Coalition says we are going in hock at a rate of $2.5 Billion................................................ a week! That is about a hundred bucks per taxpayer per week we are going in the hole. Our kids will not like us when they are old enough to figure out what we are doing to em.

Speaking of old, I am so old I remember when Republican's were phiscal conservatives. And speaking of kids, the State legislature is responsible for paying for thier education, so that when I get feeble, I don't get mugged. Anything wrong with that logic?

Anyhow I am so old I remember when Republican's respected the Constitution..... Oh, oh. I better not get started or I'll roll. As I said earlier. I feel lonely, but this dang country needs two parties to function..... and I can only think of one. The Big Enema Party.

Steven Maurer said:

"... the Swedish economic system resides. Their economy has a GDP nearly identical to ours, despite being much heavy use of a State directed model."

According to the CIA World Factbook, Sweden's GDP is $266.5B in purchasing power parity, $362.1B if you look at the official exchange rate, and $29,600 per capita.

The United State's GDP is approximately $12.5T or ~40 times larger. America's per capita GDP is $41,800 or ~1.4 times as large.

Also, Sweden's economy had real growth of 2.4%, less than the US's was 3.5%. Sweden's unemployment rate was 6% compared to the US's lower rate of 5.1%.

<h2>Note: this are all 2005 figures, according to the above cites.</h2>