Budget deal savings less than advertised - Page 2 - New England Patriots Forums

The Brandon Five · 04-14-2011, 11:35 AM

Quote:

Originally Posted by JackBauer

Allowing the Bush tax cuts to expire on the top earners will raise revenues. I'm not even sure what you're arguing here.

I think he is referring to the Hauser effect or Hauser's law, which is the idea that the amount of revenue that can be raised is bound between ~15% and ~20% of GDP regardless of marginal rates. I don't think we are at the upper end of that range right now and actually were below the historic range in 2008-2009 so it may be that an increase in rates will raise revenue. The argument against it is that doing so will slow down the economy or cause changes in behavior (people realize less income and capital gains to avoid the higher taxes) so that while rates increase, revenues stay the same (or even decrease).

Hauser's Law - Wikipedia, the free encyclopedia

Quote:

Hauser's Law

Hauser's Law is a theory by one economist that postulates that in the United States, federal tax revenues will always be equal to approximately 19.5% of GDP, regardless of what the top marginal tax rate is. The theory was first suggested in 1993 by Kurt Hauser, a San Francisco investment economist, who wrote at the time, "No matter what the tax rates have been, in postwar America tax revenues have remained at about 19.5% of GDP."[30] Critics of Hauser's Law, such as Zubin Jelveh in a Wall St. Journal editorial, point out that tax revenues have fallen as top income rates declined if you don't include Social Security revenues.[31] From fiscal year 1946 to fiscal year 2007, federal tax receipts as a percentage of gross domestic product averaged 17.9%, with a range of 14.4% to 20.9%.[32] During the years referred to by Hauser (FY 46 to FY 93), the average was 17.7% and the range was 14.4% to 19.7%.

***patsfan13*** · 04-14-2011, 11:38 AM

Which is why a Flat Tax at a 17% rate is the most efficient and will grow the economy.

chicowalker · 04-14-2011, 11:43 AM

Quote:

Originally Posted by The Brandon Five

"You know, I do believe this ship may sink." - Spicer Lovejoy in Titanic

NationalJournal.com - CBO Says Budget Deal Will Cut Spending by Only $352 Million - Wednesday, April 13, 2011

Coupled with the performance this afternoon by the POTUS, I am beginning to lose hope.

Ridiculous that the sides were pretending there differences were so earth-shattering that they would shut down the government over it.

What was your take on Obama's speech? (didn't watch)

JackBauer · 04-14-2011, 11:46 AM

Quote:

Originally Posted by patsfan13

Which is why a Flat Tax at a 17% rate is the most efficient and will grow the economy.

A flat tax is regressive. There's a reason we have a progressive tax structure; the economy is most efficient under said conditions.

chicowalker · 04-14-2011, 11:49 AM

Quote:

Originally Posted by JackBauer

A flat tax is regressive. ...

How are you getting to that conclusion?

Quote:

Originally Posted by JackBauer

... There's a reason we have a progressive tax structure; the economy is most efficient under said conditions.

Evidence for this?

JackBauer · 04-14-2011, 11:49 AM

Quote:

Originally Posted by patsfan13

The dems have been a total disaster and it ain't getting any better.

Well, you better get used to it because Obama's re-election looks more and more likely with each passing day

JackBauer · 04-14-2011, 11:56 AM

Quote:

Originally Posted by chicowalker

How are you getting to that conclusion?

Because a sales tax is one of the more regressive taxes and a flat income tax would be similar in nature and effect.

Quote:

Originally Posted by chicowalker

Evidence for this?

Not to be glib, but: The United States?

No, but really. Progressive taxes allow greater disposable income for mid-range earners (i.e. the middle class), which creates the largest base of demand for goods and services.

chicowalker · 04-14-2011, 12:31 PM

Quote:

Originally Posted by JackBauer

Because a sales tax is one of the more regressive taxes and a flat income tax would be similar in nature and effect.
...

A sales tax is regressive because the notion of a tax being "regressive" uses income as a base.

A flat tax should be neither regressive nor progressive, unless certain assumptions are being made about the "flat" tax (expemtions, etc.)

Quote:

Originally Posted by JackBauer

...Not to be glib, but: The United States?

No, but really. Progressive taxes allow greater disposable income for mid-range earners (i.e. the middle class), which creates the largest base of demand for goods and services.

That may be the case in theory, I'm just wondering if there is empirical support.

Gainzo · 04-14-2011, 12:52 PM

Quote:

Originally Posted by patsfan13

Which is why a Flat Tax at a 17% rate is the most efficient and will grow the economy.

Is that just the Federal tax rate? What about State taxes? Social Security? Medicare?

Let's say an individual makes $30K a year. Under your flat tax plan their take home pay would be $24,900. Add in the above and they would probably take home around 22K a year or around $1850 a month.

On the flip side if an individual makes $300K a year they would take home $249,000. Include the other stuff and they are probably looking at taking home around $218k a year or 18,000 a month.

You have no problem with this?

The Brandon Five · 04-14-2011, 01:24 PM

Quote:

Originally Posted by Gainzo

Is that just the Federal tax rate? What about State taxes? Social Security? Medicare?

Let's say an individual makes $30K a year. Under your flat tax plan their take home pay would be $24,900. Add in the above and they would probably take home around 22K a year or around $1850 a month.

On the flip side if an individual makes $300K a year they would take home $249,000. Include the other stuff and they are probably looking at taking home around $218k a year or 18,000 a month.

You have no problem with this?

I think the FAIR Tax plan (a flat tax proposal) allows for no Federal tax liability for a family of four making less than $30,000.

Americans For Fair Taxation: Frequently Asked Questions Answers