Progs : Reality :: Reality : *p00f*
*waves to Laffer Curve*
Here’s a little coaching for the Progs—especially those in Congress considering the “Bush Tax Cuts.”
Don’t get scared, little Proglets. I’ll type slowly and include pretty pictures.
Over the past six decades, tax revenues as a percentage of GDP have averaged just under 19% regardless of the top marginal personal income tax rate. The top marginal rate has been as high as 92% (1952-53) and as low as 28% (1988-90).
Here’s that pretty picture I promised.
*
See the red line? See how it wanders all over the page? That’s the line you fools crazy kidz have been in charge of. One would almost think you were drunk. ...or something.
See that steady green line? Green means money. See how it stays pretty much the same no matter how drunkenly the red line wanders up and down? That’s known as a [big, scary word warning!] reality.
Let’s explore why:
Why? Higher taxes discourage the “animal spirits” of entrepreneurship. When tax rates are raised, taxpayers are encouraged to shift, hide and underreport income. Taxpayers divert their effort from pro-growth productive investments to seeking tax shelters, tax havens and tax exempt investments. This behavior tends to dampen economic growth and job creation. Lower taxes increase the incentives to work, produce, save and invest, thereby encouraging capital formation and jobs. Taxpayers have less incentive to shelter and shift income.
See Proggysaps? Less taxes = more growth = more money for everyone. Instead of squabbling over who gets a bigger piece of The Pie, we’re making More Pies for everyone. [You like pie, doncha?]
Wouldn’t increasing taxes be like gubbmint support for the tax shelter industry? Hm… I wonder who benefits from that?
As you Proggydorks keep telling us [and showing us]: if you want to discourage an activity, tax it. That’s the ‘reason’ you give for proposals to tax soda pop at the rate of 1¢ per ounce: “We think you’re too fat—stop being that! Or give us money.”
Here’s a special bit of [scary word warning!] reality you might wanna pay attention to, Proggytards:
On average, GDP has grown at a faster pace in the several quarters after taxes are lowered than the several quarters before the tax reductions. ...
This is explained once the relationship between taxes and GDP growth is understood. Under a tax increase, the denominator, GDP, will rise less than forecast, while the numerator, tax revenues, will advance less than anticipated. Therefore the quotient, the percentage of GDP collected in taxes, will remain the same. Nineteen percent of a larger GDP is preferable to 19% of a smaller GDP.
I know, I know; that’s faaar too complicated for a Proggyboobz to follow, involving big, complex words like denominator and quotient and all. But please, Proggydoltz. Stretch your minds back to second grade maths and give it a try, eh? I’ll copy/paste s l o wly for ya: try to keep up.
...the Obama tax increases are targeted at those who are largely responsible for capital formation. Capital formation is the life blood for job creation. [remember that three-letter word? J O B S?] As jobs are created, more people pay income, Social Security and Medicare taxes. As the economy grows, corporate income tax receipts grow. Rising corporate profits provide an underpinning to the stock market, so capital gain and dividend tax collections increase. A pro-growth, low marginal personal tax rate stimulates capital formation and GDP, which triggers a higher level of tax receipts for the other sources of government revenue.
See? More money in the economy = more money for gubbmint = more money for you Proggylunkheads to waste. Geddit?
So simple even a bitter, clingy wingnut can grasp it. Question of the Year, why don’t the Proggychumps geddit? Are they really that stoo-pud? Or, maaaaybe, possibly might be their Stated Agenda not be their Actual Agenda?
Oh, the Progladytes aren’t stooopid; they’re just following their *beliefs.* Religous belief isn’t amenable to argument by either logic or fact. Jesus rose from the dead; taxing the rich is “fair.” Facts to the contrary on either don’t matter when you Believe.
Posted by on 12/01/10 at 10:56 AMThere was an interview a while back, where Obama was asked about taxes on capital gains, and whether he believed that lowering capital gains taxes would be good for the economy.
He said, “Yes. But it wouldn’t be fair.”
Someone else, with perhaps a little more common sense, suggested that not only should we not raise the capital gains tax, we should lower it. Capital gains are oxygen for the economy. Or, as the quote says, life blood.
Now there’s an analogy I can grab hold of. Taxers of capital gains are blood suckers.
Posted by ZZMike on 12/02/10 at 07:44 PM
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