More on Supply Side
The Maximum Leader and I have been bashing each other with Laffer Curve shillelaghs recently.
To catch you up:
The Maximum Leader hails the recent unexpected reduction of the deficit as evidence that we are on the right side of the curve.
I shot back with this.
Mike claimed that I was actually making his point here.
Mike and I were both off-track in the second and third posts. The real determination of where we are on the Laffer Curve isn't based on a reduction of the predicted shortfall. The acid test is whether or not total tax receipts have increased or decreased as a result of the Bush tax cuts. The deficit may not be as bad as predicted, but this does not tell us whether or not the total collected taxes have risen or fallen. The deficit is somewhat independent of the amount of taxes collected. If our congress, to mix metaphors, dipsenses pork sandwiches like a bunch of drunken sailors, they can drown any amount of tax receipts in a flood of red ink.
So let's set aside the budgetary proclivities of our duly elected representatives for a moment.
If we are to settle, once and for all, where we are on the Laffer curve, we have to look at whether tax cuts have generated an economic surge sufficient to actually increase revenues even though the total tax burden is a smaller percentage of the GDP. (Of course, we'd have to adjust a bit for inflation, but that's been pretty mild of late.)
If 2004 tax receipts are greater than the 2001 tax receipts, Mike is right. We were on the right side of the Laffer Curve and Smallholder will have to confess his error.
If 2004 tax receipts are less than the 2004 tax, I'm right. We were, and still are, on the left side of the curve and the Maximum Leader will have to confess his error*.
I'm not very good at finding numbers stuff on the internet. Can anyone find a site that shows the total taxes collected by the IRS on an annual basis? Please let us know.
* Actually, the Maximum Leader will just ignore evidence contrary to his world view and sing "la-la-la."
To catch you up:
The Maximum Leader hails the recent unexpected reduction of the deficit as evidence that we are on the right side of the curve.
I shot back with this.
Mike claimed that I was actually making his point here.
Mike and I were both off-track in the second and third posts. The real determination of where we are on the Laffer Curve isn't based on a reduction of the predicted shortfall. The acid test is whether or not total tax receipts have increased or decreased as a result of the Bush tax cuts. The deficit may not be as bad as predicted, but this does not tell us whether or not the total collected taxes have risen or fallen. The deficit is somewhat independent of the amount of taxes collected. If our congress, to mix metaphors, dipsenses pork sandwiches like a bunch of drunken sailors, they can drown any amount of tax receipts in a flood of red ink.
So let's set aside the budgetary proclivities of our duly elected representatives for a moment.
If we are to settle, once and for all, where we are on the Laffer curve, we have to look at whether tax cuts have generated an economic surge sufficient to actually increase revenues even though the total tax burden is a smaller percentage of the GDP. (Of course, we'd have to adjust a bit for inflation, but that's been pretty mild of late.)
If 2004 tax receipts are greater than the 2001 tax receipts, Mike is right. We were on the right side of the Laffer Curve and Smallholder will have to confess his error.
If 2004 tax receipts are less than the 2004 tax, I'm right. We were, and still are, on the left side of the curve and the Maximum Leader will have to confess his error*.
I'm not very good at finding numbers stuff on the internet. Can anyone find a site that shows the total taxes collected by the IRS on an annual basis? Please let us know.
* Actually, the Maximum Leader will just ignore evidence contrary to his world view and sing "la-la-la."
posted by Anonymous at 5/18/2005 08:21:00 PM
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