On Apr 26, 10:20*am, Mark Sieving wrote:
On Sat, 26 Apr 2008 06:48:00 -0400, Cubdriver usenet AT danford DOT

net wrote:
Sure. Federal revenues today are higher than they were in 2000. That's
because Bush cut taxes.

This is what is technically referred to as a post hoc ergo prompter
hoc fallacy.

Federal tax revenues for 2007 were about $100 billion more than in
2000. *Federal tax revenues were about $1,000 billion more in 2000
than they were in 1992.

While there's no doubt that an excessive tax rate will reduce total
revenue, total tax revenue has been increasing pretty steadily for the
past forty years, regardless of whatever tweaks have been made to
marginal tax rates. *The exception to that steady increase was in GW
Bush's first term, between 2000 and 2003, when total revenue dropped
about 400 billion dollars.

The problem comes when people think in terms of the gross economy and
gross taxes/tax rates. The believe created during the Reagan years
that all taxs cuts will cause economic growth that will in turn
increase tax revenue was based a wrong understanding of the Laffer
curve. This combined with some very poor economic education is the
reason for this myth continuation. Not all taxs cuts will increase tax
revenues or grow the economy.

The think we must remember is the economy is made up of hundered of
millions of individuals, each of which operates in what they consider
their own self interest. What we know as the gross national product
(GNP) is the summation if all these individual income. Now while must
people think every body acts the same in the everybody else, the
reality is that everybody acts different, because nobody situation is
the same. Therefore it is impossible to model our economy using gross
method, it can be done only by complex multi dimension models that
take these individual differneces into account.

Now consider that with our progress tax rates system, some of those
individuals, the rich productive ones, are given less incentive to
produce that those which are taxed less becuse of the high tax rates
they are force to pay on income.. The rich therefore start producing
less, or at least producing less of what is taxed ( ie income). This
result of course in decreased government revenue since there is less
to taxs, And since the wealth poeple control such a large percentage
of the GNP, they produce a extremel high proportion of the
governement take revenue. Which means as they produce less, the
governments revenues fall even quicker.

From these points it becomes clear that if the lawmakers want to
increase government revenues, they must reduce the tax rate paid by
the rich and forget making tax cut for the poor.

One more thing, since the rich will be provided with increased
incentive to generate income, they will naturally increase the income
they produce. That inturn will increase the GNP which is the
measurement of the size of the economy most often used. This is why
cutting taxes of the high income people, the 'rich', is responsible
for 'economic growth.'