"Analyst: Obama Would Be A Nightmare For Defense Programs, Firms"

On Apr 23, 11:45*pm, "dott.Piergiorgio"
wrote:
Dan ha scritto:

Recall the Reagan tax cuts followed by increases in federal
revenue followed by a spending orgy by the Congress?)

Someone can explain to me the contradictory justapoxition of "tax cuts"
and "increases in federal revenue" ?

When we in the USA talk about tax cuts, we are real talking about
income tax rate cuts.

Our problem is that most people think that all you have to do to
increase governement revenue is increase the income tax rate. This is
true for people is the lower tax rates, but not true for people in
higher tax rate. That is because as income tax rate grow, it effect
how people generate income. The higher the income tax rate, the more
adventagest for people to do things to avoid being taxed on their
income. This reduces the amount of money the government take in. To
make things worst, this effect gets exponentually bigger ( more lost
revenue) as the taxs rates grow higher.

Now at some point, the lost in revenue outstrips the increases revenue
from the higher tax rate, increasing tax rate above that point results
in the government losing money.

Now some people claim that all the government has to do is pulg up
'tax loop holes' to 'fix' the problem, This does not realy work, since
there is two loopholes that can not be filled. One people can deal
taking their profits and let their current investment grow (very bad
for the economy) and secong they can invest their mont were the
government can't get it.