Quote:
Originally Posted by Mason Malmuth
Hi Money:
I agree. But you left out the idea that the tax cuts should grow the economy enough so that more tax revenue is collected in a he long run. This means s the gamble of the tax cuts.
Mason
Quote:
Originally Posted by well named
The problem with this idea is that there's a great deal of empirical evidence that it's not true given current marginal tax rates. The Bush tax cuts, for example, were clearly not self-financing in this way even prior to the crash. Laffer gets a lot of hate but even he recognized it was a curve, not an absolute truth.
To build off of this, I think applying poker concepts like expected value etc, to other aspects of life has helped me and looking at this "gamble of the tax cuts" it's pretty clear to see the angle shooting going on here.
First, the tax cuts are not distributed evenly, the richest get the biggest benifit while the poor are getting relatively paltry cuts and in some cases increases. Second, Republicans are already pushing for spending cuts to offset the tax cuts so the costs are going to be be borne by the poor of the country.
Third, we might say that that's because we're making a bargin; cut taxes, cut spending and this will unleash creativity, inequality might increase, but that's OK because the rising tide rises all boats. That's the deal they've made in China, inequality has increased but millions have risen out of poverty.
That's clearly not the case in the US. The median worker's wages has barely increased and in some cases decreased in spite of numerous tax cuts and spending cuts and inequality has exploded. Hard to say that this "gamble" is done in good faith given the past history and the risk vs payout.
Last edited by Huehuecoyotl; 02-05-2018 at 07:32 PM.