Quote:
Originally posted by KMA-628
Trolling (again) aside, my point was simple. If you look at the economic predictions that were used to justify the tax cuts, you will see that they came true.
Prediction: Lowering income taxes will actually increase tax revenue.
Outcome: Income tax revenue decreased while corporate tax revenue increased. This was followed by an increase in tax refunds and later, an increase in income tax receipts.
Prediction: The deficit will improve not get worse.
Outcome: It did get worse before it got better, but that is o.k. because of the corresponding interest rates. Now it is trending towards the prediction, which is what we want to see (i.e. deficit below projections).
Could something else have caused the recent economic growth?
Sure.
But by admiting to this you have to also admit that the outcomes followed predictions close enough that it is entirely possible that this was the result of the cuts.
I have no problem discussing this further, but not in the manner in which you presented yourself here.
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The whole premise of this thread seems to be a simple piece of evidence gleaned from the first paragraph or so of the linked article from May of 2004:
http://www.cbo.gov/showdoc.cfm?index=5417&sequence=0
Here's the one from July, which references data from May:
http://www.cbo.gov/showdoc.cfm?index=5623&sequence=0
All it says is that revenues were slightly higher than expected. Is this an example of "supply side economics working?" You're arguing that these small revenue increases were caused by a somewhat lower marginal federal income tax rate. That need not be the case. These increases can be attributed to a variety of things beside the theoretical supply side mechanism.
Quite simply, you're ignoring the obvious in order to advance a theory you like. It would take nothing more than the inherent unpredictability in the economy (and the real world) to cause the difference in numbers.
Here's a good graf that sheds some light on what the CBO believes is happening (from the May data posted above):
Quote:
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CBO believes that the loss of revenue resulting from the 2003 tax cuts was offset, in part, by a number of factors, which may include the following: income was greater than expected in 2003; the effective tax rates on that income were higher than anticipated; and more of the taxes on that income were paid in 2004 than was projected.
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1. Income went up more than expected. Why? We don't know, and they don't seem to either. As noted above, to show that tax decreases have increased revenues, you'd have to know how much would have been collected w/o the tax cuts. (Moreover, many supply siders believe that tax cuts cause so much economic growth that more taxes will be collected at a lower rate than would have been collected had the higher rate been maintained; I doubt that this is true, and even if it were, I doubt it)
2. The effective tax rates on that income (corporate income) were higher than expected.
http://www.ftmarketwatch.com/diction..._tax_rate.html
This means that the ratio of tax payed to amount of income taxable went up more than expected. I'll take their word for it.
3. More taxes were actually paid (I'm guessing this means that fewer companies cheated on their taxes).
So, I'm going to come back to the claim: supply-side economics is working. You haven't given a prima facie case that this is true. I feel that that has been satisfactorially demonstrated. All we can do now is wait for someone else to try and support this claim with new evidence. The current CBO reports are clearly inadequate.