🚀 go-pugleaf

Scott wrote:
> On Wed, 08 Oct 2008 13:25:09 -0600, junk bonds <ju@nk.moody> wrote:
> 
>> Scott wrote:
>>> On Wed, 08 Oct 2008 10:32:29 -0600, green lantern <no@evil.escapes>
>>> wrote:
>>>
>>>> Scott wrote:
>>>>> On Wed, 8 Oct 2008 08:18:24 -0700 (PDT), WDS <Bill@seurer.net> wrote:
>>>>>
>>>>>> On Oct 7, 11:56 pm, charleneco...@excite.com wrote:
>>>>>>> If OBAMA gets elected.. the Stock Market will crash
>>>>>> Given the current market I guess Obama has already been elected then?
>>>>> No, but at this point it's almost a done deal that he will be the 
>>>>> next one elected to start fixing things.    
>>>> Here's a hint - raising taxes in a global recession won't fix a damned 
>>>> thing, you moron.
>>> If taxes are raised for the right people/companies, and left alone or 
>>> lowered for the average American, it certainly won't hurt.
>> You're so breathtakingly idiotic it just defies comprehension.
>>
>> ANY tax hikes during a deep recession are economy killers, period.
> 
> No, not true. 

Yes, completely true.

Google: Hoover + Depression.

> There is no academic study in the world that suggests that tax 
> cuts for the wealthy and powerful lead to greater economic 
> prosperity. 

Sure there is, I posted it and you deleted it, coward.

> And there is no evidence in academic literature 
> that lowering tax rates somehow will generate greater economic 
> output and magically end up paying for itself without creating 
> greater deficits. 

You're lying again.

http://online.wsj.com

OPINION MAY 20, 2008 You Can't Soak the Rich
By DAVID RANSONArticle
  more in Opinion �Email Printer Friendly Share:
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Kurt Hauser is a San Francisco investment economist who, 15 years ago, 
published fresh and eye-opening data about the federal tax system. His 
findings imply that there are draconian constraints on the ability of 
tax-rate increases to generate fresh revenues. I think his discovery 
deserves to be called Hauser's Law, because it is as central to the 
economics of taxation as Boyle's Law is to the physics of gases. Yet 
economists and policy makers are barely aware of it.

Like science, economics advances as verifiable patterns are recognized 
and codified. But economics is in a far earlier stage of evolution than 
physics. Unfortunately, it is often poisoned by political wishful 
thinking, just as medieval science was poisoned by religious doctrine. 
Taxation is an important example.

The interactions among the myriad participants in a tax system are as 
impossible to unravel as are those of the molecules in a gas, and the 
effects of tax policies are speculative and highly contentious. Will 
increasing tax rates on the rich increase revenues, as Barack Obama 
hopes, or hold back the economy, as John McCain fears? Or both?

Mr. Hauser uncovered the means to answer these questions definitively. 
On this page in 1993, he stated that "No matter what the tax rates have 
been, in postwar America tax revenues have remained at about 19.5% of 
GDP." What a pity that his discovery has not been more widely disseminated.

  The chart nearby, updating the evidence to 2007, confirms Hauser's 
Law. The federal tax "yield" (revenues divided by GDP) has remained 
close to 19.5%, even as the top tax bracket was brought down from 91% to 
the present 35%. This is what scientists call an "independence theorem," 
and it cuts the Gordian Knot of tax policy debate.

The data show that the tax yield has been independent of marginal tax 
rates over this period, but tax revenue is directly proportional to GDP. 
So if we want to increase tax revenue, we need to increase GDP.

What happens if we instead raise tax rates? Economists of all 
persuasions accept that a tax rate hike will reduce GDP, in which case 
Hauser's Law says it will also lower tax revenue. That's a highly 
inconvenient truth for redistributive tax policy, and it flies in the 
face of deeply felt beliefs about social justice. It would surely be 
unpopular today with those presidential candidates who plan to raise tax 
rates on the rich � if they knew about it.

Although Hauser's Law sounds like a restatement of the Laffer Curve (and 
Mr. Hauser did cite Arthur Laffer in his original article), it has 
independent validity. Because Mr. Laffer's curve is a theoretical 
insight, theoreticians find it easy to quibble with. Test cases, where 
the economy responds to a tax change, always lend themselves to many 
alternative explanations. Conventional economists, despite immense 
publicity, have yet to swallow the Laffer Curve. When it is mentioned at 
all by critics, it is often as an object of scorn.

Because Mr. Hauser's horizontal straight line is a simple fact, it is 
ultimately far more compelling. It also presents a major opportunity. It 
seems likely that the tax system could maintain a 19.5% yield with a top 
bracket even lower than 35%.

What makes Hauser's Law work? For supply-siders there is no mystery. As 
Mr. Hauser said: "Raising taxes encourages taxpayers to shift, hide and 
underreport income. . . . Higher taxes reduce the incentives to work, 
produce, invest and save, thereby dampening overall economic activity 
and job creation."

Putting it a different way, capital migrates away from regimes in which 
it is treated harshly, and toward regimes in which it is free to be 
invested profitably and safely. In this regard, the capital controlled 
by our richest citizens is especially tax-intolerant.

The economics of taxation will be moribund until economists accept and 
explain Hauser's Law. For progress to be made, they will have to face up 
to it, reconcile it with other facts, and incorporate it within the body 
of accepted knowledge. And if this requires overturning existing 
doctrine, then so be it.

Presidential candidates, instead of disputing how much more tax to 
impose on whom, would be better advised to come up with plans for 
increasing GDP while ridding the tax system of its wearying complexity. 
That would be a formula for success.