The Ryan Budget: Who It Helps and Who It Hurts

[Kulindahr]

Or for an alternative analysis:
http://www.washingtonpost.com/blogs...e-the-deficit/2012/02/03/gIQABW9fmQ_blog.html


Tax receipts increased, but you can hardly say that it was because of the Bush era tax cuts. People were making money off of the new housing bubble and we had regular economic growth, which ends up giving us inflation. Had the Bush era tax cuts not been passed, tax receipts would have increased even more.

Nicely stated.

 

[Benvolio]

Your reasoning is fallacious, Supersonic. Tax receipts AS A PERCENTAGE of GDP may be a function of GDP rising faster than tax receipts. What is wrong with that? You imply that if the percentage goes down, actual receipts went down. Not if the GDP went up. Remember that not all domestic product results in income taxes. More than 50% of eligible voters pay no income tax. In 2001 we were in the Clinton recession, and 9-11 hit the economy, but we paid taxes at Clinton rates, so of course it was a higher percentage of GDP.

 

[Kulindahr]

It's time to put this canard to rest.

It never made sense in the first place. Lowering taxes to gain revenue? Voodoo economics, Daddy Bush said.

And he was right. The evidence is in.

According to the CBO, lowering taxes 10 percent does increase modest output, but they do not pay for themselves, and have a net loss.

Results? Deficits.

Republicans, when are you going to retire this old wives' tale? You guys are starting to sound like Miss Cleo.

http://www.cbo.gov/publication/17507

I don't think it's sufficiently linear for a flat statement like that. It's been too long since I reviewed the numbers to pin it to a spot on the curve, but there is a small zone where cuts do pay for themselves. I do remember it's when marginal rates are high, bu the rest escapes me just now.

The problem is that while on a curve of length x, Republicans are claiming that an effect which occurs on merely length y<<<x applies to the entire curve.

There have been some dramatic engineering failures based on the same sort of faulty extrapolation. If we want an economy and federal budget akin to an earthen dam vulnerable to be lifted off the ground and carried off by the reservoir water, paying attention to the Republicans is the way to go. If we want stability and prosperity, we'd better find some engineers who actually look at the whole picture.

 

[White Eagle]

More of the same, just told by NYTimes.

http://www.nytimes.com/2012/03/21/opinion/the-careless-house-budget.html?_r=2

Editorial
The Careless House Budget
Published: March 20, 2012

As he rolled out his 2013 budget on Tuesday, Paul Ryan, the House Budget Committee chairman, correctly said that he and his fellow Republicans were offering the country a choice of two very clear futures. The one he outlined in his plan could hardly be more bleak.
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It is one where the rich pay less in taxes than the unfairly low rates they pay now, while programs for the poor — including Medicaid and food stamps — are slashed and thrown to the whims of individual states. Where older Americans no longer have a guarantee that Medicare will pay for their health needs. Where lack of health insurance is rampant, preschool is unaffordable, and environmental and financial regulation are severely weakened.

 

[Benvolio]

No, Johann, if GDP increases and tax rates stay the same, tax receipts will increase, but at a lower rate than GDP, because not all GDP gets taxed. In that even, tax receipts as a percentage of GDP will go down. This tells us nothing about the deficit.
This is the fallacy of suoer sonic and the Washington Post quotation he gave us.

 

[chrisrobin]

No, Johann, if GDP increases and tax rates stay the same, tax receipts will increase, but at a lower rate than GDP, because not all GDP gets taxed. In that even, tax receipts as a percentage of GDP will go down. This tells us nothing about the deficit.
This is the fallacy of suoer sonic and the Washington Post quotation he gave us.

You're absolutely right!