Listen To You Tell Me Texas Friday 7/13/18
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Is it ignorance or dishonesty? That’s the question to which I can never find an adequate answer when it comes to Democrats and their economic predictions. Last November, as the tax measure that eventually passed was being debated in Congress, House Minority Leader Nancy Pelosi said,
…this thing will explode the deficit.”
(As an aside, that marked the first time that the word “deficit” escaped Nancy Pelosi’s lips in nearly nine years. Through the entirety of the term of Barack Obama, massive federal deficits never bothered Ms. Pelosi in the least.)
But she’s all about the deficit now. As recently as last month, Ms. Pelosi was still calling the Trump tax law,
…the deficit-exploding GOP tax scam for the rich.”
Meanwhile on the north side of the U.S. Capitol, Senate Minority Leader Chuck Schumer said of Republican assertions that cutting taxes would spur economic growth,
It’s just made-up, fake math to hide another deficit-busting tax cut to benefit the wealthiest Republicans.”
Even as ordinary Americans began enjoying more net pay in their paychecks and even as they were receiving bonuses from their employers, Ms. Pelosi characterized those benefits as, “crumbs.”
So how, then, do Ms. Pelosi and Mr. Schumer deal with this little fact just released by the non-partisan Congressional Budget Office? Federal revenues from income taxes are up $76 billion in the first calendar half of 2018 as compared to the first half of 2017. Defying Democrat predictions of shriveling federal revenues, treasury receipts are up nine percent since January, despite the fact that lower tax rates went into effect in February.
This is a puzzlement to Democrats. Or at least it appears to be. By all evidence, they just can’t grasp the concept that taxes affect behavior. They can’t wrap their heads around the idea that if you tax something – say, enterprise and risk-taking – you get less of it. Nor do they understand the converse, tax it less, and you get more of it. They completely reject the idea that if you get out of the way of the American economy, it will soar.
By all appearances, Democrats are so economically illiterate, so ignorant of capital and markets, that they just can’t understand that lowering tax rates spurs economic activity that ultimately serves to generate increased tax revenues.
Or so they would have you believe.
The other possibility – by far the more cynical – is that Democrats understand all of this full well but don’t care. They’re not interested in success. They’re interested in power. And they’ll say anything, support anything, oppose anything or do anything in order to obtain and hold on to it. That includes pandering to the least educated and the least economically literate. They’ll not only demonize the successful, they’ll actively work to stymie success if they believe that doing so will garner the votes of those who are disaffected as a result.
So, which is it? Ignorance or dishonesty? I still can’t tell. But I know this. Either is bad for the country.
So if a lower tax rate always translates to higher tax revenue, then the optimum tax rate would be 0 percent. Is that correct?
No, Mr. Biv it wouldn’t. It would result in zero tax revenue. But so would a tax rate of 100 percent. A 100 percent tax rate would result in zero tax revenue just as surely as a zero tax rate would because someone who is taxed at 100 percent has no reason whatsoever to engage in any taxable activity.
Such was never the argument when the most recently passed tax bill was being debated. The argument from Democrats was that reducing the then prevailing marginal rates, which had crept up since the Reagan tax cuts and the Bush tax cuts, would result in a catastrophic reduction in federal revenues. No one with any real understanding of the U.S. economy or its history believed that.
Dropping marginal tax rates freed capital that got put back into the economy. That re-injection of capital triggered hiring, which boosts consumer confidence, which boosts sales of consumer goods, durable goods and autos. All of that pushed Gross Domestic Product back closer to the average of 3.0 percent per year that has prevailed since World War II.
That’s why, as predicted by those who supported Trump’s tax proposal, federal revenues from taxation have increased since the passage of the bill.
So professor, what is the optimum tax rate then? If Congress lowered it again, would it result in more revenue?
I have answered a question. So now it’s your turn. What rate do you think is appropriate? How much of someone’s legitimately earned money does the federal government have the presumptive right to take? Who will put money to better use — the federal government or the person who earned it in the first place?
I’d be more that happy to answer your question. Given the fiscal irresponsibility of our current congress, we need as much revenue as possible. Therefore the proper rate of taxation would be the maximum point on Dr. Laffer’s famous curve. Note that Dr. Laffer didn’t provide any numbers for his curve, and I won’t try to either. You on the other hand have stated unequivocally that as tax rates are lowered, revenue increases. Therefore you must know what that maximum value is. Please enlighten us. I’m certain Dr. Laffer would be interested in your analysis as well. Heck, you might even be in the running for the Nobel Prize in Economic Sciences.
I see that my principal role in this conversation is to allow you to be snide. So please, knock yourself out.
Meanwhile, I will address the substance of your reply. You say that “we need as much revenue as possible.” I disagree. The federal government is collecting record revenues every month. Our fiscal distress isn’t a revenue problem. It’s a spending problem.
I didn’t “state unequivocally” that as tax rates are lowered revenue increases. I stated that the cries by Democrats that the lowering of the existing marginal rates would “explode the deficit” proved to be wrong. Revenues increased…just as revenues increased when John Kennedy lowered rates, when Ronald Reagan lowered rates and when George W. Bush lowered rates. We have a history in this country of setting tax rates and then by increments increasing them until they become burdensome and counter-productive. Such was the case when rates were reset late last year.
My husband and I couldn’t agree with you more! Excellent!
Over the past few decades of watching politics it has become obvious to me that very few democrats have a working calculator, or if they do, they don’t know how to use it. On the other hand often times the GOP only has a passing familiarity with the truth.
Having said that, I believe your more cynical reason for Democrats behavior is probably closer to the truth.
The democrats believe in HIGHER taxes, BIGGER government, and LESS freedom. Their philosophy of government is socialism with an upper case S, which if they had their hearts desire, could easily morph into an upper case M as in marxism.
The Republicans including President Trump believe as did our Founders….in LOWER taxes, SMALLER government, MORE FREEDOM, and American Free Enterprise Capitalism. That The Constitution is an absolute document, meaning, that it STILL means what it says even after 229 years. Even if you went out another 200 plus years from now, in my humble opinion, it will STILL mean what it originally said, being just as pertinent as the day it was written. Along side with The Declaration of Independence it is inline just behind The Holy Bible as the greatest document ever written.
The Republicans have their politics RIGHT on every point. I will be voting [R] down the entire ballot as our Constitutional Republic as we have always known it depends on voting the democrats OUT. That is imperative coming up this November 2018 regarding every Senate and House seat across our country which are up for consideration. Vote the dems OUT and the Republicans IN for more prosperity for ALL Americans.
Let’s KEEP AMERICA GREAT.
Relax. Louie Gohmert’s performance yesterday reassures that cooler heads prevail.
And the economy is now in the hands of “a NEGOTIATOR…a DEAL-MAKER.”
https://www.nytimes.com/interactive/2018/07/11/business/trade-war.html
I’m trying to find the connection between Louie Gohmert’s remarks yesterday at a Congressional committee hearing on the activities of the FBI and this piece on tax policy. Still looking. Nope. Not finding the connection.
As to the “trade war” for which Democrats are so fervently hoping in order that it might damage Donald Trump, check in with JP Morgan Chase’s Jamie Dimon. He was on with Maria Bartiromo this morning detailing his company’s plans for China, something he wouldn’t even be discussing if he thought that an actual trade “war,” as opposed to a trade negotiation was about to break out.
And just for the sake of clarity, let’s remember that the economy has been in the hands of that “deal maker” and “negotiator” for 17 months now and the results have been right nice.
RE Louie: YOU fret about Congress. Take comfort that he represents you there.
RE Maria: FYI this, from the business channel where she used to work, the one The Street watches. Credit rude Trump for what Jeff Bezos has accomplished?https://finance.yahoo.com/m/784bb240-3b71-38e4-b1fe-d75feb688ad8/watch-out,-retailers.-this-is.html?.tsrc=applewf
STILL looking for the connection between your comments re: Louie Gohmert and China and now Amazon and my piece on tax policy. STILL not finding any.
And I didn’t cite Maria Baritromo. I cited what Jamie Dimon said on Maria Bartiromo’s show. Had he appeared on CNBC, I would have cited what he said on CNBC. Jamie Dimon was the subject, not the network upon which he appeared. And in any event it might be time to update your files regarding business channel viewership: http://thehill.com/homenews/media/381599-fox-business-tops-total-viewers-category-in-business-news-for-first-quarter-of
You’re REALLY good with croaking Louie?
OR MAY I VOLUNTEER as Finance Chairmsn of the Gleiser2020 Primary Campaign?
Oh!
Oh!
YOU’RE OK with Louie?
Or may I volunteer:
Fundraising Chairman, Gleiser2020 Primary Campaign?
RSVP
RE FoxBiz/CNBC ratings: Did you READ The Hill article you linked?
RE Louie, the face, and rude croaking voice, representing you in the Congress your column is ABOUT: Is he the best East Texas could come up with? YOU would do a much better job; and I’ll be the fir$t to contribute to your campaign.
Yes, another excellent column.To be sure, the Democrats and their like are a mix of dishonest and dumb. Dishonest because no one can be THAT ignorant of basic economics. Dumb because, yes, to some degree the understanding of economics does escape socialists. Conservatives hold the high ground in terms of ideas that work. So no progressive wants to go there. None wants to attempt a well-reasoned rebuttal to conservative opinion for lack of ammunition. Instead they resort to emotion and insult–we conservatives don’t care, are racists, sexist, ad nauseam.
Look at it this way…BECAUSE of their dishonesty, they are ignorant. Dishonest people never look at facts and ignorant people when looking at facts do not know what they are looking at.
Linda, I’ve never seen the left better described!
Mr. Cooke, I am going to weigh in on your tirade about Congressman Gohmert. You are out of line and a prime example of the venom of poisonous snakes the left is so good at spewing when they know they are wrong. Mr. Gohmert was a FINE judge and for you to talk so badly of him shows your character. It also is a fine example of just what I said above about dishonesty and ignorance and how they go hand in hand. Find somewhere else to spew your poison!
Paul would represent you in a much more gentlemanly, more thoughtful, manner.
https://www.newsweek.com/republican-tax-cuts-trump-wage-increases-879800
Excellent column Mr. Gleiser. As well sir, your numerous comments refuting those of the person herein are spot on!
Congressman Louie Gohmert is doing excellent work as our Representative. I have supported him for many years and gladly look forward to voting for him once again. In addition, President Trump is completely demolishing the flimsy wrongheaded arguments of the democrats by his many proven successful policy innovations.
Louie PERSONIFIES The Swamp.
‘Says all-the-right-things Mondays and Fridays back in the district office, when he’s handing out those souvenir flags your tax dollars fund.
Tuesdays-through-Thursdays in DC, he goes-native. Behavior Texans back home aren’t meant to see, like berating DC cops over parking tickets.
And Paul would do a MUCH better job filling-in for Sean Hannity than croaking Luigi.
#Gleiser2020
Mr. Gleiser is doing a tremendous service here in East Texas and beyond, with his outstanding radio station KTBB on 97.5FM & 600AM — “THE” news place as East Texas’ Number 1 RADIO source for “REAL NEWS” not fake news. As well, his important columns here and “on-air” would be surely missed.
Attn: Mr. Gleiser, hope you keep doing what you are doing and don’t change a thing. A long time KTBB listener.
Many thanks. I intend to be around for a while.