Are tax cuts without reduced spending a good thing?

[Occam's Banana]

So... Are tax cuts without reduced spending a good thing? NO! NO! NO!

Nothing in any of those quotes evinces that tax cuts are a bad thing. (If anything, the fourth strongly suggests the contrary.)

If you said yes, you don't understand the problem!

Go tell it to Ron Paul ...

The problem is not the presence of tax cuts - it is the absence of spending cuts.

To repeat what I said earlier: it is a good thing when a mugger takes less of your money, even if he doesn't spend any less on hookers and blow.

[CaptUSA]

Nothing in any of those quotes evinces that tax cuts are a bad thing. (If anything, the fourth strongly suggests the contrary.)



Go tell it to Ron Paul ...

The problem is not the presence of tax cuts - it is the absence of spending cuts.

To repeat what I said earlier: it is a good thing when a mugger takes less of your money, even if he doesn't spend any less on hookers and blow.

Yeah, I'm not sure what you're reading.... To extend your analogy, it's not only that the mugger is taking less of your money, he's taking from your children instead of you! That is the problem. And yes, the absence of spending cuts is the really, really bad thing. But if you're not going to cut spending, you shouldn't put the burden on futurity!

[Dr.No.]

Yes it is.

Tax cuts means the private sector makes more money. Larger deficits mean that the net financial savings of the private sector goes up.

[Occam's Banana]

Yeah, I'm not sure what you're reading....

I read several quotes by Thomas Jefferson to the effect debt and the burdensome taxes it engenders are bad things.

I didn't read anything at all about tax cuts being bad things.

To extend your analogy, it's not only that the mugger is taking less of your money, he's taking from your children instead of you! That is the problem. And yes, the absence of spending cuts is the really, really bad thing.

Your extension of my analogy has already been addressed in post #41:

Is it a good thing if a mugger steals less of your money, even if he doesn't spend any less on hookers and blow?

It's a bit more complicated than that. For one, the fact that the mugger is spending money on hookers and blow is making your money worth less whether he's physically taking it or not. He's essentially stealing from you in two ways, and by stealing from you less in one way he's going to steal from you more in the other.

As an example, do you think that the American people's economic situations would be better or worse if the government simply stopped collecting taxes and entirely paid for everything by deficit spending?

Which American peoples' situations? They are not an homogeneous aggregate and won't all be affected in the same way. Those in direct receipt of deficit spending will gain at the expense of those who are not, while those who are taxed will lose to the advantage of those who are not.

In the second of your "two ways" - inflationary deficit spending that "mak[es] your money worth less" - most people (especially the ones who can least afford it) are going to end up on the $#@!ty end of the Cantillon chain. With tax cuts (and especially if "government simply stopped collecting taxes"), most people would at least realize some immediate benefit before eventually getting shafted.

IOW: it is a good thing if a mugger steals less of my money on the "front end," even - indeed, especially - if the money he spends on hookers and blow is going make my money worth less down the road.

But if you're not going to cut spending, you shouldn't put the burden on futurity!

I'm not putting a burden on anyone, present or future. It's the spenders who are doing that, not the tax cutters.

[CaptUSA]

To repeat what I said earlier: it is a good thing when a mugger takes less of your money, even if he doesn't spend any less on hookers and blow.

To put it another way... The mugger is going to by a new Lamborghini. Would you rather him take your money now or enslave your children to pay for it?

[Occam's Banana]

To put it another way... The mugger is going to by a new Lamborghini. Would you rather him take your money now or enslave your children to pay for it?

Asked and answered - see post #64.

[CaptUSA]

Asked and answered - see post #64.

Really? Your moral compass believes that as long as you're getting some benefit now, screw the future generations?! Don't you see how this is why we're in this mess? Because previous generations had no problem mortgaging our lives as long as they got theirs. I take it you have no children?

[TheCount]

Tax cuts are always a good thing, but they are almost irrelevant in this discussion. Spending is the tax. It will either be stolen, borrowed, or printed, taking value away from everyone else. Changing tax rates just rearranges the spending burden.

Thank you, you've summarized my point better than I could. I completely agree.

[TheCount]

I thanked you for your response. It was a fine response. I don't know that it was any less "intelligent" than my two little cents, but if you are feeling so insecure: yes, Count, you were very, very intelligent. Good job. What more do you want, a parade?

Your response was disingenuous. Given your two posts, it seems that you asked what I would cut, not out of interest, but in order to then claim, no matter what list I produced, that it was inadequate. Then you could proceed by helicoptering your manhood around dealing in absolutes.

The entire rest of your post is an attempt to continue to derail the topic of the thread, which I should not have enabled by giving you a list of proposed spending reductions in the first place. You've already produced one thread in an attempt to reduce the conversation regarding tax cuts to ideological absolutism, feel free to make another on the topic of government spending to engage in such conversation there.

[Occam's Banana]

Really? Your moral compass believes that as long as you're getting some benefit now, screw the future generations?! Don't you see how this is why we're in this mess? Because previous generations had no problem mortgaging our lives as long as they got theirs. I take it you have no children?

What the $#@! are you yapping about? How in the ever-loving hell is it "immoral" to protest the plunder of actually living people right now, here, today (including my children) - and to wish to see them plundered less or not at all - for the supposed sake of an as-yet non-existent "futurity?" A "futurity" which, as I will point out for the third and final time, it is being jeopardized by SPENDING and NOT TAX CUTTING. So either get the $#@! off that high horse or direct your self-righteous sneers at someone else.

[TheCount]

Really? Your moral compass believes that as long as you're getting some benefit now, screw the future generations?! Don't you see how this is why we're in this mess? Because previous generations had no problem mortgaging our lives as long as they got theirs. I take it you have no children?

Somehow I think if I rephrased the question as "Should the government print an infinite amount of money in order to give the people free $#@!?" the general answer would be no, even though both the mechanism and the effect of the two policies are exactly the same.

[TheCount]

[the future] is being jeopardized by SPENDING and NOT TAX CUTTING.

I think that (nearly) everyone is in agreement on this!

However, as I posited in the OP, I believe that lower taxes would further enable deficit spending. The fact that the American people allow the government to deficit spend is the problem. Cutting taxes is further encouraging the behavior. Electing representatives who will promote tax cuts without equivalent spending cuts is doubling down on the thing that we all agree is the problem. And so on.

Reductions in spending will, in my estimation, eventually produce a reduction in taxes.

Reductions in taxes will not necessarily produce a reduction in spending. In fact, historically they seem to have done the opposite.

Therefore, I believe that spending, and not taxes, should be the priority.

[Occam's Banana]

I think that (nearly) everyone is in agreement on this!

However, as I posited in the OP, I believe that lower taxes would further enable deficit spending. The fact that the American people allow the government to deficit spend is the problem. Cutting taxes is further encouraging the behavior. Electing representatives who will promote tax cuts without equivalent spending cuts is doubling down on the thing that we all agree is the problem. And so on.

Reductions in spending will, in my estimation, eventually produce a reduction in taxes.

Reductions in taxes will not necessarily produce a reduction in spending. In fact, historically they seem to have done the opposite.

Therefore, I believe that spending, and not taxes, should be the priority.

Tax cuts are always a good thing, but they are almost irrelevant in this discussion. Spending is the tax. It will either be stolen, borrowed, or printed, taking value away from everyone else. Changing tax rates just rearranges the spending burden.

Thank you, you've summarized my point better than I could. I completely agree.

So then, do you agree that tax cuts are always a good thing or not?

[Occam's Banana]

Somehow I think if I rephrased the question as "Should the government print an infinite amount of money in order to give the people free $#@!?" the general answer would be no, even though both the mechanism and the effect of the two policies are exactly the same.

Even if the ultimate effects are the same, the immediate effects are not. Thus, you cannot simply treat the two as if they were interchangeable. As I said ealier:

Which American peoples' situations? They are not an homogeneous aggregate and won't all be affected in the same way. Those in direct receipt of deficit spending will gain at the expense of those who are not, while those who are taxed will lose to the advantage of those who are not.

If I shoot you in the head today or shoot you in the head 10 years from now, the utilmate effect is the same - you are dead either way.

Does this mean you have no reason to prefer the one over the other?

[helmuth_hubener]

Your response was disingenuous.

Not at all!

Given your two posts, it seems that you asked what I would cut, not out of interest, but in order to then claim, no matter what list I produced, that it was inadequate.

No, it was because I was interested. I didn't know that you wanted to cut anything. You certainly had not ever mentioned that you did before, not that I remember.

I am glad you want to cut military spending. I am glad you want to reduce the risk of nuclear war. That is all good and fine and noble.

Your paranoia is not so much. Perhaps you've been hanging out too much with your stalker and are now convinced that everyone is out to get you.

Then you could proceed by helicoptering your manhood around dealing in absolutes.

It is no more "manly" to want to cut a larger amount out of the federal budget than it is "manly" to want to increase it the most. They're just positions. They just are what they are. We could "intelligently" discuss which positions might be better, or worse, based on which will produce better outcomes, or worse ones. If we were capable.

And maybe we are! You certainly claim to be, and I accept that at face value. So let's try again:

Let me explain my thinking and we'll see if we can have an "intelligent" conversation.

The tremendous long-term problems that we face as a country at this time do not have to do with a lack of resources. They will not be solved by an even greater abundance of resources. To the contrary, they will be exasperated. We are already too fat, too rich, and too soft. Burying our millions of whores in even more trillions of free resources will not usher in an American Renaissance. They already have enough. What would help is to yank that money away.

Dumping the resources into the bottom of the Pacific Ocean, which is essentially what so much of the military spending is, is not nearly so insidious or destructive here at home. It doesn't work to rip down American society directly. It's just a waste.

Give me a choice between waste and actively destroying the country, and I shall choose waste.

Care to share any "intelligent" thoughts regarding that? Agree? Disagree? Giraffe?

[helmuth_hubener]

Oh, forgot to mention: I'm glad that you want to phase out the entitlement programs, too! That, unlike the military spending, I would not have necessarily guessed. And, to the extent that agreeing with me is a good thing, your wanting to phase those out is a good thing.

[TheCount]

So then, do you agree that tax cuts are always a good thing or not?

No.

I believe that reduced taxes without a reduction in spending give the illusion of being a good thing while actually being nothing of the sort.

[Superfluous Man]

We should always support tax cuts. We should always support spending cuts.

A lack of one of those is never an excuse not to support a proposal to do the other.

A point against tax cuts without spending cuts would be that ultimately, total taxation always does equal total spending. So if you don't cut spending, then truthfully, you're not really cutting taxes but just shifting the tax burden from one tax to another.

But that isn't a good enough objection, because tax cuts ultimately will starve the government of revenue and make it harder to increase spending in the future and easier to cut it.

[TheCount]

Even if the ultimate effects are the same, the immediate effects are not.

The immediate effects are the same. The ultimate effects are the same. They are the same in every respect other than ideological. It feels nice to say the government will be stealing less of peoples' money, but the reality is that if the government is running a deficit there is no functional difference between the government printing money and giving it to people vs. the government simply taxing people less.

Printing money will eventually cause the value of it to fall and create other economic problems as well. In the short run, the government and the people would be able to use that money to buy things that they would have not otherwise have been able to buy, and therefore it will seem to be a benefit to the people. Cutting taxes and continuing to spend will cause the government to print money, which does exactly the above. The people will feel a temporary benefit which will be overcome and then surpassed by the economic damage that the deficit will cause.

[The Gold Standard]

No.

I believe that reduced taxes without a reduction in spending give the illusion of being a good thing while actually being nothing of the sort.

Reduced taxes are a good thing because that isn't the government's money to take anyway. Leaving that money with the rightful owners of it is the right thing to do.

But without spending cuts, it doesn't change the amount of wealth being stolen from the people, it just changes how some of the burden is distributed. If the government eliminated the income tax tomorrow without any spending cuts, then that wealth would be stolen from people who bought products that were affected by the resulting price inflation. If the monetary expansion to finance such a huge deficit were to drive up real estate prices, people who buy real estate would be more victimized than they might be now. If commodity prices blew up, everyone who buys gas would hurt. If food skyrockets, the poorest would be the most affected, but everyone would suffer.

The overall result of wealth being stolen by the government would not change. All that might change is who gets the worse end of the deal. That's still no excuse to keep taxes high, regardless of what they intend to do with spending. But if the goal is to leave wealth in the hands of private individuals, they have to cut spending to accomplish that.

[Occam's Banana]

No.

I believe that reduced taxes without a reduction in spending give the illusion of being a good thing while actually being nothing of the sort.

So then you don't actually agree with TGS - even though you said you agreed with him completely.

[Danke]

There is a distinct pattern throughout American history: When tax rates are reduced, the economy's growth rate improves and living standards increase. Good tax policy has a number of interesting side effects. For instance, history tells us that tax revenues grow and "rich" taxpayers pay more tax when marginal tax rates are slashed. This means lower income citizens bear a lower share of the tax burden - a consequence that should lead class-warfare politicians to support lower tax rates.
Conversely, periods of higher tax rates are associated with sub par economic performance and stagnant tax revenues. In other words, when politicians attempt to "soak the rich," the rest of us take a bath. Examining the three major United States episodes of tax rate reductions can prove useful lessons.


http://www.heritage.org/node/18247/print-display

[Occam's Banana]

The immediate effects are the same. The ultimate effects are the same. They are the same in every respect other than ideological. It feels nice to say the government will be stealing less of peoples' money, but the reality is that if the government is running a deficit there is no functional difference between the government printing money and giving it to people vs. the government simply taxing people less.

Printing money will eventually cause the value of it to fall and create other economic problems as well. In the short run, the government and the people would be able to use that money to buy things that they would have not otherwise have been able to buy, and therefore it will seem to be a benefit to the people. Cutting taxes and continuing to spend will cause the government to print money, which does exactly the above. The people will feel a temporary benefit which will be overcome and then surpassed by the economic damage that the deficit will cause.

The immediate effects are NOT the same. And it has NOTHING to do with it "feel[ing] nice to say the government will be stealing less of peoples' money" ().

I'll post this again, for the third time in this thread:

Which American peoples' situations? They are not an homogeneous aggregate and won't all be affected in the same way. Those in direct receipt of deficit spending will gain at the expense of those who are not, while those who are taxed will lose to the advantage of those who are not.

In the second of your "two ways" - inflationary deficit spending that "mak[es] your money worth less" - most people (especially the ones who can least afford it) are going to end up on the $#@!ty end of the Cantillon chain. With tax cuts (and especially if "government simply stopped collecting taxes"), most people would at least realize some immediate benefit before eventually getting shafted.

IOW: it is a good thing if a mugger steals less of my money on the "front end," even - indeed, especially - if the money he spends on hookers and blow is going make my money worth less down the road.

[TheCount]

So then you don't actually agree with TGS - even though you said you agreed with him completely.

I do agree with him. He said that if the government doesn't change its spending, then the effective tax rate is the same no matter if it's called income taxes or inflation or civil forfeiture. The cost will be paid by the people no matter what it's called when it happens.

[TheCount]

The immediate effects are NOT the same.

How? What's the difference?

[Occam's Banana]

How? What's the difference?

Jesus ... I'm not posting it a fourth time ...

[Superfluous Man]

Jeffrey Tucker has a nice article that rightly praises the merits of this tax cut proposal. He doesn't get into the question of spending cuts. Nor does he need to in order to make the points he makes.
https://fee.org/articles/trump-s-tax...ter-economics/

[Occam's Banana]

Tax cuts are always a good thing, [...]

Thank you, you've summarized my point better than I could. I completely agree.

So then, do you agree that tax cuts are always a good thing or not?

No. [...]

So then you don't actually agree with TGS - even though you said you agreed with him completely.

I do agree with him. [...]

I give up.

[TheCount]

Jesus ... I'm not posting it a fourth time ...

As I said, the government could create that exact same temporary benefit by printing some money and giving it away - which is a policy that nearly everyone on this forum would say is a bad idea.

[TheCount]

I give up.

Tax cuts are always a good thing, but they are almost irrelevant in this discussion. Spending is the tax. It will either be stolen, borrowed, or printed, taking value away from everyone else. Changing tax rates just rearranges the spending burden.

If spending is the tax, then income tax cuts do nothing. They have no effect.