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Author: Subject: IRS tax revenue falls along with taxpayers' income

Peach Extraordinaire





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  posted on 5/27/2009 at 03:06 PM
So, explain to me how The Immaculate One is going to be able to continue defecit spending full-tilt in light of this news? Divine providence? Or are YOU, and millions others, suddenly going to find yourselves among the 'wealthy elite?'

Told ya so.

# # #

IRS tax revenue falls along with taxpayers' income
USA TODAY

Federal tax revenue plunged $138 billion, or 34%, in April vs. a year ago the biggest April drop since 1981, a study released Tuesday by the American Institute for Economic Research says.

When the economy slumps, so does tax revenue, and this recession has been no different, says Kerry Lynch, senior fellow at the AIER and author of the study. "It illustrates how severe the recession has been."

For example, 6 million people lost jobs in the 12 months ended in April and that means far fewer dollars from income taxes. Income tax revenue dropped 44% from a year ago.

"These are staggering numbers," Lynch says.

Big revenue losses mean that the U.S. budget deficit may be larger than predicted this year and in future years.

"It's one of the drivers of the ongoing expansion of the federal budget deficit," says John Lonski, chief economist for Moody's Investors Service. The Congressional Budget Office projects a $1.7 trillion budget deficit for fiscal year 2009.

The other deficit driver is government spending, which, the AIER's report says, is the main culprit for the federal budget deficit.

The White House thinks that tax revenue will increase in 2011, thanks in part to the stimulus package, says the report from AIER, an independent economic research institute. But it warns, "Even if that does happen, the administration also projects that government spending will be so much higher each year that large deficits will continue, and the national debt held by the public will double over the next 10 years."

 

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Zen Peach



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  posted on 5/27/2009 at 03:57 PM
The quickest and easiest way to swamp the treasury with money is to cut taxes. It's already been proven to work any time it's tried. For some reason those currently in charge say it doesn't work.

 

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Maximum Peach



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  posted on 5/27/2009 at 04:08 PM
quote:
The quickest and easiest way to swamp the treasury with money is to cut taxes. It's already been proven to work any time it's tried. For some reason those currently in charge say it doesn't work.


Silly you.

They have other ideas -

http://www.allmanbrothersband.com/modules.php?op=modload&name=XForum&am p;file=viewthread&tid=93830

 

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Sublime Peach



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  posted on 5/27/2009 at 04:59 PM
quote:
The quickest and easiest way to swamp the treasury with money is to cut taxes.


I guess by that logic if there were no tax, government coffers would be overflowing with an infinite supply of money. It's like saying if you quit work, all your bills would vanish. Or I have my eyes closed, no one can see me.

Supply side failed. Maybe you didn't notice? The tax cut myth has been disproven so many times and is so stupid on its face that all I can do is shake my head at the silliness.

 

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Zen Peach



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  posted on 5/27/2009 at 06:20 PM
quote:
quote:
The quickest and easiest way to swamp the treasury with money is to cut taxes.


I guess by that logic if there were no tax, government coffers would be overflowing with an infinite supply of money. It's like saying if you quit work, all your bills would vanish. Or I have my eyes closed, no one can see me.

Supply side failed. Maybe you didn't notice? The tax cut myth has been disproven so many times and is so stupid on its face that all I can do is shake my head at the silliness.



How many times have tax cuts heated up the economy? We've probably lost count. Sales tax receipts go up, tax compliance goes up, employment goes up. I guess it failed only in the respect that it will permanently prevent recession, but that's impossible.

The myth that's been "dis-proven so many times and is so stupid on it's face" is the one that a strong economy is based on high taxes, high spending, borrowing, and debt. Where has that ever worked? Just look at California as one quick example.

 

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Sublime Peach



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  posted on 5/28/2009 at 09:03 AM
The revenue that is lost with tax cuts is lost. If you want to show a long term trend based on your assertions, go right ahead. I am not saying that tax cuts do not have a stimulus effect on the economy, it just isn't what you are claiming. I am sure that there have been times when high tax rates, when cut, stimulated the economy, but once the stimulus wears off, you are left with less revenue to work with. Then you have to raise taxes to increase revenues...but to say that tax cuts increase revenue long term is simply ludicrous...and I think that is the argument you are making, not that tax cuts have a stimulus effect. And, show me which politicians on the right that have cut government spending when they cut taxes. Republicans are horrible about spending and borrowing, have been for as long as I have been alive. I just think your claim doesn't hold water and yet keeps getting repeated. The whole fiscal conservative myth is just that...a myth. Just like the claim that tax cuts increase revenue.

 

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Maximum Peach



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  posted on 5/28/2009 at 10:09 AM
These debates about tax cuts and resulting revenue have proponents on both side of the issue. Many say it helps, others like Goliath say not.

The real problem is that no matter what comes in, nothing in any of our lifetimes has ever stopped the Federal gov't from spending more, every year. Until that starts happening - which it will once China cuts up our credit card - then the rest of this is academic.

 

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Sublime Peach



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  posted on 5/28/2009 at 10:28 AM
Well, the country keeps growing, so how do you continue to deliver services to a growing population while cutting spending?

Cutting tax revenue can never increase the revenue taken in by the government. There is no debate there. It's like saying if you take a pay cut, you will make more money. Of course some people are easily fooled or misled or live in fantasy land and believe all kind of crazy stuff...regardless of your political philosophy, reducing revenue reduces revenue, it does not increase it.

 

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Peach Extraordinaire



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  posted on 5/28/2009 at 10:44 AM
quote:


How many times have tax cuts heated up the economy?


Every time it's been done.

 

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True Peach



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  posted on 5/28/2009 at 11:05 AM
The only forum police are those w/ moderator in their title.
 

Maximum Peach



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  posted on 5/28/2009 at 11:23 AM
quote:
Well, the country keeps growing, so how do you continue to deliver services to a growing population while cutting spending?
You cut spending by cutting all the ridiculous, unnecessary things the Federal gov't does. Most of what people need - roads, schools, utilities - gets paid for from state and local taxes. Why do we need to send money to Washington so that they can filter it through endless, wasteful bureaucracies in order to give it back to us? More people should mean more tax payers to fund the roads and schools they need, right?

quote:
Cutting tax revenue can never increase the revenue taken in by the government. There is no debate there. It's like saying if you take a pay cut, you will make more money. Of course some people are easily fooled or misled or live in fantasy land and believe all kind of crazy stuff...regardless of your political philosophy, reducing revenue reduces revenue, it does not increase it.
There's plenty of debate to be had over taxes and how they're applied. Your premise approaches the issue just like a politician does: with static thinking. If we raise or cut by "x", it will have an equal impact to revenue.

But it never works that way because people are unpredictable. Shockingly, they actually change behavior when gov't comes for their money. Raise taxes, and people stop doing the same things they did before. Raise them too high, and lots of people say screw it, and stop doing productive things, putting their money to other uses for the best return. More and more, those alternatives are no longer found in our own country. What's going to be proposed next; force people to invest and work at enterprises with low returns and high taxes?

Whatever you tax, you get less of.

 

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Obamacare: To insure the uninsured, we first make the insured
uninsured and then make them pay more to be insured again,
so the original uninsured can be insured for free.

 

Sublime Peach



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  posted on 5/28/2009 at 11:35 AM
quote:
Your premise approaches the issue just like a politician does:


Ron Paul is a politician too. His ideas are about as good as Ayn Rand's, and your's. I am simply saying that if you cut taxes, you cut revenue. It is impossible to increase government revenues by cutting taxes. If that were true, you could raise infinite amounts of money by removing all taxes.

 

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Zen Peach



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  posted on 5/28/2009 at 12:04 PM
quote:
quote:
How many times have tax cuts heated up the economy?
Every time it's been done.
Hmmm - another glib, non-specific reply, huh? Seems our 'best and brightest Comrade' is apparently 'unable to comment with any concrete facts' as he is 'too busy gritting his teeth', shouting 'told ya so' (or 'gotcha'), wishing the worst for this country and it's people, and surfing the internets for more articles to post in hit-and-run threads.

 

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Maximum Peach



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  posted on 5/28/2009 at 12:09 PM
quote:
quote:
Your premise approaches the issue just like a politician does:


Ron Paul is a politician too. His ideas are about as good as Ayn Rand's, and your's. I am simply saying that if you cut taxes, you cut revenue. It is impossible to increase government revenues by cutting taxes. If that were true, you could raise infinite amounts of money by removing all taxes.
What does Ron Paul or Ayn Rand have to do with it? Just a means to avoid the issue I guess.

Its interesting that on the subject of taking anything away from gov't, you are completely rigid in your thinking. But in terms of gov't expansion and spending, countless past posts show you to be a devout Keynesian, believing any and all sorts of predictions about future growth through new behaviors because of gov't "investment".

If tax cutting entices new investment and enterprise to occur, which in turn create new incomes that can be taxed, then you've just increased the potential for higher tax revenues. Surpress those activities through confiscatory tax policy, and you end up with nothing. The issue is one of balance.

Isn't that exactly what Obama hopes to happen with Fiat? He's committing our tax money to help Fiat/UAW fund the Chrysler buyout. Just like a tax cut - in fact way more in this case - this is an incentive in hopes of saving jobs and businesses that can be taxed down the road. Don't states constantly offer tax abatements and incentives to big businesses to entice them to locate within their geography? If tax relief shows no potential to raise tax revenues now or in the future, then why do they do this? How do they sell it to their citizens if its a net looser?




[Edited on 5/28/2009 by Fujirich]

 

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Sublime Peach



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  posted on 5/28/2009 at 12:25 PM
My point is that tax cuts do not increase government revenues. I might also add that a tax cut stimulus is Keynesian too. There are times when J M Keynes way of thinking is appropriate and times when it isn't.

 

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Maximum Peach



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  posted on 5/28/2009 at 12:54 PM
quote:
My point is that tax cuts do not increase government revenues.
To accept that, you'd have to also believe that taxes do not effect people's economic or productive behaviors. That's so obviously false it needs no defense.

 

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Obamacare: To insure the uninsured, we first make the insured
uninsured and then make them pay more to be insured again,
so the original uninsured can be insured for free.

 

Peach Extraordinaire



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  posted on 5/28/2009 at 01:12 PM
quote:
quote:
quote:
How many times have tax cuts heated up the economy?
Every time it's been done.
Hmmm - another glib, non-specific reply, huh? Seems our 'best and brightest Comrade' is apparently 'unable to comment with any concrete facts' as he is 'too busy gritting his teeth', shouting 'told ya so' (or 'gotcha'), wishing the worst for this country and it's people, and surfing the internets for more articles to post in hit-and-run threads.


Sorry darlin,' but facts are facts.

 

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As a patriot and a loyal member of the opposition I pledge to offer our new President the very same benefit of the doubt and unwavering support that the left offered George Bush over the last eight years.

 

Maximum Peach



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  posted on 5/28/2009 at 02:24 PM
quote:
quote:
quote:
My point is that tax cuts do not increase government revenues.
To accept that, you'd have to also believe that taxes do not effect people's economic or productive behaviors. That's so obviously false it needs no defense.


It's only false as it applies to the poorest of the poor in this country. For middle-class and above earners, a point or two in either direction should not be enough to have any profound impact on productivity or spending.
Yeah, I wouldn't disagree with that at all Marc. But we're hearing proposals of 5% higher capital gains, similar personal income tax rate hikes on higher earners, implimentation of cap & trade, the first discussions of a VAT. It's gonna add up quick.

What we never hear is anyone in Washington saying they recognize what's going on in the economy and they're going to cut spending. Not those bogus cuts like Obama announced a few weeks ago, where a few programs get cut in one place so they can spend 10x more somewhere else. Real cuts, where the net budget goes down.

But like I said earlier, I don't expect that until the Chinese take away the credit card. They're getting worried, and have Geithner over there right now.

 

____________________
Obamacare: To insure the uninsured, we first make the insured
uninsured and then make them pay more to be insured again,
so the original uninsured can be insured for free.

 

Maximum Peach



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  posted on 5/28/2009 at 03:22 PM
quote:
Where can I get one of these Chinese credit cards you speak of?
You already have it! Thousands have been charged in your name by our representatives in Washington. MGLowenstein III will still be paying the interest in 2109!

 

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Obamacare: To insure the uninsured, we first make the insured
uninsured and then make them pay more to be insured again,
so the original uninsured can be insured for free.

 

Zen Peach



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  posted on 5/28/2009 at 03:29 PM
W sent the head of HUD to China in 2006 to see if they'd be interested in buying large chunks of subprime mortgage debt.

They weren't.

 

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Peach Extraordinaire



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  posted on 5/28/2009 at 04:15 PM
quote:
W sent the head of HUD to China in 2006 to see if they'd be interested in buying large chunks of subprime mortgage debt.

They weren't.


By the way, how about those Red Wings, huh?

 

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As a patriot and a loyal member of the opposition I pledge to offer our new President the very same benefit of the doubt and unwavering support that the left offered George Bush over the last eight years.

 

Zen Peach



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  posted on 5/28/2009 at 08:23 PM
quote:
quote:
Your premise approaches the issue just like a politician does:


Ron Paul is a politician too. His ideas are about as good as Ayn Rand's, and your's. I am simply saying that if you cut taxes, you cut revenue. It is impossible to increase government revenues by cutting taxes. If that were true, you could raise infinite amounts of money by removing all taxes.



Nobody has said anything about removing all taxes. But it's been proven time and again that the more confiscatory tax rates get, the greater lengths people go to avoid paying it. High taxes dampen economic activity, leading to less sales taxes collected. High taxation does change peoples behavior.

In the real world, if high taxes and spending led to a sound economy what happened in California? They should be flush with money, right? And in spite of all the trouble they find themselves in, their solution was to raise taxes even further! It was voted down because the people there have had enough, and it was defeated handily.

Conversely, look at the Chinese. They enacted substantial and lasting tax relief years ago and it's led to record-setting economic growth.

 

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Sublime Peach



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  posted on 5/29/2009 at 07:25 AM
Pat, you stated that tax cuts increased revenues. I am just saying that is bogus.

As for California, that is simply a failure of democracy. They are not bringing in enough to cover their expenses, so now they are closing schools and other vital services. Governmental collapse.

First we had the real estate collapse, then a finincial collapse, and that is triggering a commercial collapse. Now add in governmental collapse in California and you have to wonder where it ends.

 

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Zen Peach



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  posted on 5/29/2009 at 07:37 AM
The reason for the revenue falling is our share of the Obama stimulus package. We're getting $400 in the form of less withholding tax in our paychecks, about $8 a week in my case.

I suspect that come next April a lot of us will be giving that money back.

 

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Maximum Peach



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  posted on 5/29/2009 at 08:43 AM
quote:
My point is that tax cuts do not increase government revenues.


Nor do increases necessarily. People will find ways to avoid paying it. I always liked the Laffer Curve, which essentially says there is a balance to be had with relation to taxes.....then again, he is a big supply side guy!

 
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