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MalabarJag · 08-09-2018, 10:50 PM

(08-09-2018, 06:42 PM)mikesez Wrote:
(08-09-2018, 06:25 PM)jj82284 Wrote: Not necessarily. An unspoken dynamic function of tax cuts/reform is broadening the taxable base of the gdp as lower tax rates disincentivise tax avoidance behaviors when actually paying income taxes.

So it is possible to have a reduction in specific tax rates and have an increase in tax revenue as a % of the National income. That's the beauty of a dynamic system. (At times past with 70% marginal rates we collected around 16%)

Even still the math dictates that at a 3% growth rate if we take in 16.5% of the National income we will be revenue neutral (assuming 17% previous effective rate).

Now if your advocating cutting spending to make reasonable tax rates sustainable then you won't get any complaint from me. The challenge of annual operating deficits is that if certain government spending is set to automatically jump 5 to 8% through baseline budgeting then it's almost impossible for any economy to keep pace.

At least we we're understanding each other. I said your analysis was incomplete, you accepted the things that I added to it and now you're adding other things that point the other way.
Your narration that things shift around such that income that the tax man didn't see it all before is now visible to him is credible, but I think the CBO already included that in their analysis.
Again we will see in April 2019.
We will compare that number to the April 2018 number X the rate of inflation, and see if real GDP growth or increased compliance wiped out the first order effects or not.

You need to compare what the April 2019 revenue would have been without the tax cuts to what is is with the tax cuts. The rate of inflation is just one modifier. How much tax would have been lost from corporations fleeing the US in 2018 had the corporate rate remained the same is another.

The tax cut was not passed to raise revenue, it was 1) to stop the bleeding of corporations from the US, (via the cut in the corporate rate), 2) a small stimulus (by reducing the top rate) and 3) to make the tax code fairer (by doubling the standard deduction and limiting the state and local tax deduction). #1 was the most important for the future of our country, and was the most significant change. If the net effect is to also raise revenue, then that's a bonus.

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