Charlie Sykes had to go and write a book. Then the liberals responded with 50+ Things You Won't Learn From Talk Radio, and then Tom McMahon and Jessica McBride responded, and now finally we have this from Jay. For me by the way, that list would actually be the infinite number of things I don't learn on talk radio, since I don't actually listen to any talk radio. I'm not going to attempt to go down their entire list, because frankly, it's just not my style. But I will attack one particular point... Tax cuts don't increase revenue.
There has been a lot of contention around this point. In fact, it's almost akin to a religion for both sides. Liberals believe whole heartedly that you can tax and tax and tax ,and that the money will always be there to tax some more like a cornucopia. Conservatives believe that if you lower the percentage and remove the loopholes, you will both spur the economy and make more actual dollars taxable thereby increasing overall revenue, while also being more fair and leaving more dollars for the average person. By my description of the two sides, I'm sure you can see where I fall.
But before I get to the actual facts of the matter, I would like to discuss one point that nobody seems to have covered yet. Why is the goal of taxes to increase revenue at all? Excuse me while I discuss basic libertarian tenants here, but government is not a business. If we decrease taxes, and revenue decreases as a result, thereby decreasing the overall size and influence of government... Why is this is a bad thing? Actually, I think it would be a damn good thing. I bring up this point, because although nobody is talking about it, this is the real point of contention that will always remain unsettled between the two sides. Liberals think increasing government revenue is a good thing, while libertarians and fiscal conservatives don't see that as a goal to be strived for. But I digress. Back to the original "revenue" argument.
One of the things about liberal thinking that always amazes me is how they can both believe that increasing taxes can increase revenue, and also believe that increasing taxes will decrease demand for things until nobody does it. I'm of course talking about smoking. The whole goal of constantly increasing cigarette taxes is to decrease the demand for cigarettes, and then use that money to supposedly pay for the societal ills that cigarettes cause. Yet somehow, when they increase the taxes on work, they don't seem to think that less work will then occur. I'm still trying to figure that out. According to liberals, increasing taxes on unwanted things leads to less of the unwanted thing, while increasing it on things we like somehow also increases that thing we like. It's a miracle I tell you... praise Jesus!
But onto more solid evidence. One of the cooler phenomena that has happened in the former Soviet states since the 1990's is their incredible economic growth compared to that of the Western European states that are slowly turning socialist with their large government social programs. One of the keys behind this incredible growth has been that many of these former Soviet states in Eastern Europe have adopted the flat tax. Here is one example of what the flat tax has done (emphasis mine):
Karl Marx might be shocked to see who’s doing what with tax systems in Central and Eastern Europe these days. After all, it’s the capitalist West that won’t abandon progressive tax systems, which Marx championed in The Communist Manifesto, while the former Soviet bloc countries are lining up to buck their old ideological fountainhead by moving to a … single tax rate for nearly all earners, regardless of income. Nowhere has this flat tax caught on more swiftly than in Central and Eastern Europe, where nine of world’s 13 countries to have adopted the system are located. It’s a reform movement that started in 1994 with Estonia, gained momentum when Russia saw a 25-percent increase in state revenue from personal income tax after implementing a 13-percent flat tax in 2001, and culminated with Slovakia’s much-lauded adoption of a single 19-percent rate on income, corporate, and valued added tax three years later....Few, if any, of the reforms in Central and Eastern Europe meet the definition of a true flat tax because they include deductions, exemptions, and other exceptions. … Several Western European leaders complain that the lower tax rates … give the newer European Union states an unfair advantage in attracting business.
What's amazing about this is that we're not talking about small increase here. That's a 25% increase one year over another simply by enacting a flat tax. What amazes me more is that liberals wouldn't be jumping all over this like white on rice. That's 25% more money that they can waste on jobs programs that don't actually create jobs, and health care initiatives that don't actually increase our health. That's 25% more dollars they can spend on giving away condoms to aborted babies.
Now why wouldn't they want to do that? Now that I think about it though, maybe its a good thing that we don't do this. After all, if it increases revenue and therefore increases the size of government, that can only lead to bad things. I guess for some people, it will always be Voodoo Economics.
<P> Think of the uses of $300 billion, the annual gap between what taxpayers owe and what they pay. .. An IRS study last year concluded that the tax gap in 2001 was $345 billion. Of that, $197 billion came from underreporting on individual income tax returns and $88 billion from underreporting by corporations and the self-employed. The rest came from those not filing or not paying the proper amount. </P>
Disclaimer The opinions expressed herein are my own personal opinions and do not represent my employer's view in anyway.