Are you saying that the tax reduction was not lost revenue?
(shrug) the Pro-Growth impacts of a predictable regulatory regime and reduced tax burdens are real. Revenues
have gone up.
The simple fact that revenues would have been higher without the tax cuts is real.
Respectfully, that is not a fact. That is an
assessment which depends upon
assumptions, some of which may - or may not - be valid. An example of a
fact would be the
fact that Revenues went
up, even as the Deficit did.
This demonstrates that the Deficit is far and away primarily driven by
spending, and, I would point out, that increase in spending relative to GDP (and, thus – see below – our revenues) is driven primarily by the
Entitlements:
[img]
https://fivethirtyeight.com/wp-content/uploads/2013/01/16fivethirtyeight-gov7-blog4801.jpg?w=575[/img]
So, again, to my original point – we don’t have a revenue problem in this country. We have a spending problem.
Do you think that it would have had an impact on the deficit if the tax cuts had not been enacted?
This gets complicated quickly.
1. I think that the primary driver of Revenues is not tax rates, but, rather, growth. If you chart revenues relative to tax rates, you see that rates can change wildly without producing a comparable change in revenues. If you chart it compared with growth, however, you see more consistency.
Hauser's Law is a pithy depiction of this:
[img:left]https://external-content.duckduckgo.com/iu/?u=https%3A%2F%2F4.bp.blogspot.com%2F-_VUStpyvgg8%2FXD3gBqYj8DI%2FAAAAAAAAR2Y%2Fmbp5vvD61l0Xr1-3UxRKnPeH_q86SsBtwCLcBGAs%2Fs1600%2Fhausers-law-in-action-1946-2018.png&f=1&nofb=1[/img]
Now, if you pay close attention to that chart, you will note that the average for the second half is slightly higher than the average for the first:
[img:left]https://external-content.duckduckgo.com/iu/?u=https%3A%2F%2Fflamingdumbass.files.wordpress.com%2F2010%2F12%2Fincome-tax-revenue1.png&f=1&nofb=1[/img]
That is because, when we reduced top marginal rates from maximum punishment (you could say, when we shifted from the right side of the Laffer Curve to the left side), we incentivized production relative to tax-avoidance strategies. We not only collected more revenue due to higher growth, we actually collected more revenue
as a portion of GDP, meaning that
more of that growth was being captured by federal revenues than in previous decades.
TL/DR: Incentives Work. Higher Tax Rates MUCH Less So.
