No. of Recommendations: 3
If you take the case of a revenue neutral tax cut (that is one in which Federal expenditures are decreased to balance a tax cut), the stimulation is decreased because most of the wealthy get most of the tax cut (they pay most of the taxes, remember.). But not all the increase in income the wealthy receive go into productive ventures. They will put a lot of their money into Treasuries (and foreign bonds) and existing stock which is not stimulative.

Right, most of "the rich" (those with household incomes over $100k who pay 60%+ of the FIT don't have that efund and are just waiting for a tax break to roll around so they can establish it.

I submit that it is more likely that a large portion of any tax cut for people at this level is very likely to be either spent or invested in assets more profitable than treasuries.

I guess since all you have an undocumented quote that is cited out of context and is to appear authoritative based on it's purported origin and since all I have an opinion, we're at an impasse.


In contrast all of Federal spending is productive, even pork is productive to some part of the economy because the Federal government only contracts for services and items or gives money to people who spend it on something in the country ( rent, groceries, automobiles, etc.). In a revenue neutral tax cut, you therefore get less stimulation than if you had left things alone.

Rhetorical question: where does the moeny to purchase pork come from? The feds can only purchase pork becuase they have either taxed someone else, or laid claim to future taxes (run a deficit). In either case, your example ignores the fact that someone else had the money before it was spent on pork. It was taken from them, so it's not their most economically valuable trade and therefore diminishes it's value to everyone.

The government does not have an economically sound reason to be in the either the "pork" or redistribution (talk about an Orwellian phrase) games.


One thing that you do get is a change in the mix of what money is spent on such as fewer battleships, highways, and low cost housing and more expensive mansions and other homes, more automobiles and home improvements, and, perhaps more groceries.

Novel concept. The government making choices with limited resources (favoring Constitutional mandates over those not so enumerated (and therefore reserved to either the states or individuals)) and letting people pursue life, liberty, and happiness on their own terms.


A New York Times editorial on August 12 (Painting the Economy Into a Corner) states that the reduction in tax rates provided only 59 cents on the dollar of economic stimulous whereas the tax cuts for dividends and capital gains produced only 9 cents of stimulous for every forgone dollar. "In contrast,the economic bang for a dollar of aid to state governments is $1.24. Yet such assistance accounted for only 3 percent of the total cost of Mr. Bush's fiscal policies."

Great!!!! Now, if only we could find someplace in the Constitution where it says it's OK for the federal government to play Sugar Daddy to the states.

The bulk of money that would be paid to the states is derived from income taxes (or worse, SS "surpluses"). It is an affront to liberty to believe that it is proper to take the fruits of a mans life and labor and give them to a state. Take as little as possible, and then let the states duke the proper mix of taxation and spending out on their own.


, inflation is already rampant in propterty taxes, property insurance, dental costs, and health care insurance

Taxes are not properly included in insurance. People choose, collectively, their level of taxation. It is not a production cost (including profit) that is built into prices and passed on to willing consumers.

My property insurance bill hasn't hardly budged. Last year was the first increase in 3, and it was a whopping 2.5%. Anecdote is not statistic, but don't recall seeing a convincing analysis that would lead me to believe that insurance costs (ex-healthcare) are increasing at a high rate.

wrt health insurance, I think there are two options. Either we take out the profit from r&d and content ourselves with the services we have, or we accept that with medical research pushing the envelope and with increasing demand (aging boomers, in patricular, but flippant use of health insurance as an aggravating factor), health insurance is guaranteed to rise. Until the boomers (and older) get individual policies that reflect the true cost of their care and stop depending on subsidies from everyone else (read, individual insurance plans being the norm vs. employer sponsored plans for everyone), everyone else will continue to see their premiums rise.
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