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2
4
yes no
Debate Score:6
Arguments:6
Total Votes:6
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 yes (2)
 
 no (4)

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clay123(135) pic



do tax cuts pay for themselves

bush tax cuts, regan tax cuts, any many more do they add to the defcit or do they pay for themselves?

yes

Side Score: 2
VS.

no

Side Score: 4
1 point

with tax cuts they stimulate the economy and drive up tax revenues so that's how they pay for themselves and they keep people Happy and it has proven with the bush tax cuts how they pay for their selves the reason we are in a deficit is not because we are taxing too little it is because we are spending too much

Side: yes
dave93(85) Disputed
1 point

How is spending bad? It is 17% of GDP. By the way GDP=C+I+G+nX where G is government spending. This means that the higher government spending is, the higher GDP will be (up to a certain point). However the fact remains that 17% of GDP is made up of government spending. Reducing that percentage will result in a loss of GDP and thus a loss in the economy

Side: No
casper3912(1581) Disputed
1 point

How does cutting taxes drive up tax revenue?

The right kind of tax cuts can stimulate the economy, the reason we are in a deficit is because money is debt, which means cash flow needs to be on a certain level so government spending substitutes for consumer spending when it falls and government soaks up the debt(like a large scale loan consolidation). The deficit isn't really that bad, we just should probably get rid of it before the next recession so we can do it again;(it'll be worse though).

Side: No
dave93(85) Disputed
1 point

What is the basis for your argument? You can't simplify the issue of taxes in one line like you did. Taxes are extremely complicated so stop rambling on about an issue that you clearly have no idea of how it works. At least read an economics book and then post something useful.

Where did the concept of how tax cuts pays for itself originate? It originated with the Reagan administration's policy of "supply-side economics." Reagan believed that tax cuts would raise revenue, an idea that came from economics Arthur Laffer, who propoesed the supply curve. What happened? Tax revenues did not increase; in fact it actually decreased, and is in part one of the causes of our huge deficit.

So how do tax cuts work? According to the Laffer curve, a decrease in taxes increases revenue to a certain point, at which the reverse becomes true, thus forming a parabolic relationship between taxes and revenue. Different taxes for different goods also have different Laffer curves. Luxuries including private yachts, huge beach mansions, and Lamborghini Murcielagos have extremely inelastic demand and supply curves. This means that the deadweight loss that comes from taxes is proportionally lower as taxes rise. Thus, a tax cut would result in a decrease in revenue. If you didn't fully grasp what I just said...again, go read an economics book.

Basically, since the market for luxuries is inelastic and the market for necessities is elastic, tax cuts for rich people would not be as effective as a tax cut for poor people. Therefore, according to one of the basic principles of economics, a tax cut for poor people, if taxes are high enough, will stimulate the economy (also raise tax revenue) and a tax cut for rich people, if taxes are not high enough, will not stimulate the economy (also lower tax revenue).

My explaination of how taxes work is even still a very gross oversimplification of the issue but its the basic idea that most experts agree on.

Side: No
1 point

Granted this question wasn't well thought out.

It originated with the Reagan administration's policy of "supply-side economics."

Actually, no, it was John F Kennedy.

"Lower rates of taxation will stimulate economic activity and so raise the levels of personal and corporate income as to yield within a few years an increased – not a reduced – flow of revenues to the federal government." Tax

Tax revenues did not increase; in fact it actually decreased, and is in part one of the causes of our huge deficit.

With relation to supply side economics and the Laffer curve, tax cuts actually did raise revenue under John F Kennedy. This principle was applied in the early 1960's. The Laffer Curve is directly in relation to spending. If there is huge spending, then there needs to be high taxes.

Therefore, minimal government equals low taxes.

Under Reagan, it fell short because he continued large government spending at the time, in which the Laffer Curve is obviously affected by spending.

The government doesn't have a right to anybody's money; OH, wait, only until they pass laws and force payment and threaten with jail time.

Basically, since the market for luxuries is inelastic and the market for necessities is elastic, tax cuts for rich people would not be as effective as a tax cut for poor people.

First, when was the last time poor people created jobs, well never, rich people create jobs because they have capital. Letting them keep of them gives incentives to pursue more, in which creates jobs.

Also, this is funny because you are telling others to read a economics book, which in fact you need it more.

Goods and services that which are inelastic are not necessarily necessities, When inelastic goods and services change in the price, they do not affect the quantity demanded for the good. For example, these would include bread, rice or eggs. Even cigarettes are considered inelastic. Raising prices will cause total revenue to increase. (DO YOU GET IT NOW, or YOU JUST COULD READ A ECONOMICS BOOK)

When elastic goods and services change in the price, they do affect the quantity demanded for the good; this is where complements and substitutes goods come into play. Raising prices will cause total revenue to decrease. For example, these would include yachts or soda.

Second, why are you rambling about price elasticity of demand in relation to tax policy.

Tax policy is macroeconomics while elasticity is microeconomics.

Therefore, according to one of the basic principles of economics, a tax cut for poor people, if taxes are high enough, will stimulate the economy (also raise tax revenue) and a tax cut for rich people, if taxes are not high enough, will not stimulate the economy (also lower tax revenue).

What insane principle is this mumbo jumbo?

Side: yes

It is believed that with more money in the private sector, there will be more spending, but that is an assumption. There is no way to prove that the private sector will always spend more money when they have it.

Side: No