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<blockquote data-quote="brett636" data-source="post: 978667" data-attributes="member: 249"><p>I can understand how you came to this conclusion, but I maintain that it can only make the current debt problems worse. </p><p></p><p>There are two problems I see with this line of thinking. </p><p></p><p>First off you are probably assuming that tax rates and tax revenues are directly related to one another. That is when tax rates rise so does tax revenue. This is simply not the case and the easiest one to make is the Capital Gains tax rate. There is plenty of evidence that shows when the Capital gains tax rate rises, the tax revenue the government collects from this tax drops which removes any rational reason to raise it but does offer an incentive to continue lowering it. The same case can be made for straight up income taxes where you reduce the economic incentive to produce when the government takes more in taxes from the reward of producing more. Case in point is my personal paycheck. I'm sure you know what my overtime rate is, and I have calculated that after a certain number of hours for the week(over 54-55) my take home hourly rate is right around $10/hour despite my actual hourly rate being more than 4 times that amount. This has reduced my desire to work more hours despite the fact that more hours are available to me if I wanted them. The same holds true for business owners. At some point its not worth their time to continue producing due to taxes and they simply make a concious decision to not produce beyond a certain level. </p><p></p><p>Secondly, even if higher tax rates produced higher tax revenues I do not believe for one second that our politicians will honor that extra revenue as deficit reducing revenue. If lightening struck and they did so it would not last past one election cycle because most Congressmen have it in their mind that their people want to see the evidence of their tax dollars at work so these politicians will make up new ways to spend the extra revenue in their districts in order to continue to be re elected. To payoff this level of debt we need many Congresses and presidents to understand that the extra revenue from these higher taxes(if they actually produced higher revenue which they do not) is to be used for debt reduction only and honestly I have no faith that either party has the self control to make this happen past one election cycle. If you give these people more money they simply find more ways to spend it and then some. You have to reign in spending in a big way and then make it impossible to spend more before higher tax rates could solve the problem, but by then higher tax rates would be unnecessary. Do you see my logic here? </p><p></p><p>Its not just that I am against tax rate hikes because I am simply against higher taxes (because I am), but that I don't see it as a honest solution to this debt crisis we are in. Higher tax revenues for our politicians, regardless of party affiliation, won't mean squat unless they are forced to keep their spending in line.</p></blockquote><p></p>
[QUOTE="brett636, post: 978667, member: 249"] I can understand how you came to this conclusion, but I maintain that it can only make the current debt problems worse. There are two problems I see with this line of thinking. First off you are probably assuming that tax rates and tax revenues are directly related to one another. That is when tax rates rise so does tax revenue. This is simply not the case and the easiest one to make is the Capital Gains tax rate. There is plenty of evidence that shows when the Capital gains tax rate rises, the tax revenue the government collects from this tax drops which removes any rational reason to raise it but does offer an incentive to continue lowering it. The same case can be made for straight up income taxes where you reduce the economic incentive to produce when the government takes more in taxes from the reward of producing more. Case in point is my personal paycheck. I'm sure you know what my overtime rate is, and I have calculated that after a certain number of hours for the week(over 54-55) my take home hourly rate is right around $10/hour despite my actual hourly rate being more than 4 times that amount. This has reduced my desire to work more hours despite the fact that more hours are available to me if I wanted them. The same holds true for business owners. At some point its not worth their time to continue producing due to taxes and they simply make a concious decision to not produce beyond a certain level. Secondly, even if higher tax rates produced higher tax revenues I do not believe for one second that our politicians will honor that extra revenue as deficit reducing revenue. If lightening struck and they did so it would not last past one election cycle because most Congressmen have it in their mind that their people want to see the evidence of their tax dollars at work so these politicians will make up new ways to spend the extra revenue in their districts in order to continue to be re elected. To payoff this level of debt we need many Congresses and presidents to understand that the extra revenue from these higher taxes(if they actually produced higher revenue which they do not) is to be used for debt reduction only and honestly I have no faith that either party has the self control to make this happen past one election cycle. If you give these people more money they simply find more ways to spend it and then some. You have to reign in spending in a big way and then make it impossible to spend more before higher tax rates could solve the problem, but by then higher tax rates would be unnecessary. Do you see my logic here? Its not just that I am against tax rate hikes because I am simply against higher taxes (because I am), but that I don't see it as a honest solution to this debt crisis we are in. Higher tax revenues for our politicians, regardless of party affiliation, won't mean squat unless they are forced to keep their spending in line. [/QUOTE]
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