There's a great editorial over at the Wall Street Journal (click image for link) about this guy named Kurt Hauser from San Francisco, who's demonstrated empirically that government receipts as a proportion of GDP are literally unaffected by income tax rates. One could only hope that the California electorate would start to pay attention and work on pro-business legislation instead of driving more of our companies over to Texas instead.
Sadly, it's not likely with the 'but it sounds good so it must be true' knee-jerk socialists that run the state. Can you believe these idiots want to add a VAT? It's no accident that the places in Europe that are kicking butt are the places growing their GDP (Ireland, Germany), not the ones that are confiscating as much as they possibly can (Spain, France, England). What I don't have a graph to show, though, is GDP-growth rate, which is affected by taxation -- ask Ireland how to benefit from a low flat tax.
But no, the local idiots are going to try to soak the rich to cover the costs of CA's incessant borrowing. Oh, and they're also going to get out of debt by borrowing more!
8 comments:
I don't suppose one has statistics or information on the % of revenue that comes from a tax bracket, or, how much comes from corporations vs. sales tax. vs. income tax., etc.
I would better appreciate this philosophy IF I could see that what they contributed to the total US government revenue is either in or out of proportion to their contribution to GDP.
And I could read this graph another way. You can let the Rich keep more of their money and they still won't grow GDP. Revenue is GDP dependent, not tax rate dependent. Of course I'm being simplistic, but still, I need more data to agree with this one way or another.
On a final note, yes, those certain states you mention in the EU are indeed confiscating what they can, and yet the people who live there seem to be much more content, better off, and healthier as a whole than those of us where taxes are lower. I suspect its cultural, but still...one wonders.
Yes and no; it's a lot like rent control in those places -- if you're lucky enough to be employed, you're Golden. But if you should happen to lose your job, good luck getting another one.
Lowering tax rates increases GDP, which increases Government revenue. The reason that Hauser's law works, in my estimation, is a side effect of the Law of Conservation of Pain.
In addition, the notion that Europe and the European nations are some sort of utopian bubble of bliss is a sacred cow so long in the tooth that it deserves to be dug up from under the permafrost in search of DNA.
In fact, European politics right now is notable for its remarkably *rightward* shifts, because of the public's disgust with the failure of redistributionist policies.
Lower tax rates on who though? Let's say the lower 80% of the US workforce is only contributing to 20% of the GDP also and the other 60% of revenue is from corporations then one could argue that one needs to lower corporation tax rates. But I guess who really grows GDP? Is it consumer-based spending growth or corporation investment in new jobs which lead those people to go out and buy things?
As for the Europeans being content, I'll admit that the Europeans I'm talking are all the well-educated university types, and since the European system pays for their education 100% they may be much more content with the system because they have very little to lose and lots to gain.
Corporate investment is predicated upon consumer spending: they don't buy, no company.
and yes, especially if they're from western europe, (and ESPECIALLY France), you're definitely talking a relatively priveleged group.
After being in Louisiana again, I'm a bit wary of "pro-business." Pro-business here has meant "let them screw up the local economy, destroy the environment, fail to provide the jobs they said they would, and then pack up and leave anyway." Of course, I'm sure a lot of politicians here profited handsomely.
Ah, they are western European (UK, Italy, Germany, France, Sweden) so that explains a bit. My one fire science colleague from Hungary has fallen on hard times (although still employed) so now from your comments I'm beginning to see some of the other things you're referring to.
So lowering taxes on consumers then may make sense, but which group of consumers generates the most growth? Is it the top 5%, or the other 95%. It seems (note I say seems) that at times the top 5% has its own economic ecosystem which is mostly insulated from the greater US economic system and so their spending and saving rates don't really influence the GDP at all. But I would love to see some data supporting or disproving that.
Amanda: when Louisiana gets the rule of law, THEN evaluate. :)
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