Originally Posted by e1618978
This is where you made the argument - do you continue to support your assertion that the 1992-2000 trend line would have continued without the Bush tax cuts or not? If you still support that, I don't see why you would have a problem asserting that the trend line would bump back up again if the tax cuts were reversed. You don't seem very sure of your argument if you are not willing to predict large revenue increases as a result of the end of the bush tax cuts.
Again, even though you think I "would not have a problem asserting" something, I did not assert it. It's ridiculous to think we would just jump back up into some previous trend, and I don't believe that would happen. But I certainly do believe we would take in more revenues, and I'd like to find an economist who disagrees.
But rather than arguing about arguments I never made, let's first get to an argument that you actually have made:
My assertion that the Bush tax cuts raised revenue is based on the fact that revenue did, in fact, increase during the period (faster than the GNP, faster than inflation), and that the 2000 recession was (IMHO) very short and mild due to the tax cuts. I don't have the luxury of two seperate universes to play around with to know for sure what would have occurred in two separate histories - all we can do is predict what will happen. IMHO it will be pretty obvious who is right and wrong in 2-4 years from now.
1. I find it interesting that, as franksargent points out, that the graph is recording what happened after 2008. A large part of that trend that you're pointing to is actually in the future.
2. We don't need two separate futures - we have the predictions at the time of what would happen with Bush's tax cuts. We have Gore et al. on one side, saying we would go back into deficit, and we have Bush and the media and everyone else laughing it off and accusing Gore of "fuzzy math."
3. Yes, revenue eventually went back to increasing again after Bush's tax cuts (after a couple years of decreasing). Revenue always increases, because the economy grows, the population grows, productivity increases, etc. Look at that trend line dating back decade after decade. You haven't addressed this, so please do: How can you claim Bush's tax cuts caused a trend to occur, when that trend had been in place for decades prior to Bush's tax cuts?
(Bolded so you wouldn't avoid it again.)
4. Please address the fact that the White House economic people, not to mention neutral and liberal economists, all reject the idea that tax cuts increase revenues. They all say that tax cuts reduce revenues, as I and others have linked to over and over again in the past. Why do they say that, and why do non-economists on the internet claim otherwise?
5. The recession was over, according to the quasi-official dating by the NBER, by third quarter 2001, before Bush's tax cuts took effect. How did Bush's tax cuts then stop the recession?
If tax cuts do not increase revenue, it looks like they don't decrease it either (at least, IMHO they don't based on the graph). Any tax bump that fails to raise new revenue is a bad idea - and again we will find out all about that in a couple years after Obama raises the rates - it will be plainly obvious (one way or the other) for all future generations to see, and we won't have to argue this particular point any more.
We've already done this experiment, over and over again, and it already is plainly obvious, and we don't have to argue this point any more:
1. We did it when Reagan cut taxes in the 1980s, and claimed it would wipe out the deficit, but the deficit actually skyrocketed.
2. We did the experiment when Clinton increased taxes in the 1990s, and Republicans claimed we would go into the worst depression the world has ever seen, but we actually had the best economic period in US history and eventually completely wiped out the deficit.
3. We did the experiment in the 2000s when Bush cut taxes and said we wouldn't go into deficit, but we did.
How many more times do we need to do this?