Now I like Factcheck.org as much as the next guy, but sometimes they just get things wrong, like their wrong-headed analysis of John McCain’s statement that President Bush's tax cuts have increased federal revenues. They claim, “But revenues would have been even higher without them.”
Sadly, this analysis is all WRONG!
It’s surmises that people (especially higher income people) would NOT defer their incomes, as they do when income tax rates rise.
That presumption can NEVER be made.
In fact, the reverse CAN BE surmised, because “PEOPLE ALWAYS RESPOND TO INCENTIVES” and lower/higher tax rates are incentives.
In short, though tax revenues would’ve been higher HAD higher income people paid their taxes upfront, without deferring income, THAT would not have happened had tax rates stayed high, as higher tax rates are an incentive to deferring income.
Sadly, this analysis is all WRONG!
It’s surmises that people (especially higher income people) would NOT defer their incomes, as they do when income tax rates rise.
That presumption can NEVER be made.
In fact, the reverse CAN BE surmised, because “PEOPLE ALWAYS RESPOND TO INCENTIVES” and lower/higher tax rates are incentives.
In short, though tax revenues would’ve been higher HAD higher income people paid their taxes upfront, without deferring income, THAT would not have happened had tax rates stayed high, as higher tax rates are an incentive to deferring income.
JMK, that's just amazing in its ignorance of the facts and history.
ReplyDeleteIt's the equivalent of BW's liberal meanderings based on nothing other than his own preconceptions.
We saw it with the Reagan cuts in the 1980s and now with Bush's cuts.
To deny the obvious is partisanship at its worst.
That was the first thing to jump out at me when I saw that FactCheck article Mal!
ReplyDeleteWhy WOULD higher income people NOT defer more of their incomes if rates had risen or stayed the same?
There was no incentive for them to do that!
The economic ignorance is, well...blissful in its majesty, and by "blissful," of course I mean mind-numbingly, absurdly DUMB.