Comments on: The Truth About Tax Cuts https://themusingsofthebigredcar.com/the-truth-about-tax-cuts/?utm_source=rss&utm_medium=rss&utm_campaign=the-truth-about-tax-cuts 53 years and 204,000 miles of business, CEO, leadership, startup, political, military wisdom Thu, 10 Jan 2013 17:21:00 +0000 hourly 1 https://wordpress.org/?v=5.9.11 By: JLM https://themusingsofthebigredcar.com/the-truth-about-tax-cuts/#comment-147 Thu, 10 Jan 2013 17:21:00 +0000 http://themusingsofthebigredcar.com/?p=750#comment-147 In reply to Mike.

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I am with you on everything other than the impact on revenue of anything other than tax cuts.

The increase in government spending is going to increase income. This is classic Keynesian economics whether folks embrace it or not.

The housing boom is going to increase revenue to the homebuilders and other contractors. Big multiplier effect in this industry.

The refinancing of existing homes is a tax free transaction.

Good times are felt across the board. Just as bad times are.

Nonetheless, the increase in tax revenues was fueled in great measure by tax cuts.
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]]> By: Mike https://themusingsofthebigredcar.com/the-truth-about-tax-cuts/#comment-146 Thu, 10 Jan 2013 17:09:00 +0000 http://themusingsofthebigredcar.com/?p=750#comment-146 Starting the graph in 2001 is part of the issue since revenues had fallen precipitously from 2000 – 2001 (though this was not Bush’s fault). Also, remember that EGTRRA was passed in June 2001 yet tax receipts fell sharply again that year. In other words, the economy recovering from the 911 / dot com crash / Enron era of 2000 – 2003 explains a great deal of the pickup.

http://www.heritage.org/federalbudget/current-tax-receipts

When you add another tax cut, doubling defense spending, a housing boom fueled by historically low rates and relaxed standards, and everyone using their homes like an ATM machine, you should see an increase in revenues, no? I think it’s fairly telling that revenues peaked the same year housing prices peaked…

I’ll conclude by saying that I think Romney lost a perfect opportunity here. Had he come in and said that he’d attack spending first, then refocus on cutting taxes once we reached a balanced budget, I think he would’ve won.

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