Bullshit, then why didn't it work during the Bush administration? They were counting on that effect in order to balance their budget. Same goes with the Reagan administration. They were counting on that extra money to balance out their spending. When it didn't materialize, Reagan left the US with over $4tn in debt and Bush with over $11tn in public debt which was supposed to be paid off with the extra tax revenue.

Because tax cuts can't cover war spending :D

If you cut taxes but on the same time you spend much more than before, the bigger tax income won't cover the debt.

I couldn't find a better graph, but it shows the tax revenue grown. But the spending grown much more.

http://www.renewamerica.com/images/columns/bowyer030411.gif

http://static8.businessinsider.com/image/4e1b069c49e2ae172a000000/us-federal-receipts-and-expenditures-2000-2011.png

If that Bush moron used bigger tax income into something productive instead of war on Iraq, the Obama's administration wouldn't need to struggle with all these problems Bush's administration left him.

One thing I know for sure - rising taxes during recession/crisis is never the smartest idea..
By the way, both Romney and Obama agreed during that debate, that they need to lower taxes for business entities, especially small businesses, to stimulate the growth and create more jobs... Obama also said that he will reduce spending, so wow, he starts to make some sense...

have you got a graph for the swedish tax cuts?

So, which is it, do tax cuts increase tax receipts or not. I told you earlier that it's magical thinking to expect that tax cuts will lead to more revenue. And now you're agreeing with me. I'm not really sure how to respond to that.

As far as the Bush administration goes, it's normal after a period of time where there's a recession for there to be a spike of sorts in the tax receipts generated when the economy starts to move again. You would see that in pretty much ever scenario that you're likely to encounter.

If you take a look at that second graph that you linked to, you should note that once the tax receipts started to grow they grew in what appears to be proportional with government spending up until about 2007.

The tax cuts were a constant for that entire period as well, suggesting that the tax cuts didn't do crap. As whenever you have government spending the government will be taking a slice out of all that income generated in the process. All the tax cut did was signal to investors that other people are going to be investing soon so you better get in before they do.

Yep, that's conjecture, but it's much more solid than the alternative that lowering tax rates leads to more tax revenue.

There are a ton of "Technical Analysts" who do exactly that. They buy and sell based upon the assumption that others will do so when a price hits a specific number based upon tea leaves. Much of the job of managing the economy is convincing people that things will continue in a predictably stable fashion.

I'd like to see that as well. I'm not seeing any evidence of tax cuts raising tax revenues.

Well, I see tax income just like sales index in your shop.

If something sells well, you should rise the prices (or taxes during growth) to receive more income. But if you rise the price/tax too much, you won't sell this much / you will see less revenue in total.

Rising taxes during growth is a good strategy, but after every growth there is a recession and then you have to lower the taxes or the recession hits harder.

If you lower the taxes too much, you will see less income just as making them higher too much would do the same

another link about Sweden:
http://www.aei-ideas.org/2012/05/swedens-amazing-supply-side-tax-cut-experiment/

Thanks but you said cutting tax rates increased tax revenue. This article just suggests cutting tax rates increased economic growth, which is fairly obvious.

What I was hoping to see was something to back up the statement:

"And Sweden did that [lower taxes] recently and guess what? Tax revenue has grown significantly."

I would be very interested in that!

As my second link covers that, the tax cut "paid for itself" , it means the tax revenue was big enough to cover all the expenses without having to borrow a single dime.

And the budget defficit in Sweden disappeared.

But maybe somebody from Sweden could describe this better...

And economic growth means more people spend more money and more businesses create more income = more tax income...

and, for example, Polish VAT tax income. The second marking on the right shows the moment when VAT was increased by 1%

http://1.bp.blogspot.com/-gZkX7ddXCoA/UAR6b1PVlXI/AAAAAAAACc4/ls8TTQ3jPZI/s1600/vat1.JPG

http://janpinski.nowyekran.pl/post/71221,podwyzka-vat-spowodowala-spadek-wplywow-do-budzetu
(the source is in Polish because you can't find English sources about polish economy so easily, so use google translate :P)

It's not like all tax cuts and all tax rises will have an contradictional impact. But rising taxes after certain amount will lower the income.

All right, I'm gonna watch the whole debate now. If you still think that lowering the taxes during recession isn't the best thing for tax income and economy, well... thankfully, even Obama sees it different than you :P

All I am saying is best thing for economy and increasing tax are not the same thing. Best thing for the economy is subjective. Lowering tax rate = More tax paid can be tested (fairly) objectively. If there is some evidence to show that it has happened, I would like to see it.

http://www.ekonomifakta.se/sv/Artiklar/2011/Januari/Skattetryck-vs-skatteintakter/

What a Laffer curve shows is that as a treasury minister, you should seek for a perfect tax percentage. If you go higher or lower than that amount, you will loose revenue. But the situation in the economy is dynamic, so you have to respond accordingly - lower the taxes during recession, make them higher during growth.

Chance of debt going down with either guy in office: zero.

The color of the tie of the person in the Oval Office does not change the way politics are done in Washington. The debates are just there to make people think there is a difference between the two candidates, and to concede their personal beliefs while giving into the social and media pressures of "picking a side".

People want real change? Vote out all incumbent politicians. All you're doing otherwise is reelecting the same people who tax the hell out of decent, hardworking Americans to fund foreign wars and bailouts for banks that like to gamble with Americans' assets.

I leave you with the wise words of the late George Carlin. http://www.youtube.com/watch?v=acLW1vFO-2Q

I disagree with you strongly. Normally I would concur with such a statement but Romney has already shown he means business. Picking Paul Ryan - THE debt, deficit and economics guy in congress - shows that Romney is serious about fixing problems. You don't pick a guy like Ryan if you're just trying to be president. You pick a guy who can bring you a state or a bloc of voters; i.e., Portman or Rubio.

Also, I see we have a dude "Hedwards" who has decided to join this debate and copy/paste the same old talking points without putting so much as an ounce of original thought into his "positions." I also teach econ (although not in a couple of years) and I cannot name a single time in US history when lower taxes did not result in economic growth and an increase in federal tax receipts.

As tax rates rise, less people pay taxes. That is as true and constant as anything in life. Guess how many people paid taxes at the top tax rate under FDR? I'll post the answer later but I seriously want to see hedwards or some other left-wing zombie take a stab at it first.

@hedwards, et. al - The Laffer curve is Economics 101, guys. Seriously, you need to read up on this kind of thing before trying to have a debate about taxes. The links keeveek provided are a decent real-world examples. Here's the wikipedia article to get you started: https://en.wikipedia.org/wiki/Laffer_curve

Picking Paul Ryan does show that Romney is serious about the financial side of things, because Paul Ryan has *already* been willing to burn bridges and cut through "politics as usual" about the deficit, so he's going to fight for deficit reduction regardless of Romney. If Romney isn't actually serious about finances there is going to be serious egg on his face and Paul Ryan will probably put it there.

The flip side of that is that the Vice President position doesn't actually have a lot of official power, the job's all about what the VP and Pres make it. It's a position that can be used to bury someone very thoroughly, although you usually have to have their cooperation (ex: Biden, who apparently can't go on national TV without embarrassing the Pres, and is basically no longer in contact with the media).

Cheney could get things done because Bush made him the Pres' right-hand man, and because Cheney had a lot of connections and bridges. Paul Ryan has already burned some bridges, so how much he can actually do may be more limited. And it will depend on just how solidly Romney positions him in the administration. But it's a great VP choice to make a statement that Romney is actually paying attention to the economic situation.

Oh god, thanks men!

At last somebody with education about economy... The world is not doomed yet...

This article covers most of the facts about Laffer curve:
http://www.heritage.org/research/reports/2004/06/the-laffer-curve-past-present-and-future