12-11-2016, 04:33 PM
Warren Dew Wrote:From the standpoint of desirability, as discussed at the links I provided, we need to start with the need to increase the labor force participation rate, or at least keep it from decreasing any faster than necessary, to maintain living standards. As discussed at the links I provided, that involves either or both of increasing incentives to work or reducing subsidies for not working.
The obvious way to increase incentives to work is to reduce income tax rates. Past a certain point, reductions in income tax rates will increase the deficit and thus the debt. That's a reason increased debt would be desirable.
This makes no sense. You give an example of a plumber who if you cut his taxes, we will be incented to lower his prices to drum up more business (i.e. more hours). That is if you subsidize the plumber so that he can maintain his standard of living while working for less money per hour, he will opt to do this. Why? Why not just use the extra income from the tax cut to pay down debt, sock more away for retirement, pay for the kid’s college or increase his standard of living? Why would he choose to work more to less money (per hour)? Would YOU do that?
You seem to think that a tax cut is somehow different from any other increase in income. Suppose the plumber, instead of seeing an income increase from the tax cut, got it from an inherited annuity? How is getting a second check each month for X dollars functionally different from getting X dollars more per month on the job from a tax cut? Seems the same to me.
But how is receiving an inherited annuity or a tax cut any different from simply getting a check from the government each month (i.e. stimulus)? In any of these case the choices would remain the same (1) save it or pay down debt (2) spending it (3) pass along you good fortune to your customers in the form for lower prices.
Yet don’t conservatives agree that giving out handouts decreases the incentive to work?
It seems you don’t understand how supply side works. Supply side is tax cuts for RICH people. The fact that they include non-rich people in the actual tax cut policies is because it is good politics. But the whole supply-side theory is critically dependent on most of the tax cuts going to high income individuals. That is key, and not because supply siders are greedy or hate the poor. Jack Kemp certainly did not and I cannot believe Paul Ryan feels that way either. Yet both wanted/want to give major tax cuts to high income folks and cut government payments to the indigent.