Ron Paul For President in 2008

[N-Syte]

@ Final-Fan
A bit touchy, eh? If cutting spending is so important to you, then why is it so much of your passion is devoted to defending increasing the taxing power of government?

Let’s start with the last tax cut. Bush signed it into law May 28, 2003.

And now let’s look at receipts of each fiscal year since then against GDP.
03 Total Receipts: $1,969B GDP: 10,828B = 18.2%           16.5%  (OMB)
04 Total Receipts: $2,034B GDP: 11,712B = 17.3%           16.3%  (OMB)
05 Total Receipts: $2,287B GDP: 12,042B = 18.4%           17.5%  (OMB Est)
06 Total Receipts: $2,537B GDP: 12,641B = 19.4%           17.5%  (OMB Est)
07 Total Receipts: $2,709B GDP: 13,543B = 20.0% (Est)   17.6% (OMB Est)

Since you won’t allow me to use my nutso economists as sources, I resorted to using data from the IRS. (I guess I wouldn’t have to if I was able to use the smart, sophisticated economists you turn to. Let me guess, Krugman?)  I also added the percentages from the Office and Management Budget.  The post war average is about 17.9%.

Sure the rate drops in ’04, but would you give them at least one year to take effect? It’s not as if signing a bill works like a light switch. What’s even more stunning is that this was achieved during a period of war and dramatic increases in fuel costs.

We could go through the same exercise in the 80’s, the 60’s, and the 20’s. Shall we make it a game where you pick the decade? Maybe we could look at the inverse when taxes were increased?

Look at corporate taxes. In 1985 the Brits were the first to kick off what turned into a tidal wave of corporate tax cuts across the West (those other nations needed to stay competitive, no?) When you look at the 20 or so countries that cut their rates, the results are stunning. Some cut there rates by a third, while others slashed them by nearly a half. The result is the same. Receipts as a percentage of GDP went up remarkably. OK, OK many of those countries also reduced the depreciation corps could claim (a tax shield, but you already knew that). But the results have been the same even after the impact of depreciation is phased out.

Well, of course the tax base would need to increase! What do you think economic growth does? Yet you are skeptical that tax cuts could some how contribute to that growth? I give up!

I’ve already said that my first preference would be to cut spending. I’ve simply challenged your proposition that raising taxes to reduce the debt is the better alternative if we must spend like drunken sailors. And yes, the debt went up dramatically over the last seven years. Embarrassingly so. But it was the spending side that drove it, not mythical declines in tax receipts.

As far as how severe US debt is on a relative basis, here is a sampling:
2005 Debt vs GDP
US 75%
Denmark 204%
Canada 48% (go Canucks!)
France 155%
Germany 156%
Spain 88%
Sweden 194%
Belgium 302% (and top income tax rate is 50%! Ouch)
Norway 159%
Swiss 350%
Britain 394%

You can wax on into infinitum about the joys of tax increases, but if you really want to keep this nightmare from reaching the US, run away from any candidate advocating government solutions to societal problems. Any candidates pushing a program beginning with the word “universal” is a good start.