re: #229 Varek Raith

You guys won’t be taken seriously on the deficit/taxes until you realize that supply side economics is an abject failure and that tax cuts don’t pay for themselves. Also, jettison the stupid Norquist pledge you guys hold in such high esteem.
Then we’ll talk.
Mmmkay?

Well, not exactly.

Take a super-simplified income tax…a 0% tax rate will bring in $0. A 100% tax rate will also generate no revenue…no one will report any income. As you move away from these two extremes, revenue from the tax will rise.

So mathematically, somewhere in between there is a maximum level of tax revenue. If your tax rate is higher than the “perfect” peak rate, a tax reduction will actually increase revenues. If you’re at or below that peak rate, a tax reduction will reduce revenues.

More complicated taxes obviously have more complicated solutions than this, and people won’t agree on where the tax rates today are relative to the peak rates, but the basic underlying principle is sound. It’s also a good reminder that there is a point at which raising taxes really does hurt revenues. France is about to find this out the hard way.