10-02-2016, 08:51 PM
(10-02-2016, 07:09 AM)treee Wrote: No one is arguing with you that you can go too far in the other direction too. You were right in your earlier post that it takes healthy amounts of moderation to avoid fiscal disaster. That said, I think policies focused on increasing the GDP would be a healthier attitude for a government than just cutting expenses.
And I think that's a big part of what's failed here. Obviously we know 0% tax rates and 100% tax rates are not optimal, but the debate is always what is optimal (and it's probably not a constant number).
The idea of "trickle down" is more jobs and supply & demand leads to wage growth. But in this case the Kansas job market was already doing fairly well, so there weren't a lot of jobs to gain. I also think the artificially low interest rates have provided plenty of easy money to businesses for investment, so you don't see the traditional bump in spending from tax cuts because there was already so much cheap financing available.
Higher taxes and bigger government DOES lead to slower growth (and less jobs). But other than marginal corporate tax rates being high, the average tax rates here are still lower overall vs. the EU. So optimal might be higher, but probably not all that much higher (and not nearly enough to close the deficit without also lowering spending).
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