The great Kansas experiment continues...

[treee]

(10-02-2016, 08:51 PM)JustWinBaby Wrote: 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).

 Definitely. 

Quote: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.  

I thought it was universally agreed upon by most economists that supply side economics as we've known them up to this point are largely ineffective.

Quote: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).

I agree that there are cuts that need to be made in conjunction with slight tax hikes in order to reduce the deficit effectively. I personally believe that we need to do whatever possible to responsibly subsidize higher education because these student loans are going to absolutely kill our economy in the no-too-distant future. 

Quote:Because wage increases are tied to market rates much more so than profitability.  For tax cuts to "trickle down", you have to have job growth making a tight labor market and bidding up wages.   And it's job growth that is tied to profitability.

U.S. wages are never going to trend upward naturally in the free market again as long as we are competing against these countries with such low standards of living. It is just the grim reality of things.