Raising Taxes Will NOT Help the Deficit
Tax revenues are mainly a function of GDP, and almost independent of tax rates (with conditions, e.g., existing rates are not uber-low). If somebody has evidence that proves that statement wrong, I’d like to see it.
So assuming that premise is factual why do people who should know better, like David Stockman, continue to confuse the public about this issue? I.e, since higher tax rates WILL hurt economic growth, how is it a good idea to raise tax rates in order to achieve the goal of lowering deficits by increasing government revenue? How can that possibly work?
You must grow the economy to increase government revenues and therefore help with deficits. Raising taxes will NOT grow the economy. The way to grow the economy is to CUT tax rates.
Again, if somebody has evidence to the contrary, I’d like to see it. I’m open to discussion on this point, but the reading I’ve done points to this conclusion.
We need to understand what are, and what are not, the relevant factors in a complicated system like this, so that we change the right ones and make it better instead of worse. This is rule #2 of problem solving, right after defining the problem itself.