Politicians

[UNTflyer]

--- He is also on record as opposing the cuts of about 10 years ago.... claimed he all he was do with the extra money was go to Wall Street and buy more stock... and that his secretarys and lower paid employees needed the cuts more. I think he knows a little bit about money and finance.

.

That's funny, because the tax is on income, not wealth. Buffet really doesn't have income - he doesn't make a salary much more than I have. His corporate salary is $100,00 a year. He has wealth and he receives dividends from his investments, and that is taxed at a completely different rate.

And everyone... EVERYONE who pays taxes got a tax cut 10 years ago. Every tax bracket was lowered by 3%, except for the lowest bracket (15%) was lowered to 10%.

Edited July 12, 2011 by UNTflyer

[KRAM1]

That's funny, because the tax is on income, not wealth. Buffet really doesn't have income - he doesn't make a salary much more than I have. His corporate salary is $100,00 a year. He has wealth and he receives dividends from his investments, and that is taxed at a completely different rate.

And everyone... EVERYONE who pays taxes got a tax cut 10 years ago. Every tax bracket was lowered by 3%, except for the lowest bracket (15%) was lowered to 10%.

It's hard when folks just don't see the full picture of where some of these folks who advocate higher taxes are coming from. Buffet does know a great deal about finance and investing, but that definitely does not make him an expert in the economics of taxation. If he did, he might realize how high tax rates actually hurt the working poor a great deal and how high tax rates stifle job creation and wealth creation. He's a "good guy" and very interested in helping others, but does not want to pay any more taxes than necessary...if he did, he would pony up and send in some voluntary payments. ...foolish as that would be. Just like those who pay no income taxes who are always shouting about the tax breaks some folks get who are actually paying taxes. I have yet to understand why the people who actually create jobs and pay taxes in this nation are vilified so much by the political left. I guess the left's definition of "fair" when it comes to taxes is that "fair" is the highest tax rate someone else pays who is already one of the 49% of the population who pay any income tax in the first place.

The US continues to be one of the only nations that continues to punish wealth creation by taxing the crap out of it! Great way to punish saving and capital formation, isn't it?

[yyz28]

People who push for higher corporate taxes so that the "little guy" doesn't take it in the shorts doesn't understand economics 101 stuff. There is NO SUCH THING as a business tax. Business pass ALL taxes onto consumers. Raise corporate taxes by 10%, and the prices at Wal-Mart go up 10%. Tax the oil companies an extra 25%, and the cost of gas will go up 25%.

We should have NO corporate taxes, as they are hidden taxes that consumers and taxpayers pay for anyways. In the end, the END USER, not the business they buy groceries from, pay all of the taxes.

Regarding pushing the Rich to pay more taxes, and those of you who support this, I have only one question - how much is enough. How much SHOULD they pay to be considered their fair share. When answering this, consider the following -

The top 1% of the population earns 16.7% of the income in this country, and pays 39% of the tax burden.

The top 5% of the population earns 31.2% of the income in this country, and pays 55% of the tax burden.

The top 10% of the population earns 42.36% of the income in this country, and pays 66% of the tax burden.

The top 25% of the population earns 64.86% of the income in this country, and pays 86% of the tax burden.

The top 50% of the population earns 86.01% of the income in this country, and pays 97% of the tax burden.

The bottom 50% of the population pays 3% of the tax burden.

...so the "SUPER-RICH" which are being targeted. let's call 'em the top 10%... already pay 66% of the TOTAL tax burden. How much of the total burden should they be responsible for? How much of their income should be taxed?

[SCREAMING EAGLE-66]

That's funny, because the tax is on income, not wealth. Buffet really doesn't have income - he doesn't make a salary much more than I have. His corporate salary is $100,00 a year. He has wealth and he receives dividends from his investments, and that is taxed at a completely different rate.

And everyone... EVERYONE who pays taxes got a tax cut 10 years ago. Every tax bracket was lowered by 3%, except for the lowest bracket (15%) was lowered to 10%.

You are exactly about his salery... BUT it is a minor part to his income.... he pays 15% on his capital gains..... Those working and making a large salery say $250,000 pay 35%..

They are the ones really getting screwed.... Not the super wealthy such Perot and Buffett that get little or no salery compared to their earnings from capital gains.. usually stock...

The rest of what you said is correct. You just aren't thinking what it meant to the super wealthy (not the high wage earners). Of course they pay more, they earn more but they actually pay a lower rate.... only 15%.. same as low wage earners. ..... but you seem to think that is fair.

AND what happened after that tax cut.... the national debt went wild.... increased as much in eight years as the years from 1788- 2001. THINK... that isn't conservative that is liberal... don't spend more than you take in and try to run down the debt some... you don't do that by passing more cuts which decreases your income.

Edited July 13, 2011 by SCREAMING EAGLE-66

[UNTFan23]

You are exactly about his salery... BUT it is a minor part to his income.... he pays 15% on his capital gains..... Those working and making a large salery say $250,000 pay 35%..

They are the ones really getting screwed.... Not the super wealthy such Perot and Buffett that get little or no salery compared to their earnings from capital gains.. usually stock...

The rest of what you said is correct. You just aren't thinking what it meant to the super wealthy (not the high wage earners). Of course they pay more, they earn more but they actually pay a lower rate.... only 15%.. same as low wage earners. ..... but you seem to think that is fair.

AND what happened after that tax cut.... the national debt went wild.... increased as much in eight years as the years from 1788- 2001. THINK... that isn't conservative that is liberal... don't spend more than you take in and try to run down the debt some... you don't do that by passing more cuts which decreases your income.

The biggest problem for your advocacy of increasing the capital gains tax is it works a lot like a sales tax. You will only pay the tax when you realize a profit resulting from the sell an investment. So raising the capital gains tax could dissuade investors from selling large blocks of stocks/EFTs/Mutual Funds. Otherwise, you are only collecting on dividends and capital gains for certain stocks, EFTs and Mutual funds, which depending on how many shares you own is only a small amount the government would collect on.

For someone such as myself that is in the process of building wealth, it really irks me to pay capital gain taxes when I never sold a stock/EFT/Mutual fund and use DRIPs on dividends I received. I hate the idea of punishing people for building wealth for their retirement when they reinvest dividends rather than taking the cash.

Thankfully there are investment vehicles where future earnings can be withdrawn tax free (Roth IRA).

[DoubleEagle]

You are exactly about his salery... BUT it is a minor part to his income.... he pays 15% on his capital gains..... Those working and making a large salery say $250,000 pay 35%..

They are the ones really getting screwed.... Not the super wealthy such Perot and Buffett that get little or no salery compared to their earnings from capital gains.. usually stock...

The rest of what you said is correct. You just aren't thinking what it meant to the super wealthy (not the high wage earners). Of course they pay more, they earn more but they actually pay a lower rate.... only 15%.. same as low wage earners. ..... but you seem to think that is fair.

This is completely incorrect. The table below shows average tax rates cut by income bracket. These tax rates include ALL sources of income (salary, capital gains, dividends, etc.)

• Year Total Top 0.1% Top 1% Top 5% Top 10% Top 25% Top 50% Bottom 50%
  
• 2001 14.23% 28.20% 27.50% 23.68% 21.41% 18.08% 15.85% 4.09%
  
• 2002 13.03% 28.49% 27.25% 22.95% 20.51% 16.99% 14.66% 3.21%
  
• 2003 11.90% 24.64% 24.31% 20.74% 18.49% 15.38% 13.35% 2.95%
  
• 2004 12.10% 23.09% 23.49% 20.67% 18.60% 15.53% 13.51% 2.97%
  
• 2005 12.45% 22.52% 23.13% 20.78% 18.84% 15.86% 13.84% 2.98%
  
• 2006 12.60% 21.98% 22.79% 20.68% 18.86% 15.95% 13.98% 3.01%
  
• 2007 12.68% 21.46% 22.45% 20.53% 18.79% 15.98% 14.03% 2.99%
  
• 2008 12.24% 22.70% 23.27% 20.70% 18.71% 15.68% 13.65% 2.59%
  

The wealthiest Americans have always borne the largest federal income tax burden, in the form of the highest tax rates as well as in relation to their % of total income.

[KRAM1]

The biggest problem for your advocacy of increasing the capital gains tax is it works a lot like a sales tax. You will only pay the tax when you realize a profit resulting from the sell an investment. So raising the capital gains tax could dissuade investors from selling large blocks of stocks/EFTs/Mutual Funds. Otherwise, you are only collecting on dividends and capital gains for certain stocks, EFTs and Mutual funds, which depending on how many shares you own is only a small amount the government would collect on.

For someone such as myself that is in the process of building wealth, it really irks me to pay capital gain taxes when I never sold a stock/EFT/Mutual fund and use DRIPs on dividends I received. I hate the idea of punishing people for building wealth for their retirement when they reinvest dividends rather than taking the cash.

Thankfully there are investment vehicles where future earnings can be withdrawn tax free (Roth IRA).

When you raise the capital gains tax, you actually receive less tax revenue from capital gains...just like when a state (think Oregon or Washington...can't recall which one at this time) thinks its great to raise taxes on the super wealthy in their state...gee all of a sudden the "super wealthy" no longer live in your state in the numbers they did before the tax and the state gets less tax revenue. For the life of me I cannot understand why this is so hard to understand...just check the data. Good grief!

Good job UNTFan23...keep building wealth...even though you get "punished" for doing it, it is the right thing to do. DRIPS and EFT's are great, but, yes, paying the tax on the dividends is tough when you reinvest it all. Thanks to all the folks who think investors are not savers and need to pay more taxes for that little piece of sheer stupidity!

[SCREAMING EAGLE-66]

When you raise the capital gains tax, you actually receive less tax revenue from capital gains...just like when a state (think Oregon or Washington...can't recall which one at this time) thinks its great to raise taxes on the super wealthy in their state...gee all of a sudden the "super wealthy" no longer live in your state in the numbers they did before the tax and the state gets less tax revenue. For the life of me I cannot understand why this is so hard to understand...just check the data. Good grief!

Good job UNTFan23...keep building wealth...even though you get "punished" for doing it, it is the right thing to do. DRIPS and EFT's are great, but, yes, paying the tax on the dividends is tough when you reinvest it all. Thanks to all the folks who think investors are not savers and need to pay more taxes for that little piece of sheer stupidity!

---Makes no sense... so you are saying if the capital gains tax went back to what it was prior to 2001 (20% instead of 15%) you are expecting people to move out of the USA?? Changing states is no big deal but moving out of the country and changing your citizenship is. Besides most other countries other than third world ones have even higher tax rates.

---Was the economy and the budget really bad in the 90's when the rate was 20% (less than what a lot of working people pay after deductions now) .... NO .. in fact capital gains was the largest reason there was a large surplus prior to 2001. Makes no sense at all. Capital gains could be kept at 15% for the first $100,000 or so of profit to help the smaller investors.. but for those making millions or 10's of millions each year paying 15% is unbelievable since most of us would pay more that that on any pay increase we would receive.... maybe not our total tax bill since much of the early money earned has no tax due to deductions but on increases which really defines what "bracket" we are in. This is why those with very small income pay little or no tax tax... deductions are more than income.... and I would not want to be them since they can barely pay basic expenses. True a lot of us got a small tax decrease in 2002? but many of them often paid millions less and paid a samller rate than you do.

---Wake up to what really happened. The proposed tax increae last December would have done nothing to you unless you earned $250,000 (net) or more and then only on the amount over $250,000. You bought a bill of goods by those who opposed it.. it only helped the "super wealthy" (big contributors) to any extent. It makes a lot of sense for the super wealthy to contribute a fortune to politicians if they save them even more in taxes... they come out ahead.. We get the best government (for them) that money can buy.

Edited July 15, 2011 by SCREAMING EAGLE-66

[KRAM1]

---Wake up to what really happened. The proposed tax increae last December would have done nothing to you unless you earned $250,000 (net) or more and then only on the amount over $250,000. You bought a bill of goods by those who opposed it.. it only helped the "super wealthy" (big contributors) to any extent. It makes a lot of sense for the super wealthy to contribute a fortune to politicians if they save them even more in taxes... they come out ahead.. We get the best government (for them) that money can buy.

Sad just sad understanding of tax economics 101! Class envy, and a big heaping of buying what the dems are trying to sell. Scream on Screaming Eagle...nice comprehension regarding the example as well...geeeezzzz. Sad.

[Green Mean]

They all suck

[KRAM1]

They all suck

On this I think we can mostly all agree!

[yyz28]

---Makes no sense... so you are saying if the capital gains tax went back to what it was prior to 2001 (20% instead of 15%) you are expecting people to move out of the USA?? Changing states is no big deal but moving out of the country and changing your citizenship is. Besides most other countries other than third world ones have even higher tax rates.

People with means can easily move assets offshore. I have offshore assets and I'm certainly not super rich, nor do I come close to qualifying for the higher tax rate you support below...

--Was the economy and the budget really bad in the 90's when the rate was 20% (less than what a lot of working people pay after deductions now) .... NO .. in fact capital gains was the largest reason there was a large surplus prior to 2001. Makes no sense at all. Capital gains could be kept at 15% for the first $100,000 or so of profit to help the smaller investors.. but for those making millions or 10's of millions each year paying 15% is unbelievable since most of us would pay more that that on any pay increase we would receive.... maybe not our total tax bill since much of the early money earned has no tax due to deductions but on increases which really defines what "bracket" we are in. This is why those with very small income pay little or no tax tax... deductions are more than income.... and I would not want to be them since they can barely pay basic expenses. True a lot of us got a small tax decrease in 2002? but many of them often paid millions less and paid a samller rate than you do.

The Capital gains tax for big time investors is just like the corporate taxes - it'll be pushed down to the end consumer. That additional hit to ROI will simply drive the decision making process and the pricing process. Very simple. If you decrease the ROI on investors, they will be less inclined to invest, and thus, less inclined to create jobs. While I stipulate that the economy was great during the LATE 90's (after the Republicans came to control Congress) I believe it would have been even better with a 15% capital gains tax. EVEN BETTER STILL with a 10%, 5% or with its elimination. Stating "the economy was good so it didn't hurt" is a logical flaw, as there is nothing to measure it against. ALL THINGS BEING EQUAL, lower taxes on investment will cause greater investment. This is a simple truth that can't be argued.

--Wake up to what really happened. The proposed tax increae last December would have done nothing to you unless you earned $250,000 (net) or more and then only on the amount over $250,000. You bought a bill of goods by those who opposed it.. it only helped the "super wealthy" (big contributors) to any extent. It makes a lot of sense for the super wealthy to contribute a fortune to politicians if they save them even more in taxes... they come out ahead.. We get the best government (for them) that money can buy.

Ugh... no. You're not right. If you make money that puts you in the 35% tax bracket, you pay that on all the money you have earned, not just on the money over the amount that put you in that tax bracket. Super-Wealthy are now defined by a household earning $250,000, is that what you're saying? That IS what the folks pushing for these tax cuts thought.

I love how, in the end, however the question is just ignored. Again, I ask, how much is fair? If the top 5% are already paying 55% of the total tax burden, and that isn't enough, how much SHOULD They be paying? How much is fair? How much of their income should they forefit? When do you say the government is asking them for too much? ...and is there any thought to the fact that if we don't cut spending, at some point the government comes to you or other middle class taxpayers and inform them they've squeezed enough out of the rich, now you've got to ante up? ...what moral foot do you have to stand on and object if you were with the pitchfork toting mob demanding we squeeze the rich more and more? It's Ok since they aren't jacking up YOUR tax rates, is that right?

So, how much is enough? When have they squeezed enough? Should the top 5% be responsible for funding 60% of the Government? 65%? 75%? When is enough finally enough?

[HoustonEagle]

People with means can easily move assets offshore. I have offshore assets and I'm certainly not super rich, nor do I come close to qualifying for the higher tax rate you support below...

The Capital gains tax for big time investors is just like the corporate taxes - it'll be pushed down to the end consumer. That additional hit to ROI will simply drive the decision making process and the pricing process. Very simple. If you decrease the ROI on investors, they will be less inclined to invest, and thus, less inclined to create jobs. While I stipulate that the economy was great during the LATE 90's (after the Republicans came to control Congress) I believe it would have been even better with a 15% capital gains tax. EVEN BETTER STILL with a 10%, 5% or with its elimination. Stating "the economy was good so it didn't hurt" is a logical flaw, as there is nothing to measure it against. ALL THINGS BEING EQUAL, lower taxes on investment will cause greater investment. This is a simple truth that can't be argued.

Ugh... no. You're not right. If you make money that puts you in the 35% tax bracket, you pay that on all the money you have earned, not just on the money over the amount that put you in that tax bracket. Super-Wealthy are now defined by a household earning $250,000, is that what you're saying? That IS what the folks pushing for these tax cuts thought.

I love how, in the end, however the question is just ignored. Again, I ask, how much is fair? If the top 5% are already paying 55% of the total tax burden, and that isn't enough, how much SHOULD They be paying? How much is fair? How much of their income should they forefit? When do you say the government is asking them for too much? ...and is there any thought to the fact that if we don't cut spending, at some point the government comes to you or other middle class taxpayers and inform them they've squeezed enough out of the rich, now you've got to ante up? ...what moral foot do you have to stand on and object if you were with the pitchfork toting mob demanding we squeeze the rich more and more? It's Ok since they aren't jacking up YOUR tax rates, is that right?

So, how much is enough? When have they squeezed enough? Should the top 5% be responsible for funding 60% of the Government? 65%? 75%? When is enough finally enough?

You sir are incorrect. You may want to brush up on how a marginal tax rate works before you step to the podium again.

[yyz28]

You sir are incorrect. You may want to brush up on how a marginal tax rate works before you step to the podium again.

No, I understand that... What I'm saying is that you pay taxes on ALL of your money, not just the amount over 250,000. So its not like the first 250000 is tax free. That's what I read him to be saying. If not, and he was referring to the fact that the bump would ONLY BE on money over the 250000, then I mis-understood his point.

[Green2012]

No, I understand that... What I'm saying is that you pay taxes on ALL of your money, not just the amount over 250,000. So its not like the first 250000 is tax free. That's what I read him to be saying. If not, and he was referring to the fact that the bump would ONLY BE on money over the 250000, then I mis-understood his point.

Well that's not what you said or implied. You said the person would pay 35% on all their income. Trying to cover up an absolute fail just makes it that much worse... And you even tried to be condescending. Ouch...

I'm with KRAM and others. Taxes suck and they only hurt the economy. Government needs to control spending not increase taxes. That would just further hurt the job market. Once the fed decides to do another stimulus we might as well start digging our grave a little deeper. Inflation will skyrocket and the fed will raise interest rates to battle it. Then the housing market will be screwed.

[yyz28]

Well that's not what you said or implied. You said the person would pay 35% on all their income. Trying to cover up an absolute fail just makes it that much worse... And you even tried to be condescending. Ouch...

You know, you're right. I went back and read all the posts in question, and I absolutely said the wrong thing. But I DO, and have for the 20 years I've been paying my own taxes, understand the difference between marginal and effective tax rates. The point I am trying (and apparently failing miserably) to make is that when you run up the marginal tax rate, you're also running up the effective tax rate which DOES have a negative impact on every dollar earned, including the first $1.

For example, with today's tax rates, which includes a marginal tax rate of 35%, someone married filing jointly earning 400,000 per year has a 25.8% marginal tax rate, meaning a quarter of every dollar earned is surrendered in taxes. Raise the marginal tax rate to 40% and the effective tax rate becomes 27.9%. This is big money, nearly $11K. The increase on the top income bracket impacts the rate taken across the board. Making changes to the top tax rate impacts the taxes paid on all of the income. ...and now, we're stripping money out of the hands of those who do the most investing, business funding, hiring who will spend it FAR more efficiently and handing it over to the Government. I just don't buy the concept that they are only impacting the "extra" or "disposable income" of these folks.

The question still remains for the folks who support "tax hikes for the rich" is how much of their income is enough? ...and how much must the rich contribute to be said to be paying "their fair share".

[Green2012]

The question still remains for the folks who support "tax hikes for the rich" is how much of their income is enough? ...and how much must the rich contribute to be said to be paying "their fair share".

Yes I absolutely agree. Most people that want to "raise taxes on the rich" don't really understand what the rich are already paying. But I think its important to realize that washington has to work together to get anything done and right now they are far from doing that. Surprisingly the Democrats seem to support entitlement and welfare/medicaid cuts in return for closing some tax loopholes. Republicans are playing hardball and saying no to anything related to the word tax. We got people like Cantor putting on this show like his heart is breaking raising the debt ceiling yet he raised it under bush every time it was called to vote. And that was accompanied with ZERO spending cuts.

My point is this. Reagan dropped taxes and the economy took off. He also closed tax loopholes and raised taxes in other areas. Why can't they do that now? They once spoke of 4 trillion over 10 years and now its down to 1.5 trillion simply because the republicans wont compromise. I just don't like our current strategy. Its more about elections than doing what's needed.

[curtisdaa]

I was so depressed last night thinking about the economy, wars, jobs,

my savings, Social Security, retirement funds, etc., I called the Suicide

Hotline. I got a call center in Pakistan, and when I told them I was suicidal,

they got all excited, and asked if I could drive a truck.

[KRAM1]

I was so depressed last night thinking about the economy, wars, jobs,

my savings, Social Security, retirement funds, etc., I called the Suicide

Hotline. I got a call center in Pakistan, and when I told them I was suicidal,

they got all excited, and asked if I could drive a truck.

That's really pretty funny. +1 for you, sir!

[eulessismore]

Watching this crap that is playing out in DC and in Austin the last few months has really disappointed me and made me even a bit more jaded toward politicians...all politicians it seems. Both sides seem to be interested in getting elected and re-elected rather than rolling up their sleeves and actually doing the "people's work". I don't care which side of the aisle you are on, it seems both sides are only interested in prolonging their political careers and bowing to the special interest groups that pay into their campaign coffers. Where are the real leaders and real representatives who don't give a darn about what some special interest group thinks of their vote one way or the other and who are willing to make the tough decisions and compromise when it is in the best interests of the nation and its citizens? This is getting to be all about posturing and the bully pulpit until the last second and then...gee...something gets done. We all know there will be an agreement on the debt ceiling issue...so, why do all the childish crap before really getting down to business and hammering out a compromise agreement that works?

Seems to me that if our elected officials really had the citizens best interests in mind that this stuff would get done long before any potential crises developed. As much as I hate to say (as I am philosophically opposed to term limits for representatives and senators) it just may be time for term limits. That would, at least, limit the influence of some special interests as the folks being elected would know their time was limited...then the yahoos would have to come home and live under the laws they enacted while in office.

Maybe I am just frustrated with the current state of affairs in DC and in Austin, probably so, but there is a severe lack of real leadership in both parties from the very top down these days...and it is clearly showing.

Good grief, folks...get on with it and act like grownups for a change. OK, I feel better now...thanks. carry on......

+1, Sir. The one consistent thing about politicians is their ability to disappoint us all, even with such lowered expectations.

[Green2012]

Take from it what you will but here's a writeup on Wikipedia.

Can reducing income tax rates increase government revenue?

In theory, the government collects no revenue at either zero or 100% tax rates. So there is some intermediate point at which government revenue is maximized. Lowering tax rates from 100% to this hypothetical rate that maximizes revenue would theoretically raise revenue, while continuing to lower tax rates below this rate would lower revenues. This concept underlies the Laffer Curve, an element of supply-side economics.

Since the 1970s, some "supply side" economists have contended that lowering marginal tax rates could stimulate economic growth to such a degree that tax revenues could rise, other factors being held constant. However, economic models and econometric analysis have found weak support for the "supply side" theory. The Center on Budget and Policy Priorities (CBPP) summarized a variety of studies done by economists across the political spectrum that indicated tax cuts do not pay for themselves and increase deficits.[89] Studies by the CBO and the U.S. Treasury also indicated that tax cuts do not pay for themselves.[90][91][92][93] In 2003, 450 economists, including ten Nobel Prize laureate, signed the Economists' statement opposing the Bush tax cuts, sent to President Bush stating that "these tax cuts will worsen the long-term budget outlook... will reduce the capacity of the government to finance Social Security and Medicare benefits as well as investments in schools, health, infrastructure, and basic research... [and] generate further inequalities in after-tax income."[94]

Economist Paul Krugman wrote in 2007: "Supply side doctrine, which claimed without evidence that tax cuts would pay for themselves, never got any traction in the world of professional economic research, even among conservatives."[95] Economist Nouriel Roubini wrote in October 2010 that the Republican Party was "trapped in a belief in voodoo economics, the economic equivalent of creationism" while the Democratic administration was unwilling to improve the tax system via a carbon tax or value-added tax.[96] Warren Buffett wrote in 2003: "When you listen to tax-cut rhetoric, remember that giving one class of taxpayer a 'break' requires -- now or down the line -- that an equivalent burden be imposed on other parties. In other words, if I get a break, someone else pays. Government can't deliver a free lunch to the country as a whole."[97] Former Comptroller General of the United States David Walker stated during January 2009: "You can't have guns, butter and tax cuts. The numbers just don't add up."[98]

Income tax revenues generally rose to new peaks in nominal dollar terms each year from 1970 to 2000 as the economy grew, with the exception of 1983, following the recession of 1981-1982. However, after peaking in 2000, income tax revenues did not regain this peak again until 2006. After a plateau in 2007 and 2008, revenues fell markedly in 2009 and 2010 due to a financial crisis and recession. Income tax revenues in 2010 remained below their 2000 peak. Relative to GDP, income tax revenues declined during most of the 1980's (from 9.0% GDP in 1980 to 8.3% GDP in 1989), rose during most of the 1990's (from 8.1% GDP in 1990 to 9.6% GDP in 1999) then declined in the 2000's (from 10.2% GDP in 2000 to 6.5% GDP in 2009).[99] The extent to which economic activity and tax policy interact to drive these trends is debated by experts. While marginal income tax rates were lowered in the early 1980's, dollar revenue increased throughout the period, although revenue relative to GDP declined. Marginal tax rates were raised during the 1990's, and both revenue dollars and revenue relative to GDP increased. Marginal rates were lowered again in the early 2000's, and both revenue and revenue relative to GDP generally declined.