A Few Good Newt Gingrich Moments At The Debate

Hi Antics,

@openid.aol.com/runnswim: So let me get this straight. You are in favor of taking 60 cents out of every dollar American citizens earn?

No, that’s not what I said. I said that, if the goal was simply to maximize revenue to the treasury, the sweet spot in the Laffer Curve would probably be about 60%. Prior to 1981, the marginal federal tax rate was 70%. You’d think that people at the time would feel enslaved. No. People worked hard. Corporations did everything possible to maximize profits. No one said, well, it’s not worth working, because the government is taking 70% of every extra dollar I earn. We paid down the debt from a ratio of 1.25 X GDP to only 0.31 X GDP, despite the Marshall Plan, GI Bill, interstate highway system, Great Society, Vietnam War, Arab oil embargo, hyper inflation, and so on.

But no one is suggesting going back to those days (although, if we were really concerned about the debt, that’s exactly what we should do). What I’ve been advocating for the past 3 1/2 years (since I first logged on this blog) is simply to return to the tax rates of the 1990s — for everybody. This includes a top marginal rate of 39.6%, which is well below the rate (60%) at which one might begin to see a negative net effect on revenue. It’s also in line with the recommendations of every independent or bipartisan committee/commission which has tried to come up with solutions for the debt problem over the past several years. So don’t go trying to make me (or Obama) into some sort of Marxist class warrior.

With respect to cutting spending — sure, I’m all for it. But what we have done over the past 30 years is cut taxes (i.e. revenue) without cutting spending and made up for the shortfall by borrowing. This is NOT conservative economic policy. Anything but. It’s the equivalent to me cutting back my work hours by 10 hours per week and making up for the shortfall in my income by borrowing the money. It’s not prudent. It’s irresponsible.

– Larry Weisenthal/Huntington Beach CA

@ilovebeeswarzone: I agree; I loved Herman Cain’s 9-9-9 plan. Eliminate all of those other taxes and just have these three. I like the idea of a flat tax and/or a consumption tax.

@openid.aol.com/runnswim:

With respect to cutting spending — sure, I’m all for it. But what we have done over the past 30 years is cut taxes (i.e. revenue) without cutting spending and made up for the shortfall by borrowing. This is NOT conservative economic policy. Anything but. It’s the equivalent to me cutting back my work hours by 10 hours per week and making up for the shortfall in my income by borrowing the money. It’s not prudent. It’s irresponsible.

This I agree with. Although cutting taxes often increases government revenues (which stands in contrast to the idea that 60% is the maximum income from taxes), I am all for the reduction of government spending…by Ron Paulian dimensions.