Tax cuts are based on a politically unsound philosophy, which has never worked in history.

-> Pro's simple arithmetic is wrong The resolution is that "tax cuts are based upon an unsound political philosophy, which has never worked in history." The philosophy has two parts, cutting taxes and cutting spending. Pro's proof of the alleged error in philosophy was that (1) if the government wants more money, it should just increase taxes, because that always works, and (2) spending cuts are politically impossible as proved by observing that it never happens. Pro basically conceded that his first contention, that cutting taxes always reduces revenue, was wrong. He said that only part of the Reagan tax cuts were repealed, and that revenues grew by 19%. Moreover, he concedes that revenues grew after the 1997 tax cuts during the Clinton administration. According to the simple math he claimed applicable in his opening argument, higher taxes always mean higher revenue and lower taxes always mean lower revenue. That didn't happen, so his contention was false. I'll get to Pro's new argument in a minute. Pro's second contention was that it is political impossible to cut spending. I showed that when the situation gets bad enough, spending cuts are inevitable. I cited cuts by profligate spenders like California, Greece, and Spain. I also noted that during the prosperous times of the Clinton Administration, that through bipartisan effort is was possible to at least keep spending constant. Pro had no rebuttal. He has conceded the point. With both points disproved, his original case is dead. He has proposed a new case. He now claims that simple arithmetic does not apply and that many factors affect the economy and the taxes collected. Pro is correct in these generalities. He maintains that Federal Reserve policy changes brought the revenue increases after the 1997 tax cuts, not the tax cuts themselves. Moreover, he makes the claim that while Federal Reserve policy increased revenues, the tax cuts brought the 2000 recession. His position is that increasing taxes, per 1993, brings economic growth, while tax cuts, per 1997 brings recession. This is at the very least counter-intuitive. -> Reagan Era My position was that simple arithmetic does not apply, and Pro now agrees with that. I introduced the concept of the Laffer curve. If taxes are zero, the government gets no revenue. If taxes are very high, the government gets very little revenue, because people stop working, evade taxes, and invest overseas. Pro wrongly equated the Laffer curve with Reagonomics, and cited four elements of Reaganomics. The Laffer curve stands alone and applies to all economic policies; it worked in the 14th century. Amid many factors affecting an economy, tax increases will produce either more revenue or less revenue, depending upon where the rates are with respect to the peak point. We can have a debate over where that point is, but the underlying political philosophy, claiming that such a debate is sound, is correct. Pro disputed Reaganomics as a whole, but said nothing to rebut the Laffer curve. Pro conceded there was 19% revenue growth after the Reagan tax cuts. He argued that growth would have been higher with different policies, but that is irrelevant. -> Clinton Era Getting back to the 1990s, I think the main thing driving prosperity in that period was productivity gains from the vast increase in the use of computers. That's when personal computers took hold and permeated the business economy. It may be upsetting to some to think that something other than government policy was the dominant factor, but that was the case. Pro argues that Clinton Republicanesque policies like free trade helped growth; I agree. Government spending was stable because of the peace dividend. The 2000 recession was caused, I believe, mainly by Federal Reserve policy being too loose, but also by speculative excess in the dot com boom. Pro argues that since the 1993 tax increases did not cause a recession, that proves they cause prosperity. However, I presented data showing that recovery from the recession of the early 90s, already under way when Clinton took office, was much slower than normal recoveries. Pro provided no rebuttal. For Pro's argument to be correct, that increased taxes stimulate the economy and that tax cuts cause recession, he must have an economic theory that government spends money more productively than the free market. Taxes are extracted from the free market, where the money supports consumer demand and investment in new enterprise, and is spent on government benefits and subsidies to whatever constituencies favored by the Party in power. this is no to say that all government spending is a negative, funding police and a court system, for example, is a positive. We are way beyond that. I know of no economic theory that supports the contention that government is more efficient than free markets. All the examples are contrary: North Korea versus South Korea, East Germany versus West Germany, and so forth. Those who favor big government rarely claim it is more efficient; they claim it is more equitable. In any case, Pro offered no such theory. -> 1920s Pro did not refute the claim that lower taxes increased taxes in the 1920s, saying he could find no references. If one Googles "tax policy 1920s" an abundance of references appear. The article "1920s Income Tax Cuts Sparked Economic Growth and Raised Federal Revenues" http://www.cato.org... contains hard data and summary graphs. There is nothing in the first 20 Google hits that supports Pro's position. I didn't look beyond that. The 20s provides a good example because tax rates were very high, so cutting them produced dramatic growth. Clearly in that era, the country was on the down side of the Laffer Curve. -> Kennedy Tax Cuts Pro read the table wrong in his reference, citing the budget deficit for the year enacted rather than revenue change. The Kennedy Tax cuts, enacted in 1964, were targeted mainly at business in the belief they would spur growth. The revenues from both individual and corporate taxes grew http://www.econdataus.com... after the tax cuts. Tax Revenues (Billions $) Year Individual Corporate 1964 .. 48.70 ... 23.49 1965 .. 48.79 ... 25.46 1966 .. 55.45 ... 30.07 1967 .. 61.53 ... 33.97 -> Low Taxes Spur Growth In addition to the Laffer Curve, whereby high tax rates reduce revenues, there is an effect whereby increased taxes reduces overall growth. In the long run, economic growth is the most important single factor in the economy, and a good economy generates high revenues. Switzerland is a prime example of restrained budgets and low taxes producing a budget surplus, even in these difficult economic times. http://www.bloomberg.com... Closer to home, tax increases and large deficits had been anticipated by the previous governor, but a new administration canceled the tax increases and cut spending. The result is a budget surplus despite the recession http://www.washingtonpost.com... Worldwide, "In a recent paper, Alberto Alesina and Silvia Ardagna, economics professors at Harvard, found that in developed countries, spending cuts were the key to successful fiscal adjustments — and were generally better for the economy than tax increases. .. Sweden, Finland, Canada and, most recently, Ireland, have cut their government budgets " http://www.nytimes.com... Tax cuts and cutting spending comprise a sound political philosophy. Spending cuts can always produce surpluses, and tax cuts inevitably promote growth. That's sound. ================ Pro should give the web links for his references so I don't have to search for them. Pro's [6] does not say anything about Greenspan praising Clinton's deficit handling, nor does it contain the quote.