An interesting article I came across discussing the proposed massive tax hikes the Democrats would love to impose upon us should they be given the chance suggests that lower tax rates result in increased revenues by spurring economic growth. Whereas higher tax rates, on the other hand, depress growth and therefore depress revenues.

Now obviously this can not be true for all rates of taxation. A very low tax rate would have a minimal effect on the economy and raising it probably would bring in more revenue. But I can certainly understand how high rates could depress economic growth and encourage alterations in behavior to avoid taxation.

From the article:
Tax rate reductions increase tax revenues. This truth has been proved at both state and federal levels, including by President Bush's 2003 tax cuts on income, capital gains and dividends. Those reductions have raised federal tax receipts by $785 billion, the largest four-year revenue increase in U.S. history. In fiscal 2007, which ended last month, the government took in 6.7% more tax revenues than in 2006.

These increases in tax revenue have substantially reduced the federal budget deficits. In 2004 the deficit was $413 billion, or 3.5% of gross domestic product. It narrowed to $318 billion in 2005, $248 billion in 2006 and $163 billion in 2007. That last figure is just 1.2% of GDP, which is half of the average of the past 50 years.

Lower tax rates have be so successful in spurring growth that the percentage of federal income taxes paid by the very wealthy has increased. According to the Treasury Department, the top 1% of income tax filers paid just 19% of income taxes in 1980 (when the top tax rate was 70%), and 36% in 2003, the year the Bush tax cuts took effect (when the top rate became 35%). The top 5% of income taxpayers went from 37% of taxes paid to 56%, and the top 10% from 49% to 68% of taxes paid. And the amount of taxes paid by those earning more than $1 million a year rose to $236 billion in 2005 from $132 billion in 2003, a 78% increase.

Finally, another inconvenient truth is that there have been 49 consecutive months of job growth as a result of the economic expansion induced by President Bush's 2003 tax rate reductions. http://www.opinionjournal.com/columnists/pdupont/?id=110010798
So is it true? Will raising taxes result in lower revenues and a depressed economy?

An interesting article I came across discussing the proposed massive tax hikes the Democrats would love to impose upon us should they be given the chance suggests that lower tax rates result in increased revenues by spurring economic growth. Whereas higher tax rates, on the other hand, depress growth and therefore depress revenues.

Now obviously this can not be true for all rates of taxation. A very low tax rate would have a minimal effect on the economy and raising it probably would bring in more revenue. But I can certainly understand how high rates could depress economic growth and encourage alterations in behavior to avoid taxation.

From the article:

So is it true? Will raising taxes result in lower revenues and a depressed economy?

this has been known for a while it depends on where we are on the lafer curve i believe and that is the arguement liberals tend to believe we are below the point we lowering taxes will increase revenue while conservatives argue we are above it
http://en.wikipedia.org/wiki/Laffer_curve

Why not just have a FLAT TAX? Everyone pays 15%, except those who earn less than 30,000.00 per year.

this has been known for a while it depends on where we are on the lafer curve i believe and that is the arguement liberals tend to believe we are below the point we lowering taxes will increase revenue while conservatives argue we are above it
http://en.wikipedia.org/wiki/Laffer_curve
OK. But doesn't the evidence presented with respect to the increasing revenues despite lower tax rates indicate the prior to Bush's tax cuts the rates were too high and that any increase in rates would be counterproductive?

OK. But doesn't the evidence presented with respect to the increasing revenues despite lower tax rates indicate the prior to Bush's tax cuts the rates were too high and that any increase in rates would be counterproductive?

it also said the model is slightly flawed it doesn't take into account other things that would raise over all revenue all things have to be equal for their model to make an accurate prediction but the basic theory is good. and are econmy has been hurting since bush we have lost higher paying jobs and replaced them with lower paying jobs. plus due to inflation and cola raises we are talking more money so it muddled and not very clear i think the bush tax cuts lowered real revenue ( i'm using the world real with its econmic defintion by the way)

it also said the model is slightly flawed it doesn't take into account other things that would raise over all revenue all things have to be equal for their model to make an accurate prediction but the basic theory is good. and are econmy has been hurting since bush we have lost higher paying jobs and replaced them with lower paying jobs. plus due to inflation and cola raises we are talking more money so it muddled and not very clear i think the bush tax cuts lowered real revenue ( i'm using the world real with its econmic defintion by the way)
You may be using real with its "econmic" defintion, but the data doesn't back what you're saying. As quoted in the OP:
Those reductions have raised federal tax receipts by $785 billion, the largest four-year revenue increase in U.S. history. In fiscal 2007, which ended last month, the government took in 6.7% more tax revenues than in 2006.
In 2007 alone, the government saw a 6.7% increase in revenue. That's way above inflation.

You may be using real with its "econmic" defintion, but the data doesn't back what you're saying. As quoted in the OP:

In 2007 alone, the government saw a 6.7% increase in revenue. That's way above inflation.

and counterpoint
http://logicizer.townhall.com/g/f48d2bf3-1c51-4592-aa46-191f089d752f

OK. But doesn't the evidence presented with respect to the increasing revenues despite lower tax rates indicate the prior to Bush's tax cuts the rates were too high and that any increase in rates would be counterproductive?

Not necessarily, in fact, in this case the evidence is that tax collections would have been even higher but for the tax cuts. See here (http://www.factcheck.org/taxes/supply-side_spin.html).

...So is it true? Will raising taxes result in lower revenues and a depressed economy?No, not true. What is more important than the total collected is how the burden is distributed. Before becoming Chairman of the FED, Ben was called "Helicopter Ben" becaused he correctly stated that dropping money out of a helicopter over poor neighborhoods would stimulate the economy much more than giving tax relief to the rich. The poor would immediately spend it. During GWB's first term, I received the max posssible check from the government. I had no need of it, so I deposited it in my bank account, as did most who received the max. (proving Ben was correct.)

Lets look at what the article is saying more analytically:

The article states:
"... the top 1% of income tax filers paid just 19% of income taxes in 1980 (when the top tax rate was 70%), and 36% in 2003, the year the Bush tax cuts took effect (when the top rate became 35%). ..."

But in truth especially under GWB, the very wealthy pay much less than the "top rates." For them, the initial dollars earned are, like typical Joe American, taxed at a lower than top rate, but this is not the main reason why they paid much less than the top rate. (They earn so much that this effect while very significant for Joe American, is relatively insignificant fro them.) The real reason is they have tax lawers and exploit the loop-holes in the IRS code. Every thing from lower capital gain tax rate to oil depletion allowances, to gifts of art to museums at falsely inflated value, etc.

But just for the fun (and to prove my point) lets assume that they did pay the top rates on all their income:

Then in 1980 they (the top 1%) must have had 27.14% of all taxable income. I.e. 27.14% taxed at 0.7 is the 19% as the article states.

Then in 2003 they (the top 1%) must have had 97.22% of all the taxable income. I.e. 97.22 times 0.36 is the 35% as the article states.

I knew GWB only cared for his rich supporters but never knew it was so extreme. No wonder poor Joe is having trouble making end meet, going deeper into debt, and wondering if he can keep his job and house, but he voted for GWB so deserves what he is getting. For more I refer you to my thread: "How DUMB can American Voters be?"

SUMMARY: Rather than giving money to the poor (by helicopter if necessary) to stimulate the economy, GWB has (via tax changes) taken money from them and given it to the Rich and this is part of why the GDP rate is dropping, factories are closing, deficites are growing (in contrast to Clinton's surpluses), etc. -I.e. Joe American is less able to afford the goods they produce and is needing more unemplyment checks etc.. Again: No it is not true.

PS - Yes the above is not exact, has assumptions, etc. but it is true that for the first time in at least 100 years, under GWB, the US income and wealth has become more concentrated in the hands of a few.

No, not true. What is more important than the total collected is how the burden is distributed. Before becoming Chairman of the FED, Ben was called "Helicopter Ben" becaused he correctly stated that dropping money out of a helicopter over poor neighborhoods would stimulate the economy much more than giving tax relief to the rich. The poor would immediately spend it. During GWB's first term, I received the max posssible check from the government. I had no need of it, so I deposited it in my bank account, as did most who received the max. (proving Ben was correct.)

Billy,

People are always complaining that the US doesn't save enough. But you seem to be saying it's bad for the economy to save the money? That money put into bank accounts doesn't disappear. It's re-invested in new businesses or whatever by the bank or whatever institution you use.

Investment is better for the economy than frivilous spending.

Billy,

People are always complaining that the US doesn't save enough. But you seem to be saying it's bad for the economy to save the money? That money put into bank accounts doesn't disappear. It's re-invested in new businesses or whatever by the bank or whatever institution you use.

Investment is better for the economy than frivilous spending.

intelligent investment is what we have is unintelligent investement right now

Billy,
People are always complaining that the US doesn't save enough. But you seem to be saying it's bad for the economy to save the money? That money put into bank accounts doesn't disappear. It's re-invested in new businesses or whatever by the bank or whatever institution you use.
Investment is better for the economy than frivilous spending.Correct (almost by definiton of "frivilous") but that depends upon the time scale you want to have the stimulation take place in. If the money placed in the bank is loaned to someone developing a new cement factory then probably there is more economic benefit over the next couple of decades than if placed in the hands of the poor who may buy dinner with it, but there is the "velocity of money" and "multipier effects" to also consider.

The same $100 dollars if rapidly repeatedly spent (passed for one temporary owner to another) can produce the same stimulation effect as much more money invested in buying a mine for example (assuming the mine seller does some other longer term use of the funds recieved, perhaps holding it in a bank demand deposit while contracts are worked out).

Also only a fraction of the money deposited is put to work as the bank must keep some cash in the vault, a fraction of the total deposits. If an initial $100depost is 90% lent out and that gets deposited in another bank with $81 then lent by the second bank, etc. the money supply with expand several fold but not necesaarily produce any stimulation of the economy in the short term.

It is a complex question with no simple answer, but Ben was correct- the quickest way to get the most stimulation is to put the money in the hands of people who will repeatedly spend 100% of it as it passes from hand to hand.