How can the government increase it's revenue while cutting taxes?

Question

I don't get it. Aren't taxes where the Government gets it's money? I guess we could put in some tariffs on imports, but isn't that considered a type of taxation? The only other way I know that a Government can take in money is by collecting fines.. parking tickets, and stuff.

Seriously, How would it work? What am I missing?

Both Democrats and Republicans claim to be able to do this..

Answer 1

You would have to borrow, or sell some more U.S. Treasuries to the Foreign Market.

Answer 2

http://www.discovery.org/a/2407

I can't tell you why I can just tell you it's fact. Read the article I linked to.

There are several theories but anyone that says they know is full of it.

Some say it's because those with the highest incomes can control their income. Some say it's because of the changes of tax code that comes with the rate changes.

Bottom line is if you want to curb growth and slow revenues you increase tax rates. If you want to stimulate economic growth and increase revenues you reduce tax rates.

Answer 3

By increasing industry, creating new wealth, and enlarging  the tax base.

Answer 4

Cutting taxes you can't, cutting tax rates it's possible, you take a smaller percentage of a bigger economy which is therefor more money.

Answer 5

If people can keep more of their own money they usually invest it in businesses, IRAs or spend it. All of those activities increase jobs and tax revenue. The govt. taking money usually goes down a rat hole.

Answer 6

Buy cutting outrageous wasteful spending. That is no. one. Cut, cut, cut. get lean and mean, fast.

Answer 7

As former President Clinton said in the DNC speech, we had only theory to go on when discussing Reagan-omics, until 2001, when Republicans had control of both the Congress and the White House.  Then, we found out what actually happens.  Taxes cut, spending up, deficit explodes, money spent on defense, money spent on pork (both parties guilty of that), no-bid contracts.  We found out that Republican discipline on spending is also just theory.  But what I see here for answers, and everywhere else for that matter, is still the original theory, as if we don't now know what really happens.  I think it is true that if taxes are cut, and spending is cut to match, the economy would grow faster and the government would make more money in the end.  But we have never tried that, so we don't know.  Until then, all we'll get to justify Reagan-omics is the theory.

Answer 8

the less tax you collect,the more people have to spend.you know money is what makes the wheels go around.

Answer 9

Very simple. People have more money to spend and stimulate the economy. Raising taxes would cause everyone to have less money to spend and crash the economy, hence Obama's plan.

Not to mention... I trust myself with my money more than the government with it.

Answer 10

1) acknowlege the foundation of society.  Business = jobs

2) get out of the way of business, don't strangle business with taxes so they can grow.  that way they can employee people who get taxes taken out of their check; the more business there is, the more people spend, supporting other business, who can hire more.

3) tax revenue increases with successful businesses.

4) lowering tax burden on business = more revenue.

Answer 11

When taxes are cut, there is therefor more money in the economy to be spent and re-spent (and taxed repeatedly).  Every extra dollar we have in our pockets gets used over and over and over again.  For example, if income taxes were cut, you might now have an extra $50 in your pocket.  Say you use it to get a tank of gas.  You paid fuel tax on that gas.  Now it's the gas stations money, and in part gets distributed to their employees who also pay income tax on it.  Since they have more left with lower income tax, they might get some groceries with it.  That goes towards their employees who also pay income tax.  And so on and so forth, but obviously in much larger amounts.

Answer 12

If taxes where 30% on $100, the government would get $30.  If government cut taxes to 20% the would get $20.  Now if a company was able to make $155 while in the past they only made $100, because taxes are lower, the governments cut would be $31.