How does decreasing taxes raise revenue?

I can, to some extent, see how low taxes help companies focus on making more money, thus stimulating the economy, but how do lower taxes help our bankrupt government? Also, how can taxes get much lower for corporations like GE who paid $0 in taxes when they filed last year?

Axiom: If you want less of something tax it. If you want less economic activity then tax it more. Greater economic activity equals a greater tax base and more revenue.

The problem with some corporations not paying very much total taxes is not the rate that corporations are taxed at because in the US the corporate tax rate is high compared to the world. It is the fact that government gives tax breaks for certain activities that they engage in. Those corporations that can engage in those activities then get deductions that end up negating their tax liability. That is the problem. Government should lower the tax rates and get rid of the tax deductions available. Then all corporations are on equal ground to compete and more economic activity will occur therefore more tax revenue will be generated.

You make a good point about GE. Their taxes certainly can’t go any lower. However, they have done nothing illegal. They have just pursued congressionally mandated exemptions from taxation, which may have been engineered by GE’s lobbyists who essentially “bought” some congressmen through campaign contributions. This is a form of corruption and should be stopped, in my opinion.
However, the fact remains that the tax burden is exactly that, a burden. Thomas Jefferson said, “The government that governs best is the government that governs least.” (within reason, of course). I agree with this.
P.S. When Obama first took office, Nancy Pelosi passed a $770Billion “stimulus bill”. It essentially purchased jobs at the rate ~$125,000-200,000/per job created. What if she had passed a $770Billion tax cut instead. Both actions will add the same amount of cash to our economy. But a tax cut will put all of the money into the private sector, rather than simply funding Nancy’s government mandated pet liberal projects. Which do you think will stimulate the economy more? I vote for the tax cut, mainly because of the added advantage of returning the $770Billion back to the government in the form of increased tax returns.

Everybody is going to hate this answer but I’m sorry, I think it’s true and considering our current economic situation I’m not sure how anybody can disagree but that’s your right.

Decreasing taxes is supposed to stimulate the economy insofar as the wealthier folks have more money to invest back into the masses through higher wages, better benefits, and a lot of jobs. However, I have seen no proof to that end. Especially GE. I think that it’s just an archaic economic system that needs to be revamped. Clearly people and companies work in their own best interest (deporting jobs isn’t good for America, it’s good for low wages). The government likes keeping these companies on top though because they back their political campaigns allowing them to stay in power.

Lowering the taxes of corporations or businesses CAN result in stimulating the economy. However, that reasoning implies that companies will choose to use the additional funds/revenue towards growing their business (hiring additional employees). If they choose to simply keep the additional revenue, what was the benefit of lowering taxes?

Taxes can be lowered, but if there is no “enforcement” of bringing those savings back to the economy, all that can be said is lowering taxes benefits businesses.

When personal taxes are lowered, people have more to spend. They spend that money on things that are produced by factories etc. That money goes all the way to the top and executives make boat loads of money but they don’t pay their workers any more. So that’s how low taxes help. They make the rich richer.

When corporate taxes are lowered, CEO’s get to keep more of the money the company produces. They do not increase worker’s wages because of this though. This is how lower corporate taxes work. They make the rich richer.

Higher personal and or corporate taxes cause people to have less money and they spend less. In this scenario, CEO’s will move their money into tax havens / other countries / non-taxable investments. This is how higher taxes help. They make the rich richer, by making the poor poorer.

Thomas Sowell: Lower taxes to raise revenue:…

The Historical Lessons of Lower Tax Rates:…

larger taxes actual do shrink gross revenues, your question implies you already knew that. yet greater advantageous gross revenues isn’t what Democrats are after. If it happens, great, however the Dems are after what they supply theory to ‘equity’ certainly. they could quite have equality of consequences regardless of if meaning no person does all that properly; quite than have all human beings do properly if that meant some do extensively greater constructive than others. To them, the disparity is the greater advantageous failing. it quite is a stupid theory, yet there you pass.

The Bush tax cuts have had 10 years to produce the bountiful and booming economy and have utterly failed. The idea you mention, the so called Laffer Curve is ideology dressed up as economics. Complete hogwash.

Revenue to who is the question.

To the federal government by expanding the tax base and to everyone else becasue they spend more and create jobs.

The economy grows when the tax burden is lowered. The larger GDP results in more taxes paid. This is not rocket science. Conversely, higher taxes (or even the spectre of them) contracts the economy, resulting is less tax revenue.

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