Sowell claimed it's a "well-documented fact" that cap gains tax cuts raise revenue, but numerous economists disagree
SUMMARY: In a column criticizing Sen. Barack Obama's tax proposals, Thomas Sowell wrote that it is a "well-documented fact" that "lower tax rates on capital gains had produced more actual revenue collected from that tax than the higher tax rates had." In fact, numerous economists have challenged the assertion that cuts in the capital gains tax raise revenue in the long term. The nonpartisan Joint Committee on Taxation estimated that the 2006 extension of the 2003 cuts on capital gains taxes would result in decreased revenues of $20 billion over 10 years.
In his July 15 syndicated column criticizing Sen. Barack Obama's tax proposals, Thomas Sowell wrote that "[w]hen [ABC World News anchor Charles] Gibson reminded him of the well-documented fact that lower tax rates on capital gains had produced more actual revenue collected from that tax than the higher tax rates had, Obama was unmoved." However, as Media Matters for America documented when Gibson claimed during an April 16 Democratic presidential debate that "in each instance, when the [capital gains tax] rate dropped, revenues from the tax increased," numerous economists have challenged the assertion that cuts in the capital gains tax raise revenue in the long term. The nonpartisan Joint Committee on Taxation estimated in June 2006 that the 2006 extension of the 2003 cuts on capital gains taxes would result in decreased revenues of $20 billion over 10 years.
Additionally, Sowell asserted: "Since about half the people in the United States own stocks -- either directly or because their pension funds buy stocks -- socking it to people who earn capital gains is by no means socking it just to 'the rich.' But, again, that is one of the many facts that don't matter politically." In fact, most distributions from two common forms of retirement accounts -- 401(k) and IRA -- are taxed as regular income, not as capital gains. Additionally, Obama said after the debate that he would not raise the capital gains tax rate on individuals with income of less than $250,000.
From Sowell's July 15 column:
Politicians' top priority is to solve their own problem, which is how to get elected and then re-elected. Barack Obama is a politician through and through, even though pretending that he is not is his special strategy to get elected.
Some of his more trusting followers are belatedly discovering that, as he "refines" his position on various issues, now that he has gotten their votes in the Democratic primaries and needs the votes of others in the coming general election.
Perhaps a defining moment in showing Senator Obama's priorities was his declaring, in answer to a question from Charles Gibson, that he was for raising the capital gains tax rate. When Gibson reminded him of the well-documented fact that lower tax rates on capital gains had produced more actual revenue collected from that tax than the higher tax rates had, Obama was unmoved.
The question of how to raise more revenue may be the economic issue but the political issue is whether socking it to "the rich" in the name of "fairness" gains more votes.
Since about half the people in the United States own stocks -- either directly or because their pension funds buy stocks -- socking it to people who earn capital gains is by no means socking it just to "the rich." But, again, that is one of the many facts that don't matter politically.
What matters politically is the image of coming out on the side of "the people" against "the privileged."
If you are a nurse or mechanic who will be depending on your pension to take care of you when you retire -- as Social Security is unlikely to do -- you may not think of yourself as one of the privileged. But unless you connect the dots between capital gains tax rates and your retirement income, you may fall under the spell of the well-honed Obama rhetoric. Obama is for higher minimum wage rates. Does anyone care what actually happens in countries with higher minimum wage rates? Of course not.
In fact, numerous economists have challenged the assertion that cuts in the capital gains tax raise revenue in the long term. The nonpartisan Joint Committee on Taxation estimated that the 2006 extension of the 2003 cuts on capital gains taxes would result in decreased revenues of $20 billion over 10 years.
Seeing as how the markets have been going down for quite some time, its almost impossible to expect anything less than a decrease in revenue. Theres not many people in capital gains making the same money as they were when the market was viable. An increase in capital gains tax right now isn't going to increase the revenue, it will only curb investment into capital gains markets. The time to do such an act is when the market is blossoming, and you can take the hit of a huge 1 time sell off of stocks in order to take back profit before the change in taxation. With the DOW at under 11000, doing so right now would be too catastrophic that any economist will tell you to expect bankruptcy, job losses, and a short term market crash.
Except for the fact that experts in the field have said that lowering capital gains taxes lowers revenues in the long term.
People with more intelligence and training and less blind partisanship than you exhibit have made a fair determination. You, on the other hand, have a knee-jerk response to this that fits your preconceived notions, regardless of the evidence.
Except for the fact that experts in the field have said that lowering capital gains taxes lowers revenues in the long term.
If you knew anything about financials and economics, you'd know that anything with the market right now is going to product a decrease in revenue - whether the taxes are the same or increased. What experts are referring to are considered in "normal" or "typical" market conditions. The conditions of the current market are anything but.
Dont blame this whole "partisan" crap on your lack of knowledge. I have minimal investments outside of my 403b, so this is hardly effecting me either way. But everyone knows that when you have a chance for higher returns on your money (aka, lower taxation), there is an increased influence to take chance on earnings.
If you knew anything about financials and economics, you'd know that anything with the market right now is going to product a decrease in revenue
No it won't. If Bush announced today that the capital gains tax was going to be increased, revenues would soar.
No they wouldnt. You'd see even worse recession & inflation due to a short term immediate market pull out.
You really dont understand the fundamentals of financial investment.
"well, gee, if we lower these tax revenues to ZERO would mean INFINITE tax revenues!"
Uh, no, sorry sonny. Anyone smarter than a 6th grader would know that numbers are not actually divisible by zero. However, there would be an infinite revenue, if there was an infinite monetary supply, thats certain.
But you're purposely distorting facts and extremes for other reason than you dont understand common economics and financial systems. Thats ok. You're entitle to live under a rock, or in the closet if you will. But I would highly suggest picking up some solid text material to gain knowledge, as opposed to surfing blogs all day.
You might say something to your candidate, McCain about not knowing anything about economics, living under a rock, etc. He's admitted it, at least once, but probably more so.
The thing is, we rely on economists who know way more than you and I about how the economy works. What you think might be a response to a certain economic action could turn out to be something else. It's hard to speculate when it comes to the economy. Educated, degreed economists disagree with the fact that lowering cap gains will drive up revenues.
Just because you, someone who dabbles in economics, says that revenues will increase doesn't persuade me that they will. Again, economics is a difficult subject matter in which to speculate. If it were easier, we'd all be millionaires.
Because the market has been very volatile in the past decade since the .com bomb out. If you look at the revenue that would have been made during the period of the .com's booming, you'd see that the the effects would have surpassed the estimate regardless of which tax percentage you put on the capital gains.
However, with the past 9-10years of investment cycles migrating from stock markets to commodities, you'll notice that the amount invested has increased, but you'll also see that the amount that has gone into the NYSE, DOW, Nasdaq, etc has actually produced more losers than winners. The only place currently for the past several years that have been yielding high profits have come from international trading commodities. The problem is we dont produce nearly as much as we used to when our stock market was tip-top. The country has migrated from a manufacturing base to a service base industry. The reduction in revenue from the markets is synonomous with our ever increasing trade deficit.
Just as its not a fact that an increase in tax percentage will always bring an increase in revenue.
The problem is we dont produce nearly as much as we used to when our stock market was tip-top. The country has migrated from a manufacturing base to a service base industry.
And this is a direct result of the policies of Reagan, Bush 41, Clinton and Bush 43.
False. This is a direct problem forced upon environmental regulations that create an increase in costs. Not that anything is wrong with the EPA in my book, but don't cry because businesses are leaving when its cheaper to manufacture elsewhere. Its plain to see why.
It is plain to see why, but you only see a tiny piece of it.
Lax or non-existent environmental regulation is only one factor in many.
Others include...
Lower standards of living. A lack of basic infrastructure, sanitation, utilities and decent housing results in a workforce overflowing with people willing to take any job at any rate of pay.
Lack of workplace safety regulations. The less you are required to do to protect workers from danger, the less costly it is to employ them.
Lack of regulations protecting democracy in the workplace. Even worse, hostile and sometimes violent treatment of any worker who so much as utters a single word about organizing employees.
The high cost of providing health care insurance. Several automotive companies have relocated manufacturing to Canada not because of lower wages, but because they don't have to bear the huge expense of providing health care insurance.
The expansion of knowledge and education in other societies. It started with mostly manual labor jobs being exported. Today, seemingly no position is safe. Companies are finding themselves able to outsource highly skilled engineering, design and research positions to nations with a much lower standard of living.
Exasperating all of these factors is vastly improved communications technology, which makes coordinating with overseas facilities much easier and faster.
To simply lay the blame entirely at the feet of those who seek to protect the environment is ridiculous.
I'm not sure where you copied/pasted that from, but sure each of those have an effect on the entire business market today -not just loss of manufacturing.
The pure and simple bottom line is this: when you impose increase regulations - whether they be environmental, or something else - the cost of production is going to increase. Production costs can only increase so much until the BEP is breached and the product is no longer profitable in the market that its being sold in. Then there are two options: shut down completely and cut your losses, or relocate for cheaper costs while still maintaining your market place with a cheaper priced product &/or higher net margin.
The single largest burden on the manufacturing industry and blue collar workers is not health insurance, or anything to do with labor itself, it is and always has been environmental regulations. Coming in at second place is labor contracts and unions. There is a reason that China doesn't have these problems and is in a booming economic & productivity cycle.
Again, Science, please cite your cources for all of this economic wisdom you're spouting from your...brain. Because, while I have a degree in Economics and an MBA, I have NEVER heard anyone make such a bullsh...I mean, questionable statement. The higher price of labor in this country FAR outweighs any regulation cost, you mor...sorry, my esteemed collegue, but your dime store economic babble is starting to grate on my nerves.
Of course, I don't know everything either, so please enlighten me.
Aaaand...what a surprise, no response.
The higher labor costs do have an effect, but they do NOT outweigh the regulatory costs. Sorry, but im going to have to call Shens on you here, as you most definately do NOT have an MBA in economics if this is your actual stance.
Labor cost is a major problem, but that is offset by charging higher prices. Regulator costs are also offset by higher prices. But the difference between the two? Only one outcome see more money going into the hands of the workers to maintain profit margin.
This is a very, very, very simple outcome of the supply & demand curve using the break even point.
Science,
Your point isn't made by your statments.
An accusation of plagiary, which you can't prove. How civil and noble of you.
This references several sources, but this is the only place you're going to find this post because it was authored by me.
Where do you get your burden rankings?
It was never stated for the record, but it was suspected that Boeing did not relocate here for the same reason. The piggy-poos in charge cost us several thousand more jobs. No one knows how many other jobs went elsewhere. Other places demonstrating more "personal responsibility" got a pretty good bang for their buck, I'd say. Again, where was the upside for my neighborhood, ignoring quality of life issues, that is, which also have value. We wound up with neither economic advantage nor quality of life, thanks to people like you.
You keep calling shenanigans, but you don't have anything to counter it - you know, like facts. You seem to be pulling a lot of this from your anal cavity.
Let me say that companies who have moved American jobs overseas are the culprits - not regulators, not the Federal government, nobody, but the boards and shareholders who are greedy for more and more money. When you can get someone to make a pair of shoes for a $1/hour in Indonesia, why would you pay someone in the U.S. to do it for $20/hour? That seems to make some sense; however, I'd have to question the patriotism of these people. If making money is more important than making sure American jobs stay in America, then take you f**king company and go abroad. I'm sure the U.S. government would be more than happy to tax your profits at over 75%, just to make up for the ills that are foisted upon the American taxpayer for the company's (and shareholders') greed.
Again, it's not the government who sent these companies overseas, it's those who lead the companies. Your blame is totally misplaced.
I got curious, but couldn't find much...
The mayor of Arlington, TX:
"When Toyota was considering a location for a new truck plant, air quality was cited as a reason for eliminating our region-- costing the local economy thousands of jobs."
The SEED Coalition:
"Dallas has poor air quality and lost both Toyota and Boeing as a result."
The New York Times:
"They are keen on maintaining a healthy-air designation, believing it helped [San Antonio] attract an $800 million Toyota plant last year while Dallas, a competitor, had additional regulatory burdens from clean-air violations."
Science Guy fails, as usual, coming back with unfounded opinion, speculation, and the usual talking points - no facts that anyone could determine. He should be on Faux News (maybe he is). Why does he bother? He gets shot down every time and WILL NOT fact check. Total waste of bandwidth.
Nevertheless, you pollution fans cost us both jobs AND quality of life. Kind of a conservative paradise, no?
Well, a quick look on the Google turned up this quote from the Arlington, TX web site:
"The bad air is bad for business, too. When Toyota was considering a location for a new truck plant, air quality was cited as a reason for eliminating our region-- costing the local economy thousands of jobs."
Like most conservatives, you prefer Hannity's talking points and guesswork to easily found facts. Probably more stories out there.
Why do you pollution extremists want to kill our jobs? Asking again, where is the upside for my town?
In an earlier posting,science101 disputed the air quality argument because the workers are inside.
That is true, while they are working but, the workers will LIVE outside of the plant & they don't want their families wearing gas masks when they go outside.
I've read OMB papers on this subject, and they are available on-line . The conclusion is that changing the rates lower increases revenue in the short term because the short-term tax basis changes, and the investors move positions to take advantage of it, rather than hold. Long term, overall revenue is down because the tax rates are - no surprise - lower.
Raising the rates will cause a short burst as investors move before the rate increase kicks in, after that, the studies found, investing is just investing, and what made an equity attractive before still holds, regardless of the tax rates (without taking anything to extremes in the rates).
The fact that a tax rate changes causes investors to move, not so much what the rates actually are.
The fact that a tax rate changes causes investors to move, not so much what the rates actually are.
Thats exactly correct. Even if there was a 1% tax increase, you'd see a massive short term sell of in order to keep that 1% as profit. These aren't people who are putting in a few hundred dollars into the market. 1% of millions is...well, you get the drift.
Even with an increase in taxes, people will still invest, but lower their net expected gains. However, with a non-typical market condition, such as today, any massive sell of would cause vast economic hardship including corporate bankruptcy, job losses, and asset sell offs to gain capital. Pretty much, exactly what the market is doing now, but much worse...and forcefully brought on.
What's the difference if investors hold their securities in anticipation of a capital gains tax decrease and then sell off en masse or if they sell off en masse in anticipation of a tax increase? A mass sell-off is a mass sell-off. It's at least a year before we start seeing either candidates proposals come to fruition so it doesn't really make sense to condemn either plan because of todays market conditions. If the markets are still in the toilet a year from now we're going to have a whole lot worse problems.
Because no financial person would sell off in anticipation of a tax DECREASE. That is instant profit that you weren't expecting to gain - and even more reason to keep your investment at a stand still in the current stock. A change in the capital gains tax never starts on a certain day and says "ok after you invest on this day, it will be at this rate of taxation". That would involve a sell off both ways. Capital gains tax changes take place immediately and effect all current and future investments.
I can't believe you even asked that question.
You realize of course that the folks who don't sell, in anticipation of the announced tax cut will DECREASE the amount collected in the period between the tax cut announcement and it's effective date.
Once the effective date hits, investors will sell to realize their gains under the new, lower tax rate.
Whether the taxes go up or down, the result is a TIME-SHIFT in when the taxes are collected on sales transactions that would otherwise have been completed either earlier or later. The actual number of sales won't change.
Once this 'bubble' passes and trading returns to normal, the higher tax rate will result in higher tax receipts.
I don't think there would be a mass sell-off after a tax cut. I think investments would probably increase. The people who make their living sailing on their yachts in Florida while waiting for the next dividend check are going to take their extra money and reinvest it in new manufacturing, offices, and maybe even a new corporate headquarters....
....in DUBAI, INDIA, and CHINA.
Science,
Quit using logic and deep understanding of the subject's material. You have no business trying to engage in reasonable debate here, especially when the facts support you.
Tax revenue is generated by the transfer of wealth in this economy. We call this economic activity. To make it more lucrative to hold onto wealth, ie, deciding to hold onto to investments to avoid exhorbatant tax rates, you slow economic activity and thus revenue collection. When you lower tax rates througout the economy or provide yearly rebates such as we had, revenue will go up because of the overall level of economic activity. The very same holds true for capital gains taxation.
Now, Science let the beloved ones here get back to nasty name-calling, blaming everything on Bush and awaiting for Pelosi to share her plan for lowering gas prices that she had in 2005 (oops, sorry, they don't really mention that here).
Quit using logic and deep understanding of the subject's material.
haha Thanks Proud! You made my day. I was hoping I wasn't the only one here that was in touch with reality! :-)
I'm looking for the nasty namecalling and Bush bashing in this thread, and at this point, I don't see any.
I do, however see shots being taken at Nancy Pelosi.
I do, however see shots being taken at Nancy Pelosi.
Not exactly a difficult thing to accomplish....
It is also interesting that all the lib posters here who attacked the rebates and said they did nothing for the economy. Now Pelosi has propsed a second round of rebates. How many posters here will now be willing to retract their previous attacks? My guess.......none.
Now Pelosi has propsed a second round of rebates.
But to be fair to Nancy - the 2nd round of rebates is so we can all purchase bicycles & tow behind baskets while she attempts to turn off the nozzle of the oil well :-)
I'd rather tax money come back to me in the form of a rebate check than see it go to support (1) an illegal war for oil and (2) corproate welfare, where people who already have more money than they know what to do with end up getting a portion of my check. You know, MY paycheck, which I change into cash, to spend, to live on, feed my family and keep this economy going.
Why should my money go to some rich douchebag sitting in a leather chair in the Bahamas?
Cuts in the capital gains tax can't produce enough additional revenue (a percentage of the resulting increased growth) to offset the loss from the existing activity taxed at the lower rate.
If a cut in the capital gains tax produces a 20% spike in growth - and that would be a remarkable result, indeed - the baseline (80%) of economic activity would be taxed at the new, lower, rate as well.
So - does a lower tax on the new 20% offset (let alone exceed) the loss on the existing 80% at the new lower rate? Of course not.
Newz,
Using your example assuming a 1:1 reduction in taxes/growth, the 20% tax reduction/20% growth would produce 96% of the former tax revenues. (1.2 x .80) If the the ratio of growth to cuts is greater than 1:1, say 1:1.25 the 20% tax reduction would break even. Any growth over 1.25 would provide a net increase in revenue.
It would be interesting to see if there are any studies that show the ratio of tax cuts to revenue at the various rates.
As an aside, I would be all for a 1:1 ratio of tax cuts/growth as a growing economy produces more wealth for everyone except perhaps the government.
When you lower tax rates throughout the economy or provide yearly rebates such as we had, revenue will go up because of the overall level of economic activity. The very same holds true for capital gains taxation.
What's your source? This very article contradicts your claim and is supported by documentation.
carnival,
Here's one, many more to follow if needed:
http://www.reuters.com/article/pressRelease/idUS182962+23-Jan-2008+PRN20080123
Ok, so a corporately-funded conservative think tank puts out an opinion piece (it hardly qualifies as a study) against increases in the capital gians tax rates. The think tank isn't just referenced in the article, they authored it.
I don't see any significance in your link.
ProdCon,
I'll read through your article, but here's my source--besides what MMFA already provided: Experts agree that capital gains tax cuts lose revenue
carnie,
I also looked over your article
While a capital gains tax cut can lead investors to rush to “cash in” their capital gains when the lower rate first takes effect, it does not raise revenue over the long run.
The emphasis is in the article. They work because moving capital is less onerous when taxes are lower. If they are higher, the richest folks just hold onto them in trusts or just let the dividend checks be taxed or more than likely rolled into some other tax dodge. (We need a flat tax system) I would agree with the article you cite, that permanance of tax cuts is better in terms of planning for growth of investment capital.
Speaking of dividends, when a stock becomes attractive, it is in part due to the price, but also the earnings of the company, which is the dividend. As more capital flows into a company, it does impact 401ks because the dividend is included in the value of the fund shares you own which in turn increases.
ProudCon,
Your article asserts that "the stimulus package had positive
effects on the economy and government finances. The economy grew, the
government gained revenue and the rich now pay a larger share of taxes than
ever."
But the "govt. gained revenue" part is misleading. They don't mention that it's only a temporary spike in revenue. My link used the CBO to prove with hard data that in the long run revenues fall:
Cutting capital gains rates reduces revenues over the long run. That’s the conclusion of the federal government’s official revenue-estimating agencies, as well as outside experts and the Bush Administration’s own Treasury Department.
* The non-partisan Congressional Budget Office (CBO) and the Joint Committee on Taxation have estimated that extending the capital gains tax cut enacted in 2003 would cost $100 billion over the next decade. The Administration’s Office of Management and Budget included a similar estimate in the President’s budget.
* After reviewing numerous studies of how investors respond to capital gains tax cuts, CBO commented that “the best estimates of taxpayers’ response to changes in the capital gains rate do not suggest a large revenue increase from additional realizations of capital gains — and certainly not an increase large enough to offset the losses from a lower rate.”
* The Bush Administration Treasury Department examined the economic effects of extending the capital gains and dividend tax cuts. Even under the Treasury’s most optimistic scenario about the economic effects of these tax cuts, the tax cuts would not generate anywhere close to enough added economic growth to pay for themselves — and would thus lose money.
As for the article claiming that the tax cuts are largely responsible for improving the economy, here:
Tax Cuts Coincided With Improvement in the Economy But Didn’t Cause It
Advocates of the 2003 tax cuts frequently emphasize that the economy’s performance improved around the time that these tax cuts were enacted, and they imply that the tax cuts caused the improvement in the economy. But as nine out of ten prominent economists told the New York Times in a recent informal survey, the economy’s improvement was most likely attributable to factors other than the tax cuts.[3]
Again, I would point to the "temporary' aspect of gain. Permanance allows for better long term gain in capital which in turn brings in more economic activity and thus revenue.
Also, remember the CBO looks at tax and economic activity as a static sized pie. But, growth in wealth enlarges the 'economic pie' so instead of looking at a specific portion of the pie as fixed in potential revenue, consider that 10% of a growing economy will generate a greater protion of revenue than say 20% of a pie that inhibits growth.
One reason is that preferential tax rates for capital gains encourage tax sheltering, by creating incentives for taxpayers to take often-convoluted steps to reclassify ordinary income as capital gains. This is economically unproductive and wastes resources. The Urban-Brookings Tax Policy Center’s director Leonard Burman, one of the nation’s leading tax experts, has explained, “shelter investments are invariably lousy, unproductive ventures that would never exist but for tax benefits.” Burman has concluded that, “capital gains tax cuts are as likely to depress the economy as to stimulate it.”
Carn,
I agree in the powers of attorneys and accounts to manuver money away from taxation to the detriment of the overall economy. That is why I would strongly urge a flat tax system that would make those useless.
Heading off to beddy-bie. Thanks for the reasonable discussion.
But, growth in wealth enlarges the 'economic pie' so instead of looking at a specific portion of the pie as fixed in potential revenue, consider that 10% of a growing economy will generate a greater protion of revenue than say 20% of a pie that inhibits growth.
I understand that tax cuts have the ability to stimulate economic growth, thereby increasing revenue. The more income people have, the larger the amount of taxes they give, even if the tax rate is the same (or less, depending on how much more they're making).
But your're basically making the claim that long term tax cuts will boost the economy so much so that the revenues will increasein the long run, i.e. tax cuts pay for themselves. I just don't agree.
Ohh! You typed my real alias! Let's exchange emails now! ;D
Nice talking to you.
Tomas Sowell is an idiot. I've read som his garbage in graduate chool saying how charities and non-profits are actually greedier that for-profit corporations. That twisted logic didn't even fly in a relatively conservative class of MBA students. He's also written about how autism is being over diagnosed, and how many of these kids just have minor speech-delays. As a parent of autistic childeren, who actually READS and KNOWS something about what's going on, this man should drink a nice cup of SHUT THE F%#@ UP. (How many childeren lost out on early intervention becasue parents were given false hope by this j@ck@$$?)
He's an idiot, and a hack, and no one should take this imbecile seriously.
I've read som his garbage in graduate chool saying how charities and non-profits are actually greedier that for-profit corporations.
Err. I dont know about the "charities", but I can vouche that non-profits are just as greedy. Remember, the only difference between a non-profit and for-profit are the tax codes. They still have revenue, profit margins, etc. And the CEO's can make just as much as corporate CEO's.
Where you get the idea that they are somehow loyal organizations is beyond me. Especially when you consider that there are probably just as many corrupt charity organizations as their are private corporations.
A CEO getting paid a hansome salary is not the same as shareholder getting profits distributed to them. (Who says that non-proft have to pay lousy salaries? Where is that written?) And those 'healthy profit margins' you mention STAY IN THE ORGANIZATION. Becuause they are NOT distrubuted to shareholders, they help the company operate in lean times w/o cutting as many jobs, and help keep the price of their service low, even whne cost are periodically high. The basic design and purpose of the two org structures are different. If you think that non-profits are no more altruistic that for profit corporations, then you're as cynical as Sowell and every other lying, greedy right winger trying to defend an indefensible point.
Just a small point. I took a look at the MMFA link by the Joint Committee on Taxation regarding the "lost" revenue to the government by extending the tax cuts.
Maybe I am wrong, but it looks to me that the analysis did not take into account any growth that occurs by keeping that $20 billion in the private sector.
As a side note, IMHO, projecting government revenue ten years out has about as much chance of being accurate as buying a mega-millions lottery ticket.
pps. NiceGuy. My heart goes out to you and your family as you deal with your children's autism. You and your wife are heroes in my book for the love and care you provide for your children. I have watched my sister deal with her bi-polar, ADHD child and my brother-in-law deal with his child who suffers from obsessive-compulsiveness and a type schizophrenia. It is incredibly difficult.
Looking at Mr. Sowell's recent column, (and correct me if I am wrong,) it looks to me like he never offers advice regarding other people's children. I understand your feelings but doesn't Sowell make a valid point that some late-talkers are misdiagnosed as autistic?
I know very little about autism, so forgive my ignorance.
I understand your feelings but doesn't Sowell make a valid point that some late-talkers are misdiagnosed as autistic?
That's a a very valid question. I'm not saying it doesn't happen. But the opposite has far more often been the case, at least until the last 5 years or so.
The thing is: The intesive early intervention speech therapy given to autistics will do no harm, and indeed probably help a speech delayed, but otherwise typical, child.
BUT putting off this therapy, which is most effective when done early in the child's development, while the brain is still the most maleable, can have lifelong consequences for the child. So if someone were to not bother to have their child screened, because they're reading contrarian nonsense like his and remaining in denial, then theirfamily and their child is being harmed by someone (in a position of authority) spouting his opinion, when he has NO IDEA what he's talking about.
We (that's everyone now) need MORE screening, not less; MORE servcies, not less; and MORE interventions, not less. His ignorant voice can only do harm. At best it might save the government (and in some states insurance companies) a little bit of money. But the trade-off here is senseless, since it will mean MORE CARE that will be needed later in the life of every child that misses out on this therapy, due to a late diagnosis.
Niceguy,
For the sake of argument, are there any studies that show early childhood development program's effect on children with autism? I understand completely if quantitative studies are hard to find.
If I remember correctly, Sowell was critical of success rates.
ps. I know this is off topic, so thanks for taking the time to respond. I too have dealt with early childhood physical therapy for my daughter so I am in philosophical in agreement with early childhood therapy.
Again, you have a good point. There are inherent problems in "proving" any success rates. First - it's particularly hard to measure where there kids are as a baseline, or at a any point in there progress. Standardized testing does not really measure their abilities very well. (As an example - there have been many times where my older son could not accomplish a task when presented with the standardized instructions - but had no problem if the instructor rephrased them so that he understood what was being asked. In some cases the rephrasing was very minor, but if the test ins't standardized, then you can't control for variations by test administrator. (How do you know they're not giving away the whole answer?) But it's kind of like taking an IQ in a language that you don't speak: do you have a low IQ, or do you just not speak the language?
Another common crticism is the lack of a control group. And this is understandable, becasue what parent is going to let their child go without needed therapy? We would counter that that the "control group" would be every autistic from 1947 (when Kanner & Aspberger first labeled the disorders) to 1997 when Greenspan really got some traction with his "floortime" methods. Although there is no concrete data (which admittedly bothers me, as a man of science myself) the prognonsis for autistics up until 10-15 years ago was: Very likely to never speak, if they haven't started by age 3-4; no chance to socialize or make friends; no chance to graduate form school or hold down a job; plus a myriad of other problems. The prognisis is still uncertain, but many (including my two boys, and just about every kid they'r in therapy with) will learn to speak, learn to make firends, learn how to LEARN (and many will be back in mainstream classrooms by middle school), and while early therapy does not guarentee HS graduation, adult independence or a job, it does promise the POSSIBILITY of that which is basically impossible without it. (The big success story from the 'old days' was Temple Grandin (an amazing person - look her up) but she got intensive therapy and special eductaion even beofre such programs were really formalized. She credits her parents for puching that, and for her success.)
All I can offer is this: My kids had NO LAGUAGE AT ALL thourgh age 3 (not even "mama" & "dada"). And I have no reason to believe (based on history) that they would have ever learned any. But from 3-4 (first year in therapy) they made huge strides, and constantly reached new milestones. Now my oldest is almsot 7. He still has significant problems with language and social skills, but he uses what he learns as often as he finds the opportunity. He's still in therapy, but you can see in him that there's nothing he can't learn, provided that we know how to teach him. (They DO learn, just not the same way the rest of us do.)
But, scientifically speaking, I sympathize with those looking for hard numbers. Because there isn't much. You just run into too many problems with both quantification and controls. What I can tell you is that the anectdotal evidence is overwheming, and it is backed up by published research (qualatative though the studies may be) and the prognosis of autism has gone from [basically being completely unable to live and care of themselves] to [uncertain]. That's not exactlky comforting for a parent, but I'll take possibility over what they would have told you 15+ years ago.
Another problem is that there are numerous "quack" medical practices out there for autistics. The effacacy of these is also unproven, and in fact even the basic science underlying there claims ahs proven to be false, but they'll give you the same argument: no scientific data either way. So if any of these did work (and they don't, but let's pretend) then the speech therapy experiment would be further complicated by any effects that these alternative practices have. How do you distiguish what's actually working?
Unlike "diseases" which have physical symptoms and markers you can't meaure the rate of "autism" like you can a white blood cell count, or blood pressure, or cholesterol.
Just a small point. I took a look at the MMFA link by the Joint Committee on Taxation regarding the "lost" revenue to the government by extending the tax cuts.
Maybe I am wrong, but it looks to me that the analysis did not take into account any growth that occurs by keeping that $20 billion in the private sector.
ProudCon already made a similar statement, but the claim that cutting the capital gains tax will stimulate economic growth so much so that revenues increase in the long run is unfounded.
To raise revenue over the long run, capital gains tax cuts would need to have extraordinary huge, positive effects on saving, investment, and economic growth that virtually no respected expert or institution believes they have. In fact, experts are not even sure that the long-term economic effects of these capital gains tax cuts are positive rather then negative.
As a side note, IMHO, projecting government revenue ten years out has about as much chance of being accurate as buying a mega-millions lottery ticket.
You're being awfully dismissive by comparing the JCT's revenue estimation process--worked on by a team of 17 PhD economists specializing in revenue estimates--to the chances of winning a lottery. I hope this had nothing to do with their results conflicting with your beliefs on tax cuts.
Of course the analysis are estimates and not meant to be 100% accurate predictions, but their the most reliable, accurate, and non-partisan data out there. Oh, and they are not static, they are dynamic estimates based on sophisticated models.
For instance: "JCT begins with CBO’s 10-year macroeconomic Budget Baseline. CBO macroeconomic Budget Baseline captures predicted growth in economy and other long-term trends"
Source: Inside the JCT Revenue Estimating Process
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I wonder how much revenue or GDP is generated by keeping a dollar in the private sector . Or $ 20 Billion .