Quote:
Originally Posted by Calgaryborn
No it shows a quick turn around after 9/11. You don't seem to recall what happened to the economy as a result of 9/11. The recovery afterwards was remarkable. You can't look at the receipts in the year of a tax increase or decrease. It takes time for those things to work through the economy. My point is valid: Revenue increased with lower taxes.
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In a single year in the mid-2000's, USA tax receipts increased more than the entire USA defence budget.
On the other hand, in the late 2000's, USA tax receipts collapsed by about one-third, which is really an underrated problem today.
Basically, the USA has too few taxpayers and its collections are very concentrated in the higher end (20% of taxpayers footing 80% of tax receipts) meaning the consequence is the potential for tremendous volatility and a certain lack of predictability in revenues.
Other countries - although not necessarily Canada - seem to have more predictability because the tax base might be wider.
Again, markets - watch the money - aren't giving this debt crisis much of a pulse - far less than you could be seeing - because everyone knows the USA could raise taxes pretty easily and be fairly covered in a hurry.
Cowperson