Is it Possible to cut both taxes AND spending?

[Free Bird]

Just something I'm curious about. It seems with spending cuts also come tax increases. Is it possible to kill many taxes such as General sales and estate, go to a flat income tax rate, but also have controlled lower spending? Or would the economy go kerplooey?

[Deus Naturae]

Yes, of course it's literally possible to do so. If your question is "is it possible to cut both taxes and spending without a negative impact on the economy," then the answer is still yes. There's plenty of spending that provides practically no value to the US economy or even detracts from it: Spending on overseas military bases, aid to foreign governments, agricultural subsidies distributed so that farmers will grow less and charge higher prices, etc.

There are other areas of spending (subsidies to large corporations, unneeded weapons spending, etc) that might cause the loss of some jobs if ended, but long-term wouldn't have a significant negative impact on the economy.

[Free Bird]

Without negative effects is indeed what I was thinking. Where would the tax cuts be, which ones would be eliminated altogether, and where would we cut spending?

[🦀🎂🦀🎂]

The obvious answer, is that there is no obvious answer.

Corporation Tax is a prime target, I guess, if you're looking for a tax to eliminate. It's often floated that this tax should be abolished, usually in a revenue neutral manner like eliminating subsidies or carbon taxation (the latter solution probably will not fly with you I guess). It's kind of absurdly high in the US, and isn't really that important in the great scheme of things.

[Deus Naturae]

Without negative effects is indeed what I was thinking. Where would the tax cuts be, which ones would be eliminated altogether, and where would we cut spending?

If your only goal is to not negatively impact the economy, then they can really be anywhere. If you want to maximize growth, the best tax to cut would be the corporate tax, since the US has one of the highest rates in the world and corporate taxation just makes little sense in general (tax costs can just be passed on to consumers and workers via higher prices and lower wages). Payroll taxes are also pretty bad but they're directly tied to certain programs so reducing them would have to depend on what spending you're cutting. Personally I'd try to reduce a broad range of taxes but taxes on personal and business income would be my top priority.

As for the first areas I'd cut, see my previous post in this thread. I'd also cut Education, since the DoE's primary function is to take in money and then distribute it to State governments on the condition they do x, y, and z. There's no evidence whatsoever that this has a positive impact on educational outcomes.

[King]

Yeah, if you cut spending by more... the Reaganite dream of expansion eventually creating more real revenue than never really comes to pass because another recession always comes and screws it up. Reagan projected a surplus for 1988 but then 1987. CBO had similar for Bush tax cuts for 2010 but then 2008

[memphis]

Yeah, if you cut spending by more... the Reaganite dream of expansion eventually creating more real revenue than never really comes to pass because another recession always comes and screws it up. Reagan projected a surplus for 1988 but then 1987. CBO had similar for Bush tax cuts for 2010 but then 2008

See Kansas and Governor Brownback.

[King]

Brownback is more of glaring evidence to why rate cuts don't work as well as targeted tax credits which actually require people who receive them to DO something.

[ingemann]

Is it possible... yes , but honestly you have to be in rather unique situation for it to be a good idea. In a booming economy it would be a bad idea, unless the cut included massive firing of public employers (expanding the workforce), while in a recession it would bad idea, unless the tax cut was for the poorest.
It would be best if it was in a low growth high employment economy.

 Of course there are always exception, some thing have little direct negative economic effect if you cut them, the army, law enforcement etc. Of course there may be a indirect effect (increasing the number of unemployed people with combat training, really not the best idea).

As a example of a government policy, which would have little to none negative effect to cut would be the War on Drugs; it's expensive, it have negative effect on the economy and of course the fact that it's a incredible failure doesn't help either.

[Chunk Yogurt for President!]

Yes. We did so in the 20s. Harding was a great president.

[All Along The Watchtower]

Yeah, if you cut spending by more... the Reaganite dream of expansion eventually creating more real revenue than never really comes to pass because another recession always comes and screws it up. Reagan projected a surplus for 1988 but then 1987. CBO had similar for Bush tax cuts for 2010 but then 2008

http://en.wikipedia.org/wiki/Starve_the_beast

[Maxwell]

Yes, of course it's literally possible to do so. If your question is "is it possible to cut both taxes and spending without a negative impact on the economy," then the answer is still yes. There's plenty of spending that provides practically no value to the US economy or even detracts from it: Spending on overseas military bases, aid to foreign governments, agricultural subsidies distributed so that farmers will grow less and charge higher prices, etc.

There are other areas of spending (subsidies to large corporations, unneeded weapons spending, etc) that might cause the loss of some jobs if ended, but long-term wouldn't have a significant negative impact on the economy.

This.

[Replicator]

Ideally but in the real world it doesn't happen. Unless you consider paying off the debt as spending. Too many politicians have hand outs and bribes to fulfill. I'd propose a highest tax bracket to be 50% no higher with most Americans paying 28% or 33%. Lower income Americans would be at a lower rate but get a full refund anyways.