All of the Republican presidential candidates are competing to see who can spout a big lie about tax policy most convincingly: tax cuts pay for themselves.
Common sense says that's absurd. So does economic research. But that doesn't stop the Republican know-nothings, some of whom also disbelieve in evolution, from ignoring the facts.
What got me going on this was hearing disgraced former Rep. Tom DeLay holding forth on conservative talk radio today. He claimed that tax cuts generate increased revenue for government.
I thought, hogwash. But I hadn't done much research on this, so fired up Google this evening for what I figured would be some myth-busting.
I was right. Reputable economic research doesn't support the ridiculous notion that cutting government revenues somehow increases government revenues.
TIME magazine's business and economics columnist, Justin Fox, blogged about this subject in 2006. He adjusted for inflation when evaluating the effect of Reagan's tax cuts. Bottom line: it's false that tax receipts rise as a result of tax cuts. Check it out.
Now a Department of Treasury analysis presented in the Mid-Session Review itself confirms what outside experts have consistently said — tax cuts do not come remotely close to paying for themselves.
In this study the Center shows that economic growth was about the same in the 1980s (Reagan tax cuts) and in the 1990s (Clinton tax increases). But growth in government revenues was much higher in the 1990s.
I've got a granddaughter now. I don't want her saddled with paying for the massive deficits that the Bush administration is financing with a U.S. Treasury Credit Card – borrow now and pay later.
Clinton left this country a huge budget surplus and good economic growth. Bush is about to leave us with a huge budget deficit and poor economic growth.
His tax cuts have been a disaster. The last thing the United States needs is another Republican president who sticks his head in the sand and ignores economic reality.
As a Washington Post columnist said about politicians' propensity to believe that tax cuts increase revenues:
Politicians are always speechifying about how the United States must lead the world in research to maintain its edge. But having the world's best economics research isn't particularly helpful if those same politicians are silly enough to tune it out. The truth is that American business excels at turning university research into world-beating products; the paranoia on this score is overdone. But American government is often lousy at turning research into policies. That's what we should fret about.