"I helped create the GOP tax myth. Trump is wrong. Tax cuts don't equal growth."

Four decades ago, while working for Rep. Jack Kemp (R-N.Y.), I had a hand in creating the Republican tax myth. Of course, it didn’t seem like a myth at that time — taxes were rising rapidly because of inflation and bracket creep, the top tax rate was 70 percent and the economy seemed trapped in stagflation with no way out. Tax cuts, at that time, were an appropriate remedy for the economy’s ills. By the time Ronald Reagan was president, Republican tax gospel went something like this:

SNIP

Based on this logic, tax cuts became the GOP’s go-to solution for nearly every economic problem. Extravagant claims are made for any proposed tax cut. Wednesday, President Trump argued that “our country and our economy cannot take off” without the kind of tax reform he proposes. Last week, Republican economist Arthur Laffer said, “If you cut that [corporate] tax rate to 15 percent, it will pay for itself many times over. … This will bring in probably $1.5 trillion net by itself.”

That’s wishful thinking. So is most Republican rhetoric around tax cutting. In reality, there’s no evidence that a tax cut now would spur growth.


The flip-side of tax cut mythology is the notion that tax increases are an economic disaster — the reason, in theory, every Republican in Congress voted against the tax increase proposed by Bill Clinton in 1993. Yet the 1990s was the most prosperous decade in recent memory. At 37.3 percent, aggregate real GDP growth in the 1990s exceeded that in the 1980s.

Despite huge tax cuts almost annually during the George W. Bush administration that cost the Treasury trillions in revenue, according to the Congressional Budget Office, growth collapsed in the first decade of the 2000s. Real GDP rose just 19.5 percent, well below its ’90s rate.

https://www.washingtonpost.com/news...uts-dont-equal-growth/?utm_term=.762f5d422adc


Well there you have it, directly from the guy who help produce the myth ... anymore denials?

 

As predicted ...

 

It might be the case that those who are not extremely wealthy might do better with tax cuts while the extremely wealthy should get none. As a non-extremely wealthy type I'd probably spend some of the extra money but save some as well. That means more money spent on consumer goods. The extremely wealthy don't spend when they're given a tax cut, they simply hoard it away and tell themselves they're now extremely wealthy times 2 and are better than someone with less. They don't use money, they fetishise it. I was once told that tax cuts for the extremely wealthy are good because they will go out and buy new private planes and yachts and that's good for the economy. Hah bloody hah.

 

Obviously if you tax an individual or country it diminishes their economic health. Ever hear someone say my taxes went up so now I can afford a new car???

 

Depends on what you mean by "economic health". Taxes is how you finance a society. Working out how you apply taxes is the issue.

 

so then why not tell us how a person's or country's economic health is increased by taxing the person or country?

 

you mean how you finance a libcommie govt. The society is financed largely through private markets

 

Setting the optimum rates is the key. Taxes are income for government. Without effective and efficient government there is no economic health in a society. Taxes are necessary, it's how you work them that's important.

 

No, it's financed through taxes, in any form of economy. Markets are for the exchange of commodities, not for some sort of common good.

 

You have no understanding of supply side economics. And tax cuts to stimulate economic growth comes from Keynes.

Tax cuts are the Keynesian component of supply side economic policy.

No evidence supply side works ?? Twenty five years from Reagan to Bush 43 - and yes, Bill Clinton was a supply sider.

 

as if someone disagreed????? Who???? Strawman?? the Issue is now we have libcommies who want to raise taxes on the top 1% when they already pay 42% of all revenue the govt gets thus making everyone else freeriders with more and more incentive to vote themselves a bigger free lunch.

 

Hmmm, that 'GOP Tax Myth' was well understood by democrats back in JFK's day.

 

so food is not for some sort of common good?? Republican free markets just saved another 60 million from starving to death in China. Is that a common good?

 

JFK: “But the most direct and significant kind of Federal action aiding economic growth is to make possible an increase in private consumption and investment demand—to cut the fetters which hold back private spending.If Government is to retain the confidence of the people, it must not spend more than can be justified on grounds of national need or spent with maximum efficiency.The final and best means of strengthening demand among consumers and business is to reduce the burden on private income and the deterrents to private initiative which are imposed by our present tax system; and this administration pledged itself last summer to an across-the-board, top-to-bottom cut in personal and corporate income taxes to be enacted and become effective in 1963.”

President Kennedy goes on to say “I am talking about the accumulated evidence of the last five years that our present tax system, developed as it was, in good part, during World War II to restrain growth, exerts too heavy a burden on growth in peace time; that it siphons out of the private economy too large a share of personal and business purchasing power; that it reduces the financial incentives for personal effort, investment, and risk-taking…In short, to increase demand and lift the economy, the Federal Government’s most useful role is not to push into a program of excessive increases in public expenditures, but to expand the incentives and opportunities for private expenditures…When consumers purchase more goods, plants use more of their capacity, men are hired instead of laid off, investment increases and profits are high. Corporate tax rates must also be cut to increase incentives and the availability of investment capital.”-John Kennedy

 

As I wrote - taxes are necessary, it's how you work them that counts. How they are structured is the point. It seems we're agreed on their necessity, perhaps disagreeing on their structure and application. I have no idea who pays what taxes in the US. If the wealthy are paying 42% of total government revenue then there must be a lot of them paying taxes which is a good thing.

 

its very bad thing because it makes everyone else free riding leeches and it punishes the very people who best know how to cause growth. Do you understand?

 

What about food? Is it important to realise that it's now a commodity? For most of us we don't grow our own food any longer. We have specialist occupations that do that and very large businesses that process and distribute food. We pay for it if we can afford it, we get given it if we can't.

 

You make the error of believing that the wealthy cause growth. For every one entrepreneur you have a rentier or two, or more.

 

you mean the poor cause wealth??????

 

its distributed by Republican free markets and the second China employed them they saved another 60 million from slowly starving to death. Do you understand now.

 

if someone inherited $100 billion either he would invest it for economic growth or lose it. Do you understand?

 

as if someone disagreed???? You are the master of saying the obvious.

 

I meant what I wrote.

 

How do you lose that amount of money?

 

Apparently I'm not obvious enough.