Tax cuts. Always.July 29, 2010
Just a little political rant before I go see Inception with Sue this evening. No WoW on a weeknight, zounds!
Well, I’ll probably come back and work the auction house for a few minutes before bed…anyway.
(Late night edit: I’d recommend Inception to anyone I know, a nice intricate psychological thriller with some strong and somewhat trippy action notes.)
So we’re hearing a lot of GOP noise about their beloved Bush-era tax cuts that are set to expire. Mind you, the Republicans did that, because otherwise the cost of the tax cuts would have been too obvious and they would have failed to become law. It’s a remarkable policy in how little sense it makes upon scrutiny; and remarkable in how it manages to survive despite that. I’ve heard all about the notion of ‘class warfare’…we always do. Here’s a bit from the Fox news crap, courtesy of Senator Fred (ex-senator Fred Thompson, who I remember more from The Hunt for Red October and Law & Order).
THOMPSON: Well, in the — in the first place, you know, every politician that ever run for office ought to be asked a simple question: how long — a person who worked for the government, should we work two days for the government or three days for the government? What answer should that be. A lot of people would be surprised at how long we work for the government.
They come up with nice-sounding rhetoric to back up their form of class warfare; it’s not as if the rich have much of a tendency to even pay these taxes, what with loopholes in the tax code, contributions to politicians and charities and such. We yammer on about income tax rates when a big chunk of the populace doesn’t pay out in income; they pay out in payroll taxes, which we never talk about. Don’t even touch that. Don’t even bring it up.
And in truth, we’d better not. But for some reason, the Democrats can’t come up with any spin for their argument. They just speak truth, as if truth really mattered in politics.
And then there’s the popular Republican canard that tax cuts pay for themselves. This snippet is from Marco Rubio, who is running with teabagger backing for a Senate seat from Florida.
“They will be paid for because they create economic growth, especially in the long-term,” he said. When Guthrie interjected that unemployment benefits act as a stimulus, he said, “Well I don’t think anyone can say that with a straight face.” “First of all, private sector growth is stimulus.” Rubio’s position puts him in the mainstream of Republican political thinking, that the Bush tax cuts pay for themselves while unemployment benefits should be paid for without adding to the debt.
This is one of those cases where the oft-repeated lie drowns out the obvious truth. No, they don’t pay for themselves. Bush was making the same noise back in 2006 when his struggling economy showed some signs of life; that is, before the bubble burst and the rich cashed in their chips.
Economists and budget analysts outside of the administration have explained that these claims are not supported by data or economic theory. 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.
Even using its rosiest projections of the budget, spending cuts to offset tax cuts, and the state of the economy, Bush’s own Treasury Department couldn’t bring the projected cost of his tax cuts down by more than 10%. That is to say…
Thus, even if the Treasury’s most optimistic assumptions are accepted (and the dynamic effect is assumed to happen much more quickly than even Treasury seems to assume), the cost of the tax cuts in 2016 — taking into account “dynamic” effects — would still be more than 90 percent of the cost of the tax cuts under the standard cost estimates.
…no free lunch. And this obvious truth can be made clear by a simple reductio ad absurdum. So, tax cuts pay for themselves. They stimulate the economy. They increase tax revenues. Does this mean that by reducing tax rates to zero, we raise revenue to infinity? Is that too obvious? How about keeping them at one percent? Surely the incredible stimulated economy would explode and we’d have all the revenue we’d ever need. Right?
No? What do you mean, there’s an actual tax rate we need to maintain? Any idea what it is? Show your math…
I can recall one prominent Republican, ever, who actually turned on this policy and advocated tax increases. Because there has never been a time — ever — that I can recall, where tax cuts weren’t the way to go. Are we prosperous, running surpluses? Cut taxes, give the money back to the people. Are we running deficits? Cut taxes, it’ll stimulate revenue. Is the economy good? Cut taxes, the gov’t is raking in cash. Is the economy bad? Cut taxes, we must help it. Are we at peace? Cut taxes, we don’t need all the military spending. Are we at war? Well, cut taxes anyway. One fellow I can recall who bucked this trend, and I remember what they did to him, too.
Yeah, they certainly stuck his head on a pike, now didn’t they. To the point that when he was endorsing McCain back in 2008 it was kind of a joke. They were spiteful enough to vote for Perot and give us two terms of Clinton! Not that McCain enthused them either, but then I think they wanted a Democrat to take over and make Americans take all the necessary medicine (and gain their ire for it). Clinton of course went through the same thing, but I have my doubts that Obama can turn it around like that. He’s too honest.
Anyway, I know about the whole ‘starve the beast’ mentality, but I see it as waging class warfare against the likes of me, even as they bark about class warfare every time they get it back. They lie and pretend it’s not what they’re doing. Of course, if it weren’t for the variety of folks voting against their own economic interests over social issues like guns, gays or god, the Republicans would never stand a chance.
A good segue into how Republicans have an interest in destroying our education system, so that stupid Americans can stab themselves in the back voting for the benefit of the rich. Or, how Republicans in power somehow manage to not do anything about their social issues, the better to keep their base fired up while they do accomplish the eternal preservation of wealth. But that’s another show.
No real point to this beyond the obvious; time will tell on whether or not the Democrats have the stones to do that which is obviously the right thing to do. I’m skeptical.