Dissent To The Dissent
[Patrick Appel] A reader writes:
In this morning's dissent of the day, a reader writes:
Clearly, at least in the past 50 or so years, the U.S. has been on the side of the curve where cutting taxes results in increased economic activity which results in greater tax receipts for the Federal government.
Not so fast. Republicans take it as an article of faith that lowering taxes will increase revenues. Based on their logic, we should lower taxes to zero and achieve *infinite* revenue. [insert Dr. Evil pinky laugh here]
For some time, economists have agreed that we are on the "other" side of the Laffer curve where tax cuts will only serve to lower revenue.
Here's more info from Time:
If there's one thing that economists agree on, it's that these claims are false. We're not talking just ivory-tower lefties. Virtually every economics Ph.D. who has worked in a prominent role in the Bush Administration acknowledges that the tax cuts enacted during the past six years have not paid for themselves--and were never intended to. Harvard professor Greg Mankiw, chairman of Bush's Council of Economic Advisers from 2003 to 2005, even devotes a section of his best-selling economics textbook to debunking the claim that tax cuts increase revenues.
I don't advocate raising taxes just to increase revenue. I think that controlling spending is the first order of business, but Republicans have been distorting the debate for some time on this Laffer curve issue and they need to be called out on it.