One who intends to leave others better off for his having existed.

8/9/10

Bruce Bartlett on Tax Cuts and Revenue


...Tax Nonsense


On July 13, Senate Minority Leader Mitch McConnell, R-Kentucky, asserted that there was no net revenue loss from any of the Bush tax cuts, in defense of an earlier comment by Senator John Kyl, R-Arizona, that all spending increases must be offset so as not to increase the deficit but tax cuts must never be offset.


There's no evidence whatsoever that the Bush tax cuts
actually diminished revenue.


They increased revenue,
because of the vibrancy of these tax cuts in the economy.


So I think what Senator Kyl was expressing
was the view of virtually every Republican on that subject.


Senate Minority Leader Mitch McConnell


Bush administration economists, however, never made any such claim.

You know that the tax cuts have not fueled record revenues.


...You know that the first order effect of cutting taxes is to lower tax revenues.


...No thoughtful person believes that this possible offset
more than compensated...for these tax cuts.


Not a single one.


If I'm wrong, show me the evidence...


Andrew Samwick
Chief economist at the Council of Economic Advisers
George W. Bush’s first term, January 3, 2007


Federal revenue is lower today than it would have been without the tax cuts.


There’s really no dispute among economists about that.

Alan Viard
Senior economist at Council of Economic Advisers during Bush’s first term
Washington Post, October 17, 2006

...Tax revenues in 2006 appear to have recovered,
...but this does not make up for the lost revenue during 2003, 2004, and 2005.


Edward Lazear
Chairman of the Council of Economic Advisers in Bush’s second term
September 28, 2006


As a general rule, I do not believe that tax cuts pay for themselves.


Henry Paulson
Bush’s nominee to be Secretary of the Treasury, June 27, 2006

...A 2005 Congressional Budget Office study
during the time that Republican Doug Holtz-Eakin was CBO director,
concluded that a 10 percent cut in federal income tax rates
would recoup at most 28 percent of the static revenue loss over 10 years.


Although the economy grows in response to tax reductions
(because of higher consumption in the short run and improved incentives in the long run),
it is unlikely to grow so much that lost tax revenue is completely recovered
by the higher level of economic activity.


The 2003 Economic Report of the President during Bush’s first term


The actual data show pretty convincingly
that the Bush tax cuts reduced revenue rather significantly.


Bruce Bartlett
17 Jul 2010

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