Here's a recent quote from the Senate Majority leader, Mitch McConnell, (R) Kentucky:
“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.”
So, the view of every Republican in Congress is that lowering taxes always increases revenue. Putting aside the fact that this claim is manifest nonsense - it implies that revenues will peak when tax rates reach 0% - it was also rejected by every Bush Administration economist.
Nonetheless, if we are to believe their current leader, every Republican congressional representative, and every Republican senator, believes this nonsense.
That’s a pretty impressive triumph of will over intellect. Frightening, but impressive.
Joe H.
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2 comments:
I wonder if these PARTICULAR tax cuts may be interpreted, in any way, as increasing revenue...setting aside the goofy view that all tax cuts do.
Jim,
The kernel of truth contained in their argument is that, at some point along the “Laffer Curve,” increasing tax rates would lead to lower tax revenues, and, consequently, lowering tax rates would lead to increased revenues. If tax rates were 100%, revenues would hover around 0% of gross domestic product, just as they would if the tax rates were 0%. Revenues are higher than 0% of gross domestic product tight now, so we know that tax revenues initially rise with increased rates and eventually fall when rates increase to the point of negative marginal utility.
What is never discussed is where the point of negative marginal utility is. The Republican argument implicitly assumes that current tax rates are beyond it, despite the fact that all the evidence, and their own economists, indicate that we’ve yet to reach it.
Now, notwithstanding what the Minority Leader said, I’d like to believe that Republican Congresspeople don’t truly believe that tax reductions always increase tax revenues. I’d like to think they’re not really that crazy.
I’d like to believe that - but they’ve undermined my faith in recent years.
Joe H.
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