| Description | Posted November 15th, 2007 at 9:15 am
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From time to time, some high-ranking Republican official in Congress or at the White House will insist that tax cuts can pay for themselves. The idea, basically, is that the government can cut taxes, which will in turn create economic growth, which in turn create more wealth. When people and businesses have to pay taxes on their new gains, revenue will flow into the government and — presto! — the tax receipts will compensate for the tax cuts.
Except it doesn’t work. It never has; it never will; and no one who deserves to be taken seriously on policy matters believes differently. It doesn’t happen often, but occasionally, even Republicans in positions of authority will acknowledge reality.
Tax cuts don’t pay for themselves. This might sound like dog-bites-man news, except for one thing: This rather unremarkable statement comes from Jim Nussle, the new director of the Office of Management and Budget in an administration whose president is given to saying things like “You cut taxes, and the tax revenues increase” (February 2006) and “We have cut taxes, causing economic growth, which caused there to be this year alone 187 billion more tax dollars coming into the Treasury” (August 2007).
[snip]
Once we cut through the rhetoric, we see a pleasant surprise — even Bush’s own budget director is willing to concede that tax cuts can’t pay for themselves. Reality in a Bush administration statement is so rare, it feels like a cause for celebration. |
