11/30/2010

Cuts in Tax Rates Do Not Mean Cuts in Tax Revenues


Paul Ryan (politician)Image via Wikipedia
Paul Ryan (R-WI)
 by Brian Johnson   November 30, 2010
This isn't hard to understand.  Art Laffer developed the Laffer Curve to illustrate how cuts in tax rates, down to a certain level, increase tax revenues.  The GOP, if they want to effectively govern, need to articulate, and demonstrate, to the American public the lie that all tax cuts create debt and deficits.  They also need to have a spokesperson that can finally convince the public that taxes is money that belongs to them, they earned it, and it is being confiscated by the government.   What creates deficits and debt is not that the Government is confiscating too little, it is that the politicians spend way too much.
The Democrats love to talk of how the Reagan tax cuts increased the deficit.  A few facts:  The Reagan tax cuts nearly doubled revenue to the Federal Government between 1981 and 1989.  The deficits came about because Congress (which holds the purse strings) increased spending by more than double.  Even with that, spending as a percentage of GDP dropped, during that same time period.  How much did the "rich" pay during the "evil" Reagan years"
  • The share of the income tax burden borne by the top 10 percent of taxpayers increased from 48.0 percent in 1981 to 57.2 percent in 1988.
  • Meanwhile, the share of income taxes paid by the bottom 50 percent of taxpayers dropped from 7.5 percent in 1981 to 5.7 percent in 1988 (from the U.S. Senate Joint Economic Committee  Report). 
Dr. Sowell is correct.  If Republicans would put someone out front and center to speak to the American public, we can win this debate.  Not one of the same tired old faces like Boehner, McCain, Lindsey Graham, or Mitch McConnell.  They are looked at with the same distrust as all the Democrat usual players.  A relatively fresh face like Wisconsin Representative Paul Ryan.  After watching Ryan in the White House Health Care meetings, in which he ran circles around both Democrats and Republicans, discussing economic impacts of ObamaCare in a manner anybody could understand, as well as looking at his "Roadmap For America's Future", he is the guy that I believe should be placed front and center to go toe-to-toe with Pelosi, Reid, and Obama.

Sowell: Can Republicans Talk?
By Thomas Sowell November 30, 2010 6:56 AM


 The biggest battle in the lame duck session of Congress may well be over whether or not to extend the Bush administration's tax cuts, which are scheduled to expire in January. The fact that this decision has been left until late in the eleventh hour, even though the expiration date has been known for years, tells us a lot about the utter irresponsibility of Congress.

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