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The Great Republican Tax Lie

By The Reverend Published: June 21, 2011

MSNBC's Lawrence O'Donnell is actually doing a pretty good job with his new "The Last Word" program every weeknight at 8 PM. Last night O'Donnell had just an excellent segment on the Great Republican Tax Lie.

What is the Great Republican Tax Lie?

The Lie as told most recently by Tim Pawlenty...

"Once we unleash the energy of America's businesses, families and individuals, as we did in the 80's and 90's...a booming job market will reduce the demand for government assistance and rising incomes will increase federal revenues. In the 1980's, revenues to the federal government increased by 99%."

O'Donnell explains the Big GOP Lie in detail....

"Tax cuts actually increase the amount of money the government collects in taxes."

"Republicans say the federal government will get more by taxing less because lower tax rates will make everyone work harder, they'll want to work harder, because they'll make more money than before, the economy will be stimulated and there will be more money in the total economy subject to taxation."

"This is now a Republican article of faith."

George W. Bush....

"You cut taxes and the tax revenues increase."

John McCain.....

"The fact is the tax cuts have dramatically increased revenues."

Droopy Dawg Mitch McConnell...

"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."

On this issue in particular, Republican politicians will lie with the same ease as breathing while winking and nodding to their wealthy constituents who are in on the Big Lie with them....knowing full well that you can't eat your cake and also have your cake in more abundance than before you ate it.

Republican economic experts....non-politicians....on the other hand, do not endorse the Big Republican Tax Lie....

GOP Treasury Secretary Hank Paulson, under oath....

"As a general rule, I don't believe that tax cuts pay for themselves."

Edward Lazear, George W. Bush's Chairman of the Council of Economic Advisers, under oath....

"As a general rule, we do not think tax cuts pay for themselves, the data do not support this claim."

Question to Alan Greenspan: "You don't agree with Republican leaders who say that tax cuts pay for themselves?"

Greenspan: "They do not."

O'Donnell then interviewed Bruce Bartlett, who worked in both the Reagan and Bush Sr. administrations as an economic adviser. Bartlett responds to Tim Pawlenty's claim that after Reagan's tax cuts, federal revenues increased by 99%....

" What Pawlenty says is just factually untrue. Anybody that wants to find out can simply go to CBO.gov and look up the data. The fact is that between fiscal years 1981-1989 revenues increased in nominal dollars terms only by 65%. But a good chunk of that was inflation. If you simply took the 1981 numbers and inflated them to 1989 numbers the increase was only about 25%. And of course the population increased....so on a per capita basis, revenues were only up about 15%. But at the end of the day, what really matters is revenues as share of GDP and they were down about one percentage point, which means that revenues were about $66 billion lower than they would have been if they had simply stayed constant as a share of GDP."

Bartlett claimed that nobody in the Reagan administration ever said that cutting taxes increased federal revenues....

"If you go back to the documents that the (Reagan) administration sent to Capitol Hill in February 1981, they showed massive revenue losses. Now it turned out that revenues came in much lower than anybody expected, but that was because inflation came down much quicker than anybody expected....lower inflation reduces federal revenue ( tax revenue not worth as much)."

O'Donnell asked Bartlett about Droopy Dawg's claim that the Bush tax cuts increased revenues....

Bartlett: "Well that's just complete nonsense. I really have no idea on what basis he's making that claim. Look, some very special types of tax cuts, like the cut in the capital gains rate, can come very close to paying for themselves. An across the board tax cut may only lose 70% or so of the revenue cut, but lots and lots of tax cuts are just a dollar per dollar loss in revenue."

The reason why what O'Donnell and Bartlett said last night is so important right now is because of what House Republicans and Republican presidential candidates have been touting as a cure for both our national unemployment and sluggish demand problems, as well as our national debt problem. Today's Republicans are telling voters the same Great Republican Tax Lie.

From Paul Ryan's plan to abolish and replace Medicare with a privatized health insurance plan for seniors, redistributing the "savings" by cutting taxes on the very rich by another 37%.....to T-Paw's ridiculous notion that reducing corporate tax rates to 15% as well as lowering tax rates on millionaires and billionaires will stimulate 5% economic growth per year while also increasing federal revenues(!).....to LittleJohn Kasich's elimination of Ohio's estate tax to increase(!) state revenues...Republican politicians have apparently all decided to promote the Great Republican Tax Lie.

No matter how many times it is told....the Great GOP Lie that cutting taxes results in increased government revenues.....will NEVER be true.

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