Bruce Bartlett served in Reagan's White House as domestic policy adviser and was an aide to Rep. Jack Kemp [R-NY], co-sponsor of the Kemp-Roth bill, which turned Reagan's campaign tax promises into law in 1981.
But as Bartlett points out, the Republican love-affair with tax cuts (which is inevitably backed by the supposed successes of Kemp-Roth) is founded on the systematic denial of many inconvenient truths about the Reagan tax-cuts and the cuts that came after, including the fact that Reagan repeatedly raised taxes after the 1981 cuts; that the "prosperity" of the 1980s is grossly overstated (GDP growth in the 1980s was weaker than in the 1970s); that the Reagan years ended with a series of unprecedented market crashes and a deep recession; that Clinton's tax increases ended the recession; that GWB enacted near-annual cuts that coincided with collapsing GDP growth and federal revenues (and that growth returned when Obama allowed the Bush cuts to start expiring) and so on.
All this is to say that Republican tax-orthodoxy, trotted out yet again in support of Trump's latest insane, doomed plans, are based on convenient fairy tales that paper over inconvenient data, and that the only people who believe these stories are millionaires who stand to grow even richer, and normal people who've had the wool pulled down over their eyes.
Now, Republicans propose cutting the top individual rate to 35 percent, despite lacking evidence that this lower rate led to growth during the Bush years, and a drop in the corporate tax rate to just 20 percent from 35 percent. Unlike 1986, however, this $1.5 trillion cut over the next decade will only be paid for partially by closing tax loopholes.
Republicans’ various claims are irreconcilable. One is that the rich will not benefit even though it is practically impossible for them not to — those paying the most taxes already will necessarily benefit the most from a large tax cut. And there aren’t enough tax deductions, exclusions and credits benefiting the rich that could be abolished to offset a cut in the top rate.
I helped create the GOP tax myth. Trump is wrong: Tax cuts don’t equal growth.
[Bruce Bartlett/Washington Post]
(via Naked Capitalism)
(Image: Edalisse Hirst, CC-BY)