February 10, 2005
Why Oh Why Can't We Have a Better Press Corps? (Yet Another National Review Edition)
Now it is Jesse Taylor who is reduced to gibbering madness by National Review:
Pandagon: It Works, You Jerks!: In a yearly ritual, Republicans and libertarians rush to the holy temple of lower taxes and defend the battery of tax cuts as growers of tax revenues. Revenues are growing!, they say. Revenues are showing!, they say. Oh, those revenues, flowing and mowing, knowing and towing!
After a Seussian venture into linguistic delusion, however, they sober up and write the same claptrap they've been writing since Reagan was in office.
The Washington Post thus called the 2001-2003 tax cuts "unaffordable," claiming revenues would be $192 billion higher without them (about 1.5 percent of GDP). But that rosy figure depends entirely on the hidden assumption that the economy would be just as strong with higher tax rates as with lower tax rates. I am aware of no economic theory or evidence that suggests that might be true. Besides, the Congressional Budget Office estimates that federal tax revenues will rise by $177 billion this year alone -- an increase of 9.4 percent.
The Democrats continue to argue that the budget deficit explosion is a result of the Bush tax cut. Nice try, but that's inconsistent with the facts. In fact, the 2003 reduction in the capital gains and dividend taxes has led to an increase in revenues, because it has led to an increase in economic growth and stock values....
Now, here's the issue - not a single one of them ever references tax revenues by year. You would think with all this talk of supply-side tax cuts growing tax revenues, they would be proudly putting forth all those growing revenue figures each year, proudly stating how much more money lower tax rates were bringing in.
Oh, right, that's because there are no such figures.
Tax revenues fell year over year from 2000-on. In fact, all projections for rising year-over-year revenues presume that there are no more new tax cuts coming down the pike. Even if there was a $177 billion rise in tax revenues in 2005, you would still need around another $100 billion in revenue growth to match 2000's revenue in non-inflation adjusted dollars.
The way I like to put it is that in 2010 real individual income tax revenue per capita will *still* be eight percent lower than it was in 2000.
Posted by DeLong at February 10, 2005 06:42 PM