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News & Current Events Discuss I helped create the GOP tax myth. Trump is wrong: Tax cuts donít equal growth. at the General Forum; It's good to see some insider input on the trickle-down myth the republicans have been humping for years now. Four ...

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Old 09-28-2017, 03:12 PM
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Default I helped create the GOP tax myth. Trump is wrong: Tax cuts donít equal growth.

It's good to see some insider input on the trickle-down myth the republicans have been humping for years now.

Four decades ago, while working for Rep. Jack Kemp (R-N.Y.), I had a hand in creating the Republican tax myth. Of course, it didnít seem like a myth at that time ó taxes were rising rapidly because of inflation and bracket creep, the top tax rate was 70 percent and the economy seemed trapped in stagflation with no way out. Tax cuts, at that time, were an appropriate remedy for the economyís ills. By the time Ronald Reagan was president, Republican tax gospel went something like this:

<The tax system has an enormously powerful effect on economic growth and employment.>

<High taxes and tax rates were largely responsible for stagflation in the 1970s.
Reaganís 1981 tax cut, which was based a bill, co-sponsored by Kemp and Sen. William Roth (R-Del.), that I helped design, unleashed the American economy and led to an abundance of growth.>

The Reagan tax cut did have a positive effect on the economy, but the prosperity of the í80s is overrated in the Republican mind. In fact, aggregate real gross domestic product growth was higher in the í70s ó 37.2 percent vs. 35.9 percent.

<Moreover, GOP tax mythology usually leaves out other factors that also contributed to growth in the 1980s: First was the sharp reduction in interest rates by the Federal Reserve. The fed funds rate fell by more than half, from about 19 percent in July 1981 to about 9 percent in November 1982.>

<Second, Reaganís defense buildup and highway construction programs greatly increased the federal governmentís purchases of goods and services. This is textbook Keynesian economics.>

<Third, there was the simple bounce-back from the recession of 1981-82. Recoveries in the postwar era tended to be V-shaped ó they were as sharp as the downturns they followed. The deeper the recession, the more robust the recovery.>

<Finally, Iím not sure how many Republicans even know anymore that Reagan raised taxes several times after 1981. His last budget showed that as of 1988, the aggregate, cumulative revenue loss from the 1981 tax cut was $264 billion and legislated tax increases brought about half of that back.>

<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.>


https://www.washingtonpost.com/news/...nl_most&wpmm=1
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Old 09-28-2017, 04:47 PM
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Default Re: I helped create the GOP tax myth. Trump is wrong: Tax cuts donít equal growth.

thanks for the affirmation

I knew growth was better in the 70s along with a whole lotta other things, I was there and I was in the 80s too.
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Old 09-28-2017, 05:27 PM
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Default Re: I helped create the GOP tax myth. Trump is wrong: Tax cuts donít equal growth.

Sorry, But history proves wrong, the opinion of the OP. Aside from that, even if tax cuts do not stimulate the economy, they do something far more important for the Republic. They diminish the power of the purse as exercised by the Government. The US Government is over 20% of GDP. In point of fact, our government should not be a key participant in the economy. (actually no real democratic government should be.)

Whether putting more money into the economy, or under their mattress, it is, after all, the People's money. And even if they blow it frivolously, it is moving through the economy.

However, every time our government applies a new ruling on bringing in more taxes, the rich seem to get rich and the poor get poorer. The dependent poor get more needed handouts, and become more dependent on the government. The rich seem to do better as well, suggesting they benefit from high taxes.

Which is easy to understand when you realize they are actually collecting taxes for the government from those who work for wages. But not so much from those who are dependent on the government.

And generally the moneyed class are benefitting from the laws which give them tax "incentives" AKA loop holes, credits and breaks. Benefits most wage earners cannot access.



As Perot would say; " It's simple really."

Cash sitting in offshore banks pay no taxes, yet help no one get a job.
Cash working out in the economy pays taxes because now, someone has a job.
A job means taxable income, and taxable spending.

I fail to perceive why this simple equation isn't seen as a benefit to the economy,,,; and the treasury.
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Old 09-28-2017, 10:02 PM
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Default Re: I helped create the GOP tax myth. Trump is wrong: Tax cuts donít equal growth.

Quote:
QUOTE FrancSevin

Sorry, But history proves wrong, the opinion of the OP.
What history would that be? From the OP “Four decades ago, while working for Rep. Jack Kemp (R-N.Y.) “Bruce Bartlett was a domestic policy adviser to President Ronald Reagan. Kinda looks like history to me.


Quote:
Aside from that, even if tax cuts do not stimulate the economy, they do something far more important for the Republic. They diminish the power of the purse as exercised by the Government. The US Government is over 20% of GDP. In point of fact, our government should not be a key participant in the economy. (Actually no real democratic government should be.)

SOooo…yer bitchen about the size of the gov on one side of yer mouth WHILE the other side SAYS that running the government into the ground with tax cuts that favor the rich over the middle-class IS A GOOD THING!

Quote:
Whether putting more money into the economy, or under their mattress, it is, after all, the People’s money. And even if they blow it frivolously, it is moving through the economy.
That’s why I favor putting in the hands of those that spend it instead of the mattress.


Quote:
However, every time our government applies a new ruling on bringing in more taxes, the rich seem to get rich and the poor get poorer.
SAD indeed.

T
Quote:
he rich seem to do better as well, suggesting they benefit from high taxes.
You can thank the Gipper for that one. The top 3 percent started getting their grip with his election. Check this chart out.

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Old 09-28-2017, 10:09 PM
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Post Re: I helped create the GOP tax myth. Trump is wrong: Tax cuts donít equal growth.

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Originally Posted by FrancSevin View Post
Sorry, But history proves wrong...
I'm amazed at how many people will make such claims but provide absolutely no proof of their claim.

One resounding fact on this whole situation that Republicans have never been able to address is the issue of the Kansas experiment.
https://www.forbes.com/sites/beltway.../#6b73645f5508

Kansas implemented the Republican wet dream. And it failed.
Since Kansas enacted tax and spending cuts in 2012 and 2013, Brownback and his allies have argued that this fiscal potion would generate an explosion of economic growth. It didnít. Overall growth and job creation in Kansas underperformed both the national economy and neighboring states. From January, 2014 (after both tax cuts passed) to April, 2017, Kansas gained only 28,000 net new non-farm jobs. By contrast, Nebraska, an economically similar state with a much smaller labor force, saw a net increase of 35,000 jobs.
....
The tax cuts did produce one explosion, however. The stateís budget deficit was expected to hit $280 million this year, despite major spending reductions. Kansas falls well below national averages in a wide range of public services from K-12 education to housing to police and fire protection, according to an analysis by the Urban Instituteís State and Local Finance Initiative. Under order from the state Supreme Court, the legislature has voted to increase funding for public schools by $293 million over the next two years.
Every single time the Kansas situation is brought up, Repubs dodge it like the plague. It's the inconvenient fact of how they had a state-wide implementation of exactly what they wanted, and it failed miserably.
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Old 09-29-2017, 12:33 AM
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Default Re: I helped create the GOP tax myth. Trump is wrong: Tax cuts donít equal growth.

Quote:
Originally Posted by foundit66 View Post
I'm amazed at how many people will make such claims but provide absolutely no proof of their claim.

One resounding fact on this whole situation that Republicans have never been able to address is the issue of the Kansas experiment.
https://www.forbes.com/sites/beltway.../#6b73645f5508

Kansas implemented the Republican wet dream. And it failed.
Since Kansas enacted tax and spending cuts in 2012 and 2013, Brownback and his allies have argued that this fiscal potion would generate an explosion of economic growth. It didnít. Overall growth and job creation in Kansas underperformed both the national economy and neighboring states. From January, 2014 (after both tax cuts passed) to April, 2017, Kansas gained only 28,000 net new non-farm jobs. By contrast, Nebraska, an economically similar state with a much smaller labor force, saw a net increase of 35,000 jobs.
....
The tax cuts did produce one explosion, however. The stateís budget deficit was expected to hit $280 million this year, despite major spending reductions. Kansas falls well below national averages in a wide range of public services from K-12 education to housing to police and fire protection, according to an analysis by the Urban Instituteís State and Local Finance Initiative. Under order from the state Supreme Court, the legislature has voted to increase funding for public schools by $293 million over the next two years.
Every single time the Kansas situation is brought up, Repubs dodge it like the plague. It's the inconvenient fact of how they had a state-wide implementation of exactly what they wanted, and it failed miserably.
If someone has proof that "history" is on their side it would be nice of them to put forth said proof; especially if that proof refutes a ďdomestic policy adviser to President Ronald Reagan.ď
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