From the Heritage Foundation, published in June of this year.
I’ll let you review the myths yourselves — nothing noted will surprise most of you, I don’t think — but I do want to note this particular bit, as it reinforces an earlier post of mine today:
Having established that spending is causing the expanding long-term budget deficits, the next question is how to fix that problem. Lawmakers seeking deficit reduction will not find any easy targets. Defenders of each spending program will surely claim some special status that should exempt their program from reforms. Defenders of current tax policies will point out the negative economic consequences of large tax hikes. As the debate proceeds, two competing reform frameworks will likely emerge:
* A “split the difference” approach that closes half the gap with tax increases and half with spending cuts; and
* An “address the source” approach that targets the policies that are actually driving the deficit up.Most people argue that the “split the difference” approach seems moderate and reasonable. By reforming all tax and spending policies equally, Congress would not single out any one policy. Conservatives and liberals could compromise in a bipartisan show of strength. However, politicians should not take the path of least resistance with a problem of this significance. A solution sustainable over the long term must address the budget deficit at the source. After all, when a family purchases a larger home than it can afford, the proper response is not to obtain second jobs, put the kids to work, and drastically cut back on groceries, electricity, and medical care. The proper response is to address the source of financial distress by moving back to a smaller home.
Similarly, the nation’s rising long-term budget deficits are almost exclusively the result of Washington making entitlement commitments that the nation cannot afford. Therefore, the presumption must be to pare back these commitments to an affordable level. Yet “split the difference” essentially lets most of the entitlement spending growth off the hook and passes a significant burden onto taxpayers and onto federal programs that have succeeded without raising costs. With Social Security, Medicare, and Medicaid costs projected to rise by 10 percent of GDP by 2050,[18] splitting the difference would still require by far the largest tax increase in American history, leaving spending and taxes at levels never seen before during peacetime. It would allow expanding entitlement programs to transform the entire federal budget.
This approach is also unsustainable over the long run. Even if lawmakers broadly raise taxes and reduce spending to balance the budget in the short run, their failure to address the problem at its source means that entitlement costs will likely continue to grow quickly. This would in turn require continuous additional spending cuts and tax hikes elsewhere to keep the budget under control.
Finally, splitting the difference sends the wrong message to future lawmakers by rewarding policies that aggressively increase the short-term budget deficit. Liberal lawmakers could enact large new spending bills without paying for them, believing that much of the future deficit reduction will be split across tax hikes and other spending programs, effectively locking in much of the targeted spending increase—the “feed the beast” strategy. Conservative lawmakers could deeply cut taxes without paying for them on the assumption that half of the resulting deficits will eventually be closed by spending cuts—the “starve the beast” strategy. In either case, the “split the difference” approach to deficit reduction would sacrifice other budget priorities to make room for the new, unaffordable policy.
Do we have the political will?
Or will we just keep punting — and leave our children and grandchildren to riot and picket on the mall like so many butthurt Greeks …?
Further evidence that tax cuts lead to increased overall revenue.
I believe the term is settled science.
Oh, and if you’re wondering why I keep trying to take Jeff’s identity, it’s because I’d really much prefer to be him.
You sure are a self-diminishing tiny little person SL. It’s a wonder you’ve the heart to hurt yourself that way day in day out.
The only compromise I want to see is when the responsible grownups propose cutting programs by 30%, and eventually compromise on cutting them 12%. Repeat annually.
Don’t forget the Federal Reserve in this equation. They have been actively peddling cures. We are short an out of the money call option on hyperinflation and the salesman is telling us its going to be ok.
Where can we split the Federal Reserve?
Don’t worry, we can do without a defense department in order to preserve the fairness…
Europe’s done it for years. And I’m sure China has our back.
/sarc
Seriously though, out of all the reactions I’ve seen to the trial baloon floated by Simpson & Bowles, the only real adult one was Paul Ryan.
And even though some may mistake me for a Rethug! shill, I’d like to point out that without exception all of the Democrat’s reactions were horror! at the either the idea of spending decreases or tax cuts.
I wonder what good ol’ centrist, blue-dog, DLC Erkine Bowles thought of his ideological collegue’s reaction?
Of course, even I was stunned that they didn’t at least choose a prior year as a baseline for discretionary spending, but used 2010; after Obama had increased discretionary spending by more than 25%…
I wonder what good ol’ centrist, blue-dog, DLC Erkine Bowles thought of his ideological collegue’s reaction?
Deficit Panel Leader Tweaks White House
Well, he’s done…
The hit-pieces will start rolling out of Kos, Huff-Po, and DU at any moment; heck, they probably have already started!
Re: Bowles’ comments regarding Obama listening to Republicans
The meme I keep seeing pop up on the left is that the reason for the recent Democrat drubbing and Obama’s waning popularity is that Democrats (and Obama in particular) have been bending over too far to accomodate those evil Rethuglicans. Seriously, many “progressives” actually think that. I used to laugh out loud every time I saw it stated. Now I just sadly shake my head.
So if you are drinking too much, to the point you are making your family miserable, is the solution to drink half as much and then distill your own hootch to keep the cost down on that half?
Dave,
So I suppose Obama leaning across the table and reminding everyone that he won was bending over too far to accomodate Rethugs!
I suppose he should have outlawed opposition, you know, by executive order.
Hey Jeff – just link to any credible evidence that tax cuts have ever increased revenues.
I just might hit that paypal button and make Mrs. Trampoline a liar.
Reagan tax cuts increased revenues. Bush tax cuts increased revenues. Go away you lying twat.
Here you go ST
http://tiny.cc/taxdata
In the 80’s when Reagan’s historic tax cuts occurred.
Pay the man, Cafone
ST’s biggest miss is that he thinks I care that the government could lose revenue if individuals keep more of their own money.
As someone else pointed out, either here or at AoSHQ, you can think of tax cuts (the real kind, not the “just failing to raise tax rates” kind) as a sort of ‘sale’ on the price of government.
And as everyone knows, when retailers have a big sale, revenues invariably decline. It’s settled science! That’s why retailers only have sales when they’re *forced* to do so by those wretched tea party types — only a fool would do willingly.
Bob,
I believe that locking your political opponents (and their ideas) out of the legislative process is the textbook definition of “bipartisanship”.
And, as with taxes, everyone knows this except retailers, who see increased revenue when they have sales.
Well, yeah… was my sarcasm insufficiently drippy?
I just like getting another boot in while the argument’s on the ground.
Of course you don’t care.
You’re still a bitter, unemployed wingnut who wants to experience the world burning on Fox News.
Hit that paypal yet ST?
The PayPal button is over on the left side, ST.
Hit it.
And you are my groupie, hanging out here all the time and oftentimes trying literally to present yourself as me.
Embrace the irony!
Embrace the pw3n ST…
You’re everything he wishes he could be, Jeff. I’ll admit to holding considerable admiration for your intellect, and some envy at your ability to raise your kid Lileks-style, but I wouldn’t go so far as to say I want to pretend I’m you. That’s just creepy.
Thanks for the kind words, Squid.
ST often comments here under my name. Not sure if it’s creepy or just sad.
Then again, I guess it could be both simultaneously.
Speaking of my kid, we’re off to take him in to the doctor. His stomach has been acting up for a week now, poor little guy. Back later. If you see “me” commenting in the near future, you can be sure it isn’t me — and that ST has borrowed another IP and another email address in order to get through and make a dick of himself here. Again.
So ST is the latest incarnation of RD? Figures. Oh well, Trollhammer still works….
Oh, and Jeff, you’re one of two blogs I support each month. You provide more than enough value to keep me coming back.
Hey Jeff – just link to any credible evidence that tax cuts have ever increased revenues.
Here‘s Brad DeLong saying that marginal rate cuts from 70% to 50% would probably increase revenue. Is he sufficiently leftist to be considered credible? That’d cover both Reagan and Kennedy’s ’64 cut in our country. There are plenty of examples from Russia to Ireland if you’d like more.
In your rush to mock naive supply-siders, you present your own naivete. Bravo.
What’s ironic is that maintaining maximum revenue as the desired goal state actually argues against a few historical progressive taxation schemes. It’s not the poor and middle class who might find their rates on the right hand portion of the curve. It’s the rich.
Maximizing revenue is just boob-bait talk to sell tax rate increases. Maximizing control over all is the reason and end sought. As always.
Yes, that’s worth keeping in mind, Geoff. Another way of phrasing this question is “What tax rates allow for the largest possible government?”
That is only a goal for the progressives and it was widely rejected by the rest of the country earlier this month.
The Fourth Biggest Myth is that most teabaggers are too stupid to understand how progressive tax rates actually work.
That’s just silly.
You are speaking of “largest possible” while I am speaking of “most powerful”. Ends and means and means and ends.
I see the left as desiring power first and accepting that to maximize it may lessen the revenue some. Putting all under the thumb of the government would certainly downsize the economy.
Maximizing revenue and so making government bigger in money terms would mean growing the economy even faster so that the relative size of the government would decline even as it’s actual size increased.
I would like to aim for government revenue to be less than 15% of GDP with a balanced budget.
Ahhh, I catch your distinction now, Geoff.
Progressive tax rates work by segregating targets for extortion by income level.
The really big fish you just fucking hammer, because there’s only one or two percent of the population there and their voting power, even if they attempt to start their own boutique political astroturf outfits, will never defend them from the power of the tax man. Hammer those sad fucks, I say.
The group below that, well, they need to be shorn, too, but you make the take low enough that they will use part of what their lawyers and accountants can save to try to buy access – really protection – from the government.
The middle class, the last group paying any tax at all? Well, if you control the public school system, they are generally pretty easy to handle, aren’t they?
The 49% that don’t pay any tax at all, and are most likely receiving checks from Uncle Sugar already?
They are the Noble Citizens, unsullied by work OR philosophical foundations past learning how to stick both hands out.
It’s going to be bloody. And it’s going to happen.
Yawn.
Pretty sure the Heritage Foundation pre-dates the Tea Parties — though the desire to dip your balls in your buddy’s mouth probably predates the Heritage Foundation, I’ll give you that much.
Fortunately for the uber-wealthy progressives, income and wealth have a very personally variable relationship. Hammering the high earners is just a minor annoyance to the very wealthy.
nah you commies use the tax code to help your commie buddies
Urban Dictionary has just informed me they’ve accepted for publication the word “nadsucker,” which refers to someone who calls Tea Party activists “teabaggers.”
geoffb-
Absolutely agree with you on the distinction – but the government uses that top rate to cull the herd of most of those that attempt to make the cut to uber wealthy.
See also “estate tax”.
Communists. Man they do piss me off.
An attack, not an administration.
Where oh where is nishbot? Probably still drowning her sorrows with a bottle of Asahi.
It is, in fact, a malpresidency.
That’s right, still no real name from me. Just another identity. Because I’m actually a terrified little pussy who can only snipe from a safe distance, and anonymously.
Jeff’s bitch. That’s what I am.
“Jeff’s bitch. That’s what I am.”
– Nadsucking doesn’t elevate you to “bitch” status. It just makes you a run-of-the-mill nadsucker.