Tax Evasion

The great lie of supply-side economics

Supply-side economics is the monster that will not die. The supply-side argument that, in the United States, tax-rate cuts pay for themselves--that, after cutting taxes, the government actually ends up with more revenue--has little or no support within the mainstream economic profession, and no hard empirical data to back it up. Myriad studies have demonstrated that both the Reagan tax cuts of the nineteen-eighties and the tax cuts put through under the ... Full Story »

Posted by Julian Friedland
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Subjects: U.S., Politics, Business
Topics: Presidential Election 2008, U.S. Budget, U.S. Economy, Republicans, Republican Nomination, Taxes
Member Tags: Trickle-down economics, Bush's war on the middle class
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Kaizar Campwala
by Kaizar Campwala - Oct. 1, 2008

Explains well the author's position that the conservative mantra of tax-cutting for increased government revenue, is not a feasible policy based on historic data. Does not confront, or present information about the response when a conservative is presented with the dilemma he lays out.

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Julia Willebrand
by Julia Willebrand - Oct. 1, 2008

Exceptionally well sourced especially if the reader also views the background data. Center for Budget and Policy Priorities cited by Suroweicki amply supports his thesis with great evidence. Couldn't be more useful argument agaginst the over the top tax cuts of the Bush Administration.

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Chris Finnie
by Chris Finnie - Oct. 1, 2008

We all know that George Bush has little truck with reality. He's not interested in facts. This just proves the disdain for reality is not limited to the liar in chief. Robert Reich once said during a televised interview that it would make more sense to cut taxes for the poor if you want to stimulate the economy--a "bubble-up" effect, rather than trickle-down. The reason, he said, is that economic data shows that the poor spend a greater percentage of their income. So giving them more to spend will more directly stimulate the economy. Makes sense to me.

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Tom Cox
by Tom Cox - Oct. 1, 2008

Surowiecki plays a strong hand poorly. There are good criticisms of the supply side argument - he doesn't make them. He actually contradicts himself while trying to show the (real) weaknesses of the supply side case: he admits that tax cuts change behavior, then wants to compare post-cut tax income with what it would have been under the old tax rate, WITHOUT accounting for that changed behavior. His biases are clear but not compelling. Poorly sourced and dogmatic.

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Julian Friedland
by Julian Friedland - Oct. 1, 2008
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M. Simon
by M. Simon - Oct. 1, 2008

As soon as the tax cuts were enacted in 2003 the economy came out of a slump and tax revenues started increasing. In fact government revenue increased faster than projected by the CBO. The deficit is now at about 160 bn a year and falling. Making it about 1.5 % of economic output. It is scheduled to go to zero around 2008. So despite the studies, in the real world it is working.

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Roland F. Hirsch
by Roland F. Hirsch - Oct. 1, 2008

The facts seems to have eluded the author of this opinion piece. Tax RATES were cut, tax REVENUES have gone up. And they have gone up in exactly the right way: total individual taxes have gone up only slightly, but corporate taxes have gone up substantially. This is because people can keep a larger fraction of their income and spend it and companies can hire more people and make bigger profits, thus leading to large taxes on them. The impact was greatest on the bottom 50% of taxpayers, who now pay almost no income tax despite having more jobs, while the top 5% is paying more than before. If the Democrats had done this, the author would be cheering, but he has a bad case of BDS, probably caught from the editors of this magazine.

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Thomas J. Walsh
by Thomas J. Walsh - Oct. 1, 2008

This is an issue that has gone severely under-reported throughout the Bush 43 era. From the "more revenue" misinformation to the "death tax" misnomer (I'd call them lies but have used softer terms here) the current administration has mislead the public and have never been called out it. I remain baffled that we never hear or see the term "trickle-down economics" from the media. Haven't we been trickled-on enough?

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Gene Brown
by Gene Brown - Oct. 1, 2008

He ought to have present information about the response when a conservative is presented with the dilemma he lays out. The best the conservatives can do is say the ANNUAL deficit this year is only spending $160 billion dollars more than will be received as revenue. Few are publishing the actual national debt figure. When it all adds up Bush White House has almost doubled the National debt from $4 trillion in 2000. The debt weakens the dollar.

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