Tax Cuts Don't "Cost" the Government

Tax cuts do not necessarily “cost” the Government anything.  In fact, history has repeatedly shown that tax cuts can stimulate the economy like Obama could only dream of with his big Government Stimulus plans.  In the past, tax cuts led to economic growth, economic growth meant more employment.  More employment and economic growth resulted in more taxes collected by Government, and less need for Government services.

  

Calvin Coolidge, John F. Kennedy, Ronald Reagan, and Bill Clinton (after initially raising taxes and losing Congress because of it), all lowered tax rates and each time the economy was stimulated and more money was collected by the Federal Government as a result.  Even George W. Bush’s lowered tax rates, the one's set to expire at the end of this month, resulted in more, not less revenue to the Federal Government. 

  

Dr. Thomas Sowell

Dr. Thomas Sowell explains this and more in two articles he wrote entitled Fiscal Cliff Notes and Fiscal Cliff Notes:Part II. 

  

A few of the excellent points Dr. Sowell explains are listed here:

• The Congressional Budget Office has been embarrassed repeatedly by making projections based on the assumption that tax revenues and tax rates move in the same direction.

• Tax revenues went up when tax rates went down, as far back as the Coolidge administration.

• It is sheer hogwash that "tax cuts for the rich" caused the government to lose tax revenues. The government gained tax revenues, not lost them.

• "the rich" paid a larger amount of taxes, and a larger share of all taxes, after the tax rates were cut.

• No previous administration in the entire history of the nation ever finished the year with a trillion dollar deficit. The Obama administration has done so every single year.

• “Quantitative easing" is debasing the value of money by creating more of it and is nothing new. Irresponsible governments have done this, not just for centuries, but for thousands of years.  It is a way to take people's wealth from them without having to openly raise taxes. Inflation is the most universal tax of all.

What Dr. Sowell is unable to explain is why Republicans, and specifically John Boehner, will not explain this, and take the argument to the American people rather than accepting Obama’s false narrative.  It should be such an easy case to make, with the truth and history on their side.