I disagree jetty, I think most adults are smarter than a 5 year old. But I also think people believe what they want rather than what the fact's show. And as I have been saying for years now, with respect to certain facts, history is the tell. For me the tax cut argument started with a term paper in high school on the great depression.
The Great Depression brought an end to GOP tax cuts. Faced with a ballooning deficit, President Herbert Hoover proposed a major tax increase, including new excise taxes and a broader, somewhat steeper income tax. In a striking display of bipartisanship, Democratic leaders embraced the plan. They even went Hoover one better, trying to replace the regressive excise taxes with an even more regressive national sales tax. It was a major reversal for the party, which had long opposed any sort of sales tax. It was also a huge blunder, prompting a revolt among rank-and-file Democrats. When the dust finally settled, lawmakers agreed to a host of new excises, as well as steeper, somewhat broader income taxes. Widely considered both prudent and distasteful, these changes constituted the largest peacetime tax increase in the nation's history. For Republicans, the law brought an unhappy end to Mellon's long campaign for tax reduction. For Democrats, it established the regressive starting point for New Deal tax reform.
Tax cuts were the order of the day -- and the decade -- throughout the 1920s. Taken together, the Revenue Acts of 1921, 1924, 1926, and 1928 lightened the burden for almost everyone. Wealthy taxpayers did particularly well, enjoying a steep decline in marginal rates; between 1918 and 1929, the top rate fell from 77 percent to just 24 percent. Meanwhile, many middle-class Americans disappeared from the tax rolls altogether, as Congress narrowed the income tax to focus on the well-to-do. Perhaps most important, the business community managed to orchestrate repeal of the excess profits tax -- the most progressive, and burdensome, tax to emerge from World War I.
On the eve of the Great Depression, the revenue system featured a narrower, flatter individual income tax, as well as a modest corporate income levy. Despite the best efforts of Treasury Secretary Andrew Mellon, it also included an estate tax; Democrats and progressive Republicans had managed to stave off his call for repeal, although they agreed to substantial rate cuts. Mellon could console himself with broad success in almost every other facet of his tax cut program. Dominating fiscal policy for more than 11 years, he reshaped the tax system along new, distinctly less progressive lines.
Now, if you combine that history of tax cut's that were not pared with at least marginal spending cut's, to today's tax cut's and spending increases, you can quickly see why GHW Bush called it Voodoo economics. Hence the problem with the Romney/Ryan plan of cutting taxes more while not cutting anything but discretionary spending. But OB's plan really dosen't work either. Both of them fall short because neither of them address Social Security and Medicare with respect to the simple matter of projected longetivity or how long people live today as opposed to how long people lived in 1933 when SS was adopted. More people live to collect SS today than in 1933. And people who live to collect, do so for an average of 14 more years. Also, medicare can't account for the increased cost of care.
The subject is so pollitically toxic nobody has the stones to make a call on the possible solutions. Getting the legislature to act responsibly will be tough though. The main reason is retirement companies are drooling over the almost 2.2 trillion dollars in Social Security now. What you'll see is a massive lobbing effort combined with a huge disinformation campagin focused on privatization. Hence our underlying political problem. MONEY!!! Until we at least limit or at best eliminate money from every aspect of the political process, all we're gonna see is what rich people want to do and how the rest of us are gonna pay for it. For the last 11 years, we've been told how tax cut's create & promote economic growth.
While I've said many times Bush took over with a surplus, he also saw the pull back caused by the 9/11 attacks. That followed with a massive outsourcing of IT support jobs. Arguably, conspiracy theroies aside, neither were his fault. Conventional repug wisdom, although a failed one, was to cut taxes. Which he did. His problem was when that didn't work, he did it again. It's like, "I cut it twice and it's still too short"
I'm curious to see how the report from the nonpartisan Congressional Research Service is receved on the hill. The report states that a 65 year data study shows that tax cut's do not support economic growth. They simply redistribute wealth up to the top % of earners. Here is the full report for anyone who cares to read it.
http://graphics8.nytimes.com/news/busin ... conomy.pdf
and i hope he knows this chit never gets personal with me...
