Tax Cuts Do Stimulate Economic Growth

I have been sick for the past week, so I haven't been able to include as much of my own discussion of the topics as I would have liked. I was lucky enough to just post the articles that are worth being aware of. Not every article posted here is automatically something I agree with. It is important to stay aware of arguments used by the opposition.

Specifically, this piece from the Democrat Party's official publication, the New York Times, trying to make the case that there is no correlation between tax rate cuts and economic activity, is a perfect example of leftist distortion of the facts.

It conveniently glosses over the reason behind almost all of the economic growth in the 1980s and 1990s, the Reagan tax cuts. Dropping the top Federal marginal income tax rate from 70% down to 28% did more to encourage people to earn income than anything else I can recall in my lifetime. Anyone who claims otherwise is practicing the exact same kind of dishonest historical revisionism as those who state that the Reagan tax cuts caused the massive Federal deficits. Once again, the Reagan cuts resulted in more than double the overall tax revenues. The deficit was caused completely by Congress tripling the level of spending. The fact that Congress was controlled by the DemonRats back then is just a coincidence when the story of those times is reported by the media.

The other big lie repeated in the Times article is that the economy did very well after the humongous Clinton-Gore tax increases of 1993. Clinton worshippers have long claimed that his tax hikes were the reason for the booming economy of the late 1990s. I have long contended that Clinton was one very lucky SOB because the economy did well under his regime in spite of his tax increases, not because of them. Just as almost all State governments are learning, the driving force behind the 1990s' economy was the stock market, fueled primarily by the hyper-inflation in prices of dot-com stocks. That whole mess had nothing to do with the tax rates and was driven by a herd of greedy short-sighted idiots who pretended that money could be magically created out of nothing.

KMK
- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 11/08/2002 02:53:00 PM Send this post: