Has EconomistMom Been Tutoring Ben Stein on Fiscal Policy?
Ben Stein finally writes a decent op-ed:
And, I do not want my taxes raised. I already pay a staggering amount of tax and I don’t care for it. In fact, I would like to pay no tax at all. I could have so much more to prepare for onrushing old age. But the unhappy fact is that it’s necessary to raise my taxes and the taxes of all upper-income Americans. (I do wish, however, that “upper income” started just a dollar above me.) The sad truth of the last two two-term Republican presidents is that their economic premise, the key part of their economic game plan, simply has not done what it’s supposed to do. That is, cutting taxes, especially on upper-income Americans, does not generate so much economic activity that it replaces all the lost I.R.S. take and then some.
Stein is a McCain supporter and (as he states) he doesn’t want his taxes raised. But he offers the right criticisms of the standard free lunch GOP nonsense, which EconomistMom rightfully praises. But I do have a couple of quibbles:
That is, cutting taxes, especially on upper-income Americans, does not generate so much economic activity that it replaces all the lost I.R.S. take and then some. At least those have been the results so far. When Ronald Reagan lowered taxes, personal income tax revenue stagnated from 1982 to 1984. Now, you may say that revenue rose sharply after that. So maybe that was a mixed result … Government spending grew dramatically under President Reagan, very nearly doubling, and leaving us with a federal deficit vastly bigger than the one he inherited.
Actually nominal spending did not even double during the Reagan years, which meant the increase in real spending was not that great after all. In fact, the ratio of Federal spending to GDP stayed virtually the same. And the increase in real Federal taxes over the 1981 to 1992 period was about 17%. I think EconomistMom needs to have Ben take a few more remedial classes.