Not if you read the fine print. According to an analysis by the Treasury Department, Bush's tax cuts may raise total national output of goods and services by 0.7%.
But is that enough to pay for the tax cuts? Not even close. An 0.7 percent increase in economic output would lead to increased tax payments of $29 billion.
Sounds impressive, right? Wrong. Making the tax cuts permanent would reduce federal revenues in 2016 by $314 billion. That is more than 10 times what the Treasury analysis suggests tax cuts would generate in increased tax revenue. While trickle-down economics might make for good politics, it's bad economics. Growth is great, but at what price?
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Krugman is is on fire today, as he has been for a while, this time talking about the tax cuts.
But, even he makes an essential error that all the democrats seem to be making.
I'm no fan of tax expenditures. I'm not even particularly fond of most tax deductions regardless of whether or not they're based on religion. Taxes should be about raising revenue, and a complex tax code just makes inserting more loopholes--as well as outright cheating--even more possible.
Julia Gillard has done a backflip and agreed to introduce a budget-neutral carbon tax after last year promising not
Yesterday, the President told Kansas: "if you vote Democrat, you're voting for a tax increase."