Monday, July 18, 2011

Trent Franks: Deficit Peacock

"We know that if we grow this economy, that nothing will do more good toward bringing in additional revenues to government. And that’s not to theory; that’s a historical observation. Even the much-maligned Bush tax cuts brought in an additional $100 billion a year to government coffers. We forget that unless someone is out there producing, there’s no tax revenue. There’s no revenue. There’s no nothing for anyone."

Rep. Trent Franks

Even George W. Bush appointees said to Congress that the tax cuts did not bring in more tax revenue.

Robert Carroll, deputy assistant secretary for tax analysis at the U.S. Treasury Department during Bush’s second term.

“As a matter of principle, we do not think tax cuts pay for themselves.”

Alan D. Viard, a former economist at Council of Economic Advisers during President Bush's first term, said there is no proof that the Bush tax cuts brought in more tax revenue.

"Federal revenue is lower today than it would have been without the tax cuts. There's really no dispute among economists about that," said Alan D. Viard, a former Bush White House economist now at the nonpartisan American Enterprise Institute. "It's logically possible" that a tax cut could spur sufficient economic growth to pay for itself, Viard said. "But there's no evidence that these tax cuts would come anywhere close to that."

Former Treasury Sec. Henry Paulson.

“As a general rule, I do not believe that tax cuts pay for themselves.”

Edward Lazear, former chairman of the chairman of the Council of Economic Advisers, told Senate Budget Committee that the Bush tax cuts lost tax revenue.

“Will the tax cuts pay for themselves? As a general rule, we do not think tax cuts pay for themselves. Certainly, the data presented above do not support this claim. Tax revenues in 2006 appear to have recovered to the level seen at this point in previous business cycles, but this does not make up for the lost revenue during 2003, 2004, and 2005. The tax cuts were a positive step and have contributed to the enhanced economic growth, additional jobs, higher real disposable income, and the low unemployment rates that we currently see today.”

Even Bush's economic team admits that the tax cuts do not increase tax revenue. Simply mathematics dictate that you do not add by subtracting. Franks is another deficit peacock. Franks doesn't care about reducing the deficit. He just wants more tax cuts.

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