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Sunday, August 1, 2010

A Note on Supply-Side Thinking - The Agenda - National Review Online

I mention this because I don’t think many conservatives fully understand how damaging the supply-side idea has been to the case for a smaller, more effective, more disciplined government. On July 14th, Len Burman of the Tax Policy Center made the following argument in congressional testimony on the future of individual tax rates:

The message during the last decade seems to have been not that spending and tax cuts were available at a discount, but that they were free. Spending for wars, Medicare expansion, and “no child left behind” happened at the same time that taxes were falling. Citizens could be forgiven for forgetting that there is any connection between spending and taxes.

My guess is that if President Bush had announced a new war surtax to pay for Iraq or an increase in the Medicare payroll tax rate to pay for the prescription drug benefit, both initiatives would have been less popular. Given that the prescription drug benefit only passed Congress by one vote after an extraordinary amount of arm-twisting, it seems unlikely that it would have passed at all if accompanied by a tax increase. [Emphasis added.]

It's important that conservatives come to grips with the facts about spending and taxation.

It's also worth noting that the conservative pundits who try to prove their courage by taking a deliberately contrarian stand advocating higher government revenues in isolation aren't doing us any favors.

The essential question is what should the government be doing. Once we answer that, figuring out how to pay for it will be easy by comparison.

Posted via email from rhymeswithclown's posterous

1 comment:

D said...

I can't remember who wrote the piece, but I was reading a few days ago about the paradox of supply-sideism.

We should applaud lower taxes always and everywhere. Yet, lower taxes yield more revenue for the State. Since the State is always unscrupulous and has never or will never impose responsibility on itself, should we ever propose lower taxes in the first place?

The perfect circular argument, one I have yet to see burst.