On Consoling Democrats
jr., r. emmett tyrrell
On Consoling Democrats Tax cuts needn't make them miserable, if Mr. Bush shows them the upside BYR. EMMETT TYRRELL, JR. W atching our Gentleman President deliver his message day by day, I think...
...the hard-pressed may be working and saving as much as they can, and so do not change their behavior very much...
...Even in the short term the Reagan tax cut boosted revenues enough to recoup about two-thirds of its alleged cost...
...Today, owing to bracket creep and the Clinton tax increase, federal taxes, as a share of the economy, are higher than they have ever been during peacetime...
...But he cannot say it out The World Bank has determined that countries with the lowest tax rates, such as Hong Kong, had the revenue to increase government spending three times as fast...
...do they suppose this would have happened during Carter's second term of malaise...
...In the wake of the Reagan tax cuts of the 1980s, tax revenues went up by more than 30 percent in the course of his term...
...And on the Republican side of the aisle we do not hear any talk about tax cuts being "voodoo economics...
...The Democrats should contemplate the words of the pot in reference to the kettle...
...Pledged to civility, our Gentleman P. cannot inflict so much pain, and thus sometimes sounds a bit vague in explaining why he proposes to cut the taxes of the people who pay nearly all the income tax already...
...On that the record is clear...
...Bush II hopes to also...
...To paraphrase Mr...
...The upper middle class broke even...
...Reagan's did better, with a two-thirds short-term payback according to Lindsey, but then Reagan's cuts were more focused on the rich...
...the pols will spend it...
...The extra growth they created, and the investments they made, laid a base for an even greater expansion in revenues long term...
...Gore's top one percent...
...The strongest proof that tax cuts stimulate growth and increase revenue over time is the evidence, piling up for years, that lower tax rates actually stimulate government growth...
...With enough growth from lower taxes there will be plenty of federal revenue...
...Tax cuts boost growth because they boost incentives to work and especially to invest...
...That brings to mind another truth of the Reagan years, to wit: Do not leave money around...
...It drives Dems into a frenzy, not to mention journalists on whom it has an effect similar to that of Holy Water on demons...
...Hong Kong managed it and Ronald Reagan managed it...
...Their acceptance, in a general way, of tax cuts is all the more amusing for its appearance of issuing from incomprehension...
...They munch on 20.7 percent of the GDP...
...Their conclusion is that the Bush tax cuts will earn back more than 40 percent of their apparent cost, meaning they will cost only about $900 billion rather than the $1.6 trillion GWB advertises...
...My advice to GWB is to stifle the urge to cut programs...
...W atching our Gentleman President deliver his message day by day, I think how relentless history's motions are...and silent...
...If they did understand, they would not be exhorting against tax cuts for the rich...
...Fortunately there are others not so bound...
...But tax cuts for the rich—the economic activists, as Lawrence Kudlow calls them—returned tens of billions in extra revenue to the government, back when that was real money...
...Now here is the important bit: Virtually all the payback came from the richest taxpayers, Mr...
...Moreover the surplus has only emboldened pols to spend more...
...Alas the Kultursmog pollutes economics as much as anything these days, and this is a thought no longer permitted to be expressed...
...That only irks the Democrats whose support will make his life easier...
...V 22 THE AMERICAN SPECTATOR ¦ April 2001...
...Bush, "We think of them as our subscribers...
...For businesses they lower the cost—and thus raise the return—on hiring top personnel who cluster around the upper brackets...
...Both GWB's optimistic message and his genial, confident style hearten us, bringing Ronald Reagan to mind...
...Implicitly they accept this Reaganite initiative, while grunting unhappily about the return of Reaganomics.They do not seem to understand how it is that tax cuts help the economy, but whatever level of cut GWB proposes, they agree to two-thirds of it...
...because tax cuts work by raising the rewards for work and investment, thereby increasing those activities, tax revenues go up...
...He should run tell the Democrats this: They can have their futile government projects if he gets his tax cuts...
...Like Reagan, GWB is characterized by his opponents as a dim bulb, and in GWB's case as inarticulate to boot...
...Reagan's generous reductions for the middle class and below lost quite a bit of money for the government...
...In a fit of usefulness the World Bank has determined that countries with the lowest tax rates, for instance Hong Kong, had the revenue to increase government spending three times as fast as countries with high tax rates...
...And precisely more without the cuts...
...Over the past few years the rate of federal spending increase has been over 6 percent—and that was during good times when the nanny state had less reason to minister to our needs...
...Our Gentleman President is proud of his ability to work with all sides...
...Critics argue that revenues would have increased even loud...
...What a splendid opportunity this is...
...The key is to have the overall economy grow faster than government...
...Democrats and Republicans both want growth, in the Democrats' case government growth...
...Certain data are indisputable: Larry Lindsey, GWB's most influential economic adviser, documented the effects of the Reagan tax cuts a decade ago using actual tax returns...
...The same Democrats who hooted at Ronald Reagan's economics now silently accept the core of that economic position, namely that economic growth is crucial and tax cuts are the elixir of growth...
...Under Reagan the economy grew and so did the government...
...How can we console the Democrats...
...Stress growth...
...Cut taxes and eventually the happy Democrats will understand...
...Alas Republicans, including our esteemed Gentleman President, do not always help their slower brethren's understanding as much as they could...
...Both can have their wish...
...If GWB truncated his tax cuts, as the Dems want him to, so as to reduce rates only for the middle class and below, the result would be even more lost revenue...
...after the rate reductions they yielded about as much revenue as before...
...It is evident from the design of GWB's tax cut that he knows what Reagan knew...
...The ever-useful Heritage Foundation has performed a "dynamic" THE AMERICAN SPECTATOR ¦ April 2001 21 analysis of GWB's tax cut, meaning that when assessing the tax cut's effect on revenue they take into account the increased economic activity that results...
...Perhaps this will help...
...Advised by Lindsey, surely GWB knows all this...
...The size of the tax cut would go up by cutting it down...
Vol. 34 • April 2001 • No. 3
