Somewhere, Laffer is Laughing
Talking Points Memo echoes an oft-repeated, but more or less discredited, Democratic meme:
Jonathan Chait - March 14th, 2005 The Bush plan is to allow workers to divert some percentage of their payroll taxes into private accounts. This is essentially a tax cut: instead of sending your money to the government to be spent on current Social Security recipients, you get to keep it, albeit for an earmarked purpose. Tax cuts don’t make deficits smaller, they make them larger.
Oh? Then how is it that tax receipts increased after the second phase of Bush's tax cut went into effect in late May of 2003? Taxes were lower, yet the government collected more of them...hmmm...could it be that The Laffer Curve actually works? Nah...
Deficits, it's true, haven't improved yet as a result, but that speaks more to government spending levels than the effect of the cuts themselves, which demonstrably increased, despite the cuts.
» March 15th, 2005
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