Dispelling the GOP Tax Myth

[DonViejo]

September 28, 2017 at 11:55 am EDT By Taegan Goddard

Bruce Bartlett: “Four decades ago, while working for Rep. Jack Kemp (R-NY), I had a hand in creating the Republican tax myth. Of course, it didn’t seem like a myth at that time — taxes were rising rapidly because of inflation and bracket creep, the top tax rate was 70 percent and the economy seemed trapped in stagflation with no way out. Tax cuts, at that time, were an appropriate remedy for the economy’s ills.”

“Tax cuts became the GOP’s go-to solution for nearly every economic problem. Extravagant claims are made for any proposed tax cut…”

“That’s wishful thinking. So is most Republican rhetoric around tax cutting. In reality, there’s no evidence that a tax cut now would spur growth.

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https://politicalwire.com/2017/09/28/dispelling-gop-tax-myth/

[unblock]

1. Generally speaking, a tax cut can only really help if

There's a shortage of investment capital.

Note that it's actually not about "incentives". The tax rate doesn't change whether something's profitable or not, it only changes how much of that profit you keep. So the rate change doesn't affect many decisions at all.

What it is is a redistribution of wealth. The rich are more likely to invest, and *if* what ails the economy is the specific problem of not enough investment capital, then a tax cut for the rich is one solution that may help the economy as a whole -- although it comes with other problems, most notably, it concentrates weather upward.

An alternative would be direct investment by the government in such a situation. But, you know,... socialism blah blah blah.


At other times, a tax cut for the rich doesn't help and may make things worse. Right now, wealth is already highly concentrated and there's no shortage of investment capital, a tax cut for the rich is idiotic.