The last month has been a little crazy, and I really haven't felt like writing at all. The urge is slowly coming back, aided in part by the fact that some truly stupid shit has been said over the past three or four weeks.
Tax policy has been in the news lately, given the impending expiration of the Bush tax cuts and our pathetic fiscal state. Expiration, assuming our stalwart, fiscally responsible Congress doesn't outdo themselves and extend them beyond the termination date.
It starts with the usual suspects: deficit peacocks in the Republican party who have suddenly become acquainted with the size of the deficit now that they're in the minority and have to act like they didn't just spend the last eight years bombing brown people and giving money away to rich people because government surpluses are evil things that cause bad things like social spending or preparedness for economic downturns. The primary difference this time is that now they showing their true colors: openly admitting that they do not believe that tax cuts should ever have to be paid for or that they have any adverse impact on the budget.
Here's Sen. Tom Coburn:
Continuing the [Bush] tax cuts isn’t a cost, if you added new taxes, new tax cuts, I would agree that’s a cost. It’s not a cost. That’s where we are today. That’s the baseline. It doesn’t score anything to continue them. It costs money if we increase, which I would be willing to do. I think we ought to cut corporate taxes.
You should never raise taxes in order to cut taxes. Surely congress has the authority and it would be right, if we decide we want to cut taxes to spur the economy, not to have to raise taxes in order to offset those costs. You do need to offset the cost of increased spending. And that’s what Republicans object to. But you should never have to offset cost of a deliberate decision to reduce tax rates on Americans.
"I think we need to be paying for all the spending that’s going on," [...] "But when people can keep more of their own money that shouldn’t be considered a cost."
And their own minority leader, Sen. Mitch McConnell:
"There's no evidence whatsoever that the Bush tax cuts actually diminished revenue," he told Brian Beutler of TPMDC. "They increased revenue because of the vibrancy of these tax cuts in the economy. So I think what Senator Kyl was expressing was the view of virtually every Republican on that subject."
And I am sure there are more, but those are just the quotes that I flagged during my weeks off. The fact that errant bullshit like this is allowed to go completely unchallenged in the news media is an entirely different issue. For now, let's just look at the facts for those of us that actually exist in a reality-based world. The following figure is from the Center on Budget and Policy Priorities, a nonpartisan organization:
Even the Congressional Budget Office draws similar conclusions, as Ezra Klein notes here:
But how about the Congressional Budget Office's estimations? "The new CBO data show that changes in law enacted since January 2001 increased the deficit by $539 billion in 2005. In the absence of such legislation, the nation would have a surplus this year. Tax cuts account for almost half — 48 percent — of this $539 billion in increased costs." How about the Committee for a Responsible Federal Budget? Their budget calculator shows that the tax cuts will cost $3.28 trillion between 2011 and 2018.
All empirical evidence notwithstanding, the crux of the mandatory Republican fetish with tax cuts is that by lowering taxes, you widen the base of people paying taxes, as if doing so makes taxes a bargain buy or a sale item at Walmart. This makes sense, to a very limited extent, in a private sector application with goods and services (a major difference being that paying taxes is compulsory, whereas consumers may pick and choose what goods they wish to purchase).
When businesses lower their prices, a higher number of consumers are generally more inclined to purchase their goods. It's basic supply and demand. The primary difference between the public and private sector, however, is that you generally don't have a bunch of demagoguing idiots running private sector companies that enact markedly stupid policies out of a mindless, irrational, and patently false conviction. The private sector is concerned with profit, success, and the continuity of their business. When they lower prices on their goods, they do so in a targeted manner to drive up sales, attract new customers, or punish their competitors. They do not do so reflexively regardless of any market or economic setting or as their sole idea for running their operations. If a corporation were to perpetually lower prices, as the Republicans wish to do with taxes, many of them would go out of business. Why? Because at some point, their costs would exceed their revenue, and they wouldn't remain solvent.
Somehow that logic escapes Republicans, or they simply refuse to acknowledge what is a very obvious and time-tested principle. A principle that is the foundation of our economy and our private sector. A principle that is not backed by ideology, but fact and hard data. Data that is self-evident in our prolonged budget crisis, whereby their pet tax cuts have failed miserably as costs/spending increased while revenues fell.
So we're left with a nation in which almost half of our elected officials believe in a false, irresponsible, and dangerous fiscal policy and where they are never challenged on the fallacies of their policies by those in a position to do so. Basically, people believe this bullshit because it gets spread widely and uncritically as truth, or even a position with a modicum of validity that should be considered despite the enormity of the evidence to the contrary. Bill Maher sums this up best in an episode of Real Time before the summer break:
That's the problem with our obsession with always seeing two sides of every issue equally -- especially when one side has a lot of money. It means we have to pretend there are always two truths, and the side that doesn't know anything has something to say. [...]
We shouldn't decide everything by polling the masses. Just because most people believe something doesn't make it true. This is the fallacy called argumentum ad numeram: the idea that something is true because great numbers believe it. As in: Eat shit, 20 trillion flies can't be wrong.
Indeed.
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