the night my comment got eaten

12 Dec 2005

I am reposting this here, because I think the comment I tried to leave here got eaten by the NiT coment moderation monster.

In it, I am responding to some assertions about the tax situation:

Yeah, because tax cuts don’t lead to higher federal receipts or anything like that.

…

Barbieux, give me a break. It doesn’t take a genius to figure out that, even though there’s no proof that excessive revenue is caused by tax cuts, it does indicate that tax cuts do not necessarily aversely affect revenue.

(Uncle)

And:

Say Uncle has a point. These tax cuts have brought in more revenue… [diatribe against liberals snipped] (Glen Dean)

Reality check.

First, Uncle, that graph is retarded. It’s not adjusted for inflation. Tax revenues are not the highest in history (more here and here).

Second, a large amount of the recent increase in tax revenue was due to tax cuts expiring and other temporary anomalies, not due to the tax cuts themselves spurring growth, something the CBO itself has acknowledged:

The fiscal outlook for the coming decade has not changed much since the Congressional Budget Office (CBO) issued its previous baseline projections of the federal budget in March. Although the deficit for 2005 will be notably lower than CBO estimated then, the underlying projections of revenues and outlays for future years are similar to those presented five months ago. (emphasis added)

Neither is it true that there’s no evidence that tax cuts decrease tax revenue. There’s a preponderance of evidence. More here. It’s an interesting issue, to be sure, but not one that amateur-hour dishonest graphs that don’t even index for inflation aren’t going to help clarify.