Tax Voodoo
Monday, July 26th, 2010I heard it again today. The idea that the government takes in more tax dollars if it lowers taxes. This time it was Wisconsin senatorial candidate Ron Johnson on Joy Cardin’s Wisconsin Public Radio show. Let’s have a listen.
One might make the case that Geithner is wrong; that raising any taxes on anyone is a bad idea in these economic times. But that isn’t what Johnson is saying. He’s flatly saying that cutting taxes increases tax revenue, full stop.
Do you believe him? I don’t. There may be a theoretical point at which cutting taxes does increase tax revenue, but the idea that we’re at such a point, or that this principle is axiomatic and true under all circumstances, strikes me as complete bullshit. Need more? For the wonkish, here’s an article discussing why tax cuts that pay for themselves are myths and here’s another.