Wednesday, July 12, 2006

Tax Cuts as Deficit Reduction

I've been attempting to parse Saturday's NYT story about the unexpected jump in federal tax revenue. This of course was a preview to the White House's communication offensive on the subject--by which the mad prince and his mouthpieces were able to trumpet the talking point success of the Bush tax cuts in boosting the economy, thereby leading to increased tax revenue.

I have always hated the supply-side argument, and how anti-tax radicals like Grover Norquist use the argument disingenously (because they don't *want* revenues collected by the government to increase).

But the counter-argument balance proffered in the mainstream media outlets I've sampled have run in two basic streams:

1. The deficit is still too big.

Argued by Congressional Democrats who have given up anyhow and so take whatever earmarks and pork they can while they have a chance. This argument (improvement is great, but the problem still isn't fixed) fails to connect with the increasingly capitalistic ethics of our republic. Within the moral framework of the CEO, problems need never be solved (or addressed, really), so long as you can point to measurable results (aka "good progress").

2. With the coming rise in Medicare, Medicaid, and Social Security spending, we're basically fucked.

Argued by those who've been arguing this for years, and basically no one in elective office can afford to listen. These people argue that the slight uptick in revenue won't matter in the face of the coming entitlement collapse. (These are the same people who are quoted out of context to imply that the Bush tax cuts aren't significant relative to our overall revenue requirements.)

The link is to a Wall Street Journal blog post, that finally reframed the question in a way that cuts through a lot of the bullshit:

Does the amount of revenue raised due to the tax cuts equal or exceed the amount of revenue lost due to the tax cuts?

According to the White House's own projections: not so much.

No comments: