Monday, December 05, 2011

The GOP’s not even trying…

…to pretend that they give a hoot about average Americans.

For the last 30 years, the Republican stance on taxes has essentially been:
Lower taxes will lead to people having more money. They’ll use that money to buy more stuff. As they buy more stuff, employers will create more jobs and the economy will grow. As the economy grows, the government will still take in the same amount of money because even though tax rates are lower, the economy is bigger.

So, tax cuts are good and pay for themselves (smaller tax rate, but larger economy).

Let’s over-simplify that some more:
If the economy were a $100 bill and the tax rate were 10%, the government would get $10, leaving $90 for everybody else.

The Republicans argue that if you cut the tax rate by 20% the economy would grow (let’s, for argument sake, say by that same 20%). So, now the economy should be worth $120, the tax rate is 8%, the government gets $9.60 and everybody else gets to keep $110.40.

Now, there’s not a one-to-one relationship between the tax cut and economic growth (that is, if you cut the tax rate by 1% you don’t automatically grow the economy by 1%; in reality, the economy grows by less).

Obviously, even in this most optimistic of scenarios, the tax cuts don’t pay for themselves.  But, the GOP believes that they do, except when they don’t. Which is now:
“Like many foes of the payroll tax break, [Rep. Allen West, a freshman Republican from Florida] said he opposes the way it reduces the revenue stream to Social Security -- even if those funds are replenished with spending cuts elsewhere in the budget.”
The conclusion that one is left to draw is simply this: tax cuts are good when they help the 1% and bad when they help the 99%.