The opening comments of this commentary belie proven and demonstrated economic data. Every round of tax cuts has increased federal tax receipts thanks to the increase in economic activity and employment: JFK, Reagan, Bush II, and Trump. This has been reproduced at state, local, and multiple foreign governments, as well. Any argument starting with the "cost" of tax cuts is simply not credible.
As with all other related scenarios, the problem is spending, not letting the people who earn money keep the fruits of their own labor.
I think Art Laffer and others would disagree with the notion that every tax cut leads to increases in federal tax receipts (although the TCJA had some great growth effects). It's going to matter a lot what the starting point is.
In any event, the short-term effect of extending various costly parts of the TCJA will lower revenue and increase borrowing, at least temporarily. I worry about a world where interest costs keep going up due to so much borrowing and not bringing in enough revenue eventually gets beat out by any growth effects from lower tax rates.
The opening comments of this commentary belie proven and demonstrated economic data. Every round of tax cuts has increased federal tax receipts thanks to the increase in economic activity and employment: JFK, Reagan, Bush II, and Trump. This has been reproduced at state, local, and multiple foreign governments, as well. Any argument starting with the "cost" of tax cuts is simply not credible.
As with all other related scenarios, the problem is spending, not letting the people who earn money keep the fruits of their own labor.
Mike, appreciate your comments.
I think Art Laffer and others would disagree with the notion that every tax cut leads to increases in federal tax receipts (although the TCJA had some great growth effects). It's going to matter a lot what the starting point is.
In any event, the short-term effect of extending various costly parts of the TCJA will lower revenue and increase borrowing, at least temporarily. I worry about a world where interest costs keep going up due to so much borrowing and not bringing in enough revenue eventually gets beat out by any growth effects from lower tax rates.