Quote:
Originally Posted by sebastian_dangerfield
But they're not, so it's not part of this discussion. Left to do what they like, the Dems would spend more. But you don't see me criticizing them for that here, in this finite discussion.
That's a projection you cannot support. You have no idea what the removal of that money from the economy would do in terms of decreased economic activity. This economy is amazingly fragile. The negative multiplier effect of any pullback in consumption could create a decrease in revenue far exceeding the tax cuts. This is why even Obama and the Dems, no doubt suppressing a gag reflex, are open to an across the board extension. (By saying this, I am not arguing that tax cuts pay for themselves. I don't buy that any more than you do. But I think this is a unique instance where the lapse of a tax cut could have disastrous results.)
If you agree with my last point, how do reach the conclusion we nevertheless need to roll back all of the Bush tax cuts? (Keep in mind, I'm not GOP Orthodox on this... I personally think that the safe play is to raise the bar to $500-750K.)
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The real measure of the tax cuts is what they did for the economy when they were first put in place. The 2001 tax cuts, which were the more significant from a policy perspective, didn't result in any explosion of growth. At best one can argue they kept things from getting worse. There was a burst of growth not long after the 2003 tax cuts, though I think the case for causation is relatively slim and that it likely had more to do with the burst in spending that occured on a more sustained basis over the prior two years.
On the other side, the Clinton bills seem to have had considerable impact on growth in the 90s. Why? (1) Those bills didn't paint with a broad brush - there was not an across the board reduction on capital gains, there was a more significant reduction on gains derived from new investments in targetted industries. (2) Those bills brought tax and spending in line, meaning more debt money was available for businesses instead of the government.
If I had my druthers, I'd rewrite the bush tax provisions to be more like the Clinton ones, and not extend anything as iit stands. But no one will listen to me.
