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With a title like “Associate Director of Tax and Budget Policy at the Center for American Progress Action Fund…”

April 6, 2011

…you’d think a guy would make a better argument than this. Michael Linden, guest blogging at Think Progress, accuses Paul Ryan of raising taxes on the middle class:

…any detailed description of his ideas for tax “reform” would reveal a massive middle class tax hike. For Ryan to cut the top rate by nearly one-third and still keep revenue the same as it would have been under the Bush tax cuts regime, he has to raise taxes somewhere else. And though he pointedly refuses to tell us where those tax hikes will come from, we can make an educated guess.

No, you actually don’t have to raise taxes somewhere else. You do have to assume economic growth, which we all – Democrat and Republican, liberal and conservative – already are. If Linden knows something about the economy that we don’t, he should share.

I won’t repeat the “tax cuts lead to revenue growth” mantra here (oops, already did!), because there are so many other factors that play into the tax-revenue relationship. Instead:

From 1930 to 2010, tax revenue collection in the United States has never topped 20.9%, averaging 16.5% of GDP over these 80 years. This comes despite the drastic historical fluctuation in the rate of taxes on the wealthiest Americans

In recent years, spending, not revenues, has deviated from its historical path; spending must be addressed to rectify the budget.

That’s the outstandingly named Veronique de Rugy, who also provides this chart:

Note how the Kennedy and Reagan tax cuts resulted in no movement in tax revenues. Neither did the Clinton tax increases.

All that aside – “all that” being statistics, and you know what people say about statistics – answer me this question: why do we so emphasize education, and want kids going to college? Why do we celebrate people taking a risk by going into business? Why are “rags to riches” stories so much a part of the common human mythos?

Personal betterment? Feh. It’s so they can make more money! We want people making more money!

So how about this slogan: “America, a place where you can make more money.” Or, better: “America, a place where you can get rich!”

More rich people = more tax revenues. And a wider variety of leisure goods, too. It’s win-win.

  1. April 7, 2011 9:55 am

    There are other, less specious, criticisms of Ryan’s plan, however.

    While there’s no question Ryan is correct in the main, he also projects 2.8% unemployment WITHOUT any inflation effects.

    Maybe he’s channeling Nixon’s Wage/Price Control agenda? Because in the real world, the two are irreconcilable.


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