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The Laffer Curve vs. Starve the Beast

Posted by on May 2, 2012

Llllllllllllllllllllllllllllllllllet’s get ready to rumbllllllllllllllllllllllllllllllllllllle!  Innnnnnnnnnnnnnnnnnnn this corner…  from Chicago, Illinois…  we have…  the Aggro Mnemonics of Macroeconomics…  the Golden Calf of the Powerpoint Graph…  the Nomad Pagan of Ronald Reagan…  the Laffer Cuuuuuuuuuuuuuuuuuuuuurve!  And in the other corner…  weighing in at small enough to drown in a bathtub…  we have…  the Hellfire Nemesis of Welfare Benefits…  the Plato in Cahoot with the Cato Institute…  the Kosher Fist of Grover Norquist…  Starve!  The!  Beeeeeeeeeeeeeeeeeeeeast!  Two mutually contradictory concepts go head to head in the Thunderdome!  Two ideas enter, one idea leaves!  Who wins?  You decide!

Round 1, Fight!

George W. Bush, speech of Jul. 24, 2003: “The best way to get more revenues in the Treasury is […] cut taxes to create more economic growth. That’s how you get more money into the U.S. Treasury.”

George W. Bush, press conference of Aug. 24, 2001: “So we have the tax relief plan […] that now provides a new kind — a fiscal straightjacket for Congress.”

Round 2, Fight!

Milton Friedman, Newsweek, Aug. 7, 1978: “The only effective way to restrain government spending is by limiting government’s explicit tax revenue.”

Mitch McConnell, interview of Jul. 13, 2010: “There’s no evidence whatsoever that the Bush tax cuts actually diminished revenue. They increased revenue […] So I think what Senator Kyl was expressing was the view of virtually every Republican on that subject.”

Round 3, Fight!

Alan Greenspan, testimony to the U.S. Finance Committee, Jul. 14, 1978: “Let us remember that the basic purpose of any tax cut program in today’s environment is to reduce the momentum of expenditure growth by restraining the amount of revenue.”

Dick Cheney, Time Magazine, Dec. 6, 2007: Keeping taxes low, Vice President Dick Cheney explained, “does produce more revenue for the Federal Government.”

Round 4, Fight!

Sen. John Kyl (R.-AZ), 2006 debate at KPHO, Phoenix, Oct. 15, 2006: “I support the tax relief that enables the economy to grow, so that we can bring in a record amount of revenue to the treasury.”

Paul Ryan, Cato Policy Report, March/April 2008: “The Alternative Minimum Tax would massively expand government revenue, which would in turn allow increased government outlays, increased government involvement in the economy, and increased government control over our lives.”

Round 5, Fight!

Milton Friedman, interview with John Hawkins, Sept. 16, 2003: “The question is, “How do you hold down government spending?” […]The only effective way I think to hold it down, is to hold down the amount of income the government has. The way to do that is to cut taxes.”

Newt Gingrich, CBS Evening News, Jan. 25, 2012: INTERVIEWER: “If you lowered taxes, you’re going to increase revenues?”  GINGRICH: “Sure. Which we know worked. When we cut the capital gains tax in the 90s, the revenue went up dramatically.”

Round 6, Fight!

George W. Bush, “A Charge to Keep”, p.237, 1999: “By returning money to the taxpayers, we can also limit government.”

George W. Bush, Time Magazine, Dec. 6, 2007: “You cut taxes, and the tax revenues increase.”

Round 7, Fight!

George Will, column of Jul. 27, 1978: “The focus of the fight to restrain government has shifted from limiting government spending to limiting government receipts.”

Stuart Varney, Fox & Friends, Aug. 3, 2010: “When you lower rates on the rich, you actually bring in more money to the treasury.”

Round 8, Fight!

Stuart Varney, The O’Reilly Factor, Jul. 26, 2010: “Look at the tax cuts under John F. Kennedy, under Ronald Reagan and George W. Bush. They cut tax rates, and very soon after, there was a gigantic increase in revenues to the federal treasury.”

Rep. Jeb Hensarling (R-TX), The Kudlow Report, CNBC, Nov. 16, 2011: “Any penny of increased static revenue is a step in the wrong direction.”

Round 9, Fight!

Ron Paul,, March 30, 2001: “I fight to make government smaller. This commitment compels me to vote for all tax cuts.”

John McCain, Time Magazine, Dec. 6, 2007: “Tax cuts, starting with Kennedy, as we all know, increase revenues.”

Round 10, Fight!

Sarah Palin, speech in Boston, Apr 14, 2010: “Please, starve the beast, don’t perpetuate the problem, don’t fund the largesse that is being proposed, we need to cut taxes.”

Rudy Guiliani, Time Magazine, Dec. 6, 2007: “I know that reducing taxes produces more revenues.”

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