Much has been written about over the last few weeks (and more in the coming weeks as the House and Senate work out the details) about whether or not the tax cut proposed will pay for itself or add the project $1 Trillion to the national debt. What can we learn by looking at the history of previous tax cuts? Here are two articles on the topic: one on the economics and one on the politics of that question.
History lesson: Do big tax cuts pay for themselves?
During an interview about a proposed “trigger” to stem tax cuts if the budget deficit unexpectedly widened, Rep. Jeb Hensarling (R-Tex.) made a reference to economic history that caught The Fact Checker’s attention.
Hensarling, chairman of the House Financial Services Committee, dismissed the trigger as a “uniquely bad idea” because it would leave businesses uncertain about their tax rates. Moreover, he predicted that “we will be able to fill any deficit hole with additional revenues,” citing the tax cuts engineered by Calvin Coolidge, John F. Kennedy and Ronald Reagan. He said that if a deficit widened, it could be handled with spending cuts, but he indicated he was not worried. ....more
History Lesson For GOP: An Unpopular Tax Cut May Not Save You In 2018
Jerusalem Center for Public Affairs
The GOP is in a tax panic. Pressured by donors and worried about the 2018 midterm election, party leaders have convinced themselves that a tax cut is vital to their political survival. The unseemly result? A headlong rush to get something – anything – passed into law.
Republicans might be right about their need for a tax cut. The tax legislation making its way through Congress is remarkably unpopular. In fact, this tax cut is polling worse than many past tax increases. But when it comes time to face the voters, Republicans might be better off with an unpopular accomplishment than showing up empty-handed.