Friday, June 6, 2008

Question for McCain: Effect of Taxes on Revenue

In what I imagine reflects an ongoing power battle among McCain's staff, one of his economic advisers--Doug Holz-Eakin--is now speaking for McCain on issues outside of the economic realm, namely illegal warrantless wiretapping. He says that McCain embraces the unconstitutional Bush-Nixon claim that "It's not a crime if the president does it." The problem for Doug is that McCain previously said just the opposite.

He's flatly contradicted his boss on perhaps the most basic question of public finance as well. At a forum I attended, he was asked ""Does Senator McCain believe that tax cuts pay for themselves?" and he said "No."

But McCain has said on multiple occasions that they do. Here's a snippet from an interview with the National Review where he couldn't have been clearer in claiming (wrongly) that tax cuts raise revenue.

Ponnuru: If you could get the Democrats to agree, or at least to come to the table on entitlements or on tax simplification, are those circumstances under which you’d be willing to accept a tax increase?

Sen. McCain: No; no.

Ponnuru: No circumstances?

Sen. McCain: No. None. None. Tax cuts, starting with Kennedy, as we all know, increase revenues. So what’s the argument for increasing taxes? If you get the opposite effect out of tax cuts?
Question for McCain: "You have said multiple times that you share the belief of Arthur Laffer, one of your advisers, that tax cuts increase government revenue. Another one of your advisers says that you don't hold that view. So which is it? Do tax cuts increase revenue or not?"

Follow-up: [If he does believe tax cuts increase revenue] "As CBO Director, your adviser Doug Holtz-Eakin published a study that said that you're wrong. Only a miniscule number of economists agree with you. On what basis do you hold your view?"

Follow-up: [If he doesn't believe tax cuts increase revenue] "The Tax Policy Center calculates that your tax plan will lead to a shortfall and increase the national debt by %5.7 trillion, about $50,000 per household. Who will pay off that debt?"


John Rose said...

Good questions. I want to see them asked in one of McCain's proposed town hall debates.

MattYoung said...

McCain needs a shill, I can be that.

McCain's tax cutting proposals are meant to expand the federal government's share of the economy, as per normal supply and demand. We can see the Republican strategy of socialist expansion going back to the founding of their party.

There was a short period in which Republicans understood that the best method for reducing the relative size of government was to raise progressive taxes to astronomical heights. The idea was to make the price of corporate/government partnership so high that wealth would stay away from partnering with government.

It was Reagan who resorted to the concept of the Stalinist five year plan of massive government expansion. The first idiots who tried this for Manifest Destiny were John Fremont and Abe Lincoln, and they caused the Civil war.

In much the same way, Bush's tax cut was done precisely to partner up corporate and government in the Middle East, a plan the Reagan actually started.

So, the correct answer is McCain is a Stalinist.

IM said...

I can't speak for McCain, but see my comments to the post, "Is McCain a Lafferite?"

All I can say about the above comment is WOW...and that's not a good WOW.