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Facts and figures

This morning, Lamar Alexander said that reconciliation has never been used for anything as big as health-care reform. Health-care reform has a 10-year cost of about $950 billion. The Bush tax cuts, which passed through reconciliation, had a 10-year cost of about $1.8 trillion. Lamar Alexander voted for them.

By Ezra Klein  |  February 25, 2010; 10:47 AM ET
 
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Comments

Come on, Ezra. The comparison you draw is apples and oranges. Tax cuts empower people and return their money back to them. The proposed health reform bills restrict and limit people's freedoms. Alexander wasn't talking about dollars but the totality of the legislation.

Posted by: superman32 | February 25, 2010 10:59 AM | Report abuse

Pretty sure he meant a social program. Also, putting 1.8 Bil back into peoples pockets is different than taking 950 Bil out.

Posted by: Holla26 | February 25, 2010 10:59 AM | Report abuse

i love president obama. whatever one thinks of him, he has tried, and tried, and tried, and tried, and tried to deal with all of this.
look at him, struggling with lamar alexander.
it is almost heartbreaking.
i dont know he stays so composed.
he has to be a bodhissatvha to put up with all of this, and be in the same room with all of this energy.
i am sending light to him.

his patience and good will is more than human.

Posted by: jkaren | February 25, 2010 11:00 AM | Report abuse

Do you understand what it means to "cost" $950 bil? It doesn't mean to take it from the public.

Cost and generate aren't synonyms. They're antonyms.

Posted by: DDAWD | February 25, 2010 11:01 AM | Report abuse

jkaren, what's the emoticon for eye rolling?

Posted by: superman32 | February 25, 2010 11:02 AM | Report abuse

I take Sen. Alexander in good faith. By "big", he presumably meant not "large in number", but rather meant "generous and understanding and tolerant," or possibly "on a grand scale" or "mature."

Posted by: tomveiltomveil | February 25, 2010 11:03 AM | Report abuse

The tax cuts expire after 10 years. Health care reform doesn't.

Posted by: ath17 | February 25, 2010 11:06 AM | Report abuse

nancy pelosi looks like a cat on a hot tin roof.
she must be up to HERE with all of this.

oh my gosh.
look at kathleen sebelius looking at mitch mcconnell.
i cant watch this.
barack obama is a bodhissatvha, so he can manage this.
one must be highly spiritually evolved to suffer through this.


Posted by: jkaren | February 25, 2010 11:06 AM | Report abuse

How do you know when a Republican is lying?

When their lips are moving.

Posted by: Lomillialor | February 25, 2010 11:06 AM | Report abuse

superman32, the tax cuts were merely a bailment: the government gave us money for a little while, threw it all on the deficit, and now we all have to repay it.

http://www.nytimes.com/interactive/2009/06/09/business/economy/20090610-leonhardt-graphic.html

The point was supposed to be growth, but it never really materialized (it's as if the real purpose was to hand over money to the top 1%!).

On the other hand, HCR lowers the deficit (and costs less)....

Posted by: Chris_ | February 25, 2010 11:08 AM | Report abuse

Alexander is just wrong. COBRA, CHIPS, Medicare part D, etc. Now we can argue about what Alexander means by "big," but we can't argue that reconciliation has been used to pass more expensive legislation, it has. Nor can we argue that reconciliation hasn't been used for health care legislation, it has.

I bet nobody in the MSM calls him on this blatent lie.

Posted by: nisleib | February 25, 2010 11:09 AM | Report abuse

The entire healthcare bill isn't being passed through legislation -- the relatively small compromises between House and Senate are what would be passed in that way.

Posted by: cog145 | February 25, 2010 11:09 AM | Report abuse

From some of the comments above from the Alexander apologists, it is clear Republicans even lie to themselves.

Posted by: Lomillialor | February 25, 2010 11:10 AM | Report abuse

One of these days you'll grow up and grasp the arrogance and stupidity of large Government programs. They never work well and they usually cause more harm than good.

The healthcare industry would be better off if the Government had never gotten involved with it. The main purpose of any real reform would be to fix the unintended consequences of previous Government interventions in healthcare. For some reason they're preoccupied with creating a new batch of bad incentives. It's a misguided and foolish approach.

Posted by: fallsmeadjc | February 25, 2010 11:13 AM | Report abuse

Alexander does NOT belong there. He knows not what he speaks. Senator Coburn absolutely KNOWS what he speaks of. But then again it was nice to just see Harry Reid try to chime in on the filibuster and Obama to push him aside to not let him go there towards partisan rhetoric. Harry, it doesn't help.

Posted by: visionbrkr | February 25, 2010 11:14 AM | Report abuse

The bush tax cuts cost far more than what Ezra said.

They helped cause the recession, which has cost us 700,000 job losses per month at one point.

There are so many other ways those tax cuts have cost us that it's virtually incalculable.

Posted by: Lomillialor | February 25, 2010 11:16 AM | Report abuse

*Senator Coburn absolutely KNOWS what he speaks of. *

Especially when he talks about Medicaid fraud, which he has a lot of first hand experience in.

Posted by: constans | February 25, 2010 11:19 AM | Report abuse

Guess what? The gvmt is not involved with my health insurance at all.

I don't have any and can't get it.

Seniors adore and value medicare, a gvmt run health care program. If it wasn't for medicare, most of them wouldn't have insurance.

If you have insurance, don't insult me by pretending you know what's it's like not to have it.

Posted by: Lomillialor | February 25, 2010 11:19 AM | Report abuse

Democratic ideas aren't sophisticated and misunderstood they are arrogant and foolish.

Posted by: fallsmeadjc | February 25, 2010 11:19 AM | Report abuse

Despite medicare fraud, Coburn and the other repubs don't want to reform medicare and eliminate it. When Dems try, the repubs cry out "Death Panels".

Posted by: Lomillialor | February 25, 2010 11:20 AM | Report abuse

Ezra knows better. The difference between a 10 year tax cut is that it is $1.8T over ten years.

A health care program will last in perpetuity and cost hundreds of trillions of dollars over the next hundred years.

A public program is far harder to take away from people than it is to adjust a tax rate. Ezra should know better. He is just being a political hack.

Posted by: lancediverson | February 25, 2010 11:21 AM | Report abuse

Lomillalor,

I'd love to see some proof of the fact that the Bush tax cuts caused the recession or are you just on here to post partisan rhetoric.

You know, Republican's cause cancer too, and AIDS, AIDS too. And they kill puppies DAILY. And kittens too.

Posted by: visionbrkr | February 25, 2010 11:24 AM | Report abuse

This is a red herring....cutting taxes has NO COST associated with it....


Let me ask you this: How much would it cost for yourlocal pizza place to lower their cost on a slice of pizza by 50 cents?

What if more slices of pizza are sold at the lower cost----can you argue that cutting the cost LOST money, if profits increased?

You guys either don't understand the bigger picture or you are intentionally deceiving the public to pass a horrible progressive agenda that will destroy the USA!

Posted by: FastEddieO007 | February 25, 2010 11:26 AM | Report abuse

*Senator Coburn absolutely KNOWS what he speaks of. *

Especially when he talks about Medicaid fraud, which he has a lot of first hand experience in.

Posted by: constans | February 25, 2010 11:19 AM | Report abuse


constans,

you wouldn't accuse someone of Medicaid fraud would you? I'm sure you have some sort of proof of that, no?

Posted by: visionbrkr | February 25, 2010 11:27 AM | Report abuse

Good for you, Ezra. Letting the facts get in the way of a good story.

This healthcare summit is seeming like a waste of time. Republicans don't want to read the bill. It's too big. It's too hard for them. How many times do we have to hear that? We've all heard it before. Nothing new here.

Posted by: slag | February 25, 2010 11:32 AM | Report abuse

"Health-care reform has a 10-year cost of about $950 billion."

As calculated with 10 years of taxes and only 6 years of full benefits? Get real.

Posted by: cpurick | February 25, 2010 11:36 AM | Report abuse

As I said yesterday, yes, we'd all be better off if pharma companies were permitted to sell snake oil without being tested and reviewed by the government. We can trust them to only sell us medicines that work! We'd also be better off if people could practice medicine without that pesky "medical school" business getting in their way. The Greeks had doctors and they didn't have to go to government approved medical school! And we'd be better off if pharma companies had to enforce their own patents or if there were no court system at all to bring a malpractice suit.

As to the substance of the post, the point is that reconcilliation has been used for healthcare legislation before. It's been used for expensive programs before and for expensive, debt increasing tax cuts.

Oh, and the current HCR is being passed through normal procedures and votes. It's the riders that would be passed through reconcilliation. Alexander is being disingenuous or is lying.

Posted by: MosBen | February 25, 2010 11:38 AM | Report abuse

Eddie - Cutting taxes would have no costs if there were offsetting cuts in spending. That is NOT what we get from Republicans. The GOP loves to give tax cuts to the Paris Hilton's of the world and put it on the American credit card. Guess what, we have to pay that money back.

Don't believe me? Look at the national debt from Reagan's first term on.

Posted by: nisleib | February 25, 2010 11:41 AM | Report abuse

Here's how much the Bush Tax Cuts cost!:

http://online.wsj.com/public/article_print/SB114670305012743294.html


When you spend money to feed the goose that lays the golden egg(our capitalist economy) the cost is actually a benefit! The economy grows and delivers more money at the lower rate!!!

You Democrats don't understand that the private sector can create more jobs if the government lets it keep more of its profits! That's been the secret to the American Success story over the last 200+ years!!! Wake up!!

Posted by: FastEddieO007 | February 25, 2010 11:42 AM | Report abuse

All those who are commenting in support of GOP are big, fat liars or are crooks - sure Bush Tax cuts gave back more than 1 Trillion dollars to people. But then what 'exact' expenses you guys reduced'? Bush and GOP ran one of the biggest deficits of their times and never bothered to balance the books. If GOP and Bush were in charge of a company; they would have been tried by SEC for all the borderline fraud they committed in extra 'buget' vehicles and so on. It was the same Eron style accounting (or Greek style) by Bush Admin.

Like 'pay-as-you-go' we need another law - you can give as much tax cuts as you want provided that reduction in Government income is balanced by direct reduction in either specific entitlement to people, or war or direct service to people.

Otherwise to talk about 'tax cuts' is height of hypocracy.

Posted by: umesh409 | February 25, 2010 11:47 AM | Report abuse

nisleib - Here's a math problem for you to wrap your brain around....

You local ice cream store sells ice cream cones for $4. Typically they sell 1,000 a day. The cost of the ice cream itself is negligible as compared to the service costs and rent. One day they decide to reduce the price of the ice cream cones to $3. Soon after doing that, they've found that they typically sell 10,000 cones a day.

How much did it cost for them to reduce the price of a cone from $4 to $3?

Posted by: FastEddieO007 | February 25, 2010 11:48 AM | Report abuse

Bush tax cuts went to fat cats (top 1%), not the people.

Whatever small amount that went to the middle class was made up for with such side-effects as devastated 401ks, job losses, and budget deficits as far as the eye can see.

Posted by: Lomillialor | February 25, 2010 11:51 AM | Report abuse

@Lomillialor: "The bush tax cuts cost far more than what Ezra said. They helped cause the recession, which has cost us 700,000 job losses per month at one point. There are so many other ways those tax cuts have cost us that it's virtually incalculable."

Well, assuming this is true--which is a little like assuming the moon is made of green cheese, but let's just go with it--then the tax cuts are expiring. Shortly, it'll be as it was before, so the economy should rebound, unemployment will drop, and everything will be fixed. A Democratic utopia is practically upon us.

If our rotten economy is largely the fault of the Bush tax cuts, their expiration will, predictably, repair the economy. And things will get better, and quickly.

So, yay!

Posted by: Kevin_Willis | February 25, 2010 11:53 AM | Report abuse

FastEddie,

The tax cuts killed the goose you moron.

We are in the worst recession since the great depression, just a few years after the cuts.

Posted by: Lomillialor | February 25, 2010 11:53 AM | Report abuse

The idea that less taxes *always* increases growth is just silly. If we completely eliminated taxes it would not aid economic growth because we'd be overrun by the first country to attack as we would no longer have a military. Furthermore, there'd be either no roads or the system would be such a mess that it wouldn't work. Air traffic control would be problematic, as would regulating the power grid.

The federal government serves lots of functions that just aren't well suited to the private sector, and it has to pay for that with taxes. It's not about eliminating taxes. That's just silly. It's about finding the sweet spot for taxation which allows the private sector to flourish while providing the services necessary to keep the country together.

There's nothing revolutionary or socialist about 40% taxation and 10% taxation isn't a synonym for "freedom".

Posted by: MosBen | February 25, 2010 11:55 AM | Report abuse

@MosBen: "As I said yesterday, yes, we'd all be better off if pharma companies were permitted to sell snake oil without being tested and reviewed by the government."

Actually, we already do this. It's called homeopathy, or Nutracuticals. Or some variation thereof. The drugstores are full of 'em. And Big Pharma has been getting into that business. They know how to market snake oil.

Posted by: Kevin_Willis | February 25, 2010 11:57 AM | Report abuse

Taxes are the price of doing business imposed by the government on corporations(as well as individuals).

When the government reduces the price of doing business, they are likely to find more corporations paying these taxes(albeit at a lower rate). That is EXACTLY what happened after the Bush Tax Cuts. Overall Revenue INCREASED!!!!!

But Ezra is playing a despicable game with the numbers in order to DECEIVE!!! He is extrapolating the previously high rate on the revenues that had been paid at the low rate ans claiming that as a COST!!! This is INSANE!!!

Ezra's despicable treachery with numbers in this regard is outrageous!! He may as well call himself a vicious propagandist-----and propaganda is propaganda!

I will remind Ezra that he works for an American Corporation named the Washington Post. If many more Americans had a job like his, healthcare wouldn't be as much of a problem as it is. And more people would have jobs if there were more successful American corporations. And there would be more successful American corporations if there were less tax imposed on them by the federal government.


Posted by: FastEddieO007 | February 25, 2010 11:58 AM | Report abuse

@Lomillialor: "The tax cuts killed the goose you moron. We are in the worst recession since the great depression, just a few years after the cuts."

The tax cuts are expiring, Lom. Happy days are here again!

Soon we'll all be riding high on a government-funded easy street.

Posted by: Kevin_Willis | February 25, 2010 12:00 PM | Report abuse

Can taxes be too high? Sure. But they can also be too low.

Do you know what the top marginal tax rate was all through the fifties? Over 90%. How did the American economy do during the fifties? Clinton raised taxes; did that cause the American econcomy to crash?

The problem, for Republicans, is that we now have decades of "trickle down economics/voodoo economics" to look at. We can see when these tax cuts were done and what effect it had on our national debt.

Reagan tripled the national debt. W. Bush doubled it.

Posted by: nisleib | February 25, 2010 12:02 PM | Report abuse

The Democrats in Washington DC know they are the most radical people to ever control the power in our country and to make themselves feel better they've initiated mumbling some horribly false rationalizations to themselves.

I'm sure you're glad you could be a part of this Ezra!

Posted by: FastEddieO007 | February 25, 2010 12:02 PM | Report abuse

Kevin,

I said the tax cuts HELPED cause the recession. They clearly were one of many mistakes by many politicians (including Dems).

So stop attributing words such as "largely caused" to me.

Furthermore, Reagan and the two Bushes created 82% of the entire national debt as of Jan 2009 when Obama took office. That Republican debt not only HELPED cause the recession, but it will help prolong it now because we can't afford to spend as much to ease our way out of it as we would have had the GOP not bankrupted the USA.

There is nothing wrong with tax cuts, just so long as you also cut spending and national ambitions. What the IDIOT republicans don't understand or admit, is that with those tax cuts, we are now or will soon be forced to scale back national defense, SS, medicare, the space program, and most other programs. We are fast becoming a third world country because of the debt the GOP has put on our back.

BTW, CBO data and analysis indicates 4/5 of the current annual deficit is due to Bush's policies, not Obama's.

Posted by: Lomillialor | February 25, 2010 12:04 PM | Report abuse

FastEddie,

The most radical people in US history were our founding fathers.

The next most radical was Bush, who invaded a wrong country, suspended habeous corpus and the geneva conventions, publicly announced we would torture people, outed a covert CIA agent, doubled the national debt in 8 years, allowed 911 to happen after being warned something was imminent, lied about who attacked us on 911, helped rob $100s billions from western states in the 2001 fake energy crisis.

Posted by: Lomillialor | February 25, 2010 12:08 PM | Report abuse

Lomillialor - I'm on your side, but could you provide a link to that 82% number?

I know Reagan tripled the national debt and Dubya doubled it, but I'd love a study that breaks it all out.

Thanks

Posted by: nisleib | February 25, 2010 12:09 PM | Report abuse

Kevin,

Any child can figure out that truly good times won't return as soon as the tax cuts expire. Why can't you figure it out?

Posted by: Lomillialor | February 25, 2010 12:09 PM | Report abuse

nisleib

use google

There are plenty of charts around showing the figures (total and for each president).

Posted by: Lomillialor | February 25, 2010 12:13 PM | Report abuse

No Lomilliator---the three most radical people in history are Hitler, Stalin, and Mao----all of them are Progressives who think that consolidating power into a central authority where sweeping decisions for "the betterment of mankind" can be made most effectively.


The forefathers were the least radical, constructing a very humble form of government that distributed power evenly across all people with checks and balances built-in that prevent it from being consolidated by power-hungry elites.

Posted by: FastEddieO007 | February 25, 2010 12:13 PM | Report abuse

Fast Eddie, are you denying that some level of taxation is necessary? If the government eliminated all taxation, and thus all government spending, we'd all be better off?

And Kevin, that may be, but are you disputing my sarcastically-made point that the government has been involved in healthcare for decades and that many of the things it does are beneficial? I'm not arguing for the particular bills before Congress (at least not in this post), but responding to the people that say that government should stay out of healthcare. To them I say 1) too late, and 2) are you sure you want the government completely out of healthcare?

Posted by: MosBen | February 25, 2010 12:13 PM | Report abuse

Fast Eddie, are you denying that some level of taxation is necessary? If the government eliminated all taxation, and thus all government spending, we'd all be better off?

No---not at all. In fact my idea would be to design government around the principles of a Negative Feedback Amplifier, where tax rates are increased as prosperity is achieved, i.e. link the tax rate to GDP Growth....this would have a stabilizing function, i.e. slow growth down so that the economy can better accomodate it.

But a recession is like having a goose that lays the golden eggs gets a cold. You need to ease up your demand on the poor bird and let it get healthy----tax cuts are a VERY important.

The USA can probably afford some of the most lavish entitlements, BUT we need to prioritize economic growth, which occurs at lower tax rates. And I belive the federal government needs money to do the necessary things.

Federalizing Healthcare though? Probably a bad idea all around...keep in mind we don't even federalize education! And how responsive is your local school's spending/quality responsive to the needs of the community?

Posted by: FastEddieO007 | February 25, 2010 12:19 PM | Report abuse

FastEddie,

We were talking of the most radical people in US gvmt. Pay attention.

Posted by: Lomillialor | February 25, 2010 12:26 PM | Report abuse

FastEddie,

The forefathers are almost unopposed in the world for their radicalism. They created the most liberal form of gvmt ever seen. They risked lives and property to fight and defeat the British empire.

Posted by: Lomillialor | February 25, 2010 12:29 PM | Report abuse

So your complaint is with the spending only, and not with the regulations? Furthermore, aren't healthcare subsidies *like* a tax cut insofar as it's sending money from the federal government back into the marketplace?

As to your theory about how taxes should work, should the government cut spending to match those tax cuts? Where should the spending cuts come from? Aren't people also helped during recessions from programs like unemployment insurance, which allows them to keep putting money into the economy? Didn't the stimulus plan include lots of tax cuts?

Posted by: MosBen | February 25, 2010 12:30 PM | Report abuse

government has been involved in healthcare for decades and that many of the things it does are beneficial


Many of the things that the federal government doe are NOT beneficial, with Exhibit A being the tax exclusion that artificially couples employment with healthcare! This has become the number one liability, causing so much dysfunction that we require reform. Any reform should thus start there.

The federal government's involvement has generally led to dysfunction due to hidden agendas by both sides of the aisle!

The few things that the federal government does right, such as regulation on insurance companies and third party arbitration of insurance recission claims would be severely compromised as the federal government began playing a more significant role...i.e. what if your recission claim with your insurance company was based around a federal directive to not cover a medical service in a particular case---suddenly the federal gov't is not a 3rd party, but a conflicted party---how can it fairly arbitrate?

Posted by: FastEddieO007 | February 25, 2010 12:36 PM | Report abuse

Actually TAX RATES have as much to do with spending as the price of the slice of pizza at a local stand.

Tax Rates should be set purely for the best rate of return! Period....i.e. the federal government should be in the business of profits, so long as they are looking long term!


Spending will need to be wherever it needs to be. If you ran a Pizza stand, could you spend money on a fancy big screen TV...well does your profit center support it?

The Bush Cuts were a clear case of cutting taxes to spur growth---they were a NET GAIN! To look at them any other way is false. They represent one of the most successful STIMULUS bills ever enact by a government! Unfortunately too many people with a radical agenda have tried to cloud that message out!

Posted by: FastEddieO007 | February 25, 2010 12:43 PM | Report abuse

Eddie - The Bush tax cuts were NOT a net gain. They did not pay for themselves. This is a matter of historical fact.

Posted by: nisleib | February 25, 2010 12:50 PM | Report abuse

"Health-care reform has a 10-year cost of about $950 billion."

Care to wager on what the actual costs will be? I'll be it makes the "costs" of the Bush tax cuts look like budget dust.

Stop charactizing tax cuts as a cost. Only in DC would someone consider money taxed a lower rate that isn't theirs in the first place a cost.

Posted by: NoVAHockey | February 25, 2010 12:54 PM | Report abuse

~~~
The Bush tax cuts were NOT a net gain. They did not pay for themselves. This is a matter of historical fact.
~~~

Ohh really.....

http://online.wsj.com/public/article_print/SB114670305012743294.html

--------
Between 2001 and 2004 (the most recent data), the percentage of federal income taxes paid by those with $200,000 incomes and above has risen to 46.6% from 40.5%. In other words, out of every 100 Americans, the wealthiest three are now paying close to the same amount in taxes as the other 97 combined. The richest income group pays a larger share of the tax burden than at anytime in the last 30 years with the exception of the late 1990s -- right before the artificially inflated high tech bubble burst.

Millionaires paid more, too. The tax share paid by Americans with an income above $1 million a year rose to 17.8% in 2003 from 16.9% in 2002, the year before the capital gains and dividend tax cuts.

The most astounding result from the IRS data is the deluge of revenues from the very taxes that were cut in 2003: capital gains and dividends. As shown in the nearby chart, capital gains receipts from 2002-04 have climbed by 79% after the reduction in the tax rate from 20% to 15%. Dividend tax receipts are up 35% from 2002 to 2004, even though the taxable rate fell from 39.6% to 15%. This is as clear evidence of a Laffer Curve effect as one will find: Lower rates produced increased revenues.

What explains this surge in tax revenues, especially at the high end of the income scale? The main factor at play here is the robust economic expansion
--------

Do you remember the recession that immediately followed 9-11? My best friend worked as a high tech recruiter---the phones went from being lit up to completely dark. The Bush Tax Cuts turned it around!

Posted by: FastEddieO007 | February 25, 2010 12:55 PM | Report abuse

Ezra - HOW DO YOU GET THE $1 TRILLION COST FOR BUSH'S TAX CUT? Do you "assume" that the amount of revenues taxed at the lower rates would've been taxed at the higher rates?

If so, you are guilty of a very despicable liberal lie! Please come clean?

Posted by: FastEddieO007 | February 25, 2010 12:59 PM | Report abuse

"As the debate turns to economic stimulus, we’re starting to hear this: “Bush realized that the economy needed help, so he asked Congress to enact tax cuts to provide stimulus. And this turned the economy around.”

None of this is true.

There were two main Bush tax cuts — EGTRRA, enacted in mid-2001, and JGTRRA, enacted in 2003.

EGTRRA arrived in the middle of a recession, but that was an accident. It was devised in 1999, when the economy was booming, to defend Bush’s right flank against Steve Forbes. During the 2000 campaign, Bush sold it as a way of returning budget surpluses to the people, with not a hint that it had something to do with fighting recession. The recession story was an after-the-fact reinvention.

And EGTRRA didn’t seem to help all that much. Formally, the recession ended in late 2001, but most labor-market indicators continued to worsen into mid-2003.

JGTRRA, which mainly cut tax rates on capital gains and dividends, was followed by a real recovery. And the Bushies naturally claimed the credit. But the real source of the expansion was the housing boom, which had very little to do with the tax cut.

This is today’s history lesson.

Posted by: nisleib | February 25, 2010 1:08 PM | Report abuse

The Bush Cuts were a clear case of cutting taxes to spur growth---they were a NET GAIN! To look at them any other way is false. They represent one of the most successful STIMULUS bills ever enact by a government! Unfortunately too many people with a radical agenda have tried to cloud that message out!

Posted by: FastEddieO007 | February 25, 2010 1:27 PM | Report abuse

Eddie - You can keep saying that, but it won't make it true.

The biggest tax cutters were Reagan and Dubya. The biggest increases in the national debt were done during Reagan (tripled) and Dubya (doubled.)

Growth during the Dubya was caused by the construction/housing bubble, not tax cuts. Heck, his tax cuts were never even supposed to be stimulus. They were supposed to give back to America the surplus Clinton left Dubya.

Posted by: nisleib | February 25, 2010 1:37 PM | Report abuse

The tax cuts cost money because they were funded by deficit. When you lower taxes but increase spending (like, say, on a WAR) it's not really a tax cut, it's increasing the deficit.

Posted by: MercuryChaos | February 25, 2010 1:40 PM | Report abuse

The tax cuts cost money because they represented a decrease in government revenue without a decrease in spending. So doing the tax cuts incurred a debt that we have to pay back. The tax cuts didn't spur on economic growth enough to increase revenues to pay for the tax cut.

Posted by: MosBen | February 25, 2010 1:41 PM | Report abuse

Republican Logic

1) Cut Taxes
2) ?????????
3) Profit!

Since Reagan we have had 20 years of Republican rule (Reagan 8, HW Bush 4, W Bush 8) and 9 years of Democratic Presidents (Clinton 8, Obama 1) and how has the national debt done? We have plenty of history to use in evaluating the effect of trickle down/voodoo economics. And it isn't pretty.

Posted by: nisleib | February 25, 2010 1:52 PM | Report abuse

If the government lowers the cost of doing business in the USA and more people end up doing business at the lower cost, DOES IT REALLY COST ANYTHING?

--------
Between 2001 and 2004 (the most recent data), the percentage of federal income taxes paid by those with $200,000 incomes and above has risen to 46.6% from 40.5%. In other words, out of every 100 Americans, the wealthiest three are now paying close to the same amount in taxes as the other 97 combined. The richest income group pays a larger share of the tax burden than at anytime in the last 30 years with the exception of the late 1990s -- right before the artificially inflated high tech bubble burst.

Millionaires paid more, too. The tax share paid by Americans with an income above $1 million a year rose to 17.8% in 2003 from 16.9% in 2002, the year before the capital gains and dividend tax cuts.

The most astounding result from the IRS data is the deluge of revenues from the very taxes that were cut in 2003: capital gains and dividends. As shown in the nearby chart, capital gains receipts from 2002-04 have climbed by 79% after the reduction in the tax rate from 20% to 15%. Dividend tax receipts are up 35% from 2002 to 2004, even though the taxable rate fell from 39.6% to 15%. This is as clear evidence of a Laffer Curve effect as one will find: Lower rates produced increased revenues.

What explains this surge in tax revenues, especially at the high end of the income scale? The main factor at play here is the robust economic expansion
--------

Posted by: FastEddieO007 | February 25, 2010 1:56 PM | Report abuse

MosBen - REVENUE INCREASED AS A RESULT OF BUSH TAX CUTS!!!

Do you own a business? How do you think people with businesses set prices? If they want to increase their revenue, can they simply raise prices? Does that work?

If my kid runs a lemonade stand and sells 10 cups of lemonade at 50 cents each, is it reasonable to assume she could have increased her revenue by making the price of each cup be $100 a cup?

If the government reduces the cost of doing business in a timeframe where it is becoming increasingly unfavorable for doing business(i.e. a recession) the result is prosperity and growth.

Posted by: FastEddieO007 | February 25, 2010 2:02 PM | Report abuse

Fast Eddie, yes, there can still be a net positive cost if the government "decreases the cost of business" and "more people end up doing business". If you decrease the government's revenues through a tax cut but don't balance that with a reduction in expenses, that creates new debt that must be paid for eventually as well as interest on that debt. The hope would be that a sudden influx of money from a decrease in taxes would stimulate the economy enough that, and this is the important bit, the economy grew enough to replace the lost revenues from the decreased taxes with new revenues from the growth.

This did not happen with the Bush tax cuts. The tax cuts increased the debt but revenues did not increase to pay for that debt. And it's not like the government's some irresponsible guy down the street. That's *our* debt.

Posted by: MosBen | February 25, 2010 2:09 PM | Report abuse

Tax Rates have absolutely no relationship to spending, other than if the government decides to spend more than it collects in taxes it will run a deficit.

Tax Rates are like the price of a cup of lemonade....there is a certain optimum price that will maximize the return on investment.

The Bush Tax Cuts were justified as an argument that the rates did not amount to an optimum rate of return----there was still room for growth and the economy suffered from under-investment. Leaving more money in the private economy allowed for the economy overall to grow.


You liberals cannot seem to grasp this basic concept---many of you seem more bent on conveying the subtext of your radical agenda to dismantle the capitalistic economy.

Posted by: FastEddieO007 | February 25, 2010 2:10 PM | Report abuse

Two Scenarios:

My Kid sells 10 cups of lemonade at $1 a cup.
(Net=$10)

OR

My kid sells 100 cups of lemonade at 50 cents a cup. (Net=$50)

How much does it cost my kid's lemonade business to lower the price of a cup of lemonade?

Posted by: FastEddieO007 | February 25, 2010 2:14 PM | Report abuse

Also, that isn't to say that the pre-Bush tax cut rates were the perfect ideal, or that that we'll be hunky dorey when they expire. There's no one ideal tax rate, but it's also true that lower taxes are not always better.

If anyone believes that, I'll be happy to review their plans for how society will function if taxes are eliminated completely.

Posted by: MosBen | February 25, 2010 2:14 PM | Report abuse

The deficit was a result of the recession. Period. The government suddenly found itself with a smaller economy to tax. Bush's tax cuts gave the appearance of increasing the deficit---but that would only be based around a short-sighted perception.

Economics Rule Number 1: Supply And Demand----if you reduce the price, you increase demand. Lowering the price on doing business, increased the demand for doing business. The increased demand for doing business leads to MORE BUSINESS....ultimately more business, even at a lower rate, leads to more revenue.

Had Bush not cut taxes, do you honestly believe there wouldn't have been more debt for longer time?

Posted by: FastEddieO007 | February 25, 2010 2:21 PM | Report abuse

Lower taxes will nearly always lead to more growth. More growth isn't always the top priority though.

Indeed I don't say the federal government shouldn't keep taxes as low as possible. What I say is it should set it for maximum return on investment---like my kid's lemonade stand.

During a recession, the government should lower rates as much as possible----that is when economic growth SHOULD BE the top priority! But any other time, there are other key factors.

Certainly there is a role for the federal government, and it will need money to play that role. American businesses will have to pay the piper sooner or later, and ultimately they benefit from the federal government enforcing rules and providing basic functions like National Security and regulating interstate commerce.

Posted by: FastEddieO007 | February 25, 2010 2:25 PM | Report abuse

If ALL tax cuts were done by simple majorities, or even by budget reconciliation, I wouldn't mind.

But ANY spending increase done by the reconciliation process is distasteful.

The difference? Tax cuts mean that the government confiscates LESS money from the people, whereas spending increases mean that the government confiscates MORE moeny from the people. Let us head in the direction of LESS confiscation.

Posted by: MKS1 | February 25, 2010 2:44 PM | Report abuse

Very well said MKS1!

So we all agree now right? Using reconcillation for changing policy in a way where the government is doing less to us is fine----but when they are enacting policies that will dramatically alter our way of life, using the reconcilliation would be a complete abomination.

If you disagree please respond, otherwise I will assume we've reached consensus.

Posted by: FastEddieO007 | February 26, 2010 12:37 AM | Report abuse


Now that, that there...
Ezra, I just love when you do stuff like that.

Posted by: dcunning1 | February 26, 2010 9:26 AM | Report abuse


The tax cuts expire? Yes, they do.
You can, once more, RECONCILE another tax cut bill back into law.
How you going to RECONCILE 40,000+ people who have 'expired' for lack of health care back in?
Think about them APPLES...and oranges.

Posted by: dcunning1 | February 26, 2010 9:32 AM | Report abuse

In 2003, 450 economists, including ten Nobel Prize laureate, signed the Economists' statement opposing the Bush tax cuts, sent to President Bush stating that----------

"these tax cuts will worsen the long-term budget outlook... will reduce the capacity of the government to finance Social Security and Medicare benefits as well as investments in schools, health, infrastructure, and basic research... [and] generate further inequalities in after-tax income."

Posted by: ws84 | February 27, 2010 8:00 AM | Report abuse

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