Let's start with your first criticism of Mr. Limbaugh and his purported "lies":
Rush claims that lowering taxes raises revenues.
That is 100% false.
Actually, it's not 100 percent false. In a pioneering study by the Adam Smith Institute in the mid-1980's, an analysis was performed of the experience of several countries in raising and lowering marginal tax rates. The findings were contrary to your statement and consistent with Rush's statement in many cases (recall that you labelled the statement "100 percent false", not just sometimes false and sometimes true).
Here is the entire report (not that you will read it since your mind does not appear to be receptive to new information, but in case anyone else wants to):
adamsmith.org
This study recites several examples in which marginal rates were lowered and the results were that (1) overall tax revenues went up; (2) the affluent ended up paying more in taxes than they had before (reduced incentive to shelter and increased incentive to work); and (3) upward mobility was enhanced because new arrivals into the affluent income levels did not have a large percent of their income confiscated in taxes.
Now, the Adam Smith Institute is a conservative institution; no doubt about that. But the facts in its report are real. So you can't say that 100 percent of the time revenues go down when tax rates go down.
In fact, in the U.S. that hasn't always been the case either. Two examples:
John Kennedy cut tax rates while he was President. He faced opposition from many within his party, but he accomplished a significant rate cut. Total federal revenues from 1960 (before Kennedy took office) through 1964 (after he was dead) were:
1960 $92,492,000,000
1961 $94,388,000,000
1962 $99,676,000,000
1963 $106,560,000,000
1964 $112,613,000,000
whitehouse.gov
One writer described the tax cut and its aftermath as follows:
Mr. Mellon's Plan
In 1920, during the postwar recession, Republicans swept to victory in the White House and Congress by pledging a "return to normalcy" on tax rates, meaning repeal on the high rates that had been imposed to finance the war. Andrew Mellon, the Pittsburgh financier who became President Harding's Treasury Secretary, insisted that the high wartime rates were stifling the economy, and that their repeal would bring prosperity and government revenues sufficient to pay off the war debt.
In 1962, President [John F.] Kennedy wanted to fulfill his campaign pledge to"get the country moving again." Rep. Wilbur Mills, then chairman of the House Ways and Means Committee, recalls that he, Treasury Secretary Douglas Dillon and the President were aware of what Mellon had done in the 1920s. The idea of stimulating the economy through deficit spending was rejected and a tax-cutting program ordered up. By way of introducing the Kennedy tax program, which sharply reduced personal and business tax rates, Mr. Mills explicitly argued that the lower rates would mean higher revenues.
Rep. Mills said: "There are two roads the government could follow toward a larger, more prosperous economy -- the tax reduction road or the government expenditure road gets us to a higher level of economic activity...with more labor and capital in the private sector being used to produce goods and services on government orders. The tax reduction road gets us...to a bigger, more prosperous, more efficient economy with a larger and larger share of that enlarged activity initiating in the decision of individuals to increase consumption and business concerns to increase their productive capacity."
The concept that Mellon bore in mind in the policy debates of the early 1920s, was that there are always two rates that will produce the same revenues -- one rate consistent with high productivity and one with low productivity. When the rate is zero, of course, there are no revenues, and when the rate is 100%, clearly revenues increase. But in between 0% and 100% rate reduction is a gamble, because obviously sometimes rate reduction means a revenue loss -- the extreme example being a cut from 1% to zero.
Clearly the Kennedy rate cuts were successful gambles. The Treasury, which did not take into account the effects of rate reduction on economic activity, projected six-year revenue losses of &89 billion as a result of the 11962-64 cuts. Instead, revenues increased by $54 billion over that period. Mr. Mills to this day complains that "Treasury wouldn't give us credit for the revenue gains."
polyconomics.com
And then there is the example of Ronald Reagan. It is widely believed that tax revenues went down while Reagan was President, and this resulted in huge deficits. However, a look at the revenue figures shows that they went up over the course of his Presidency, even if you adjust them for inflation. The initial downturn in revenues from the tax cut was more than replaced by an upsurge in reported income to be taxed later on from economic growth and greater participation in the tax system.
Here are the figures. Reagan cut taxes 5% in 1981 and 10 percent each in 1982 and 1983. Predictably, this caused revenues to temporarily decline (though not by a lot). The actual figures are:
whitehouse.gov
1980 $517,112,000,000
(Reagan elected, inherits next budget)
1981 $599,272,000,000
(5 percent tax cut)
1982 $617,766,000,000
(10 percent tax cut)
1983 $600,562,000,000
(10 percent tax cut)
1984 $666,486,000,000
1985 $734,088,000,000
1986 $769,215,000,000
1987 $854,353,000,000
1988 $909,303,000,000
1989 $991,190,000,000
Even if you adjust these figures for inflation, revenues were substantially higher in 1989 than they were in 1981.
In 1980, the last year before the tax cuts, tax revenues were $956 billion (in constant 1996 dollars).
Revenues exceeded that 1980 level in eight of the next 10 years. Annual revenues over the next decade averaged $102 billion above their 1980 level (in constant 1996 dollars).
Any increase in budget deficits was therefore the result of spending increases rather than tax cut-induced revenue decreases.
heritage.org
Now, you can dismiss this as being from "conservative sources" and all the usual stuff you do (besides looking at the actual numbers). But the actual numbers indicate that revenues went down only once during the Reagan administration, and only by a very modest amount. When Reagan became President annual federal revenues were $517,112,000,000. When he left office they were $991,190,000,000. That isn't conservative or liberal politics; it's strictly arithmetic.
So you can criticize Rush for "lying", but it doesn't look to me like he got that one wrong. Your first "Rush lie", it turns out, wasn't 100% false at all. You were mistaken. But we've come to expect that from you. It's as regular as a World Series without the Cubs. |
