Debate Exposes Obama's Ridiculous Tax Myth

Blaming tax cuts for a recession is a contention so ridiculous that even a fake economic study doesn't exist to prove it.

Not long ago, a former Obama staffer working with a left-wing think tank concocted a study using an assortment of cooked-up assumptions that claimed Republican presidential nominee Mitt Romney would have to increase taxes on the "middle class."

In Washington, this is referred to as an "independent study." At the Denver debate, the president called this an "impartial" analysis.

The report, by the Tax Policy Center, "estimated" that Romney's revenue-neutral tax plan would necessitate an $86 billion tax increase on the middle class, and more crucially, it allowed every Democrat in the country to pretend that an objective group had run the numbers somewhere and found that the GOP nominee was going to hike taxes on every family by -- I don't know, let's say -- $2,000 a year! Why not, right?

Few in the media were particularly put off by the fact that this fictitious assertion was endlessly repeated by Obama and friends. As the president explains it, there's simply no way to cut taxes and grow revenue at the same time. Math is math, after all. The president, likely because of his own record, seems to have forgotten about economic growth.

A recent (independent!) paper by the American Enterprise Institute found that even using the Tax Policy Center's parameters, Romney could reform the tax code and cut taxes by 20 percent and, with the modest growth encouraged by cuts, the plan could remain revenue-neutral. Would it? Economic forecasting is about as reliable as campaign tax plans. The president's economic policy, on the other hand, has been deployed and has been focused on wealth transfer in the name of fairness and spending in the name of recovery -- all of it rooted in the necessity for higher taxes.

Take this piece of warped logic from Obama: If Romney were to keep tax rates exactly where they are, he would be in fact cutting taxes for the rich. Only raising taxes can keep the status quo.

The president's plan already features a slew of increases. Some, such as taxes on investments, might not be felt directly by you -- at least not yet. Obamacare, as we know, is loaded with tax hikes you'll pay soon enough, one way or another. And the individual mandate is a tax (at least according to the administration) that promises to be one of the largest in American history.

Moreover, the American Action Forum recently released a study (an independent one!) examining the Obama administration's tax plan itself: To achieve primary budget balance by 2022, as Obama claims he can, taxing only millionaires would require raising their taxes to 123.9 percent. Taxing people making $500,000 would require an increase to 95.5 percent, and assuming the deficit reduction Obama promises, taxpayers making $30,000 would see a $1,500 hike in taxes every year over the next 10.

So even if someone could conduct a study factoring in every make-believe tax-cheating plutocrat of the liberal imagination, there simply aren't enough people to pay for Obamaworld. But it's one thing to believe in the supernatural ability of raising taxes to fix the economy and lift the poor; it's another to argue that lower tax rates can cause mass destruction.

Democrats regularly maintain that the George W. Bush administration's policies have driven the country into a metaphorical "ditch." Which policies, exactly, caused this wreck? Obama claimed in Denver, as he has often, that lower tax rates helped cause the recession. Now, blaming tax cuts for a recession is a contention so ridiculous that even a fake economic study doesn't exist to prove it.

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  • sarcasmic||

    Which policies, exactly, caused this wreck?

    Deregulation!

    Bush single handedly repealed all the financial regulations, allowing casino capitalism to run amok on Wall Street!

    And we all know what happens in casinos! People lose!

    Bushitler did it!

    Aaaaaaauuuuugggghhhh!

  • califernian||

    no seriously, is the new democrat talking point that the recession is in part due to not taxing the poor and middle class more?

    Really?

  • Suki||

    I thought Obama claimed that we have laws that give tax breaks to "da korporazionz" for sending jobs overseas. He said it again today at some campaign event. I can't tell what he is talking about specifically, besides our oppressive business tax rates making other countries more appealing because of their laws.

  • T o n y||

    Obama didn't claim that the Bush tax cuts contributed to the recession. He said they, along with the two wars and Bush's domestic programs, contributed to the deficit. The deficit and the weak economy were conflated in that debate to a puzzling degree. The Bush tax cuts are, in fact, the single largest policy contributor to the federal deficit.

  • ||

    When Shrike pulls out each morning, do you guys race to sing the Obama Song before your erection dissipates?

  • Tman||

    Well there was an image I would have preferred to be subjected to AFTER lunch instead, thanks Res.

  • ||

    Sorry. I'll write it in Mandarin next time.

  • Tman||

    That won't help either. I'm fluent in the language of fruits. Papaya is my specialty.

  • ||

    True Americans stick with apples. Don't be such a foreigner!1!!!1

  • LTC(ret) John||

    That is no help - I just ate and ....urp...!

  • CampingInYourPark||

    Yeah, that deficit has absolutely nothing to do with the 100 million working age Americans sitting on their ass and the never ending reasons for the feds to cut another check.

  • ||

    Throwing logical statements at this guy is about as effective as trying to rip through titanium plating with a boxing glove -- your attempts are praiseworthy, but you'll still be doing it when the Sun reaches the final stage of its cycle.

  • Drake||

    I started to reply, then realized the futility.

  • ||

    It's a fucking sockpuppet. Responding to it is like responding to a computer program designed to spit out things that aggravate you. Ignore it.

  • LTC(ret) John||

    I have finally come around to your reasoning (drink?). It really isn't worth it.

  • Jumbie||

    Tony is Dr. Sbaitso?

  • Hyperion||

    Don't worry, Tony has already informed us that if Obama just chants some magical words, the power of his great oratorical skills, as on display last night, will keep the sun from becoming a red giant when it exhausts all of it's fuel, and we will all be saved. However, if the Romulan wins, we are all doomed. So you see good Obamney is better than bad Obamney. So vote for Obamney and save us all.

  • ||

    Here's a chart showing the extent of Tony's retardation:

    http://desmond.imageshack.us/H.....es=landing

    Tony's retardation is represented by VY Canis Majoris.

  • ||

  • T o n y||

    Certainly the Bush recession contributed massively to the budget gap. I said policy contributor. It is a fact that the Bush tax cuts contributed the most to the deficit of any policy choice taken since Bush took office.

  • sarcasmic||

    Deficits are caused by spending.

    If you get a pay cut you can spend less or you can rely on the credit card.

    But don't blame your boss when the bill comes due. It ain't his fault that you're a stupid fuck who used your credit card to pay the mortgage.

  • T o n y||

    Here's how a budget works:

    Revenues
    Outlays

    A balanced budget means these things are equal. A deficit means revenues are smaller than outlays. A surplus means outlays are smaller than revenues. A tax cut reduces revenues.

    Next semester: multiplication and division.

  • OldMexican||

    Re: Tony,

    A balanced budget means these things are equal. A deficit means revenues are smaller than outlays.


    This is evidence of the totally backward way your mind operates.

    A deficit means that OUTLAYS are higher than revenues, not that revenues are smaller. A person has 100% control of his or her spending, not of his or her revenues. Revenue comes from trade or contgributions, which totally depend on the will of OTHERS.

    A tax cut reduces revenues.


    Yeah, and a discount reduces profits, which is why Walmart is on the ropes... Oh, wait - NOT.

  • Calidissident||

    We just had to spend more money! It's not enough that revenues increase every year, they have to catch up to spending! More taxes on the rich! That will solve everything!

  • sarcasmic||

    A deficit means revenues are smaller than outlays.

    Time for outlays to be cut until they are equal to revenues.

  • Red Rocks Rockin||

    A balanced budget means these things are equal. A deficit means revenues are smaller than outlays. A surplus means outlays are smaller than revenues. A tax cut reduces revenues.

    You left out part 4:

    A spending cut reduces outlays.

  • PapayaSF||

    A question I keep asking Tony: If Congress consistently spends 10-40% more money than they have, how much do revenues have to increase in order for the budget to balance?

    Hint: This is a trick question.

  • ThatSkepticGuy||

    "Next semester: multiplication and division."

    Oh, boy. This should be like learning the origins of the Universe from Jerry Falwell.

  • dinkster||

    Order of operations via T O N Y: Everything in the parenthesis happens BEFORE the Bushitler violates causality and ruins Obama's recovery plan. Now divide by zero.

  • ThatSkepticGuy||

    "It is a fact that the Bush tax cuts contributed the most to the deficit of any policy choice taken since Bush took office."

    It is a fact that the sun rises because the rooster crows.

    Correlation IS causation! It is, it is, It IS!

  • ThatSkepticGuy||

    "It is a fact that the Bush tax cuts contributed the most to the deficit of any policy choice taken since Bush took office."

    It is a fact that the sun rises because the rooster crows.

    Correlation IS causation! It is, it is, It IS!

  • OldMexican||

    Re: Tony,

    The Bush tax cuts are, in fact, the single largest policy contributor to the federal deficit.


    Revenue INCREASED after the tax cuts.

    Year Revenue Spending Surp/Def
    1993 $1,154.0 $1,409.4 -$255.1
    1994 $1,258.6 $1,461.8 -$203.2
    1995 $1,351.8 $1,515.8 -$164.0
    1996 $1,453.1 $1,560.5 -$107.4
    1997 $1,579.2 $1,610.1 -$21.9
    1998 $1,721.7 $1,652.5 +$69.3
    1999 $1,827.5 $1,701.8 +$126.6
    2000 $2,026.2 $1,789.0 +$236.2

    2001 $1,991.1 $1,862.9 +$128.2
    2002 $1,853.1 $2,010.9 -$157.8
    2003 $1,782.3 $2,159.9 -$377.6
    2004 $1,880.1 $2,252.9 -$412.7
    2005 $2,153.6 $2,472.0 -$318.3
    2006 $2,406.9 $2,655.1 -$248.2
    2007 $2,568.0 $2,728.7 -$160.7
    2008 $2,524.0 $2,982.5 -$458.6

    2009 $2,105.0 $3,517.7 -$1,412.7
    2010 $2,162.7 $3,456.2 -$1,293.5
    2011 $2,173.7 $3,818.8 -$1,645.1 (EST)

    As you can see, from 2004-2008 the deficit was actually going DOWN, not up.

    http://blogs-images.forbes.com.....taxes1.jpg

    What contributes to the deficit is SPENDING, Tony - not taxation. Spending is the ONLY thing that is totally under the control of the government. It can stop spending tomorrow. REVENUE depends on how much people are willing to pay, or their ability to pay. THAT cannot be controlled by government even if it went into full tyranny mode - just ask the North Koreans, or the Cubans.

  • T o n y||

    Find an economist who argues that revenues wouldn't have been higher without the Bush tax cuts--otherwise known as reductions in revenue.

  • The Craig||

    I guess we should also assume that, in the absence of these higher revenues the government does not spend even more?

  • T o n y||

    It didn't seem to matter what level revenues were at when Bush was spending.

  • OldMexican||

    Re: Tony,

    It didn't seem to matter what level revenues were at when Bush was spending.


    I thought you said the problem was the tax cuts. Yes, you did:

    The Bush tax cuts are, in fact, the single largest policy contributor to the federal deficit.

    You cannot have it both ways. Either the problem is spending (which would be correct) or tax cuts. You first say it's the tax cuts only - now you bring out the Bush spending. You can argue that you should not cut taxes without cutting spending, and you would be right, but you're not arguing that because it would contradict your cherished "aggregate demand" economic theory. That places you in a tough bind, Tony.

  • T o n y||

    If your goal is a balanced budget, you shouldn't cut taxes until you've identified spending to cut.

    You're trying to play games with arithmetic. I know you want less taxing and spending (or no taxing and spending). But your policy wishes don't change the fundamental nature of addition and subtraction.

  • XM||

    Tax cuts means you get to keep more of the money that you earned. That's it. It's not a handout. You can spend that money on the economy or expand your business, or whatever. That means more revenue. And if the government is after your money less, then you have less incentive to move your money around.

    Who cares whether tax cuts or spending cuts come first? If you cut tax first, then cuts to the inefficient programs is inevitable, because there are less money to fund them.

  • Sevo||

    T o n y| 10.4.12 @ 3:05PM |#
    ..."But your policy wishes don't change the fundamental nature of addition and subtraction."

    Shithead, there's no one here who hasn't mastered some degree of math. Bringing that up suggests you're hiding your true aim, and sure enough, shithead, that's exactly what you're doing.
    You're right the math is simple; cut costs, you cut the deficit. Is that so hard for an ignoramus like you to understand?

  • OldMexican||

    Re: Tony,

    Find an economist who argues that revenues wouldn't have been higher without the Bush tax cuts--otherwise known as reductions in revenue.


    I can find them all day long at MSNBC. That does not mean they're right - the evidence is right in front of you:

    http://blogs-images.forbes.com.....taxes1.jpg

    Besides this, be wary of any economist that denies the Law Of Opportunity Cost. Just because you presume to obtain more revenues by simply raising the tax burden does not mean you will obtain more revenues. People act with self-interest, whether you like it or not, and will do whatever is necessary to lower their exposure to government's greedy hands. This is the reason why revenues never break the 19% of GDP line, ever.

    Instead, SPENDING can be perfectly controlled, because spending is an action taken by government, not by others.

  • fish||

    Mex.....dude....you're just wasting your time. In T o n y s world there simply won't ever be enough for democratic wants.

  • Raistlin Majere||

    Oh, I don't know. Whenever T o n y shows up and I scroll down to see that Old Mexican responded (and subsequently takes him apart like field stripping a rifle) it makes even the gloomiest day at least a little bit brighter.

  • Ayn Random Variation||

    I'm amazed anyone even engages this clown. People like Tony and Obama do not understand the difference between tax rates and tax revenues. Their brains can not grasp that you can lower rates, which leads to growth, which leads to increased revenues.

    Additionally, people like this don't really care about the results of increasing tax rates. Increasing tax rates is the end in and of itself. It's all about "fairness". Obama even admitted this when he said he would increase the cap gains rate even if it didn't result in increased revenues, in the interest of fairness.

  • Suki||

    +teh infinitiez

  • dinkster||

    I dunno, I like Old Mexican's replies. They are well thought out. If T O N Y's only contribution is to set the gears a'motion from Old Mexican, than he (ironically) is a positive influence on this forum.

  • califernian||

    If only we had taxed the middle class MOAR during the last 4 years we'd be doing just fine!

  • henryknox||

    Spending is the largest policy contributor to the federal deficit. The treasury took in the most money ever in 2007 I believe after the tax cuts. Congress chose to spend it rather than pay down the deficit.

  • JohnD||

    Damn Tony, did you even read the article? Are you really that stupid? People like you give me a headache.

  • Stormy Dragon||

    As much as I hate to admit it, the simple fact is that since the Bush tax cuts, unemployment has increased steadily. So the simple tax cuts=more jobs narrative Romney has been pushing simply doesn't fit with the facts.

    At best you can say that the stimulative effects of tax cuts are being dwarfed by something far more powerful, in which case unless Romney is ready to identify what that more powerful thing is and what he intends to do about it, his tax proposals aren't going to have an effect.

    The other possibility is that we have to consider whether we're "over the hump" on the laffer curve and have actually reached the point were further tax decreases don't improve the economy. Which doesn't mean we shouldn't reduce the government, only that our focus should be on spending cuts rather than tax cuts.

  • robc||

    TARP, QE1-3, Medicare Part D.

    That more powerful thing is easy to name.

    The other possibility is that we have to consider whether we're "over the hump" on the laffer curve

    You know which part of the Bush tax cut significantly decreased tax revenue? The 15%-10% new tax bracket created. The rest of the taxes are over the hump and their cuts had no to slightly positive effects.

    Guess which part of the Bush tax cuts Obama wants to keep?

  • Generic Stranger||

    As much as I hate to admit it, the simple fact is that since the Bush tax cuts, unemployment has increased steadily.

    No, it didn't. Check out this chart.

    Unemployment rose after the dot-com bust, then sunk again after the Bush tax cuts until the housing bust happened in 2007. With the given data, there's no way to correlate the Bush tax cuts with anything except maybe lowered unemployment.

  • CampingInYourPark||

    "As much as I hate to admit it, the simple fact is that since the Bush tax cuts, unemployment has increased steadily."

    Obviously you've never looked at an unemployment rate chart from 2001 to present. There's nothing "steady about the increase in the unemployment rate. Most of the rise occurred in 2008, after decreasing from 2003-2007.

  • PapayaSF||

    And note that the Democrats took over the House in 2007, and increased the minimum wage.

  • Drake||

    If you hated to admit, you should have checked the data. Some pain would have been avoided.

    The "Bush Tax Cuts" were enacted in June 2001. U.S. Unemployment was 4.5%. When the Republicans last controlled Congress in 2006 in Dec. 2006, unemployment was 4.4%. So we survived 5 and a half years of those tax rates with only minor fluctuations in unemployment.
    http://www.davemanuel.com/hist.....states.php

  • Hyperion||

    focus should be on spending cuts rather than tax cuts
    Progressives do not understand the term 'spending cuts'. It does not even exist in their vocabulary. Therefore, more taxes is the only solution to everything.

  • califernian||

    ummmmmm do you know what year the income tax cuts went into effect?

  • Doctor Whom||

    Democrats regularly maintain that the George W. Bush administration's policies have driven the country into a metaphorical "ditch." Which policies, exactly, caused this wreck?

    I like to ask Democrats that question and rattle off the GWB policies that suspiciously resemble what Democrats say they want, e.g., bigger and more intrusive government and faith in Keynesianism. That shuts them up.

  • Drake||

    Ask them what helpful bills the 2007-2008 Democrat Congress passed that Bush vetoed.

  • ||

    I think you libertards deserve to be sent to Gitmo for inciting civil unrest. Hussein I does not lie. He is pure and immeasurably wise.

    GAIA BLESS THE IMPERATOR.

  • Doctor Whom||

    Just don't send any drones to my building until I've cleared my docket.

  • Hyperion||

    They are also upsetting the delicate feelings of the Obama supporters. Which is mean and bullying and a hate crime. To the gulag with all the extremists!

  • ||

    Gulag? Pfft. That's a walk in the park compared to a day with the Chieftain of Kashyyyk, the First Lady of the United States, Michelle Chewbama.

  • ||

    Yeah, Bush's policies drove the economy into a ditch. And then Obama picked up the reins and yelled "HYAH" and continued them even harder. Spare us your excuses, TEAM BLUE fucks. You got your messiah, and his name is George Bush III. And the thing is, you know it, and I love that you know it. Because it's killing you on the inside.

    Good.

  • ||

    I really don't get some people's refusal to believe that it's entirely possible to have two successive Presidents suck dick. Yeah, the electorate really did fuck up thatbadly. Thrice.

  • sarcasmic||

    And they're about to do it again with Robamney.

  • JohnD||

    So more Obama would be soooo muuucccch beeettteeer? Duh.

  • FD||

    I dunno. It's up to 43, by my count

  • kinnath||

    The proper analogy is that Bush drove the wagon into the ditch, then Obama shot the mule.

  • ||

    No -- he violated the mule before shooting it.

  • Drake||

    Then looted the wagon before setting it on fire.

  • thom||

    He's just torturing the mule. Slowly. While grinning. Repeatedly saying "You'll never walk again!"

  • ||

    "Here's some crutches!"

  • FD||

    "You got your messiah, and his name is George Bush III."

    Couldn't agree more. The two party hair-splitting has been laughable and gut-wrenching at the same time. Although you're correct, neither side will ever recognize your point, let alone admit it.
    The tribalism has now become almost pathological.

  • ||

    Almost? No, I would say that it has reached full-blown pathological at this point. Because can you think of anything--anything--that Obama could do, or for that matter, Romney, that would cause their TEAM to stop voting for them, to stop being FULL PARTISAN? Because I can't.

  • Ayn Random Variation||

    If obama came out for school vouchers he would lose the teachers unions.

    If Romney and obama switched their abortion positions they would lose those crowds.

    Those people won't switch sides, but they would stay home.

  • JWS||

    With the choice between Obamney and Robama, I will always choose Robama.

  • LTC(ret) John||

    DAMN YOU !!! THIS IS THE MOST IMPROTANT ELECTION EVER!!!111!

    Obamney is the clear choice over Robama!

    Meh.

    I am torn between wanting the Establishment GOP kicked in the wedding tackle and the epic meltdown the MSNBC-oids would have if the Lightworker lost. I am slightly in favor of Chris Matthews exploding on live TV, for now.

  • FD||

    ...and Maddow squirming, trying to keep her faux misery hidden behind the curtain.
    It would, unfortunately, be ephemeral elation. I mean, funny and amusing to be sure, but ephemeral nonetheless.
    A nice dream anyhow.

  • FD||

    Meant, misery. For Maddow it wouldn't be faux if Obama was tossed out.

  • JWS||

    Careful though.
    If Mr. Just Words, Just Speeches doesn't win, we'll have to endure months and months of sweaty Guvmn't lawyers and activist judges.
    Oh, and don't forget all the buildings burning to the ground because of the riotous hoards who will be convinced that life is no longer worth living.

  • ThatSkepticGuy||

    If Obama loses it'll be because all those swing voters who elected him in the first place suddenly became racist.

  • code-7||

    http://www.businessweek.com/pr.....he-economy

    Yeah, there is a study showing that tax cuts do not create any sort of boom in the economy, sorry.

  • Sevo||

    code-7| 10.4.12 @ 10:19PM |#
    "http://www.businessweek.com/pr.....he-economy
    Yeah, there is a study showing that tax cuts do not create any sort of boom in the economy, sorry."

    You have every reason to be sorry; that wasn't the question.
    Try again on this one:
    "Blaming tax cuts for a recession is a contention so ridiculous that even a fake economic study doesn't exist to prove it."

  • RodgerMitchell||

    Regarding the federal deficit:

    1. Accounting rule: Deficits = surpluses
    2. Federal deficit = economy's surplus; federal surplus = economy's deficit

    Question: Why do people want the economy to run a deficit?

  • dinkster||

    Or, you know, you could just have competing currencies...

  • ||

    1. Accounting rule: Deficits = surpluses


    Ummm, no, Deficits =/= surpluses.

    You have to pay back deficits. You get to spend surpluses.

    2. Federal deficit = economy's surplus; federal surplus = economy's deficit

    Right, we owe it to ourselves. The fact that this meme gained traction in the fifties and sixties is the reason we're left with the Reagan meme that "deficits don't matter".

  • BillsCatz||

    Seems nobody wants to step behind current personalities to look at the real issues -- all this corporate dictatorship and tax hoohaw started long before either one of these men got into politics. It's a given that human nature loves to blame the most visible and disregard how a situation initially came into being.

    Just for yucks, lets start with post-WWII and the Cold War, right around the time the MIC started taking over the American economy. Multi-million dollar bribes, endless paid lobbyists and industries that eventually managed to be excused from ANY obligations to the very country that spawned them. Weapons mfrs that get no-bid billion dollar contracts with no penalties at all if the project goes sour or is years behind schedule, and corporate tax breaks, cuts and rebates, too. Sounds more like a corporate banana split with nuts than any type of rational business arrangement, eh?

    But try to blame it on Obama anyhow.

  • tipuasher||

    Economic forecasting is about as reliable as campaign tax plans. The president’s economic policy, on the other hand, has been deployed
    http://fabianzaccaria.com

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