Debt and Deficits

Mitch McConnell Predicted the GOP Tax Cut Would Raise Revenue and Reduce the Deficit. Nope.

A year after the tax law, growth is up but tax revenue is down.

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Olivier Douliery/picture alliance / Consolidated/Newscom

For years, the supply-side argument that tax cuts "pay for themselves" has been an article of faith among Republican lawmakers. The idea, which dates back decades, is that lowering tax rates will result in an increase in economic activity and a commensurate increase in tax revenues that makes up for any revenue lost to rate reductions.

The evidence for the stronger versions of this proposition has always been weak at best; growth can offset some revenue losses, but it rarely produces enough revenue to completely "pay for" a tax cut. Yet it has persisted in Republican circles because of its political convenience: It provides a tidy and simple justification for tax cuts without spending cuts.

Its influence has remained strong during the Trump presidency. At the end of 2017, for example, when Republicans passed the Tax Cuts and Jobs Act, Mitch McConnell insisted that this was exactly what would happen. "I not only don't think it will increase the deficit," he said, "I think it will be beyond revenue-neutral. In other words, I think it will produce more than enough to fill that gap."

There was no reason to believe this at the time. Not one credible analysis of the tax law—even from pro-tax-cut, GOP-friendly sources—saw this as a likely result. And now that the tax bill has in place for a year, there is still no evidence that it's happening, nor any evidence that most Republicans are reconsidering the party dogma.

Yes, economic growth has exceeded expectations. But as Jim Tankersly writes in The New York Times, "the additional tax revenue has yet to show up, even with stronger growth." In fact, the federal government's tax revenue dropped by about $83 billion. The Tax Foundation, which tends to favor tax reductions, has revised its estimate of the likely deficit increase stemming from the law from $450 billion to about $900 billion over the next 10 years. The tax law has made the deficit larger, and it is likely to continue making it larger over time.

That doesn't mean that tax cuts have to increase the deficit. The deficit is simply the gap between the federal government's revenues and outlays—what it brings in and what it spends. The trick to avoiding a larger deficit is to offset tax cuts with spending cuts.

But that is not what McConnell did. A few months after ushering the tax bill into law, he helped broker a deal with Democrats that increased domestic spending (a Democratic priority) in exchange for increasing military spending (a Republican priority).

As with reducing taxes, raising spending also expands the deficit. That the deficit would expand in following a one-two punch of lower tax revenues and higher federal spending is perhaps the most obvious fiscal result imaginable. Spend more and tax less, and the gap between spending and revenues will expand. That's exactly what has happened, and now the deficit is on track to hit $1 trillion years earlier than expected when Trump took office.

McConnell helped both the lower taxes and the spending increases come into effect, yet he argues that his party has no unique responsibility for the resulting increase in the deficit. In an interview last year, he called the nation's rising budget deficit "very disturbing"—but then went on to say that his party shoulders no blame. "It's disappointing, but it's not a Republican problem," he told Bloomberg News. Instead, he argued that it was a bipartisan failure to tackle entitlement spending that was driving the nation's debt build-up.

There is truth to that. The major entitlement programs—Medicare, Social Security, Medicaid—are the biggest drivers of the long-term debt, which now exceeds $20 trillion. But annual deficits, while related, are not the same as total federal debt. And it was under Republican control of Congress and the White House that the policies driving our surging deficits were put in place.

It's not too hard to understand the political convenience of knee-jerk supply-siderism: It offers a justification for tax cuts, which are popular, without spending cuts, which are not. But while libertarians might like the idea of lower taxes, the result is a government that seems cheaper than it is, by deferring the cost. It ends up being a way to let government grow larger while insulating taxpayers from the price tag.

Republicans spent years pretending to be outraged about trillion-dollar deficits under Barack Obama. McConnell's argument, which is essentially that Republicans couldn't realistically do anything to reduce the deficit under Donald Trump, is a flagrant abdication of fiscal responsibility, an open refusal to tackle a problem that McConnell and many of his fellow Republicans (including, from time to time, President Trump) have complained about for years.

Yes, the Republican commitment to fiscal responsibility has, for the last several decades, been more rhetorical than real. But under Trump, who on the campaign trail ruled out major entitlement reforms and who has called himself the "king of debt," the party has nearly done away with the pretense entirely, with predictable results. At this point, the GOP position on the budget amounts to a giant collective shrug.

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180 responses to “Mitch McConnell Predicted the GOP Tax Cut Would Raise Revenue and Reduce the Deficit. Nope.

  1. Some day propagandists will differentiate Republicans from RINOs.

    But that is not what McConnell did. A few months after ushering the tax bill into law, he helped broker a deal with Democrats that increased domestic spending (a Democratic priority) in exchange for increasing military spending (a Republican priority).

    This could not possibly have been the set up to this federal shutdown to eliminate federal employees after 30 days but the military is untouched?

    1. Taxpayers will save tens of billions after tens of thousands of bureaucrats are fired after 30 days.

      They wont get to work against downsizing the government anymore.

    2. “Some day propagandists will differentiate Republicans from RINOs”

      Yeah, but your hypothetical “republicans” are a figment of your imagination. Your “RINOs” are the creatures that actually exist in Washington. Kinda makes differentiating between the two rather pointless.

      In fact, it’s almost as if no one in Washington gives a single shit about deficit and they’re willing to say anything that might help them win an election; reality be damned.

      1. I consider Republicans different from RINOs when the Republicans follow the GOP platform.

        RINOs tend to vote with Democrats.

        There are few Republicans in the GOP just like there are few Libertarians in the LP. National politics attracts saboteurs to parties.

        Congress can only be blamed so much. Voters keep voting in big spenders, so any limited government Republicans are boxed out. The Democratic Party has zero fiscally conservative people that I can think of.

        1. What would you say the difference is between your fabled “Republicans” and Libertartians?

          1. Things like fiscal responsibility.

      2. Which means it’s not only in Wash., it’s the voters thruout the country. They’re happy, collectively, to send the bill to the future.

        1. That’s not really true. Every conservative I know is for massive spending cuts to LOTS of things. They do have their blind spots, which vary from person to person, they’re not libertarians after all! But if congress slashed half the FedGov spending, I think half or so of the country would be stoked. It’s the spineless pieces of shit that somehow ALWAYS get into office that don’t think like this, not actual voters.

          There are a few legit politicians too, especially the more local you get. See all the GOP governors over the decades who have balanced state budgets via cuts etc. How many cities/counties are run in the black EVERY SINGLE YEAR in Red parts of the country? Plenty. It’s just once you get high up there are very, very few who have the balls to remain true. Even in the house I think there are a fair number, it’s the senate where it’s basically 100% traitors.

          1. I always find this argument about state and local governments “balancing” their budgets or running a surplus without taking any account of the amount of federal dollars required to maintain this balance. Texas is a great example of this; balanced state budget with billions of federal dollars for medicaid, medicare, highways, etc. Everyone else in the country contributing to help them “balance” their budget.
            Until we have true transparent accounting with our various levels of government, how can anyone say they are truly spending within their means?

            1. Ummm… Balancing a budget is a way of being, not about specific numbers. Just like a person. You can make 100K a year, or 50K a year, and either one of those people could be in debt up to their eyeballs. It’s what you spend! Look at all the states who bring in their billions of federal dollars, and STILL run in the hole.

    3. Some day propagandists will differentiate Republicans from RINOs.

      Nope.

      That is, literally, the purpose of the Republican primary process. Whoever gets the nomination on the other side is, by definition, the Republican that the Republican party, with the consent of the Republican voters, has nominated for the job.

      So no. That differentiation, if it truly exists, is the duty of Republican voters and the Republican party. Not journalists.

      1. Nobody is fooled.

        RINOs are Lefties who cannot get elected as Democrats in a Red district.

        1. How true this is. Just before the midterms, Democrats suddenly stopped talking about ‘impeachment’ because it was a vote loser. Most sensible people know it is still their intention to attempt to impeach Trump.
          Dems will say and do anything to obtain power at any costs. They cheat, steal votes and smear opposition candidates and have absolutely zero scruples. Brownard Country is a prime example of the disgusting depth they will sink to in order to win.
          They are so fixated on their righteousness that they can justify any dirty tactics to themselves to gain power to ‘keep the fascists out’, never realising that their own behaviour makes them the fascists.

    4. “Some day propagandists will differentiate Republicans from RINOs.”

      Okay, propagandist, what’s the difference?

      1. Poor troll.

        1. Ha, if that’s not the pot and kettle.

  2. Hey peter… federal corporate and income taxe revenue went up… you know where the tax changes largely were…

    link

    Maybe the dishonest New York times is counting the collection if federal fees due to the other regulatory rollbacks? What is hard about looking at the related revenue changes instead if relying on a left wing headline from a left wing economist?

        1. Nice self own. That was posted on November 21, 2013. The 2013-2018 years are clearly labelled “estimate”

          1. Linked wrong page, was on phone. But every report from FY19 4q last year shows the same, increased revenues from income and corporate. When home I’ll post them. Again, the NYT is using total revenue, it is not discussing just income and corporate tax revenues. Which if you read the NYT article it states.

          2. So here you go, since you are apparently too intellectually lazy to look it up yourself. Also in the same link you will see how liberals are spinning numbers to claim revenue is down.

            First the hard numbers:

            “Nominal revenue did increase, according to Treasury’s fiscal year-end report, which shows that total federal tax revenue is up only $14 billion, or 0.4 percent, between FY 2018 and FY 2017.”

            So how do they get the “decrease”… well… the claim that tax revenues should grow at the inflation rate, and since 2017 * (1+IR) > 2018 nominal, 2018 revenues decreased.

            “However, this nominal increase is well below the rate of inflation ? meaning that the value of revenue collection has actually declined in real terms. ”

            So in terms of total dollars, Revenue is up. However, democrats attempt to massage the data in order to show revenues falling, ie by increasing the 2017 numbers by multiplying by inflation. This is despite the fact that no study that I know of, at least reputable, has ever claimed the tax revenue increases monotonically with the inflation rate. It is an “adjustment” made to make arguments for idiots like yourself.

            So do you want to try again?

            link

            1. My god you are dumb. There are more people in the US working this year than last. Inflation leads to income COLAs. There was GDP growth. All of these things increase the amount of taxable income compared to the same year, meaning revenue goes up even if rates stay the same. If you want to compare revenue with TaxRates-A in 2017 with vs revenue with TaxRates-B in 2018, you need to account for the 2017-2018 revenue changes that were unrelated to the rate change. This is middle school algebra for fucks sake.

              1. “Focusing specifically on revenues raised under the new tax code, revenue has declined by between 3.5 and 8 percent.”

                Any claim that has a two to one estimate of revenue is bullshit. Try telling the an IRS auditor that your income was between 3.5% and 8% lower than the year before. You’ll end up telling your spouse what day is visitor’s day.

                The inflation estimate is wrong for almost an unlimited number of reasons. The method used to compute it changes with political exigencies. If you really want to count inflation then consider the “revenues” the government receives from the inflationary decrease in the value of bank deposits. How about the increase in revenue due to low interest loans whose yield is less than “inflation”?

                The final analysis is whether the economy grows faster or slower due to the tax policies. If the economy grows at a faster rate than federal spending then all is good. If not, then start investing in canned food and ammunition.

            2. I concur with Magnitogorsk : Dumb.

              If you look at federal tax reviews over the last fifty years, they’ve gone up every year save 4-5 times. That’s just the normal expansion of the economy through inflation and population growth. Revenue increased after tax cuts, after tax increases, and no tax change at all. Revenue increased during both recessions and economic expansions. The only years with no increase immediately followed an economic shock, such as the beginning of a new recession. Even then, revenue just reset lower and immediately began to climb again. When someone defends supply side’s magic unicorn fairy dust by pointing to a uptick in revenue, their argument is pretty much : “Water is wet. Isn’t it amazing !!!”

              So, did the change to the tax code increase or decrease the (water is wet) rise in revenues? You don’t even need to look at alternate projections of with or without; just consider the failure of every supply side exercise from Reagan to W to Kansas to Trump : A massive increase of debt always follows.
              2+2, it seems, still equals 4.

              Because the cost of government rises as surely as revenue returns, even with the scope of government unchanged. No part of this river you step in is ever unchanged. Kindergarten economics only works for toddlers.

              1. If you look at federal tax reviews over the last fifty years, they’ve gone up every year save 4-5 times.

                Quite the admission that tax revenues tend to go up regardless of what the tax rate actually is.

                Here’s another fun fact–revenues have only exceeded 19% of GDP five times since the end of World War II, one of them during the 1981 recession, regardless of what the tax rate was set at.

                Hmmmmm, wonder what the other factor in these deficits are, one that involves where those revenues actually go?

                1. Let’s try keeping it simple (maybe that will help) :

                  (1) Revenue increases almost automatically year to year, as does costs.

                  (2) Cut taxes and you probably still see an increase in revenue, but that increase will be smaller than the increase without the cut. Remember, costs are rising.

                  (3) You never see the mythic “increase in revenue from the tax cut so great the cut doesn’t increase the deficit”. That’s childish nonsense only a simple-minded idiot could believe.

                  (4) What’s commonly called “supply-side economics” isn’t economics at all, but a political tactic to promise free stuff to people. Yep, promise a tax cut magically doesn’t affect the deficit and you are promising free stuff to voters, usually to the tune of trillions of dollars.

                  (5) One additional factor : Excepting fools, everyone (Mitch McConnell included) knows supply side economics is a scam. When every single word on your economic policy is a fraud, that makes it all the harder to ask for fiscal discipline. It’s common to see see spending restraint slacken after the lies & phony numbers of another supply side con.

                  1. Or more concise, tiresome progtard spews disingenuous bullshit.

                    As usual.

                2. “Quite the admission that tax revenues tend to go up regardless of what the tax rate actually is.”

                  Congratulations, you’ve discovered inflation.

                  1. I think the theory is correct, we’re just beyond the point on the Laffer (spelling?) curve where it’s reducing total revenue.

                    As far as things go though… Why would we WANT higher revenue? It’s spending that’s the problem. It has ALWAYS been spending.

                    I hate the deficit, but I almost wonder if we will ever deal with it if we DON’T put our backs against the wall. I don’t think we will, because your average person is too stupid and short sighted. If tax cuts slow the growth of government, and I do subscribe to the “we’ll ALWAYS spend every penny we take in, and then some” theory, and jacks the debt… Sooner or later we’ll have to actually address it.

                    1. It won’t be addressed until the dollar is not the choice of international trade. That soaks up the dollars created by the deficit/debt. When the black market value of the dollar in other countries equals or is below the official rate, the debt starts to crater the country.

                    2. Vek, a couple of comments :

                      (1) Sure, you’re right; the Laffer Curve is perfectly sound theoretically and we’re just beyond the point where it applies. The problem is we are way, way, way, beyond that point. Reagan’s cuts were beyond that point and they were much more sizable than anything possible now, simply because of the existing rates he was cutting. The theory has no relationship to factual reality and hasn’t since day-one. Using it to promise free stuff to voters is a fraud.

                      (2) Bill Clinton and GHW Bush together dealt with the deficit by tax hikes, structural spending restraints and spending cuts. It took compromise, political pain, and sacrifice by two Presidents and Congress to do it – yet all that was destroyed by the next supply-side clown to occupy the Oval Office. If you want to excuse the GOP for always blowing-up the deficit, saying that will save us from the deficit (somehow) just ain’t the way to do it.

                    3. Yeah, it’s spending cuts. We bring in more money than we need already… We need to cut spending. Period. But since that won’t happen, and I don’t think people will stomach tax hikes of any real amount (why should we anyway?), I think we’re just going to end up devaluing the dollar/crashing the economy. That’s what I think is the most likely scenario.

                    4. Vek,

                      I look through these comments and this I see a lot of people looking to have their cake and eat it. They want to support their GOP – a party of grotesque fiscal irresponsibility that has made the deficit much, much worse every time they’ve held federal power for almost forty years now. And they want their fat juicy tax cuts, always delivered in amounts running to trillions.

                      At the same time, they look to be pious with fiscal rectitude. Party all night Saturday with hookers and lines of coke, then sing “amen” to a sermon on the evils of sin Sunday. Exactly how do commenters here manage this hypocrisy? By a three part process :

                      (1) Claim tax cuts magically don’t increase the deficit.
                      (2) Cry out “it’s all the spending” at strategic intervals
                      (3) Moan “it’s just hopeless” – And then go back to stuffing their face with cake.

                      It’s transparent evasion. As noted above, the deficit was brought under control not that long ago, so it’s not hopeless. It just took adults willing to make real and difficult choices – not yell out slogans to inoculate themselves from responsibility. And all that ground was immediately lost with the election of W, a man who passed-out trillion dollar promises like candy to children on Halloween. I’m curious : Did you vote for him?

                    5. I hate the way the GOP has done things, especially when they have had the brief periods where they could have passed anything they want.

                      I have never voted for an R or D for president, ACTUALLY. I’ve voted Libertarian every time.

                      As far as “adults,” I assume you’re talking about the Clinton era? I wasn’t old enough to vote back then, but if I had been I would have been a Perot man! Either way, the Democrats of today are NOTHING like Bill Clinton. I disagree with 1990s Clinton on plenty of things, but he at least governed in a fairly sane way. The Dems of 2019 are NOT adults, and would simply be even more irresponsible than the Rs, AND trample on other rights not related to money.

                      We are screwed IMO. I don’t want to have my cake and eat it too… I want to stop buying cake. But nobody else has the nerve to do it. The Rs of today are like getting a Franco instead of a Stalin… I want George Washington or Thomas Jefferson, but they’re not on the table. I don’t think they will be until things get much worse first, because most people are too short sighted and stupid.

              2. None of these tax cuts failed to increase federal revenues. The fact that spending increased even faster has no reflection on the tax cuts viability.

                Further, I noted about a reference in a comment to increased taxes due to COLA impacts on wages. VERY few American workers have organized labor agreements with COLA except for government workers and those getting checks from the government. And that impact is on the spending side more than the revenue side.

    1. Sorry, I don’t see you increase in revenue. Yes the actual amount year over year increased, it pretty much always does, due to inflation and normal economic growth. However the percentage of increase is actually down from the years prior to the tax cuts. The total tax revenue increase in the years prior to the tax cut are about 8.5%. By contrast the total tax revenue increase in the years after the tax cut is about 5%. The rate of growth in the Economy has been up from prior to the tax cuts, so it could be a fair argument to say that tax cuts have increased economic growth. However that economic growth, at least so far, has not seemed to translate into increased revenue. If the tax cuts had in fact increased revenue then the percentage of year to year revenue increase should have gone up, not down.

      Just for the record, I am in favor of tax cuts, and I do believe in supply side economics. However the economics behind it is not a simple linear correlation between tax rates and revenue. If it were, why not drop the tax rates to 0.01% and we would be swimming in money. The reality is that it is a bell curve. If taxes are too high, reducing taxes will in fact increase revenue. However, as you decrease the tax rate the effect of the lower rate becomes less and less, until you reach a point where it begins to decrease revenue rather than increase it. Also this does not hold up for all taxes, and can be different from one tax to another.

      1. I linked to the above which links to the treasury report, which for some reason has been removed. Total revenue in dollars is indeed higher for 2018 than 2017. But some analysts are trying to adjust the 2017 with the inflation rate in order to make the claim that the tax cuts hurt revenue. It’s the same trick they attempted to pull in 1998 with the “budget surplus” even though the total debt numbers increased in 1998. Again, no paper has shown that tax revenue grows monotonically with inflation. It’s more fun with numbers by those with a political slant.

      2. This is the correct way to state this! I agree completely Merl.

      3. To your point, Milton Friedman once said if you cut taxes and revenues rise you have not cut taxes enough.

        The real issue is spending is rising faster than revenues, faster than population growth, faster than inflation. The government greed for ever more money is insatiable. Until that is under control a balanced budget will not happen at any tax rate.

      4. To your point, Milton Friedman once said if you cut taxes and revenues rise you have not cut taxes enough.

        The real issue is spending is rising faster than revenues, faster than population growth, faster than inflation. The government greed for ever more money is insatiable. Until that is under control a balanced budget will not happen at any tax rate.

  3. I sent my DNA to 23 and me and they told me I’m 100 percent Tulpa’s bitch.

    1. Man, if I knew you were going to throw this kind of tantrum I’d have done this a long time ago.

      1. Sucked dick for money I mean.

        1. I am pathetic and I fucked up badly and now I’m sadly trying to reframe my continued embarassment and public ridicule as somethong positive for me.

          1. I accuse other people of having tantrums by flying in from the rafters and throwing a tantrum.

      2. Taking flak, over target.

  4. By the way… how would tax cuts stop put of control spending? Appropriations were passed by veto proof majorities. It’s the spending stupid.

    1. Someone explained this to me once. It involved collecting underpants. I don’t remember the next step.

      1. Profit.

        1. Yeah, but isn’t there SOMETHING in between those steps… I just can’t seem to recall…

  5. Is Suderman seriously arguing against tax cuts and the need to increase government revenue in Reason Magazine again?

    I don’t even…

    1. Its Suderman.

    2. I think that paying for what you spend fits well within libertarian philosophy.

      1. Don’t weasel, you know full well what 90% of the money goes to, and you know what Suderman is trying to do here.

      2. “Not Taxing is Theft”

        1. “Not Taxing is Theft”

          Yes it is. From the future generations that must pay for it.

          1. That isn’t about taxes. Spending too much is what you’re talking about.

          2. Must?

            LOL.

    3. He has been a dick-suckin’ Obamafag from the first day he got here.

    4. Yes of course … it SUDERMAN dude.

      Have you forgotten you are on the NEW Reason? Where libertarian has been redefined as a synonym for progressive.

  6. Tax cuts are never enough.

    1. Cut spending. Reduce the deficit. It’s only difficult because politicians and voters think we can do this forever. Sane people would behave rationally.

      1. I doubt it. Supply-side actually originates in Keynesian notions. Reducing taxes creates the same deficit as increasing spending and it is that deficit which increases growth by pulling forward consumption in exchange for an IOU payable in the future. Politically, it’s just a way of getting people who don’t believe they personally benefit from make-work schemes to benefit from and vote for those growth-producing deficits anyway.

        After all in the long run we are all dead. And what supply-side makes really really clear is that pretty much every voter views their own kids/grandkids as their PROPERTY not as an actual human who deserves the chance to live their own life as a goal rather than live their life as a means to OUR ends. Viewed that way – it is entirely rational that we make the decisions about our property rather than let our property be free to make their own decisions.

        1. The difference between a tax cut deficit and still deficit spending with no cut is RESOURCE ALLOCATION.

          A tax cut allows the market to spend more money, as opposed to government spending which is on useless crap. In theory this is where you get a little more actual increase in REAL GDP.

  7. Peter, lets see some real numbers here. Don’t tell us “In fact, the federal government’s tax revenue dropped by about $83 billion”

    So, lets see the gross tax stolen in 2017 and because its probably not final yet, the latest estimate for gross tax stolen in 2018. Real, hard numbers.

    When people say “increased by x%” or “decreased by some number” but don’t release the two numbers that give you that calculation, I get the sense that they are trying to hide something.

    Because if the ‘dropped by 83 Billion’ is really
    “We thinkwe were going to collect 4 Trillion under the old rules, but instead collected 3.917 trillion under the new rules, and last years collected was 3.8 trillion”
    Well, that ain’t a cut. That’s an increase.

  8. Why can’t people understand the difference between “debt” and “deficit”? Here’s Suderman:

    likely deficit increase stemming from the law from $450 billion to about $900 billion over the next 10 years

    That statement makes no sense. He means debt here. And it’s not really that big a number since the debt is already 21 trillion.

    Of course, the repubs are still principle-lacking hacks. But get it right.

    1. Not sure what’s so difficult about that statement. Over the next ten years (i.e. between now and the end of 2028), the result of this tax cut will be that yearly deficit will increase to an amount that is $450-$900B above what it would have been without the tax cuts..

      1. I’m more that it’s debt. The deficit is the differences between taking in a spending. So your assuming it’s what 3% growth in government spending a year? What if it’s less? (Yeah I know), what if it’s more?

        Remember Obamacare wasn’t supposed to have a deficit or a small one. Good things.

  9. “For years, the supply-side argument that tax cuts “pay for themselves” has been an article of faith among Republican lawmakers”

    The idea that tax cuts must be ‘paid for’ is leftist nonsense.

    It presupposes that the money that taxpayers earn actually belongs to the government

    But it doesn’t..

    Accept that simple truth and the scales will begin to fall from your eyes.

    1. It’s a figure of speech

      1. Since when does the left do ‘figure of speech’? They say figure of speech to deceive because in actuality they mean it.

        Do you illiberal minds brah?

    2. Totally true. And that “paid for” bullshit started on the left.

      1. If you don’t think tax cuts need to be offset with spending cuts, then you get to own the budget deficit, deal?

        1. Where did you get that? I want spending cuts to more than offset tax cuts. I want the government to be balanced or ideally run a surplus so the debt can come down.

          1. I want a unicorn that shits diamonds.

            1. You should want to not be an idiot.

            2. Tony, if everyone like you drank their Drano, we would rapidly be running a surplus.

              So drink your Drano.

            3. Funny that a balanced budget is seen as a unicorn in Tony world… Since the US government has frequently had a balanced budget, many states do it all the time, and other countries in this fucked up world are doing it RIGHT NOW.

              All we have to do is slash and burn useless federal spending, and let the states raise their taxes accordingly if citizens of certain states want that useless spending. Those that DON’T will be coming out ahead, and even those that do will likely get better programs for less money, since state governments tend to be more effective according to studies.

            4. No wonder you voted for Obama and Hillary

        2. Tax cuts don’t need to be ‘offset’.

          There will BE no spending cuts until spending cuts are the only option.

          The only way to get to that option is to get the government out of our pockets.

          We need ironclad tax reductions. The type that end whole pathways to taxation for good and for ever.

          Spending will only stop when they have nothing to spend.

          1. That’s not how money works in America. You’d think political leaders of the whole country would have figured that out by now after all this time of failing to starve the beast.

            1. You say that now… What about at 30 trillion in debt? 40?

              It’ll come eventually. One way or another, it will be balanced out. Massive inflation may pay a large part in this.

  10. McConnell Predicted the GOP Tax Cut Would Raise Revenue and Reduce the Deficit. Nope.

    How about a meta-law dealing with the consequences of legislation? Something like: The proposer of a bill must commit to a measurable outcome within, say, one year of implementation. If the outcome of your law is not so realized, the law is automatically voided, you are recalled, and you are banned from running for public office. You so smart — put your money where your mouth is.

    1. “How about a meta-law dealing with the consequences of legislation?”

      It’s called an “election”, and, unfortunately, many of the nice people of Kentucky like the cut of Mitch’s jib.

  11. The reality here is that most people like low taxes and high services. It is difficult to move beyond that point because politicians like easy solutions (just borrow more money). I have supported politicians who were honest and they often lost. Suderman would say cut spending and Alexandria Ocasio-Cortez would say increase taxes. Is there a compromise here or just more rhetoric.

    1. The reality here is that most people like low taxes and high services

      High services? What does that even mean?

      We don’t need a Postal Service. We don’t need a Department of Education, of Commerce, of Energy. We don’t need an EPA. We don’t need the vast bulk that is the Civil Service.

      Or their massive pension obligations.

      The ‘high services’ we supposedly so crave are government payouts for support and nothing more.

      Before there can be compromise–never mind solution, we must all be looking at the same issue, speaking about it in the same language, with ideological pretense stripped away.

      Until then, we will accelerate towards the cliff in a cloud of superluminal rhetoric.

      1. People want shit for free, which is basically what he said. It’s a known flaw of any democratic system of government.

        1. SOME people do.

          I despise “free” shit, because I know I have paid for it, and so are other hardworking people. I refused to collect even unemployment for the couple brief periods I could have theoretically done it when I was younger. If SS even exists, that’s such a biggie I’ll probably take it… But maybe not, just out of spite, if I have enough money in the bank.

          But it sure is tempting to just become a useless leech and steal others peoples money. My father only half jokingly said maybe he should just file for disability and scam the system, since he has some health issues now that may well qualify him if he exaggerated the issues. He said this after watching some useless piece of trash guy talking about possibly losing his food stamps over the shutdown. He said if that piece of garbage is stealing my money, I might as well just do it myself, why even try or care?

      2. Hopefully in a few more days we can RIF many of these nonessentials out permanently.

  12. Whenever you see Suderman complaining about a lack of spending cuts, always remember that it was Peter Suderman who opposed a bill that would have cut $1.022 trillion in direct spending–$772 billion from Medicaid.

    In that light, Suderman’s bullshit arguments against making the government smaller through tax cuts shouldn’t surprise anyone. He doesn’t want to cut spending, and he doesn’t want to cut taxes either? Your mask is slipping.

    1. +10000

    2. Why do people still listen to Suderman? He’s as libertarian as Bill Weld

      1. ^True Dat^

  13. In fact, the federal government’s tax revenue dropped by about $83 billion.

    What happened to state and local tax revenues?

  14. Sudderman remains butt hurt that the government isn’t stealing as much money as it used to. Fuck you Peter. You are always free to pay more taxes voluntarily, assuming your dingbat wife will let you

  15. …growth can offset some revenue losses, but it rarely produces enough revenue to completely “pay for” a tax cut.

    I appreciate the scare quotes, at least. I was beginning to think that the Federal Reserve owned all the money.

  16. Nobody ever believed this to be true. It was just a lie Republicans told back when they pretended to care about fiscal prudence.

    And the sick fact is most of you morons support this political party because of some latent Jesus bullshit. Why do you people even bother having thoughts?

    1. The money belongs to the people, not Nancy Pelosi’s motorcade. Reduced revenue is not a concern of mine. Only spending is.

      1. Republicans are doing their best to take it away from the people and give it to nontaxpaying corporations and billionaires and their useless offspring.

        1. They are letting people keep money they earned. Oh the humanity. If you were not so hateful and vicious, your stupidity and ignorance would be comical

          1. “They are letting people keep money they earned.”

            Great. Now cut spending.

            1. If spending isn’t cut but continues to go up every year, can you give a reason why taxation shouldn’t be 100% of your income? After all, you’ve ruled out cutting taxes.

              1. “After all, you’ve ruled out cutting taxes.”

                I fail to see where you came to that conclusion.

                1. But in the interest of stirring the pot….

                  I’d posit that the Democrats are actually the current fiscally responsible party. They are at least willing to pay for what they spend.

                  1. Bullshit. Nancy will not let a dime of hers slip from her fingers into the coffers. The Democrats do not want to pay for what they spend, they make you to pay for what they spend.

                  2. That has been true for decades now. So many people are apparently so stupid they believe whatever Republican say. Why would anyone do that? They’re liars.

                  3. Oh bullshit. They use that line as an excuse to raise taxes. Then they spend even more.

                    Don’t ever try to push that line again.

                    1. Depends on the Republicans!

                      The ones in DC are almost useless to a man, maybe a few decent ones fiscally in the house.

                      But in state and local government… You know how many Rs have balanced budgets in the locality they run? Fuck tons. You don’t see many conservative cities or counties going BK in a grand fashion do you?

        2. Corporations aren’t people. A tax on corporations is essentially a tax on jobs. That’s why we tax the people IN those corporations.

          Even Europe understands this. Here’s NPR on US corporate taxes:

          The long answer: The U.S. has the highest top corporate tax rate at least among advanced economies. Compared with nations in the OECD ? the Organization for Economic Cooperation and Development, a group of highly developed countries ? the U.S. has the highest top corporate tax rate in the world. The top corporate tax rate in the U.S., a combination of federal and state and local taxes, is nearly 39 percent this year. That’s well above most other OECD nations.

          You want to argue raising taxes on “the rich”, fine, that’s a discussion we can have. You want to tweak the progressive income tax rate, fine, that’s a discussion we can have. “Taxing corporations” is dumb.

          1. But Paul, so is Tony.

        3. Like Apple and Starbucks right? Corporations are just some robots not made up of people right?

          I love how the government is supposedly better than a corporation, yet with a corporation I have a choice in their product. With the government, I have to pay for lube..

          1. “I love how the government is supposedly better than a corporation, yet with a corporation I have a choice in their product.”

            If you’re dissatisfied with the “government product”, you’re free to go somewhere else and better suits your needs. If it’s low taxes you desire, may I recommend Saudi Arabia?

            1. Pollock the troll hates America and the constitution but wont leave.

              1. Removal of progtards should become compulsory.

            2. If Saudi Arabia didn’t have any Arabs it would be pretty sweet!

              LOL

        4. Tony,

          Corporations do not pay taxes, they collect taxes and pass them on the government.

          For corporations, taxes are a business expense. Like all business expenses, they become part of the price of the goods or services the corporation sells. So the CUSTOMERS of the corporations pay the taxes.

          Progressives LOVE taxes collected through corporations (that is after all, pretty much what a VAT is) because those suckers known as voters don’t realize just how much they are indirectly paying in taxes.

    2. What you say about people who disagree with you and what people who disagree with you actually are is very different.

      That is strong evidence that you are on the wrong side.

      1. What possible reason is there to support the Republican party at this juncture unless your brain is befouled with some stupid Jesus bullshit?

        1. what possible reason is there to support the Democrat party at this juncture unless your brain is befouled with some stupid big government bullshit?

          This is fun!

          1. You can BOTH be right.

        2. what possible reason is there to support the Democrat party at this juncture unless your brain is befouled with some stupid big government bullshit?

          This is fun!

        3. Factually speaking two of the largest demographics that support the Democrat party are…overwhelmingly Southern Baptist and Catholic.

          You’re a fucking idiot Tony.

        4. What’s the difference between that and the SJW intersectional cultism you gobble down? At least the Jesus people aren’t trying to actively destroy humanity like you and your misanthropic sect.

          1. Um, the Jesus people are actively trying to destroy humanity. They’re the global warming deniers. They’re the ones with the shifty Revelations shit going on.

            1. No you retarded swishbuckler, it’s the Muslims that are out to destroy the human race. People like you in particular. And it’s people like me that will be protecting your stupid ass if they try that shit here.

              You sure as hell aren’t going to be defending much of anything.

            2. That global warming that’s been happening at half or lower all the “best” estimates they’ve made, and even less than that compared to the catastrophic worst case scenarios? Yeah, I’ll worry about it when they’ve been able to get their models within a dozen or two percentage points 5 years before it happens. Until then, they’re just blowing smoke out their ass about how bad they think it will be.

              Thus far, the evidence points to it being HALF as bad as their middle of the road estimates… Which means it isn’t going to be shit.

            3. Tony,

              Bend over as far as you can, grab you toes, and shove that global warming denier shit right up your ass.

              Man made global climate change is a theory, that probably has merit. That said, the magnitude estimates of it’s impact are based on a collection of computer driven climate models that are slightly better that using the magic 8 ball I had as a kid.

              The current models have not predicted progress to date with any accuracy, which is unsurprising since they don’t model long term knowledge of history well either. They also almost completely ignore solar activity and contain a huge number of “factors” included to get the desired results because we lack knowledge of many of the contributing natural processes than impact climate cycles.

              There are people who do not believe there is any such thing as man made climate change, but you swing “global warming deniers” as a verbal hammer to smear anyone who does not accept your faith in the current models.

              I do not have faith in the climate models. I know FAR too much about computer models to accept the conclusions they currently produce. I also oppose spending Triilions of dollars, retarding growth of our and the world’s economy, based on the current half baked models. NOT because I flatly reject man made global warming theory, but because we don’t know enough to make decisions on.

  17. “The trick to avoiding a larger deficit is to offset tax cuts with spending cuts.”

    No, the trick to avoiding a larger deficit is to cut spending and keep revenues high. KEEP doing that, and the debt goes away, too.

    1. No, it is to cut spending more than you cut taxes.

    2. No, it is to cut spending more than you cut taxes.

      1. And the way to balance your personal budget is to pay more on your credit card and take a job that pays less. That’s your approach, Chippy?

        1. That’s a terrible analogy, but it would be a better solution than yours, which is to steal more from your neighbors to pay for your profligate lifestyle.

  18. What exactly is a libertarian? Articles like this make it confusing.

    1. “What exactly is a libertarian?”

      Libertarians are people who don’t have to make real world decisions. We’re philosophers at best. In practice libertarianism is as unrealistic as marxist communism or laissez faire capitalism. The problem is…….human nature.

      1. Pretty much. Which is why I completely discount libertarian thought on several important issues where it clearly falls down IRL. But for many things it can be taken to the 90%+ extreme of purist libertarianism, and be nothing but good.

    2. There is no such thing as a libertarian. There are people with some libertarian beliefs, but that’s the best you’re going to get.

    3. Small and limited government.
      Non aggression principle.
      Rule of law under tight restrictions, like a US constitution.
      Strong property rights.
      Maximum liberty under rule of law.
      Maximum freedom under rule of law.
      Free market.

    4. Your confusion is understandable.

      A anarchist wants no government, no borders, none of it. He believes that the free market can provide everything required.
      A libertarian agrees with the anarchist in goals, but accepts that government and a nation is required. He believes that liberty should be maximized. A libertarian is usually accepting of national borders because the legal framework, and lack of same, typical of libertarian society is opposed by other nation states.

      Many of the most strident here are either anarchists, or so close to anarchist the distinction is moot. They self identify as libertarians.

      Most of the articles here are written by progressives who identify as libertarian at least some of the time.

      It IS confusing, since all of these want to identify as libertarian.

  19. They only budgetary way to reduce the size and scope of government is to cut SPENDING. No amount of tax cuts do that. Tax cuts only give a bloated government an excuse to borrow and inflate.

    The republicans have shown they are not intersted in the least about reducing the size and scope of government. They have shown only that they want to manage the lives of others, just like the Democrats. I could forgive them for their anti-immigration and anti-trade stances if it looked like they might actually reduce the size and scope of government. But they’re not. They’ve “shut down” the government because the proposed budget doesn’t have increased spending for a stupid wall.

    1. Yep. This is bipartisan bullshit.

    2. AGAIN, Republicans in DC!

      Many states have balanced budgets via spending cuts. So have cities, counties, etc. The ones that are sheisty enough to get into DC are 99% useless bastards, but lots of more local Rs are pretty damn decent.

  20. Oh, and the very first thing the new Great Socialist Hope of the Democrats did was reject the concept of PayGo the instant she got into office.

  21. The Laffer Curve is real, but like any equilibrium, it’s a single point, not a universal principle.

    1. Nooooooo !

      The Laffer curve is a curve of tax revenue v tax rates, aggregated over the whole economy. A curve, not a point.

      Moreover – and most importantly – it’s an aggregate curve, ie it sums the curve of tax payment v tax rates for all players in the economy. There is no single inflection point, applicable to all taxpayers, where an increase in the tax rate causes a reduction in tax payments. Different taxpayers have different inflection points according to their circumstances of life. For example a maiidle aged father with few savings but many financial commitments, and a family (but I repeat myself) may be spurred to work harder and longer by a higher tax rate, to maintain his post tax income. An older worker, with savings, may decide to retire.

      And it’s very likely, unfortunately for tax raisers, that the inflection point is lower for the most productive and best paid workers than for Joe production line. Because they tend to have savings and can sit out periods of high taxes. Or they can simply decide to spend a few years at their beach house painting instead of doing another tech start up.

      1. And another thing with that Laffer curve.

        It is designed to illustrate that there is a tax rate which maximises tax revenue, in the aggregate. But that does NOT mean that the goal of tax policy is to set taxes so as to maximise tax revenue. The goal – if there is one – is to maximise aggregate economic welfare, and the tax rate which maximises that is necessarily lower, with lower tax revenues, than the tax maximising tax rate (ie it is on the left hand upslope of the Laffer curve.)

  22. Mitch McConnell Predicted the GOP Tax Cut Would Raise Revenue and Reduce the Deficit. Nope.

    Ocasio Cortez claims Medicare for All will reduce medical costs.

    1. Occasional Cortex believes in the Tooth Fairy too I would imagine.

    2. Occasional Cortex believes in the Tooth Fairy too I would imagine.

  23. fuck them cut spending.

    1. ^ This ^

      That’s what a libertarian writer for a libertarian magazine would be writing.

  24. The money that we taxpayers earn today, and the taxes that we pay today to the government, represent our own money, yes.

    The money that the government spends today, only PARTIALLY represents our tax money being spent. The rest is borrowed money.

    If taxation is theft, then spending borrowed money is theft from future taxpayers. And due to interest, the amount that they will pay in the future is more than the spending that the government spends today.

    So if we begrudgingly accept the necessity of at least some taxation, then if we want to minimize the *overall harm* due to taxation, we taxpayers should pay for what we spend today, and not foist the bill onto the future. Ideally that would mean cutting spending down to the level of current levels of taxation.

    But if instead we only want to minimize the harm to us, today, without regards to future taxpayers, then of course, slash tax rates as low as they will go. Heck, why not just get rid of taxation altogether and borrow every dollar of spending. Why not?

    1. >>>If taxation is theft, then spending borrowed money is theft from future taxpayers

      taxation is theft. spending borrowed money is future theft. all you needed.

      1. Yeah you are right. Sometimes I am too verbose. 🙂

        1. So the answer, is to stop spending so much money. We obviously are spending more than we can afford to spend.

    2. Well, a funny thing is that if we simply borrowed or printed every single penny the feds spend, it would actually end up being a pretty fair indirect tax system. Eventually it would all catch up with EVERYBODY equally via inflation, so it’s rather like having a flat tax!

      Between borrowing and printing, from arguments I have read over the years, I see no reason to not simply print it all straight off. It is at least an honest way of going about it, and it gets the math of it all right up in everyone’s face, and the value of the dollar would adjust accordingly. The way we do it now ends up with largely the same effect, it just happens more slowly, and through weird mechanisms after working its way through the economy more. It’s more opaque, but the same dif in the end.

  25. “The libertarian case for high taxes and unlimited spending.”

    1. To be followed in 2020 with articles like “The Libertarian Case for Cory Booker”.

      1. It’s going to be depressing enough to see “The Libertarian Case for Bill Weld”

        1. yeah 🙁

  26. tax revenue is down

    What a tragedy.

  27. Supply side theories work to raise economic growth and, hence, revenue when the tax cuts are on capital so as to favor investment and returns to investment. Cutting taxes on labor reduces revenue with little impact on economic growth. Removing taxes on income and profits will boost economic growth the most like the FairTax does. You only tax consumption (not income or return on investment) which makes taxation more voluntary, by the way. When you retain taxes on profits and income, allow capital gains taxes to stay in place, and also maintain or modify investment rules and all sorts of other tax rules, the impact of tax cuts on economic growth and revenue is muted. Also, according to the Laffer Curve, tax cuts are to raise revenue when tax rates are too high. What is too high? That is hard to say. Supply Side thinking works, but is seldom put into practice in a way to show it works. If you take the top Keynesian-influenced macroeconomic models and just cut taxes on capital and investment returns, economic growth soars. A deficit like we have now could be eliminated entirely within 3 years with the correct tax cut or reform, holding spending growth to 3% or so per year. Politicians would almost assuredly never go there.

    1. The notion that cutting corporate income taxes does not provide economic growth is….not smart

      1. Corporate taxes are a bad idea in nearly all cases. The taxes are paid my customers in a non-transparent way. It only allows the government to hide how much the peons are actually paying.

  28. Hey, BUCS, you should workshop Suderman’s new talking point: “Not Taxing Is Theft”

    It will really cement the LP as the alternative that wasn’t

  29. Cut the size of the federal government by 96%

  30. Could it be that revenue is down because of accelerated loss/investment deductions within the tax act?

    1. That’s actually probably a respectable chunk of it.

  31. Someone needs to explain to the useful idiot author that only spending needs to be paid for. Tax cuts mean the rightful owners of property get to keep more of it.

    Tax cuts that grow the economy while reducing tax revenues are pure genius…

  32. ” A few months after ushering the tax bill into law, he helped broker a deal with Democrats that increased domestic spending (a Democratic priority) in exchange for increasing military spending (a Republican priority).”
    So both sides suck.
    And for as long as I remember the base line budgeting BS has been a way to increase Federal spending no matter what. We have a spending problem, not a taxing problem, although the spending is rather taxing on us. Congress is full of looney frigging buttholes!

    1. I am pretty supportive of a strong military. But with military fighting psuedo-wars all around the world and troops in over 130 countries, we are wasting the money and still don’t have the strong, agile, military we should have. We are too busy paying for interventions that do not benefit us, don’t fix anything, and generally destabilize other areas.

      It is ironic that Trumps instincts seem to often be pretty libertarianish (removing troops from Syria, reducing regulations for example) and it is the rest of the government that is fighting him on these tooth and nail. I am still seeing an establishment in DC, of both parties, that is out of control and opposes Trump not on his transgressions, but rather on the good stuff.

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  34. But while libertarians might like the idea of lower taxes, the result is a government that seems cheaper than it is, by deferring the cost. It ends up being a way to let government grow larger while insulating taxpayers from the price tag.
    And what exactly is the alternative? Tax the shit out of everyone while government continues to grow? The issue is spending. Since Congress cannot get it’s spending under control, I will take lower taxes when and where I can get them.

  35. I hate to say it, but the fed govt probably needs to be able to enforce tax laws more strictly. Hopefully through a simpler tax code rather than just a beefed up IRS. Also capital gains rate should probably be brought closer to income.

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