In the esteemed, left wing self proclaimed economists column today, Mr. Krug takes cheap political swipes at Rep. Paul Ryan's Roadmap for America's Future, calling him the "flim flam man". We think that sobriquet more properly fits the economist himself for his personal brand of agenda driven, psuedo populist, economic pronouncements, completely devoid of fact, historical evidence, or even common sense.
In today's drivel, Mr. Krug, (I just can't bring myself to add "man" to the equation) returns to the old, dosproven rhetoric that tax cuts reduce revenue to the government, all evidence to the contrary notwithstanding. For this he relies on the outdated computer models used by the CBO, and the GAO, which only account for static numbers. Meaning that if you reduce taxes by 10%, and you collected $100 this year, it assumes you will only collect $90 next year, when history has shown that every times taxes have been cut across the board, MORE revenue has found it's way into the governments coffers, through the expanded jobs base, more spending, creating more demand for more goods, which has an, OH MY GOD!, DARE I SAY IT... "trickle down effect" creating more and more demand for more varied jobs as it flows.
So here are the numbers Mr. Krug refuses to acknowledge according to the Treasury Dept.; Lets start with the Reagan tax cuts. Those were first implemented in 1982, but did not begin to take effect until late 1983.
In 1983:
Fed. Income tax revenues were: $326 B
Business tax revenue: $14.5 B
Total tax revenue: $600.6 B
BTW Congress SPENT: $808.4 B that year.
In 1984:
Fed. Income tax revenues were: $355.3 B
Business tax revenue: $15.7 B
Total tax revenue: $666.5 B AN INCREASE IN TAX REVENUE OF 11%
BTW Congress SPENT: $851.9 B that year.
In 1985:
Fed. Income tax revenues were: $395.9 B
Business tax revenue: $17.1 B
Total tax revenue: $734.1 B AN INCREASE IN TAX REVENUE OF 10.2%
BTW Congress SPENT: $946.4 B that year.
In 1986:
Fed. Income tax revenues were: $412.1 B
Business tax revenue: $18.6 B
Total tax revenue: $769.2 B AN INCREASE IN TAX REVENUE OF 4.8%
BTW Congress SPENT: $990.4 B that year.
In 1987:
Fed. Income tax revenues were: $476.5 B
Business tax revenue: $17 B
Total tax revenue: $854.4 B AN INCREASE IN TAX REVENUE OF 11.1%
BTW Congress SPENT: $1004.1 B that year.
In 1988:
Fed. Income tax revenues were: $495.7 B
Business tax revenue: $17.4 B
Total tax revenue: $909.3 B AN INCREASE IN TAX REVENUE OF 6.5%
BTW Congress SPENT: $1064.5 B that year.
And the trend continued almost unabated. BTW, ALL of these increases far exceeded any increases in GDP, meaning, Mr. Krug, that Federal income tax revenue AFTER TAX RATE CUTS INCREASE FASTER THAN ECONOMY AS A WHOLE! Resulting in more revenue for the government, which as you can see Congress willingly spent faster than it came in.
The aggregate increase in income tax revenue 1983- 1988 was 179% INCREASE!! comments Mr. Krug??? Also he fails to mention that every budget signed by President Reagan also included promised spending cuts which Congress never could bring themselves to implement. In essence they lied, as usual. The actual historical numbers belie the partisan whining of the NYT's economic advisor, maybe that is why the old grey lady can't turn a profit?
