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Thursday, October 27, 2011

Charlatans and Cranks

Suzy Khimm poses a question to the Perry campaign:

1) How will the new tax breaks for the wealthy be paid for?
Perry campaign: The purpose of this bold tax proposal is to give the economy the jumpstart it needs to get people back to work. ... Gov. Perry is confident that the economic growth that results from this plan will generate the necessary revenue to balance the budget by 2020.

So the tax cuts will pay for themselves? Greg Mankiw:

I used the phrase "charlatans and cranks" in the first edition of my principles textbook to describe some of the economic advisers to Ronald Reagan, who told him that broad-based income tax cuts would have such large supply-side effects that the tax cuts would raise tax revenue. I did not find such a claim credible, based on the available evidence. I never have, and I still don't.

There's no mystery here. The tax cuts for the wealthy will be paid for by cutting benefits for the working class, the poor, and others who are already having a tough time making ends meet.

    Posted by on Thursday, October 27, 2011 at 12:34 PM in Budget Deficit, Economics, Taxes | Permalink  Comments (81)


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