Is Rudy Out of the Mainstream of the GOP?
There's an argument being made (Tyler Cowen, Megan McArdle) that supply-side economics, the kind that says tax cuts pay for themselves, is no longer mainstream in the Republican party, i.e. it no longer has any influence and is no longer used as an argument for cutting taxes.
Is it true that supply-side economics no longer has influence in the Republican party? This is straight from Giuliani's web site:
Rudy is the real fiscal conservative in the race. He cut taxes 23 times in New York and turned a $2.3 billion budget deficit into a multi-billion dollar surplus, while balancing the city’s budget. Because he turned his conservative principles into action, New York City taxpayers saved more than $9 billion in taxes and enjoyed their lowest tax burden in decades, while the economy grew and city government saw its revenues increase from the lower tax rates. Rudy Giuliani believes in supply-side economics, because he did it and he saw it work.
Update: Free Exchange quotes last night's Republican debate (Brendan Nyhan too):
Laffer Riot, Free Exchange: ...Over at The Atlantic, Megan McArdle took issue with Mr Chait's assessment of supply-side tax policies (whereby lower tax rates increase revenues) as hugely influential...
Matthew Yglesias [cited] ... the embrace of supply side orthodoxy by much of the conservative establishment, including prominent columnists and intellectuals, along with GOP congressional leadership and the president himself.
Tyler Cowen now places himself firmly in Ms McArdle's corner, disavowing supply sider influence. ...[A]s a counterpoint, I would refer him to last night's Republican debate in New Hampshire. Looking over the transcript one finds Senator John McCain saying:
I stand on my record, and my record is 24 years of opposing tax increases, and I oppose them, and I’ll continue to oppose them. I think it’s very clear that the increase in revenue that we’ve experienced is directly related to the tax cuts that were enacted, and they need to be made permanent rather than the family budgets and businesses being uncertain about their future.
Moments later, Rudy Giuliani chimes in:
I have without any doubt of all the people running for president the strongest record of lowering taxes. I did it 23 times in a city that had never lowered a tax before well over $9 billion. I lowered the personal income tax 25 percent, and I was collecting 40 percent more in revenues from the lower tax than the higher tax. I made supply-side economics work in a city that didn’t understand it, and I ended up having a very positive impact on the economy of the city as a result of that.
It seems that at least as far as major candidates for the highest elected office in the land are concerned, supply side tax policies remain influential.
Posted by Mark Thoma on Thursday, September 6, 2007 at 02:52 PM in Budget Deficit, Economics, Politics, Taxes |
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