By Takia Hollowell
“If you believe that when the rich get richer, the poor get poorer; then you believe that creating wealth causes poverty….and you’re an idiot.” Michael Medved
The fact that one can believe that a lack of excessive taxes on the “rich” is the root cause of our economic woes is mind boggling to me. I am often guilty of trying to understand this type of thinking. The defenders of the tax-the-rich-more philosophy typically cite the following arguments when probed:
President Reagan’s tax cuts produced record deficits during his presidency
During President Clinton’s administration, our economy was thriving
President Bush created even more deficits with his tax cuts for the rich
The rich need to pay their fair share
I could go on to cite more of the left’s arguments that “prove” that tax cuts don’t work. However, I am not interested in composing an encyclopedia for my readers at this time.
Let’s address the era of President Reagan, shall we? Did his tax cuts produce a deficit?
The numbers reveal the following:
YEAR RECEIPTS (in billions) OUTLAYS (in billions) DEFICIT (in billions)
1981 $599 $ 678 $ 79
1982 $618 $ 746 $128
1983 $601 $ 808 $208
1984 $666 $ 851 $185
1985 $734 $ 946 $212
1986 $769 $ 990 $212
1987 $854 $1,004 $149
1988 $909 $1,064 $155
*Budget of the United States Government: Historic Tables, pg 14.
As you can see, the federal government’s revenue (receipts) increased year after year. According to the left’s logic, Reagan was not supposed to increase revenue with tax cuts. So why did his administration receive MORE revenue than his predecessor Jimmy Carter? Tax rates were higher during the Jimmy Carter years and according to their rhetoric, it should be impossible that Reagan pulled in more. What our liberal friends fail to tell you is that there are two components to creating a deficit. The second consists of spending (outlays) and as you can see, taxes were not a problem but rather spending. Although I love the old Gipper, I must drop any bias and admit to the fact that he overspent on his Just Say No (to drugs) legislation, housing programs, etc.
As for the President George W Bush vs. Clinton argument, we should be aware of that Bush was also guilty of spending and increasing the size of government like liberals do. Under his watch Medicare was expanded, the Department of Homeland Security was created and money was spent on the new No Child Left Behind legislation, etc. Keep in mind that the response to 9/11 and the wars also differentiated spending between the two administrations. In direct contrast, President Clinton was restrained from spending as his Republican controlled Congress squashed the idea of spending massively on programs such as nationalized healthcare. It is also noteworthy to mention that President Clinton reduced the Capital Gains tax rate from 28% to 20% in 1997 which spurred economic growth during his administration!!!! Oh no my friends, they aren’t telling this part of the story.
Despite history being clear, liberals will insist on the rich paying their fair share of taxes. Excuse me ladies and gentlemen but what does “fair share” mean? Is “fair share”even an economic term? No! The term fair share is defined by whatever the administration deems it to be. In Obama’s case, I guess making $250,000 a year qualifies you as rich. This sounds very subjective to me.
Soooooooo, how do tax cuts spur economic problems again? History has displayed over and over again that tax cuts create growth while excessive spending does the opposite. Even Democrat John F. Kennedy called for tax cuts to ignite job growth to escape a recession in 1962 ….gasp! Once again, liberals are guilty as charged for using an emotional “fair share” argument that tugs on the hearts of those that are economically challenged.