Whenever Republicans – or anyone else – propose a tax cut, Democrats run in horror to the nearest microphone crying about all the revenue it will "cost" the federal government. Panicked Pols will foretell of massive firings of teachers and policeman; children will starve because school lunches will disappear; and, condoms and birth control pills will vanish from Planned Parenthood stock rooms.
Such is the case in these waning days of the 2012 presidential campaign as Barack Obama and Joe Biden rail against the Romney-Ryan plan to lower the tax burden on Americans. It's not just that Mitt and Paul believe everybody in America could use some relief. They also know that history has proven time and again that lower tax rates are a proven stimulus for increased economic activity which produces more, not less, revenue for the US Treasury as the following chart demonstrates.
Reprinted from IBD: October 18, 2012
Not only do Obama and Biden deny historical fact with their opposition to Romney's plan, they pretend that restoration of economic vitality is somehow just one more big tax increase away. Their plan – already rejected by many Democrats in Congress – would raise taxes for the handful of folks at the top of the income ladder; many of which are small business owners.
In a front page feature for Investor's Business Daily on Tuesday, October 18, 2012, Paul Sperry does a terrific job of explaining the historical financial realities that happened when tax rates were both increased and decreased across time by Democrats and Republicans from the Kennedy Administration through that of George W. Bush.
Obama and Biden would do well to study and understand this indisputable piece of American history. But then their objective isn't really to fix our economy; it's all playing class warfare in the hope of eeking out re-election.
In his opening few paragraphs Sperry writes:
President Obama warned that GOP hopeful Mitt Romney's proposed income-tax cuts will "cost" the government revenue and repeat Bush policies that he says blew up the deficit.
"The centerpiece of his economic plan are tax cuts," Obama said at Tuesday's presidential debate in New York. "That's what took us from surplus to deficit."
He called Romney's tax plan "sketchy," because it promises to raise revenues while slashing personal tax rates from top to bottom. His debate sparring partner, Democratic Sen. John Kerry, went further, calling it a "fraud."
The Obama camp has strenuously opposed Romney's pro-growth strategy, arguing that tax breaks, especially for the wealthy, "rob" programs for the middle class and poor because they don't raise revenues and don't "pay for themselves."
"It has never been done before," Vice President Joe Biden insisted in last week's debate with Romney running-mate Paul Ryan.
"It's been done a couple of times, actually," Ryan shot back.
The data bear out Ryan. In fact, the White House's own numbers put a big wrinkle in its argument.
The historical tables in the back of the latest "Economic Report of the President" show that the Bush tax cuts generated more, not less, federal revenues — a phenomenon that also held true for Presidents Clinton, Reagan and Kennedy. Full feature here.