Here we go again, using la la land economics to justify tax cuts.
That’s not to say tax cuts are bad. But tax cuts that aren’t paid for are. And when they jack up the national debt that’s pathetic… far worse when they come from leaders supposedly dedicated to reducing that debt.
You would have thought that congressional Republicans learned a lesson from the 2001 and 2003 Bush Tax cuts. Based on actions last week, they didn’t.
Here’s a primer on la la land economics.
Researchers with the Heritage Foundation in 2001 proclaimed that Bush’s 2001 tax cuts would completely eliminate our $5 trillion national debt by 2010. Instead, over that period, the national debt jumped $7.7 trillion. Of that, about $1.6 trillion came from the unpaid for Bush tax cuts, according to a 2012 Congressional Budget Office report.
Just four months ago, the new Republican-appointed director of the CBO, Keith Hall emasculated la la land economics saying, “The evidence is that tax cuts do not pay for themselves. And our models that we’re doing, our macroeconomic effects, show that.”
Now comes the supposedly conservative, anti-deficit, Republican-controlled House of Representatives passing $650 million in tax perks with no attempt at all to offset the cost.
These unpaid for tax cuts are projected to add another one-half trillion dollars to the national debt.
“Republicans have instituted rules that block such measures unless they’re paid for,” reported Politico.com, “restrictions they will waive for themselves on this particular occasion.”
“Spending and tax cuts shouldn’t be treated differently,” said Maya MacGuineas, president of the bi-partisan Committee for a Responsible Budget, “they should both be paid for.”
But, back in la la land, Texas Congressman Kevin Brady, chairman of the House Ways and Means Committee, said, “This bill serves as a path forward to pro-growth tax reform.”
Here in Mississippi we seem to have more schizophrenic Republican leaders.
On a reality day, they dealt with slow tax revenue growth by cutting the proposed state budget for next fiscal year.
“Lt. Gov. Tate Reeves and legislative leaders approved a $6.19 billion budget plan (last week) that cuts state spending by $101.8 million,” reported Bobby Harrison in the Northeast Mississippi Daily Journal.
On a la la land day, they proposed, again, eliminating the $260 million business franchise tax.
Reeves, Governor Phil Bryant, and other GOP legislative leaders say “dumping the franchise tax will result in more money to spend and eventually increase state revenue collections,” reported the Mississippi Business Journal’s Ted Carter.
Again, this isn’t to say that eliminating the franchise tax is a bad. Pretending such a tax cut won’t slam state revenue is. Lucid leaders would pay for such tax cuts with spending cuts or other revenue adjustments.
FYI, “la la land” refers to “a state of mind synonymous with Hollywood that is out of touch with reality, focusing on dreams, fantasies or frivolous endeavors” – the Urban Dictionary.