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“They Haven’t Learned Yet”: Republican’s Love Affair With Voodoo Economics

In a moment of sanity, George HW Bush once called Ronald Reagan’s proposal for tax cuts “voodoo economics.” The idea was that tax cuts for the wealthy would somehow “trickle down” to the rest of us and grow the economy. Bush eventually had to embrace the idea as Reagan’s vice president, but later as president himself, he paid the price when he had to abandon his “no new taxes” pledge because the tax cuts accomplished nothing more than to blow up the federal budget deficit.

Along came President Clinton, who raised taxes on the wealthy (something that seems to have been forgotten in this presidential primary) and we witnessed the first budget surplus in generations. Next came George W. Bush, who cut taxes with the same result – a huge budget deficit compounded by wars and the Great Recession. At that point we were treated to the “wisdom” of VP Dick Cheney who quipped that “deficits don’t matter.” Of course that only lasted until Barack Obama became president and all of a sudden it became a national crisis. Eventually President Obama raised taxes on the wealthy once again, and cut the deficit by two thirds.

At some point, one has to wonder how long Republicans can continue their love affair with trickle-down economics. And yet all three presidential candidates continue to espouse the idea that tax cuts for the wealthy will make the economy grow.

The failure of trickle-down has been demonstrated in states as well as at the national level. We’ve all watched as the Republican governors of Kansas, Louisiana and Wisconsin failed to grow their economies by providing massive tax cuts to the wealthy. The most extreme case for years now has been Gov. Brownback in Kansas.

Brownback took office on a pledge to make Kansas friendlier to business and successfully sought to cut the top personal income tax rate by 29 percent and exempt more than 330,000 farmers and business owners from income taxes. The moves were popular in a Legislature where the GOP holds three-quarters of the seats.

Rather than grow the economy, that resulted in things like the following:

Last month, Brownback ordered $17 million in immediate reductions to universities and earlier this month delayed $93 million in contributions to pensions for school teachers and community college employees. The state has also siphoned off more than $750 million from highway projects to other parts of the budget over the past two years.

With the 2016 election on the horizon and the state budget still in crisis, it looks like some Republicans may be questioning their commitment to voodoo economics.

Now many of the same Republicans who helped pass Brownback’s plan are in open revolt, refusing to help the governor cut spending so he can avoid rolling back any of his signature tax measures.

If Brownback won’t reconsider any of the tax cuts, they say, he will have to figure out for himself how to balance the budget in the face of disappointing revenue.

“Let him own it,” Republican Rep. Mark Hutton said. “It’s his policy that put us there.”

While Rep. Hutton’s remarks won’t win him a “profile in courage” award, the Republican proposal at this point – which Brownback rejected – is to repeal the personal income tax break for farmers and business owners to raise an additional $200 million to $250 million a year.

George HW Bush knew that trickle-down was just another name for voodoo economics. Now it sounds like a few Republicans in Kansas are figuring that out. But I don’t hold out a lot of hope that this kind of awareness will be contagious in the GOP. After all, acquaintance with facts and reality is clearly not their strong suit these days.

 

By: Nancy LeTourneau, Political Animal Blog, The Washington Monthly, April 19, 2016

April 21, 2016 - Posted by | Sam Brownback, Tax Cuts for The Wealthy, Voo Doo Economics | , , , , , ,

1 Comment »

  1. The Donald’s tax plan per the non-partisan Tax Foundation increases the debt by $12 trillion over the next ten years, which is more than 60% increase, yet he says he can reduce the debt in eight years. How might I add? Ted Cruz’ tax plan will increase the debt by $3.7 trillion over ten years. Oh, but some might say they will cut spending. Outside of Bernie Sanders’ whose spending includes national healthcare, Cruz’ plans raise spending by 6% followed by Trump at 3% with Clinton at 2%, however she will increase taxes by $500 billion over the next ten years.. Yet, Cruz portrays himself as a deficit hawk. Only Kasich’s plans reduce spending by 2%. Our candidates need to seriously tell us how they are going to reduce the debt and 2% reduction is not enough nor is increased taxes of $500 billion. Trump and Cruz are not even in the ballpark.

    Like

    Comment by Keith | April 21, 2016 | Reply


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