Tax policy in a bizarro world

TAX POLICY IN A BIZARRO WORLD…. As part of yesterday’s “Tea Party panel” on ABC’s “This Week,” host Christiane Amanpour suggested it’s unrealistic to think the budget shortfall can be addressed through spending cuts alone. “Can you really sustain what everybody is calling for just by cuts in public services?” she asked her right-wing guests. “Doesn’t there need to be revenue-raising mechanisms?”

Rep. Joe Walsh (R) of Illinois rejected the premise: “Christiane, you raise revenue by growing the economy. And everything this president has done the last two years has gone against that. You get taxes and regulations off the backs of businesses so that revenues can increase.”

That’s actually backwards. The president’s policies, as an objective matter, grew the economy and increased revenues. That’s not opinion or spin; it’s just what happened. Walsh doesn’t have to like reality, but he shouldn’t lie about it on national television.

Amanpour pressed further, noting that Reagan cut taxes, saw that the debt increased, and then raised taxes. Walsh, apparently stuck in his own bizarro world where calculators bend to his will, replied:

“[I]n the ’80s, government revenues went up. We didn’t cut spending. Revenues went up in the ’80s. Every time we’ve cut taxes, revenues have gone up, the economy has grown.”

He then quickly changed the subject.

It’s important that folks realize that Walsh and those who share his talking points have no idea what they’re talking about. This truly absurd argument — tax cuts pay for themselves — comes up from time to time, but it’s not getting better with age.

Amanda Terkel noted that actual economists, even conservative ones, have no use for this argument.

“Federal revenue is lower today than it would have been without the tax cuts. There’s really no dispute among economists about that,” said Alan D. Viard, a former White House economist under George W. Bush, in a 2006 Washington Post article.

Robert Carroll, deputy assistant Treasury secretary for tax analysis, also said that no one in the administration believes tax cuts created a surge in revenue. “As a matter of principle, we do not think tax cuts pay for themselves,” Carroll said.

Bruce Bartlett, a Reagan economist who became a strong critic of the Bush administration’s policies, used data from the Office of Management and Budget in a blog post last year to illustrate how “the Bush tax cuts reduced revenue rather significantly.”

Congressional Republicans aren’t just wrong about this; they’re pathologically confused. The evidence isn’t ambiguous in the slightest — when Walsh claims “every time we’ve cut taxes, revenues have gone up,” that’s just crazy.

It’s also a reminder of why meaningful, substantive debate seems so impossible right now — there’s no foundation of reality, shared by the left and right, to build upon. It’s like being stuck on in an algebra class, and half the students are convinced arithmetic is a scam cooked up by communists. There’s just not much to talk about after that.