Tyler Cowen Wrong Again About Taxes

ATR ^ | 2011-10-05 | Ryan Ellis

[92nina]

The New York Times only publishes articles from conservatives when the latter is foolishly carrying water for the Left. This was true again this week, with the useful idiot role played this time by GMU professor Tyler Cowen, who we've publicly called out before for supporting a VAT.

You will want to read his article first. My responses are below:

Would a grand bargain with $10 in promised spending cuts for $1 in tax hikes be a good deal for conservatives? No. We have been through this before. In 1982, President Reagan was promised $3 in spending cuts for every $1 in tax hikes. In 1990, President George H.W. Bush was promised $2 in spending cuts for every $1 in tax hikes. In each case, all the tax hikes went through, since that's a matter of a single, affirmative tax law change. The spending cuts never materialized. It doesn't matter how unbalanced the promised ratio is. The first number in the ratio always has been and always will be a mirage.

Are spending cuts now tax cuts in the future? No. First, the spending cuts are merely grand bargain promises, and those have never actually come to fruition. Second, cutting spending now does not mean that taxes will be lower in the future. Congress could very easily raise spending in the future, for example. Spending and taxes are two independent choices made by politicians. They are related to each other, but there is not the causality that Cowen is asserting.

Does promising never to raise taxes mean that taxes must rise in the future because spending will keep going up? Absolutely not. First, there is no law of nature that spending must rise faster than the rate of nominal GDP growth. Spending declined...

Read more: http://www.atr.org/tyler-cowen-wrong-again-taxes-a6501#ixzz1a0uMRYSz

[92nina]

GMU Professor Tyler Cowen thinks the smart thing to do would be to raise taxes in order to get a grand bargain on the deficit. ATR disagrees.

Take this article and others I found to the fight to the Libs on their own turf; put the Left on the defensive at Digg and at Reddit and in Stumbleupon and Delicious