Rebutted by Jonathan Chait:
Here's the Journal insisting that Bush tax cuts in 2003 -- the really regressive ones, the ones that didn't waste any precious dollars on the middle class -- produced big revenue gains:
After the Bush investment tax cuts of 2003, tax revenues were $786 billion higher in 2007 ($2.568 trillion) than they were in 2003 ($1.782 trillion), the biggest four-year increase in U.S. history. So as flawed as it is, the current tax code with a top personal income tax rate of 35% is clearly capable of generating big revenue gains.
And here's the Journal insisting that the problem with the budget right now is that we're growing too slowly:
Mr. Obama has a point that tax receipts are near historic lows, but the cause isn't tax rates that are too low.... Today's revenue problem is the result of the mediocre economic recovery...
Right. We're growing really slowly even though the Bush tax cuts have been in place since 2001, and the beloved super-regressive second round of Bush tax cuts since 2003. That would suggest that the Bush tax cuts are not the cure for slow economic growth. Indeed, that conclusion is so obvious the Journal concocts a convoluted rationale to get around it. The structure of the editorial is that it begins with the second point -- revenues are really low because of growth -- and then works to the first point -- the Bush tax cuts produced big revenue gains! -- before arriving at the conclusion: "A tax increase won't help growth—or revenues." That way the Journal can treat the 2003 tax cuts as some distant historical aspiration rather than current tax policy.... The more plausible interpretation is that tax rates at current levels have a trivial impact on economic growth. Otherwise we're stuck with the Journal's claim that we're experiencing slow growth due to sub-optimal tax policy, and the solution to this is to keep current tax rates in effect.
Rebuttals to talking-points misinformation that I want to have at the forefront of my brain--for when I am surprised, as I will be, by an unexpected question from an unexpected direction while talking to reporters, phone callers, passers-by, radio interviewers, cable TV interviewers, etc....
