Repeat after me: tax cuts don't pay for themselves

Here is an interesting new U.S. site we've come across, I Heart Taxes. Take a look at it. (They do a nifty line in t-shirts too.) It, in turn, pointed us towards something else we have blogged extensively about: the widely peddled notion that tax cuts somehow pay for themselves. (Our recent exchange with MP Roger Helmer was our latest in that particular series.)

Now we have the respected U.S. economist Mark Thoma weighing in:

Republicans are selling snake oil once again:

Some Republican Senate candidates have suggested that extending the Bush tax cuts — which are scheduled to expire at the end of the year — will actually be good for the country’s bottom line, as the economic growth that results will more than offset the trillions of dollars in lost revenue. “By extending tax cuts you pay down the deficit, you grow the economy by giving people more money,” said Colorado Republican Ken Buck.

Today, on Fox News Sunday, Pennsylvania’s Republican Senate nominee Pat Toomey joined this club, telling Fox’s Chris Wallace that “it’s not clear” that extending the Bush tax cuts — while also lowering the corporate tax rate — would increase the deficit...

But, of course, the Bush tax cuts did not even come close to paying for themselves. The Bush tax cuts cost us around $1.7 trillion in revenue from 2001 through 2008, in part because of weak output and job growth following the cuts (contrary to assertions about how the tax cuts would stimulate economic growth).

As for the cost of extending the tax cuts to the wealthy, the Tax Policy Center estimates that making all the Bush tax cuts permanent, as opposed to extending them only for the middle and lower classes, would cost $680 billion over the next decade.

The disappointing part is that the press still lets them get away with this.

Now read on . . .