David Cay Johnston: "Trickle-Down Trouble"

[alp227]

This article was published in the April 13-April 19, 2011 edition of Metro Silicon Valley in print as "Tax facts: The truth about who pays and who doesn't in America's bracket racket".

For three decades, we have conducted a massive economic experiment, testing a theory known as supply-side economics. The theory goes like this: lower tax rates will encourage more investment, which in turn will mean more jobs and greater prosperity, so much so that tax revenues will go up, despite lower rates. The late Milton Friedman, the libertarian economist who wanted to shut down public parks because he considered them socialism, promoted this strategy. Ronald Reagan embraced Friedman's ideas and made them into policy when he was elected president in 1980.

For the past decade, we have doubled down on this theory of supply-side economics with the tax cuts sponsored by President George W. Bush in 2001 and 2003, which President Obama has agreed to continue for two years.

One would think that the question of whether this grand experiment worked would be settled after three decades—that the practitioners of the science of economics would look at the data and pronounce a verdict, the way Galileo and Copernicus did when they showed that the earth revolves around the sun. But economics is not like physics. Tax policy is something the framers left to politics. And in politics, the facts often matter less than who has the biggest bullhorn.

The same mad men who once ran campaigns featuring doctors extolling the health benefits of smoking are now busy marketing the dogma that tax cuts mean broad prosperity, no matter what the facts show. As millions of Americans prepare to file their annual taxes, they do so in an environment of media-perpetuated tax myths.

He also mentions Donald Trump:

I have Donald Trump's tax records for four years early in his career. He paid no taxes for two of those years. Big real estate investors enjoy tax-free living under a 1993 law President Clinton signed which lets "professional" real estate investors use paper losses like depreciation on their buildings against any cash income—even if they end up with negative incomes, like Trump.

Full story: http://www.metroactive.com/bohemian/04.13.11/feature-1115.html

[bvar22]

1. The verdict IS in:

These policies have been GREAT for the Top 1%,
but for Americans who Work for a Living,
they have been a Bi-Partisan DISASTER.

[snagglepuss]

2. Exactly. nt

[Enthusiast]

3. No question.

Yet the Reagan mythology has been ramped up in recent years. The media is killing us.

[Overseas]

4. K&R.

Demand-Side works much better for the most of us.