Stephen Moore is a supply-side economics radical. Time and again his scholarship has been shown to be worthless.
The deceptive advocacy of Stephen Moore
http://www.spinsanity.org/columns/20030922.htmlWe have a progressive income tax. The more money earned, the higher the income tax bracket. The very wealthy have seen their incomes skyrocket in the last few decades while everybody else did not experience such growth. More is paid b/c more is being earned…a lot more. For the true wealthy, they don’t make the bulk of their income from earned income. They make it through passive investments—capital gains—which is taxed in this manner:
For 2007, the maximum capital gains rates are 5%, 15%, 25% or 28%.
http://www.irs.gov/newsroom/article/0,,id=106799,00.htmlFor the bulk of the elite’s income, those tax rates are very low. Total federal tax rates paid on wages and other earnings averaged out to around 23.4%
Federal taxes on capital gains averaged around 9.6%
The Bush tax cut did disproportionately favor the rich.
• According to a Treasury Department study, the top one percent of the population pays 20 percent of all federal taxes under current law. Thus, under the Bush plan, the share of the tax cut that would go to the top one percent is about double the share of the federal taxes they pay.
• … When all federal taxes are included, as they should be, the figures show the top one percent would receive a share of the tax cut (36 percent to 43 percent) that is about twice as large as the share of federal taxes it pays (20 percent).
• This high-income group also would receive a larger percentage reduction in total federal taxes (as distinguished from just income taxes) than any other income group, while low-income families would receive one of the smallest percentage tax reductions. High-income families would receive the largest percentage increase in income, as well.
http://www.cbpp.org/2-7-01inclvlshort.htmTax cuts have always been a net loss to the government. Never in the country’s history has attendant economic growth from tax cuts covered the cost of the tax cut. Bush’s own Treasury Department released a report stating as much:
“Contrary to the claim that the tax cuts will have huge impacts on the economy, the Treasury study finds that even under favorable assumptions, making the tax cuts permanent would have a barely perceptible impact on the economy. Under more realistic assumptions, the Treasury study finds that the tax cuts could even hurt the economy.”
http://www.cbpp.org/7-27-06tax.htmAnd one final word about the glorious Reagan tax cuts, they created huge deficits and debt even in spite of the fact that Reagan raised taxes 7 times out of his 8 years in office including the largest tax increase in history to this date.
I guess what it all boils down to is: Do tax cuts provide a free lunch?
Nope, they never have.