Speaker of the House John Boehner (R-OH) yesterday, in a move that many in the media deemed conciliatory, said that House Republicans are open to raising more revenue for the federal government, as long as it comes “as a byproduct of growing our economy, energized by a simpler, cleaner, fairer tax code, with fewer loopholes and lower rates for all.”
Believing that lower tax rates will magically raise revenue thanks to a growing economy is a favorite conservative fantasy. (It’s been dubbed believing in the “tax fairy.”) Today, Sen. Chuck Schumer (D-NY) responded to Boehner’s speech by calling it “a Rumpelstiltskin fairy tale“:
Schumer derided the theory that substantial revenues can be raised without increasing the tax burden on the wealthy.
“Part of his speech he talked about dynamic scoring, this idea if you cut taxes you increase revenues,” Schumer said.
“It’s about time we debunked that myth, it’s a Rumpelstiltskin fairy tale, dynamic scoring. You may remember Rumpelstiltskin was the fairy tale figure who turned straw into gold,” he added, making reference to the popular German children’s tale from the 19th century.
Many studies have shown “that tax cuts do not come anywhere close to paying for themselves over the long term.” Greg Mankiw, chair of George W. Bush’s Council of Economic Advisers, called those who believe that tax cuts will result in a revenue increase “charlatans and cranks.” “There is no serious research evidence to suggest that” tax cuts pay for themselves, Republican economist Douglas Holtz-Eakin agreed. But Republican leaders still claim that such a thing will happen, all evidence to the contrary.