Since the election showed that a majority of Americans have largely had it with the GOP’s anti-tax extremism, many Congressional Republicans have tried to present a “compromise“: tax reform that will supposedly lower tax rates but raise more federal revenue via a combination of closing tax loopholes and economic growth, akin to the plan presented by Mitt Romney. The economic evidence has shown, however, that counting on lower tax rates to spark economic growth that ultimately raises revenue is a right-wing pipe dream.
But that hasn’t stopped the party’s failed Vice Presidential nominee, Rep. Paul Ryan (R-WI), from hopping on board. In multiple interviews over the weekend, Ryan implied that revenue would be raised by a tax reform package. As he told the Milwaukee Journal-Sentinel:
Yes, you can increase revenues without having to raise tax rates. Our fear is that if you raise tax rates you hurt economic growth. You hurt small businesses. So through tax reform you can get higher revenues without damaging the economy. We think that’s the better way to go.
He reiterated this point during an interview with Wisconsin’s News 3:
This is why we don’t think we should raise tax rates, but you can get higher revenues through tax reform. So there’s an area where I think common ground can be reached. But if the goal here is just to keep raising tax rates, then that puts our successful small businesses, which is where most of our jobs come from, out of business.
It’s certainly possible to close enough loopholes that tax reform would raise more revenue. But the GOP is counting on the growth that tax reform will supposedly cause, not the act of removing loopholes, to raise that revenue. As Sen. Chuck Schumer (D-NY) replied when Speaker John Boehner (R-OH) suggested the same idea: “Part of his speech he talked about dynamic scoring, this idea if you cut taxes you increase revenues…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.”