In an op-ed today in the Greenville News (SC) commemorating Tax Day, Sen. Lindsey Graham (R-SC) wrote that “South Carolinians [are] encouraging me to find some way — any way — to make Tax Day less burdensome.” In order to relieve the burden, Graham argued that President Bush’s tax cuts should be made permanent.
Trying to bolster his case, Graham asserted — without any evidence — that the federal government “actually collected more in tax revenue” because of Bush’s tax cuts. But then he made a slightly more jaw-dropping claim: Americans’ “uneasiness” about the economy is perhaps due to their fear that Bush’s tax cuts will expire:
[Tax cuts were] the right medicine for an ailing economy and the results were clear. By lowering taxes, the federal government spurred economic development and actually collected more in tax revenue. [...]
I believe some of the uneasiness taxpayers feel today about the economy is driven by concerns they are going to be hit with huge tax increases when the tax cuts expire.
Is fear that Bush’s tax cuts will expire causing Americans to sour on the economy? Perhaps. But maybe American negative attitudes toward the economy stem from the housing and credit crises, job losses, rising unemployment, a volatile stock market, high gas prices, high family debt, flat wages, increasing budget deficits, a weak dollar, and rising health care costs — not to mention the effects of the $12 billion per month war in Iraq that is being bankrolled largely on borrowed funds.
But more than that, economists — including the current Treasury Secretary and Federal Reserve Chairman, members of Bush’s Council on Economic Advisers (CEA) and Sen. John McCain’s (R-AZ) own economic adviser — disagree with Graham’s assertion that tax cuts boost revenue:
– Treasury Secretary Henry M. Paulson: “As a general rule, I don’t believe that tax cuts pay for themselves.”
– Federal Reserve chairman Ben Bernanke: Tax cuts only “partially offset the losses in revenues.”
– McCain economic adviser Douglas Holtz-Eakin: Asked if tax cuts generate “enough additional revenue to pay for themselves? ‘No,’ said Douglas Holtz-Eakin.”
Indeed, Graham has a fairly solid history of making absurd claims, most recently saying that McCain has done “even more” than former Vice President Al Gore on global warming.
The Wonk Room has the key facts you need to know about McCain’s economic speech today.