Kay Bailey Hutchison’s Bizarro World: ‘Every Major Tax Cut In History Has Created More Revenue’

In the budget released today, the Obama administration announced that it would end the Bush tax cuts on the wealthiest Americans, as well as shut off loopholes that effectively eviscerate corporate tax revenues, all in an effort to fuel a robust domestic agenda and start lowering the deficit.

Predictably, the right wing is up in arms over the small tax increase for the richest businesses and families. Sen. Kay Bailey Hutchison (R-TX) complained to a friendly crowd at CNBC this morning that Obama’s tax increases would harm the economy, and insisted the best way to raise revenue is to cut taxes:

HUTCHISON: I think we get revenue the way we’ve done it in the past that has been so successful in the past and that is tax cuts…Every major tax cut we’ve had in history has created more revenue.

Watch it:

The notion that cutting taxes somehow — magically — increases government revenues is a myth that won’t die. “The claim that tax cuts pay for themselves…is contradicted by the historical record,” reported the Center on Budget and Policy Priorities, which showed that revenues grew twice as fast in the 1990s, when taxes were raised, than in the 1980s, when taxes were cut. FactCheck.org called a claim like Hutchison’s “highly misleading” and stated the obvious fact that “we can’t have both lower taxes and fatter government coffers.”

“[E]verything you’ve heard about how revenues have boomed since the Bush tax cuts is wrong,” economist Paul Krugman wrote, noting that government revenues climbed steadily through the Clinton administration, then plunged dramatically following the 2001 Bush tax cuts. And falling revenues during tax-cutting Republican administrations means growing debt:


Hutchison must be looking at a different “history” than everybody else.


Also during the CNBC interview, Hutchison was asked if “it’s necessary to postpone our nations answers to health care because it costs too much.” She responded, “I certainly do.”

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