Paul Ryan’s “reality” problem: Why his justification of ruinous supply-side tax policies is warped
"The “reality” Ryan describes here is a central tenet of supply-side economics: tax cuts will spur sufficient economic growth to ultimately pay for themselves. The actual reality is very different – tax cuts almost always result in lower revenues. The Reagan tax cuts ballooned the deficit to such an extent that he actually had to bump up taxes several times to help keep it manageable. The Bush tax cuts of 2001 and 2003 are largely to thank for the deficits we have right now. Conversely, the tax increases of the Clinton years (derided at the time by Republicans and conservatives as economic suicide) coincided with vigorous economic growth and deficit reduction.
But one doesn’t even need to look to history to find repudiation of this “reality.” The supply-side “experiment” underway in Kansas right now, under the direction of Gov. Sam Brownback, is a testament to the dangers of relying on dynamic scoring to oversell tax cuts.
In 2012, Brownback made good on promises to slash income and small-business taxes in the state, claiming that they’d have immediate and potent effects on job creation and economic growth – “like shooting adrenaline into the heart of growing the economy,” he said at several points. His office produced analyses pointing to brisk job creation and an influx of new residents. What actually happened was very different: sluggish job growth, and ever-worsening budgetary problems. Just last month, state revenue forecasters acknowledged that their revenue projections from earlier this year were overly optimistic, and (since Brownback refuses to raise revenues) drastic cuts to spending will have to be made to make up the shortfall. While most states are crawling out the recession and devoting increased revenues to beefing up pared-down social services, Kansas is moving in the opposite direction, and all of it is attributable to Brownback’s tax cuts."
