[PEN-L:12047] slate on taxes

[James Devine <jdevine@xxxxxxxxxxxxxxx>]

the web page is:
http://www.slate.com/BestPolicy/97-08-30/BestPolicy.asp

the text (but not the graph) says:

A Brief History of Taxes

Are tax cuts good (and tax hikes bad)
for the economy? You sure can't prove
it from the data.

By Jodie T. Allen
(236 words; posted Saturday, Aug. 30)

   For two decades, it has been an article of
faith, at least within one potent sector of the
Republican Party, that tax cuts are ipso facto
good (and tax hikes are ipso facto bad) for the
economy, for the financial markets and thus, for
all of us. For two decades, as well, taxes have
gone up and down, and so have the economy and
the financial markets. So how do theory and
reality compare?

      Other things being equal, a tax cut, by stimulating
consumption and investment, can help the economy. But
many things besides taxes affect the level of economic
activity. And then there's the little problem of paying for
the nice tax cut. As long as Congress is unwilling to offset
revenue losses with real spending cuts (not the vague
promises of future rectitude that have been the mainstay of
every "historic balanced budget" package since 1981), a
cut in taxes means a bigger federal budget deficit. And
that, in turn, can drain investment capital, alarm an
inflation-wary Federal Reserve Board, raise interest rates,
 and unnerve financial markets.

        So, are tax cuts good for the economy and tax hikes
bad? Take a look at the record, from Ronald Reagan's
famous 1981 tax cut through Bill Clinton's famous 1993
tax hike, and judge for yourself.

        Of course, President Clinton has since repented his
tax-boosting ways. Only last month, he signed off on
another big tax cut. Uh-oh.

(Of course, the intellectual property rights for the above belong to Bill
the Octopus.
BTW, the most-often stated reason for MS's bailout of Apple is that MS wants
to save its source of new ideas.)

Jim Devine
jdevine@xxxxxxxxxxxxxxx
http://clawww.lmu.edu/fall%201997/ECON/jdevine.html
"Dear, you increase the dopamine in my accumbens." -- words of love for the
1990s.