The tax questions in tonight's debate were idiotic. "Will you promise to never raise taxes, no matter what? And I've been told by Grover Norquist that taxes cuts always increase revenues, no matter what. Sen. Obama, why don't you believe in Grover's magical ponies?"
Here is the reality:
According to Gallup's 2008 Economy and Personal Finance survey, conducted in April, 60% regard the amount of income tax they have to pay this year as "fair." Only 35% say it's not fair.
...more Americans believe "middle-income people"--a group most people are likely to associate themselves with--pay their "fair share" in federal taxes rather than "too much." By contrast, 51% believe lower-income Americans pay too much, while 63% believe upper-income people pay too little.
Americans aren't stupid, but the people who play them on TV most certainly are.
UPDATE: Via TNR, here's Jason Furman of the Brookings Institute making the point in a much more substantive way:
Joint Committee on Taxation and Treasury both score raising capital gains taxes as raising revenues. There is some behavioral response but much of that is timing and doesn't affect the medium-to-long term revenue loss.
Note that the experience after the 1997 cut and the 2003 cut is not a meaningful way to assess the impact of capital gains tax cuts on revenues because so many things were happening simultaneously. The JCT score of the capital gains cut in 1997 was a few billion dollars annually. The 2003 cut was something like $5 billion annually. But capital gains revenues can go up or down by tens of billions annually. So it is hard to look at the noisy data and infer ex post the revenue impact of these changes.
Much more here from ThinkProgress' Wonk Room
Subscribe to this blog's feed
