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GOP Myth Buster: Tax Cuts Do Not Pay for Themselves

October 1, 2017
Blog Post
Republicans have long peddled the idea that tax cuts for the wealthy few pay for themselves and in pitching the Ryan-McConnell tax framework this weekend, Speaker Ryan was no different.

Speaker Ryan on CBS' Face The Nation

"So this will have to be a deficit neutral tax bill.  But we do fundamentally believe that this tax code and this tax reform will give us faster economic growth.  Faster economic growth helps raise the economy which raises revenues.  And that helps us tackle the deficit."

In reality, the Ryan-McConnell tax cuts for billionaires plan will add an estimated $2.4 trillion to the deficit.  What's more, economists on both sides agree that tax cuts never pay for themselves.

Douglas Holtz-Eakin, president of the American Action Forum and former director of the Congressional Budget Office (2003-2005, under President Bush)

"I'm a very conservative economist. I would love it if tax cuts paid for themselves, but I'm also someone who looks at the numbers. And there's just no evidence that the tax cuts actually pay for themselves…It's just unlikely that you can move an economy that is approaching $20 trillion in size so much, so fast with a tax cut, that it will turn around and generate even more revenue." [5/9/2017]

David Stockman, former OMB director (1981-1985, under President Reagan) and former GOP Representative from Michigan (1977-1981)

"It's the same story they told back in 1980s when I was there and I never believed it… [tax cuts would produce] some additional economic growth…[but] most of the revenue loss has to be paid for with spending cuts. You have to earn it. You can't, you know, wave a magic wand." [5/15/2017]

Jared Bernstein, senior fellow at Center for Budget and Policy Priorities and former Chief Economist and Economic Adviser to Vice President Biden

"Our fiscal history on this point is clear: Cutting taxes loses revenues, which, unless offset by higher taxes elsewhere or spending cuts, increases the budget deficit, which in turn raises the debt." [9/26/2017]

Instead of running up the national debt with trillions of dollars in tax breaks for the rich and raising taxes on hard-working Americans, Republicans should put the middle class first and give not one penny in tax cuts for the wealthiest one percent.