Dr. Friedman and his wife, Rose, attend the Nobel Ball in 1976.
Ep. 10 – How to Stay Free [4/7]. Milton Friedman’s Free to Choose (1980)
I really enjoy responding to Gene Lyons’ articles. He is very entertaining with his articles and he is a good respresentative of the liberal point of view. Since I am a conservative, it is rare when we agree.
Gene Lyons in his article “The futility of reasoning with crazy,” April 27, 2011 makes this simple straight forward statement:
Also contrary to Republican mythology, the infamous Bush tax cuts did anything but increase revenue, as tax cuts never do. As Fiscal Times columnist Bruce Bartlett shows, federal revenues dropped from 20.6 percent of GDP in 2000 to 18.5 percent in 2007.
I am starting a new series that breaks down Lyon’s claims and take a look at the cold hard facts.
Michael Griffith in his article “The Facts about Tax Cuts, Revenue and Growth notes: .
In every case over the last 60 years, major tax cuts have more than paid for themselves. In fact, every major tax cut since JFK has been followed by substantial increases in revenue, not to mention solid economic growth. Moreover, total federal revenue rose at a faster rate after each of those tax cuts than it did before them. Anyone can confirm these basic facts for themselves by checking federal budget data and economic indicators before and after major tax cuts (see, for example, Federal Budget Data, Data 360 Unemployment U.S., andTotal Economy Database). Let’s take a closer look at the results of the last four major tax cuts (and then for good measure we’ll examine the Mellon tax cuts of the 1920s).
Reagan Tax Cuts: In 1994 President Clinton’s own Council of Economic Advisers stated: “It is undeniable that the sharp reduction in taxes in the early 1980s was a strong impetus to economic growth.”
The Reagan tax cuts were followed by a sharp increase in revenue. Total federal revenue, including income tax revenue, rose every year from 1983 to 1988, after a dip in 1982 (due at least in part to the recession of that year–the recession began in December 1980 and ended in November 1982). From 1982 to 1989, i.e., when Reagan budgets were in operation, total federal revenue rose from $618 billion to $991 billion. (And herein by “in operation” I mean in effect for at least 10 months of a given year.)
Let’s look at what happened to federal income tax revenue under Reagan from 1983 to 1989, bearing in mind that Reagan slashed income tax rates across the board:
1983 — $326 billion
1984 — $355 billion
1985 — $396 billion
1986 — $412 billion
1987 — $476 billion
1988 — $496 billion
1989 — $549 billion
