By Jessica Chau
In today’s news highlights, we bring you a piece that counters the belief that tax cuts and deregulation bring about economic growth, and an article from former Deputy Treasury Secretary, Robert Altman, urging lawmakers to allow the Bush tax cuts to expire.
Huffington Post, Byron Williams, 9/13/2012
It’s a great thought that we can pay less in taxes and economic prosperity would abound, trickling down like manna from heaven. But is that realistic?
Despite the contemporary supply-side deification, Reagan raised taxes several times during his eight years in the Oval Office. He placed governing over his ideology. Though he may have favored supply-side economics, Reagan’s mixed bag of cutting and raising revenues make it difficult to classify him as a strict supply-sider, which still leaves us pondering the last time supply-side economics worked.
In 1988, then presidential candidate George H.W. Bush famously stated at the Republican Convention, “Read my lips, no new taxes.” But Bush, who in 1980 called supply-side “voodoo economics,” raised taxes as a way to reduce the deficit created in the Reagan years.
After more than a decade, any spur to the economy that the Bush-era tax cuts may have offered has long since passed.
Money News, Forrest Jones, 9/14/2012
Lawmakers should deal with a fast approaching fiscal cliff by letting tax cuts expire and defer cuts to public spending, said Roger Altman, chairman at Evercore Partners and former Deputy Treasury Secretary.
“Let the tax cuts expire,” Altman told CNBC.
The U.S. economy is doing much better than most people think, and there is no need to let the tax breaks, which include the Bush-era tax cuts, carry on.
Housing is set to rebound, with housing starts already picking up, while the energy sector will continue to create jobs and fuel broader economic growth as well.
Even banks are opening up their purse strings, while production costs are becoming competitive again.