post#2 - recover just 17 percent of the costs” Further...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Washington Post Article Analysis #1 “Mr. Giuliani and the Tax Fairy” According to the author of a Washington Post editorial entitled “Mr. Giuliani and the Tax Fairy” dated December 1, 2007, reducing taxes does not produce more revenues. Their reasoning for this claim is based on the idea that supply-side thinking does not lead to tax cuts that pay for themselves. The author then goes on to further back-up this argument by suggesting it is unlikely to grow so much that lost revenue is completely recovered by the higher level of economic activity. Their evidence for this argument is based on information from N. Gregory Mankiw (former Council of Economic Advisers head under Bush) concluding “cuts on capital gains taxes could generate enough extra grow to recoup [only] half the lost revenue in the long run [while] cutting taxes on wages could
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: recover just 17 percent of the costs”. Further evidence is reported from the Congressional Budget Office under the direction of Douglas Holtz-Eakin (another economic adviser in the Bush House) that stated that “under the rosiest of scenarios, a 10 percent reduction in the personal income tax rate would generate enough economic growth to replace 22 percent of lost revenue in the first five years and 32 percent in the second five”. While the author of this article acknowledges the 2003 Economic Report of the President’s claim that the economy grows in response to tax reductions, his use of the word “completely” qualifies his thought that is unlikely for lost revenue to be completely recovered....
View Full Document

{[ snackBarMessage ]}

Ask a homework question - tutors are online