The federal debt as a percentage of GDP was approximately 30 percent in 1980. Ronald Reagan argued that a big tax cut, combined with massive increases in defense spending, would not increase the debt, as increased economic growth and the elimination of waste and fraud would fill in the gap. He was wrong; the deficit exploded, and we have been living on borrowed money ever since.
In 2012, Governor Sam Brownback pushed a large tax cut through the Kansas Legislature. He maintained that the cut would pay for itself through economic growth. It didn’t; services were cut dramatically as a result; and the tax cut was repealed by Republicans a few years later.
In 2022, Liz Truss supported an enormous tax cut, which, according to her, would pay for itself. Markets didn’t agree; the value of the pound fell significantly; and Truss was forced to resign.
Today, DeSantis and Ramaswamy are advocating for huge state tax cuts on the basis that the ensuing growth, combined with reductions in waste and fraud, would pay for them. What do you think?
Marx famously said that history repeats itself twice–once as tragedy, and once as farce. He was wrong. With the GOP and tax cuts, the hits just keep on coming.