Rebutting Right Wing Zombie Lies

by: Ronaldo

Sat Aug 20, 2011 at 10:26:49 AM CDT

1.  Tax cuts pay for themselves.

This is probably the most prominent and pernicious lie.  Because most of the GOP tax cuts go to the wealthy, right wingers have to justify this by telling people that these tax cuts don't cost them anything and are a free lunch.  However, the empirical evidence certainly doesn't back up this claim.  The GOP aligned Heritage Foundation (a source frequently relied upon by the GOP) in a  2006 analysis of extending the 2001 and 2003 Bush tax cuts estimated that only 30 percent of the gross revenue loss would be recouped through increased economic activity generated by the tax cuts.  Because the Bush tax cuts have cost us $2.5 trillion over the last 10 years, that means that these tax cuts have reduced the federal government's revenue by $1.75 trillion over the last 10 years.

Even the architects of the Bush tax cuts don't believe that they pay for themselves.  Alan Viard, senior economist at the Council of Economic Advisers during Bush's first term, told the Washington Post in 2006, "Federal revenue is lower today than it would have been without the tax cuts. There's really no dispute among economists about that." Robert Carroll, deputy assistant secretary for tax analysis at the U.S. Treasury Department during Bush's second term, also told the Post, "As a matter of principle, we do not think tax cuts pay for themselves." On September 28, 2006, Stanford economist Edward Lazear, chairman of the CEA in Bush's second term, testified before the Senate Budget Committee: "Will the tax cuts pay for themselves? As a general rule, we do not think tax cuts pay for themselves. Certainly, the data...do not support this claim. Tax revenues in 2006 appear to have recovered to the level seen at this point in previous business cycles, but this does not make up for the lost revenue during 2003, 2004, and 2005. The tax cuts were a positive step and have contributed to the enhanced economic growth, additional jobs, higher real disposable income, and the low unemployment rates that we currently see today."

It should also be noted that federal tax revenues declined from 21% of GDP in 2000 to 18% of GDP by 2007. At the same time, federal spending as a percentage of GDP increased from 18% to 21%.  It's no wonder Bush ushered in a new era of huge deficits.

2. 50% of Americans don't pay taxes.

A common Zombie lie you hear in the Right Wing Media is that 50% of Americans don't pay taxes.  Actually, it is 50% of Americans that don't pay federal income taxes.  How did this happen?  During his Administration, Ronald Reagan expanded the earned income tax credit.  George W. Bush further reduced taxes for middle class and poor Americans.  Where was the "outrage" from the Right when Reagan and Bush took millions of Americans off the federal income tax rolls?

Those same 50% who don't pay federal income taxes do pay FICA, Medicare and Social Security taxes at the federal level.  Moreover, the 50% also pay state and local taxes.  All of those taxes tend to be regressive in nature and the poor and middle class pay a higher percentage of their income in these taxes than the wealthy do.  

Some of the more "honest" right wing media outlets like the Wall Street Journal have expressed outrage that 50% of Americans don't pay federal income taxes.  Some elected Republicans officials have joined in this outrage.  Does the Wall Street Journal and some Republican politicians advocate tax increases on the poor and middle class during a weak economic recovery?  If so, I say bring it on.  I would welcome a debate on that proposal during the 2012 election cycle.

3.  The wealthy and corporations are over taxed.

We always hear from our Republican friends that the "oppressed" wealthy and corporations are over taxed.  That is yet another Right Wing Zombie lie.  Currently, the top 400 American income earners pay around 16% of their income in federal taxes.  This is because most of their income is taxed at the 15% capital gains and dividend rates.  This leads to the bizarre paradox where Warren Buffett's secretaries pay a higher percentage of their income in federal taxes than Buffett does.  Back in 1995, those same top 400 income earners paid around 30% of their income in federal taxes.  

Right Wingers and Republicans are united in their demand for a tax cut for U.S. corporations.  They claim that U.S. corporations actually pay the 35% top corporate tax rate.  That, of course, is yet another Right Wing Myth, because on the average, most U.S. corporations pay an effective rate (after taking allowable deductions) of around 25% - which is one of the lowest effective corporate tax rates in the industrialized world.  Some corporations like General Electric and Exxon Mobil pay no corporate taxes at all!  Any corporation that is paying the 35% rate should fire their tax lawyers and sue them for malpractice.

4.  Tax cuts create jobs and tax increases hurt the economy.

When Bush was making the big push for his tax cuts, he claimed that they would create 200,000 new jobs per month.  As most of us in the reality based community already know, the Bush tax cuts have been a failure.  According to the January 9, 2009 Wall Street Journal, Bush had the worst jobs creation record since Herbert Hoover.  We all know that the economy continues to struggle even though the Bush tax cuts were extended late last year.  If lower tax rates on the wealthy were the key to an economic recovery, we would be enjoying the fruits of an economic boom right now.

Conversely, tax increases on the wealthy don't hurt the economy.  In 1982, Ronald Reagan had the Congress pass into law the largest peace time tax increase in history.  During his Administration, Reagan rolled back around 40% of his 1981 tax cuts.  Nevertheless, the economy performed pretty well between 1983 and 1990.  This was the "morning in America" recovery that Reagan touted during his 1984 re-election campaign.

In 1993, President Clinton passed into law over united Republican opposition, his budget package that consisted of both tax increases and spending cuts.  Every Republican predicted that the tax increases would lead to a recession and wouldn't cause any increased revenues.  Of course, they were dead wrong and the GOP would like you to forget those wildly erroneous predictions.  (The key to the Right Wing's propaganda is the bad memories of their supporters.)

5.  Obama blew up the deficit.

One of the big claims you hear from the Right is that Obama blew up the deficit.  I heard Sean Hannity recently accuse the President of increasing the annual deficit from $450 billion to $1.5 trillion.  In reality, the non-partisan Congressional Budget Office said that Obama inherited an annual deficit of $1.3 trillion from the Bush Administration.  The increase in the annual deficit since then to $1.5 trillion is largely due to the extension of the Bush tax cuts - something the GOP supported.

It should also be noted that so far, during the Obama Administration, that the national debt has increased 23%.  That compares pretty well to the record of Ronald Reagan - whose Administration increased the national debt by 186%.  Other increases in the national debt during recent Administrations were as follows: George H.W. Bush 54%, Clinton 41% and George W. Bush 72%.

There are so many Right Wing Zombie lies, I could write a Russian novel about them but I took the opportunity to rebut some of the most pernicious ones.  The next time you are at a cocktail party and one of your Republican friends says "of course tax cuts pay for themselves,"  you will be ready with a quick and accurate rebuttal.  The major rationale for most of these Zombie Lies is to justify tax cuts for the wealthy and the corporations.  The GOP and the Right Wing Media know that billionaires, oil companies, insurance companies and Wall Street aren't very popular.  That requires them to cloak the central platform plank of the GOP in Zombie Lies.