Thursday, April 17, 2014

Rand Paul’s Supply-side Distortion

Kentucky Sen. Rand Paul claimed that 20 million jobs were created after President Ronald Reagan’s dramatic tax cuts in the 1980s, and that this was the “last time” such job growth took place. Paul is wrong on both counts.

The fact is that the economy added just over 16.1 million jobs under the tax-cutting Reagan, but it added nearly 22.9 million under Democratic President Bill Clinton, who raised taxes.

Supply-side Myth
Paul’s misinformed recitation of economic history came during an April 12 “Freedom Summit” gathering of 2016 Republican presidential prospects in Manchester, N.H. It was a straightforward expression of the supply-side myth that tax cuts produce more revenue rather than less:

Paul, April 12: When is the last time in our country we created millions of jobs? It was under Ronald Reagan. What did Ronald Reagan do? Did he come forward and say: “Oh, let’s just cut taxes for low-income people?” No, he said forthrightly let’s cut everyone’s taxes. He did dramatically. The top rate — that’s what rich people pay — was 70 percent, he lowered it to 50 percent. Then he lowered it again to 28 percent, and 20 million jobs were created. More revenue came in in fact. When you cut rates people work harder, they make more money, more revenue comes in.

http://www.factcheck.org/2014/04/rand-pauls-supply-side-distortion/

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