Tuesday, July 14, 2009

And they (Democrats) never will

Instapundit on a Detroit Freep article about growing dissatisfaction with Obama's stimulus package: "Maybe reducing taxes and regulation would help. Michigan hasn’t tried that — and neither has Obama . . . ."

It would require an enormous role-reversal for Democrats at the state or federal level to embrace tax increases in an effort to spur economic growth. As JD Foster at Heritage wrote last year, it was the tax cuts of 1997 not the widely heralded tax increases of 1993 that produced the huge economic boom of the 90s.

Proponents of tax increases often reference the Clinton 1993 tax increase and the subsequent period of economic growth as evidence that deficit reduction through tax hikes is a pro-growth policy. What these proponents ignore, however, is that the tax increases occurred at a time when the economy was recovering from recession and strong growth was to be expected. They also ignore that the real acceleration in the economy began in 1997, when economic growth should have cooled. This acceleration in growth coincided with a powerful pro-growth tax cut.

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