Among the myriad Republican myths about taxes, the most pernicious and demonstrably false - that "tax cuts pay for themselves" - is the mostly deeply held by the GOP faithful. As President George W. Bush famously (and erroneously) put it, "You cut taxes and the tax revenues increase." Now, a survey of leading economists conducted by the University of Chicago Booth School of Business is just the latest shovelful of evidence to bury Arthur Laffer's zombie lie.
Earlier this year, as Congressional Republicans learned the hard way three weeks ago from CBO Director Douglas Elmendorf, another Chicago Booth poll revealed that "80 percent of economic experts agreed that, because of the stimulus, the U.S. unemployment rate was lower at the end of 2010 than it would have been otherwise." (As Elmendorf told the House Budget Committee, ""Only 4 percent disagreed or strongly disagreed. That is a distinct minority.")
Now, the U of C is back with a new two-part survey on the Laffer Curve. In the first question, 35 percent agreed and another 35 percent were unsure that "a cut in federal income tax rates in the US right now would lead to higher GDP within five years than without the tax cut." (That response is unsurprising, given that one definition states that GDP equals consumption plus investment plus government plus net exports minus taxes.) But far more interesting are the results on the question that gets to the heart of Arthur Laffer's supply-side snake oil which has been Republican orthodoxy ever since Jude Wanniski sketched Laffer's curve on a cocktail napkin. In a nutshell, not a single one of the economists surveyed agreed that "a cut in federal income tax rates in the US right now would raise taxable income enough so that the annual total tax revenue would be higher within five years than without the tax cut."
In his comments, David Autor of MIT pointed out, "Not aware of any evidence in recent history where tax cuts actually raise revenue. Sorry, Laffer." Former Obama administration economist and current University of Chicago professor Austan Goolsbee put it this way:
Moon landing was real. Evolution exists. Tax cuts lose revenue. The research has shown this a thousand times. Enough already.
Of course, you don't have to take Goolsbee's word for it. Your own eyes will suffice.