Another WSJ Opinion Piece that Lowering Taxes on the Wealthy Helps the Non-Wealthy

Incredible Persistence in the Face of Opposition from Logic, Facts and Historical Experience

The Dismal Political Economist has to admire the Conservatives who persistently claim that lowering taxes on wealthy people will stimulate the economy.  Really he does.  Those who support that view do so in the face of overwhelming evidence that what they are supporting is just not true.  Despite this, despite every observation on the economy in the last 20 years they cling to their myths.  It is like encountering people who believe the Earth is flat.  To retain such a view in the face of reality indicates a level of devotion many of us wish we had towards real ideas and concepts.

The latest example of this is in the opinion pages of the Wall Street Journal.  There someone named Amity Shlaes writes on the lessons learned in the 1970’s.  Despite the fact that the period she is deriving her policy ideas from is over three decades old, she still manages to come up with this.

When it comes to taxes, the 1970s takeaway is that taxes on capital should always be lowered, and dramatically. Cutting a rich man's tax can serve the lowliest citizens.

That’s right, cutting taxes on rich people is a great way to help poor people.  Now this is fine conjecture, but let’s go to the video tape.  The policy that Ms. Shlaes proposed has been tried, it fact it was tried in the early 2000’s.  Ms. Shlaes should know this since she joined the George W. Bush Institute this week as director of its economic growth project.   But apparently she is unaware of what Mr. Bush actually did as President.  Apparently she does not know that taxes on rich people and taxes on capital were reduced significantly in the past decade.  Apparently she does not know that at the end of Mr. Bush’s term the U. S. was in The Great Recession and that income and wealth for middle and lower class families stagnated and declined.

But never mind.  Like those who believe that the Earth is flat, that there is intelligent life on Mars, that the Cubs will win a World Series and the Buffalo, Bills will win a Super Bowl there is nothing that can shake the faith of people like Ms. Shlaes.  The tragedy is not just that they are wrong, but that they cannot direct their strength of purpose towards something that would actually help the economy.