Friday, October 12, 2012

Going Back, in Theory

It may seem hard to believe, but there are Democrats trying to argue that raising taxes would be a good idea, even though the United States is still in the middle of an economic depression. Democrats have not been so bold about raising taxes since Walter Mondale's 1984 presidential campaign. To support this argument, the economic conditions under Bill Clinton and John Kennedy are brought up. Taxes were somewhat higher under Bill Clinton, and they were a lot higher under John Kennedy. If that were all that were different, there would be an argument in favor of that point of view.

As all libertarians know, total taxation is always equal to total spending. Based on that bit of economic knowledge, taxes were definitely higher under George Bush Jr. than they were under Bill Clinton. The only difference is that Bill Clinton favored direct taxes while George W. Bush favored indirect taxes.

While income taxes were higher under John Kennedy, those same taxes were reduced under John Kennedy. When he assumed office he lowered the top marginal rate from 90% to 70%, making that an argument in favor of cutting taxes. That would seem to be an argument in favor of significantly cutting taxes.

The most important flaw is that the argument is nothing more than a post hoc ergo propter hoc argument. To demonstrate this is actually very easy. If everything was so much better under John Kennedy and Bill Clinton, then the United States should go back to that in full. The regulatory state has advanced greatly since then, as has the security state and the welfare state.

Those who insist that those eras were better with those higher tax rates should also insist those eras were better with less regulation. The return to the taxes of that era should be accompanied by the repeal of all laws passed since that era. If, for some reason, the Democrat making that pro-tax argument doesn't agree, their own position of how conditions were better in that era can be used against him.

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