The Times’s Doctrine
This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.
“Not since Mr. Reagan ran in 1980 have supply-side tax cuts been so central a campaign issue.”
— Article in the New York Times business section. March 26, 2008
“The tax issue, for all its importance, does not yet have a prominent place in the campaign.”
— The same article, several paragraphs later
Such is what passes for political analysis these days in the pages of the New York Times, where the same article manages to declare the same issue both central and, at the same time, not prominent. The same incisive thinking — or to be more precise, the lack of it — is apparent in the rest of the article, which concerns what the Times calls “supply-side economics.”
“The big supply-side tax cuts of the 1980s and the 2000s did not work out as advertised, as even most supporters acknowledge,” says the Times news article. Well, count us among those supporters of those tax cuts who to this day refuse to acknowledge the claim made by the Times. The large graphic accompanying the article charts “cumulative change in per capita income taxes” and “real per capita income taxes,” as if an increase in either is supposed to be the gauge of successful public policy.
The article focuses on personal income taxes, but a clearer illumination of the effects on tax revenue of supply-side tax cuts can be seen with a narrower focus, on capital gains taxes. Capital gains tax revenues rose after the capital gains tax cuts of President George W. Bush, as they did after that tax was cut by President Clinton and the Republican Congress led by Speaker Gingrich. The Times article totally omits the supply-side effects of the income tax cuts of President Kennedy.
The Times article sets up a straw man — a supposed supply-side claim that all tax cuts pay for themselves. That’s a caricature of the Laffer curve, which is, after all, a curve. The idea seems to be to use the current slowing of economic growth to discredit the Bush tax cuts. In fact, one could just as easily argue that the current economic slowdown is a response to the Democratic takeover of Congress and the markets pricing in an expectation that the Bush tax cuts will expire. The article’s headline refers to “Supply-Side Doctrine,” but if anyone is being doctrinaire here it is the opponents of tax cuts, who apparently include the editors who moved this package in yesterday’s Times.
