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Wednesday, August 24, 2011
NewsBusters Finds A Tax It Wants To Raise
Topic: NewsBusters

NewsBusters, normally advocates of tax cuts, has found a tax it wants to raise.

In an Aug. 22 post, Tom Blumer rants at an Associated Press article that he claims is "a long-winded, chidish taunt about the supposed hypocrisy of anyone who would like to see" elimination of the payroll tax cut. Blumer takes particular offense at the idea that "Many of the same Republicans who fought hammer-and-tong to keep the George W. Bush-era income tax cuts from expiring on schedule are now saying a different 'temporary' tax cut should end as planned. By their own definition, that amounts to a tax increase."

Blumer huffs that "hammer-and-tong" is "violent-appearing imagery," further complaining that "The evidence that this year's cut did much of anything to "help the economy and create jobs" is sparse indeed, given that the latest data on economic growth show an average rate of less than 1% annualized during the first six months of 2011." He then defends the Bush tax cuts:

First of all, the tax cuts took place in 2001 and 2003; the latter cut, which reduced across-the-board income tax rates as well as the rates on capital gains and dividend distributions, were far more important in affecting business behavior and improving the economy. As seen here, after the 2003 tax changes were passed, Treasury receipts increased by 44% from $1.78 trillion in fiscal 2003 to $2.57 trillion in fiscal 2007. Despite overindulgent spending by Congress during that time, the deficit in fiscal 2007 came in at $162 billion, which in Obamaland isn't that much different from the deficit in a typical month.

But Blumer showed only correlation, not causation, and he did not explain why the payroll tax cut did not have thet same effect he claims the Bush tax cuts did.

Blumer also repeats a right-wing fallacy:

Several other AP writers in the past 2-3 months have pointed out that the referenced $1,000 has been gobbled up by increases in gas prices, the responsibility for which largely resides in the administration's refusal to explore and drill for oil (which, if done aggressively enough, would certainly bring down the worldwide barrel price and prices at the gas pump).

In fact, experts agree that even an aggressive expansion of oil production in the U.S. would have little effect on global oil prices.

Posted by Terry K. at 9:30 AM EDT

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