Home » Hot off the Press » “Costly” Tax Cuts
Matt Yglesias writes that Jim DeMint’s alternative plan contains $3.1 trillion of permanent tax cuts, which he says “would be over triple as costly as the stimulus that will soon be signed” (emphasis mine). Whenever liberals, the media, and fiscal analysts write about “costly” tax cuts, I wonder, costly to whom? When the government cuts taxes (and in this context I am talking about rate cuts rather than government subsidies masquerading as tax cuts), they are allowing taxpayers to keep more of the money they earned. Taxpayers — who are the ones who finance the government — are sending away less of their money. In the real world, that’s called savings. Sure, government may end up with less revenue as a result, but that’s only a problem if you take it as a given that government has to grow at a certain rate every year, rather than shrink.
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