Diminishing return: lower taxes result in lower job growth in the long run — note the nosedive after the Bush tax cuts in 2000.
Uh oh: the larger the high-end tax cuts, the larger the deficit — note the explosive growth of the deficit after the Bush tax cuts of 2000 (red line). Note also that if the Bush tax cuts were repealed, the deficit drifts easily into manageable territory (blue line).
If we’re talking bottom line, here it is: lower taxes have demonstrably meant diminishing job creation (not to mention devastated social services) and larger deficits. We know that’s not been the conventional wisdom since the storied days of Ronald Reagan in the misty past of thirty years ago, but it is the reality.
Even after eight years of Bushonomics that have crippled American fiscal policy, the current government of Canada is about to more or less repeat the same mistakes. Social and government services will be cut in the name of “austerity.” Welfare, meanwhile, is now strictly for corporations in the form of still more tax cuts, the purchase of tens of billions worth of American jet interceptors, and a massive payday for developers with the building of new prisons at a time when crime rates are down sharply after declining for a decade.