Pawlenty's Pipe Dream: "There's No Dispute" That Tax Cuts "Always" Increase Revenues

June 10, 2011 5:31 pm ET — Matt Finkelstein

Despite Tim Pawlenty's conviction that his plan to slash taxes and government spending will produce historic economic growth, credible observers have dismissed his plan as "impossible" and a "joke." This afternoon on Fox News, the conservative presidential candidate further demonstrated the gap between his right-wing religion and reality when he insisted that tax cuts "always produce an increase in revenue," adding, "There's no dispute about that."

PAWLENTY: Well, keep in mind, whether it be the Bush tax cuts or the Reagan tax cuts or other tax cuts, they always produce an increase in revenue. There's no dispute about that.


The claim that tax cuts invariably lead to increased revenues is demonstrably false. The Bush tax cuts not only failed to grow the economy, they are the primary culprit behind the soaring deficits that the nation faces today. The following chart shows the change in tax revenues as a percentage of GDP since 1990:

Pawlenty might argue that, after declining from 2001-2003, federal revenues increased in raw dollars — but that doesn't account for factors like population growth and inflation, which cause revenues to grow almost every year no matter the tax rates.

As former Bush administration economist official Alan D. Viard said in 2006, "Federal revenue is lower today than it would have been without the tax cuts. There's really no dispute among economists about that."