Economics 101

I saw the following post from the Freakonomics Facebook page. And, since we are obsessed with economics here at the Rio Grande Foundation and Errors of Enchantment (but sometimes we need a change of pace from New Mexico’s failed policies) I’d like to take an opportunity to dissect this list:

1. Tax cuts generally do NOT pay for themselves. But, some tax cuts like reducing/eliminating the capital gains and corporate income tax ARE able to boost overall economic growth enough to repay a significant portion of the cut.
2. There is no evidence “starve the beast” works.
3. The rich in the US pay much MORE than their “fair” share.
4. Correct, loopholes and deductions eliminated much of the “bite” of the top income tax of years’ past. Worse, they were economically inefficient.
5. European middle and lower classes pay much higher taxes than Americans of similar incomes.
6. Spending and especially spending on Social Security and Medicare/Medicaid drive US budget deficits. 
7. NO, “taxing the rich” cannot balance the budget. Reforming so-called “entitlements” as seen in #6 is the only surefire way to balance the budget.
8. This one is somewhat contentious, but if you understand that the US tax code is already so “progressive” as to collect disproportionate revenues from “the rich” the TCJA contained many tax cuts for those at lower income levels. 
9. Correct, the tax code prior to 1980 was inefficient and anti-growth.
10. Currently, US corporate taxes are in line with international averages. In recent years they have been higher than in other countries.
11.