Sarah Palin has taken to her Facebook page to continue to spread intentionally false information about the Democrats and the Bush tax cuts. In Palin world repealing would “cost” $3.8 billion, but the real cost of keeping the Bush tax cuts will be 700 billion over the next 10 years and it adds $4.4 trillion to the deficit. Mrs. Palin is lying.
On her Facebook page, Palin repeated her claim that Democrats don’t have a legislative proposal to keep the Bush tax cuts, “Plan? What plan? There is no plan. All we have is smoke and mirrors based on an old Obama campaign pledge that if elected, he would exempt families making less than $250,000 a year from “any form of tax increases.” But this pledge was already watered down before he was even elected. First vice-presidential candidate Joe Biden lowered it to $150,000. Then campaign surrogate Gov. Bill Richardson lowered it even further to $120,000.”
Palin then spewed the tired GOP talking point that letting the tax cuts expire is the same as a tax increase, “The truth is that as of today, Democrats haven’t taken any action to extend any part of the 2001 and 2003 tax cuts for any income group – and in this case doing nothing equals hitting American taxpayers with a massive $3.8 trillion tax increase.”
She continued, “What we do know for certain is that the White House is more than willing to raise taxes on families with incomes of less than $250,000. Democrat Senator Max Baucus admitted as much during the debate about Obamacare when he stated that “One other point that I think it’s very important to make is that it is true that in certain cases, the taxes will go up for some Americans who might be making less than $200,000.”
The Democrats do intend to vote on the Bush tax cuts. Majority Leader Harry Reid said that the tax cuts will be voted on in late September after the Senate’s August recess. According to The Hill, “Democratic and Republican staffs on the Finance Committee have begun talks on how to mark up a tax extensions package. But Finance panel staffers have yet to delve into serious discussions over the substance of the bill.” Contrary to the distortion that Palin is trying to spread about there being no plan to keep the tax cuts, it is being talked about and worked on by the both parties in the Finance Committee right now.” In short, Palin is lying.
The idea that it will cost the government money to repeal the Bush tax cuts is based on the Republican myth that tax cuts generate revenue, and have no cost. It is fuzzy math that is not based in reality. Increasing taxes on the wealthy will lower the deficit, because when taxes are increased incoming federal revenue also grows. As the Center for Budget and Policy Priorities pointed out, “Without offsets, making the tax cuts permanent would increase the deficit and thereby add to the national debt. The interest payments needed to service this higher level of debt would amount to about $700 billion over the next ten years. Thus, the total cost of making these tax cuts permanent, including the related interest costs, would be $4.4 trillion over the ten-year period.”
In case the numbers are a bit confusing the Center for Budget and Policy Priorities put together this great graph:
Palin, who or whoever wrote her Facebook post for her, was not telling the truth. They demonstrated zero understanding of basic economic principles, and insisted on putting forth a debunked Republican fantasy, in place of an actual policy. They were lazy, and did not even bother to check on the progress of the Bush tax cut legislative proposal. If Sarah Palin can’t grasp Econ 101, and is too lazy to check basic facts before making inaccurate claims then the idea of her being president is as much of fantasy as the her notion of tax cut economics.