Economy-Tanking Tax Cuts

Minnesota Congressional Rep. Michele Bachmann officially declared her presidential candidacy yesterday and vowed to get the U.S. economy going again by cutting corporate taxes.

That raises the question I ask -- and wish more media voice pieces would also ask -- every time I hear Bachmann, Speaker of the House John Boehner, Senate Minority Leader Mitch McConnell and so many others who call themselves fiscal conservatives say that cutting taxes is the way to economicy prosperity in this country.

My question is, if cutting taxes brings economic prosperity, why did the country's economy tank after Bush II cut taxes in 2001 and again in 2003?

A follow-up question is when, in U.S. history, did the economy boom as a result of tax cuts?

I find lots of assertions and postulations in Internet searches theorizing that cutting taxes puts more money in consumers' hands to spend on goods and services, thus increasing tax revenues, but nothing indicating when that has actually occurred to the point that it boosted the economy.

Conversely, we have a very real and painful recent example of when and how cutting taxes -- especially while at the same time waging two horrendously expensive, yet unfunded, wars and a horrendously expensive, unfunded Medicare drug benefit -- plunged the nation into the worst recession since it dug its way out of the Great Depression by, not cutting taxes, but with government spending that put Americans back to work.

Evidence abounds in other countries' tax policies. Which country in the developed war suffered the least in the recent and ongoing global financial crisis? Germany, which is a high-tax country. Which countries are suffering the most? How about Greece, whose population is renowned for not paying taxes.

Contrarians assert that World War II should be credited as the real reason America recovered from the Depression. That no doubt contributed. But why? Government spending and imposing taxes to cover, at least in part, the cost of that war.

So why didn't the Bush-era tax cuts infuse the economy with lots of revenue thanks to consumers having more money to spend? One reason is that people didn't spend the money they no longer sent to Uncle Sam. They paid off credit debt and put it into savings. The other is that the vast majority of the cuts went to those in the highest income bracket, who also didn't spend it on consumer goods -- unless you count yachts (a yacht manufacturer in Wisconsin after years of benefiting from Bush tax cuts closed down for a while in 2009 because business dried up and got millions in government assistance a couple of months ago) -- but invested it in Wall Street.

Americans in lower income brackets are not only still waiting for that to trickle down, but are shouldering the tax burden that has been -- and increasingly continues to be -- shifted from the wealthy and big business to the rest of us.