Tim Pawlenty on Tax Revenues During the 1980’s
Lawrence O’Donnell featured Bruce Bartlett to have an intelligent and honest discussion of tax rates and tax revenues. This feature starts with Tim Pawlenty repeating a very discredited claim – that the 1981 tax cuts led to tremendous economic growth almost doubling Federal tax revenues during the 1980’s. We’ve gone over this so many times but let’s do this again. Table 2.1 from this source does show that total Federal receipts rose from around $517 billion in 1980 to around $1031 billion in 1990, which is what Pawlenty is talking about. But note that this includes payroll taxes which rose from around $158 billion in 1980 to $380 billion in 1990 – a 141% nominal increase. Other Federal taxes (mainly individual income and corporate profits) taxes rose from $359 billion in 1980 to $652 billion in 1990, which represents a 81% increase. A little reminder for Governor Pawlenty – we increased payroll tax rates during the 1980’s. Bruce Bartlett reminded us that prices rose during the...