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Please, Tories. Don’t fall for the supply-side snake oil.

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The race to succeed Boris Johnson as leader of Britain’s Conservative Party, and as prime minister, has focused on dueling tax cut plans from the two contenders, Foreign Secretary Liz Truss and former chancellor of the exchequer Rishi Sunak. I hope my friends across the pond won’t mind a word of advice based on the United States’ long experience with similar frenzies: Don’t buy the supply-side snake oil.

The idea that tax cuts pay for themselves has long animated conservative politics in the United States. It is true that people spend and invest more if they have more money, and the economy therefore grows a bit faster than would otherwise be the case. So far, so good.

But the additional activity generally does not generate enough tax dollars to make up for the revenue lost from the cuts. President Donald Trump’s 2017 tax cuts are a case in point: Federal revenue after the cuts dropped compared with pre-cut projections despite the added growth. This was no surprise even to its advocates. The supply-side friendly Tax Foundation, which touted the proposed cuts before their passage, acknowledged they would reduce federal government revenue by nearly $1.5 trillion over the subsequent decade.

Likewise, suggestions that Truss’s proposed tax cuts........

© Washington Post

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