Raise taxes to cut government?

July 27th, 2010 by Froma in Froma Harrop, economy, politics, taxes

So much for the starve-the-beast theory whereby cutting taxes leads to smaller government. Our two leading tax-cutting presidents, Ronald Reagan and George W. Bush, advocated that theory, then expanded government with borrowed money. Clever fellows.

Another theory based on the “fiscal illusion” effect holds that raising taxes is a more effective way to contain government than cutting them.