Thursday, July 14, 2005
Works Every Time
The Washington Post carries a somewhat underreported story about the shrinking deficit. It's about 100 billion less than the government experts predicted as recently as February, 2005. Income Tax receipts are projected to be up over 14% this year. What could account for an increase in tax revenues without an increase in tax rates? Oh, that's right, the across the board cut in the rates of income tax rates that Republicans got passed as bills, signed into law by President Bush each of his years in office, has worked to increase tax revenue yet again.
Of course, the Post shows its true colors by warning:
But it would be dangerous -- and wrong -- to take this news as evidence that President Bush's tax cuts were wise policy, that the tax cuts should be made permanent or that deficit worries can be safely ignored.
No, of course it wasn't the tax rate cuts--it was the tax fairies. What did the Post say caused this increase in income tax revenues?
(summer crickets)
Well, actually the Post credits, uh, tax cuts, but warns that the tax cuts which produced the increased revenue could be ephemeral:
A big chunk of the increased revenue comes from the expiration of an investment tax break, a one-time bump-up. Similarly, last year's tax bill created a one-year tax break for multinational corporations' overseas profits; this is also a once-only boost and could reduce tax revenue next year.
Think back to the raft of criticism the tax rate cuts got from Democrats each and every time they passed into law. I've asked this question before--Do the Democrats ever get tired of being dead wrong? The truth is that tax rate cuts work every time to help the economy generally and thus ultimately raise income tax revenue because the concept fits basic human nature. President Bush was right, and the Democrats were wrong. Again.
Of course, the Post shows its true colors by warning:
But it would be dangerous -- and wrong -- to take this news as evidence that President Bush's tax cuts were wise policy, that the tax cuts should be made permanent or that deficit worries can be safely ignored.
No, of course it wasn't the tax rate cuts--it was the tax fairies. What did the Post say caused this increase in income tax revenues?
(summer crickets)
Well, actually the Post credits, uh, tax cuts, but warns that the tax cuts which produced the increased revenue could be ephemeral:
A big chunk of the increased revenue comes from the expiration of an investment tax break, a one-time bump-up. Similarly, last year's tax bill created a one-year tax break for multinational corporations' overseas profits; this is also a once-only boost and could reduce tax revenue next year.
Think back to the raft of criticism the tax rate cuts got from Democrats each and every time they passed into law. I've asked this question before--Do the Democrats ever get tired of being dead wrong? The truth is that tax rate cuts work every time to help the economy generally and thus ultimately raise income tax revenue because the concept fits basic human nature. President Bush was right, and the Democrats were wrong. Again.
# posted by Roger Fraley @ 7:17 AM 
