Monday, June 18, 2007

Tax Revenue Post Tax Cuts

US Tax RevenueInvestor's Business Daily: The Tax Story Media Invariably Bury SayUncle blames Tax Cuts for the Rich. [the chart at right is brought to us by IBD.]

Don't look to see your local (or national) branch of the Lefty media to report this. Good news while a Republican is in office? Fat chance.
Bush lowered taxes in both 2001 and 2003. During the debate for both rounds of reductions, it was repeatedly asserted that tax cuts would lead to lower revenues and not pay off with higher economic growth.

Wrong on both counts.

A cursory look at the data — and that's really all it takes, so shame on the media for misreporting — show tax revenues have surged since the tax cuts went into effect. And this is the case whether you you count them on a nominal basis, an inflation-adjusted basis or as a share of GDP.
Dollar SignIBD makes a few points on the tax cuts and taxes, I only want to highlight one.
A few points need to be made here. First, those with incomes less than $40,000 a year pay, on average, no federal income tax. None.
And of course history is a great teacher.
As we've noted repeatedly on these pages, tax cuts by President Coolidge in the 1920s, President Kennedy in the 1960s, President Reagan in the 1980s and, now, President Bush in the 2000s all show the same thing: Lower taxes mean faster economic growth.
But then none of that fits with the media's agenda.

And of course the Democrats want to raise the taxes (or "let the tax cuts lapse - is that double-speak or what?) because they object to free markets and people having (and investing) their own money. Click over to IBD and take a look at the numbers on capital gains taxes and then let's talk about whether or not the cuts should end.

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