We’d have thought that the Democrats who are now voting to let taxes increase would be thrilled to know that things turned out better than they had feared. Americans are better off despite Democratic predictions that, as Minority Leader Nancy Pelosi put it back in 2003, tax cuts would “damage long term economic growth.”
Well, we all know that the Keynesian/Krugman/Rubin tax and spend liberals in Congress were almost unanimously incorrect in concurring with “Fancy” Nancy Pelosi.
If ever there was a market test of economic policy, the last three years have been it. The stock market has recovered from its implosion in Bill Clinton’s last year in office, unemployment is down to 4.7%, and growth has averaged 3.9% in the three years since those tax cuts passed — well above the post World War II average and more than twice the growth rate in Euroland.
According to the Joint Economic Committee of Congress the Bush tax cuts on personal individual income as well as dividends and capital gains were a success accross the board:
Between May 2003 and May 2006, asset values in the U.S. have also risen by $13 trillion thanks to the stock and housing market rallies. Just the growth in asset values since 2003 exceeds the entire net worth of all but a handful of nations. Democrats who want the 15% rate on dividends and capital gains to go back up to 39.6% and 20% are saying that a big tax increase won’t affect any of this.
As to the doom and gloomer class warriors who contend that the tax cuts only benefitted the “rich,” For the one millionith time, the Bush tax cuts “soaked the rich” more than any other “progressive” tax cut in history.
The tax payments of the wealthiest 3% of Americans increased at twice the rate of the tax payments by everyone else from 2001-2004. And those richest 3% now pay nearly as much income taxes as the other 97% combined. While the incomes of the rich have risen, the lower 2003 tax rates are still soaking them for the government’s benefit.
One would think the libs would be loving all the money from the “rich” pouring into the Treasury to fund their pork barrel spending and entitlement programs. But that would mean that they may have to give Bush some credit- a virtual impossibility of course. So, they will oppose extension of the very same Bush tax cuts that helped the economy grow steadily for the last 16 quarters claiming they unfarily benefited the “rich” despite the overwheling evidence to the contrary.
Perhaps they should recall the words of a famous Democrat from another era: “The tax on capital gains directly affects investment decisions, the mobility and flow of risk capital . . . the ease or difficulty experienced by new ventures in obtaining capital, and thereby the strength and potential for growth in the economy.” That was John F. Kennedy, and he’s still right today.