One of our frequent “commenters” and friends of Pundit Review “Doug H” had this to say about my previous post “More Surprising Economic News” (below) which cited official US Treasury Dept data showing sustained job growth (lowest unemployment in 5 years) and real wage growth accross the board for all Americans (not just the “rich”):
Perhaps those in the polls are relying on a different set of dataâ?? their pay stubs. Just a guess. But, when the rising tide lifts all boats, I guess those poor boatless suckers will just drown.
Well, today more positive “surprising” economic data was reported that has demonstrated once again for the umpteenth time that the Bush 2003 Tax Cuts “Soaked the Rich.” One would think the liberal Dems who consistently opposed the Bush Tax Cuts as “Tax Cuts for the Rich” would be celebrating.
Today’s Wall St. Journal Lead Editorial Reported:
The real news, and where the policy credit belongs, is with the 2003 tax cuts. They’ve succeeded even beyond Art Laffer’s dreams, if that’s possible. In the nine quarters preceding that cut on dividend and capital gains rates and in marginal income-tax rates, economic growth averaged an annual 1.1%. In the 12 quarters — three full years — since the tax cut passed, growth has averaged a remarkable 4%. Monetary policy has also fueled this expansion, but the tax cuts were perfectly targeted to improve the incentives to take risks among businesses shell-shocked by the dot-com collapse, 9/11 and Sarbanes-Oxley.
The John Kerrys of the world who claimed that the Bush tax cuts were “irresponsible” and would “balloon the deficit” were dead wrong:
Remember the folks who said the tax cuts would “blow a hole in the deficit?” Well, revenues as a share of the economy are now expected to rise this year to 18.3%, slightly above the modern historical average of 18.2%. The remaining budget deficit of a little under $300 billion will be about 2.3% of GDP, which is smaller than in 17 of the previous 25 years. Throw in the surpluses rolling into the states, and the overall U.S. “fiscal deficit” is now economically trivial.
For critics such as our friend “Doug H” who imply that the booming economy has only benefited the “rich”:
Individual income tax payments are up 14.1% this year, and “nonwithheld” individual tax payments (reflecting capital gains, among other things) are up 20%. Because of the tax cuts, the still highly progressive U.S. tax code is soaking the rich. Since when do liberals object to a windfall for the government?
Again, the “rich” (those in the top 5% pay almost 70% of all the income taxes in this country- while the bottom 50% pay less than 4%) Will liberals who claim every accross the board “progressive” tax cut only beniefits the “rich” not be satisfied until the top quintile of workers are paying 100% of all federal and state income taxes?
The bottom line is that the Bush Tax Cuts have been an enormous success especially given the inexorable liberal-Democratic opposition to these pro-growth tax cuts on individual, investment, and business income. Add to this natuaral disasters such as Hurricane Katrina, 9-11 and the ongoing WOT, as well as high gas prices, and this sustained economic growth is really unbelievable.
Now, Bush and the GOP Congress should push agressively to make these 2003 Tax Cuts permanent. If they really wanted to see north of 8% GDP they would get serious about real pro-growth fiscal policy such as a 12% flat tax, 0% capital gains and dividends tax, and permanent abolishment of the immoral Death Tax.
Check out the abundance of posts that both Kevin and I have done that demonstrate that the Bush 2003 Tax Cuts and Accross the Board Supply Side Tax Cuts in gereral have been an enormous success for all Americans at all income levels, have generated more tax revenue-not less as Dems predicted- thereby reducing the deficit (ceteris paribus), have mostly “soaked the rich”, and have led to the lowest unemployment rate in more than a generation now at 4.6%-full employment (lower than the average of the 90s “Clinton Boom Years”).
For more on how the Bush tax cuts have lifted all “boats” not just the “rich” check these posts out:
http://www.punditreview.com/2006/06/13/a-question-for-the-tax-cut-o-phobes/
http://www.punditreview.com/2006/05/12/this-just-in-2003-bush-tax-cuts-a-success-2/
http://www.punditreview.com/2006/05/12/bush-tax-cuts-soak-the-rich-2/
http://www.punditreview.com/2006/04/18/hillarys-talks-down-economy-is-she-credible/