Those of us who understand economics 101 know that every time in American history that taxes have been cut accross the board, revenues to the Federal and State treasurys increase. We call this supply-side economics and it is now axiomatic. The 2003 Bush Tax cuts have resulted in a flood of tax receipts to the Treasury that has decreased the deficit and has been well documented. As I write about in my soon to be released book “Conservative Comebacks to Liberal Lies”
Three times in 1900s (the 20s, 60s, and 80s) and once in the 21st century (Bush 43), taxes were cut across the board. All four cuts stimulated the economy substantially and immediately and resulted in increases in tax dollars to the federal treasury not decreases as Democrats predicted.
Consider the Bush Tax Cuts that all the Democrats said would lead to massive unemployment and would destroy the economy:
Under Bush “43” tax revenues to the federal treasury also increased. According to the Wall St. Journal, “In the first 5 months of Fiscal 2006, through February, overall revenue continued to surge, growing at an overall rate of 10.3%, or an $81 billion increase from the year before, to $871 billion. That builds on the astonishing 15%, or $274 billion, revenue increase for all of 2005, which various fiscal wise-men assured us would fall off dramatically. Apparently not.”
Tax receipts for the first seven months of fiscal 2005 and 2006 from the CBO, in billions are:
2005- Individual income $547 billion, 2006- $603 billion 10.2% increase
2005 Corporate income $134 billion, 2006- $174 billion 29.5% increase
Tax receipts as a result of the Bush tax cuts on individual income, dividends, capital gains and corporate income have increased, not decreased!
While the Paul Krugmans of the world at the Grey Lady may be “surprised” that the deficit has shrunk due to the Bush/GOP Tax Cuts, we fiscal supply side conservatives are not surprised in the least.
But our friends at the NY Times are still holding out hope:
The surge could also evaporate as quickly as it appeared. Over the past decade, tax revenues have become much more volatile, alternately soaring and plunging in the wake of swings in the stock market and repeatedly defying government projections.
Brain Wesbury was dead on when he referred to the tax and spend liberals as the “Pouting Pundits of Pessimism.”