Posted by
CPT on Saturday, March 17, 2007 7:03:46 AM
Very well
written explanation () of the Shrub Tax policy.
Calling out the "myths" identified by Mr Riedl is important. Maybe a collectivist would like to try to refute one or all of them. He follows each with its appropriate refutation.
From
Brian Reidl's article ():
Myth 1: Tax revenues are too low. Fact: Revenues in 2006 were 18.4 percent of the nation's gross domestic product (GDP), which is actually above the postwar historical average.
Myth 2: The tax cuts substantially reduced 2006 revenues and expanded the budget deficit. Fact: In 2000, before the Bush tax cuts, the Congressional Budget Office (CBO) released a 10-year budget projection that assumed a healthy surplus in 2006. Yet even after all tax cuts, revenues in 2006 came in just $58 billion below the projected level. The deficit resulted more from Washington spending $514 billion above its projected level for 2006.
Myth 3: Supply-side economics assumes all tax cuts immediately pay for themselves. Fact: What is assumed is that some, not necessarily all, lost revenues will be replenished. Reducing tax rates encourages the taxed behavior, and the increased economic activity offsets some lost revenues. Whether a tax cut fully pays for itself depends on how much new activity it generates.
Myth 4: Cuts in the capital-gains tax don't pay for themselves. Fact: Capital gains revenues doubled after the 2003 capital gains tax cuts, from $50 billion to $103 billion in 2006. Before the tax cuts, the CBO projected such revenues would rise to only $68 billion.
Myth 5: The tax cuts are to blame for projected budget deficits. Fact: Revenues are already projected to jump from 18 percent of GDP today to a record 23 percent by 2050 -- and repealing the tax cuts would nudge revenues to only 24 percent. Massive future deficits will result from Social Security, Medicare and Medicaid costs pushing projected federal spending from 20 percent of GDP to at least 38 percent, according to CBO.
Myth 6: Raising tax rates is the best way to raise revenue. Fact: Revenues correlate with economic growth, not tax rates. Since 1952, the highest marginal income tax rate has dropped from 92 percent to 35 percent. Yet revenues have remained constant at 18 percent of GDP. Thus, boosting revenues requires expanding the economy.
Myth 7: Reversing upper-income tax cuts would raise substantial revenues. Fact: The popular child tax credit expansion, marriage penalty relief, the 10 percent bracket and fix of the Alternative Minimum Tax will combine this year to lower revenues by three times as much as the maligned cuts in capital gains, dividend and estate taxes. The latter tax cuts also produce some of the most positive economic benefits.
Myth 8: Tax cuts help by "putting money in our pockets." Fact: Redistributing money between governments and taxpayers merely shifts -- and does not increase -- total spending power in an economy. So government spending does not "inject" new money into an economy, nor do tax rebates help by "putting money in our pockets." Rather, low tax rates increase incentives to work, save and invest, thereby sparking productivity and economic growth.
Myth 9: The tax cuts haven't boosted the economy. Fact: The 2003 tax cuts lowered rates for income, capital gains and dividend taxes. Business investment, the stock market, job numbers and economic growth -- all of which had been stagnant -- immediately surged.
Myth 10: The tax cuts tilted toward the rich. Fact: The rich now shoulder even more of the burden. Since 2000, the share of individual income taxes paid by the bottom 40 percent of taxpayers dropped from zero to minus 4 percent -- meaning the average family in this group got a subsidy from the refundable child tax credit or earned income tax credit. The share of income taxes paid by the top fifth of taxpayers climbed from 81 percent to 85 percent.
End of Mr. Riedl's good work.
These myths, consistently trumpeted by the left and its media lickspittles are a great illustration of collectivist delusion. They see the economy as a zero sum game. As a fixed pot of gold, never changing. They also, in their compassionate arrogance assume that the *poor* are doomed and destined to remain so. Their only cure is government, controlled and managed by wealthy comfortable people who *
know better* than the rest of us slobs. Why we poor ignorant fools will just ruin
EVERYTHING if we are controlled and effectively nannied by our *
betters* seeking to feel good about themselves and their *
contribution* of telling us what is good for us.
Liberty abhors such arrogance. Such political classism. Such collectivist pap encouraging "sacrifice" for we unwashed. No, they won't and don't sacrifice. They seek power so they can pursue feeling good about themselves by instructing the "little guy", the "downtrodden", the "minority", who can't possibly help themselves without benevolent government bureaucrats.
Historical fact of the abject failures of collectivism, "public" welfare (taking yours and giving it to who they want) and socialist models don't impinge on their fantasies in the slightest.
Tax cuts that allow free investment, free and fuller employment, increased government revenues (you'd think they'd
LOVE that) and more money in the pockets of the people who actually pay for the liberals *
benevolence* are anthema to the sheople herders and their mouthpieces.
Read the
rest of the piece, its important to know the truth.
Economic freedom is integral to political freedom. That's why the
liberals HATE it.
More Content:
The American Freedom Net Web Log
Nik's MySpace Blog