April 16, 2007
Results of experiment are in...
Case Closed: Tax cuts mean growth. By Fred Thompson
...but there is reason to smile this tax season. The results of the experiment that began when Congress passed a series of tax-rate cuts in 2001 and 2003 are in. Supporters of those cuts said they would stimulate the economy. Opponents predicted ever-increasing budget deficits and national bankruptcy unless tax rates were increased, especially on the wealthy.
In fact, Treasury statistics show that tax revenues have soared and the budget deficit has been shrinking faster than even the optimists projected. Since the first tax cuts were passed, when I was in the Senate, the budget deficit has been cut in half.
Remarkably, this has happened despite the financial trauma of 9/11 and the cost of the War on Terror. The deficit, compared to the entire economy, is well below the average for the last 35 years and, at this rate, the budget will be in surplus by 2010.
Perhaps the most fascinating thing about this success story is where the increased revenues are coming from. Critics claimed that across-the-board tax cuts were some sort of gift to the rich but, on the contrary, the wealthy are paying a greater percentage of the national bill than ever before.
The richest 1% of Americans now pays 35% of all income taxes. The top 10% pay more taxes than the bottom 60%....
Tax cuts result in the rich paying a bigger share. And the maddening thing is that it's impossible to 'tell" this to most people. They just can't hear it. Their little brains reject the alien idea.
It was the same thing with the Reagan tax cuts. The percentage of taxes paid by those in the upper brackets increased. But my efforts to communicate this fact to others was hopeless...
Posted by John Weidner at April 16, 2007 06:18 PMYou can present the facts. You can hold up pie charts and graphs. But nothing penetrates. They cannot learn it.
Liberals, including nearly everyone in media, believe the false notion that resources are permanently finite. For every winner there's a loser. If that were true, we'd now be sharing the wealth of cavemen divided by about a million.
They also fail to understand the difference between our lives and the nasty, brutish, and short lives of cavemen. That difference lies not in our evolved superiority but in the accumulation of ideas that we call civilization.
Free enterprise rewards new ideas, while other economic systems stifle new ideas. If we want better lives and more civilization, we have to prime the pump of creativity by priming the pump of free enterprise.
Tax cuts are a good way to do just that. In a rational world, every presidential candidate in every election would advocate tax cuts - until they no longer produce increased revenue.
It is maddening. The good news is that even though none of the powers that be on the left (and you know who they are) will ever admit that economic growth is incompatible with high rates of taxation, because that would vindicate Reagan and Thatcher, the world is largely behaving as if the case is indeed closed.
Look around the world and virtually everywhere (OK with the possible exception of Latin America) more sensible economic policies are being set in place; trade is being liberalized, and tax rates are coming down - particularly marginal tax rates.
Even in this country, if the Democrats controlled all branches of government, we would never go back to the ridiculous marginal tax rates that existed in the 60's and 70's.
All of the positive trends displayed in the post above with the really cool graphics are going to continue, and at a more rapid pace. Over time successful countries will be imitated and failing states will have their model rejected.
It is frustrating to see something others can not or will not see but keep your chin up. Time, evidence, and reason are on our side. If not for the terrorists/lunatics out there, this would be without question the most optimistic moment in all of history.
