Jul 09 2006

Our Amazing Economy

Published by at 7:22 am under All General Discussions

The NY Times is always flumoxed when faced with the reality that tax cuts energize the economy and create a great tax revenue windfall. They are stunned to see how much steam the US economy has picked up, even in the face of a military actions and rebuilding nations, natural disasters and terrorist strikes on our economy:

An unexpectedly steep rise in tax revenues from corporations and the wealthy is driving down the projected budget deficit this year, even though spending has climbed sharply because of the war in Iraq and the cost of hurricane relief.

Tax revenues are climbing twice as fast as the administration predicted in February, so fast that the budget deficit could actually decline this year.

The main reason is a big spike in corporate tax receipts, which have nearly tripled since 2003, as well as what appears to be a big increase in individual taxes on stock market profits and executive bonuses.

Emphasis mine. Tax receipts have nearly tripled, even though the tax cuts were by no means a cut by a third. This shows a massive multiplier between a marginal tax rate cut and the resulting boom in economic output. I know liberals are a not always good with math, but it is hard to miss these kinds of result.

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