July 16, 2004

Free Market Rules

From his own web-site:

By borrowing from future generations to give tax relief to those who need help the least, George W. Bush’s economic policies have, for the first time in history, forced the federal government to spend $1 billion more EACH DAY than it takes in.

But little reported earlier this week comes this great news, as reported by Reuters:

WASHINGTON, July 13 (Reuters) - The U.S. government posted a larger-than-expected budget surplus in June, propped up by higher quarterly business tax receipts, a government report released on Tuesday showed.

In the Treasury Department's monthly budget statement, June income outpaced spending by $19.14 billion, slightly less than the government's June 2003 surplus of $21.23 billion.

"What we are seeing is the impact of a good economy, the impact of extraordinarily strong corporate profits, and likely the impact of more people being caught in the alternative minimum tax," Drew Matus, financial markets economist at Lehman Brothers in New York, said in response to the report.

"Surprisingly strong receipts are really helping out a great deal here. There is no reason to suspect, given the employment growth we have seen, that this trend will change any time soon," he said.

Corporate income tax inflows grew 38 percent in June, when quarterly tax statements are normally filed, compared to June 2003. Individual tax receipts were nearly 9 percent higher.

Read that last paragraph closely. Income tax inflows from business grew 38% and individual inflows grew 9%. Wha' Happaned? If you listen to John Kerry you would assume that tax cuts would starve the government of needed funds and eliminate food from the mouths of poor children.

But as predicted, and as happened two previous times taxes were cut (Reagan and Kennedy), money coming into the treasury has actually increased!

If that isn't proof positive that tax cuts spur economic growth, and that growth in the economy happens best when the government gets out of the way, then I don't know what is.

The same tax cuts which are causing the economy to grow at such a substantial rate are the same ones which John Kerry wants to eliminate.
From his own web-site again:

To restore fiscal discipline and strengthen our economy, Kerry will repeal Bush’s special tax breaks for Americans who make more than $200,000.

Many of those people who 'make more than $200,000' do so because they own businesses. That income which is taxed as individual income is actually business income. By increasing taxes on these individuals (and therefore the business) you decrease the liklihood that they can invest in their business to increase productivity and grow and make even more money.

That means fewer jobs created, and a slower growing ecnonomy.

Now I am not saying that tax cuts alone get the job done. We are still spending too much. Bush is spending like a liberal, with the new drug entitlement program, and increases in many domestic programs.

But through a combination of tax cuts, and fiscally responsible spending, we can actually increase the amount of money coming into the treasury, pay down the debt, and maybe afford a few nice things for you and me.

More reading is available at Blogcritics

Posted by TomCat at 11:11 AM | Comments (8)