Patriot Post On Tax Cuts

[FC]

"Remember the folks who said the tax cuts would 'blow a hole in the deficit?' Well, revenues as a share of the economy are now expected to rise this year to 18.3%, slightly above the modern historical average of 18.2%. The remaining budget deficit of a little under $300 billion will be about 2.3% of GDP, which is smaller than in 17 of the previous 25 years. Throw in the surpluses rolling into the states, and the overall U.S. 'fiscal deficit' is now economically trivial. This would all seem to be good news, but some folks are never happy. The same crowd that said the tax cuts wouldn't work, and predicted fiscal doom, are now harrumphing that the revenues reflect a windfall for 'the rich.' We suppose that's right if by rich they mean the millions of Americans moving into higher tax brackets because their paychecks are increasing. Individual income tax payments are up 14.1% this year, and 'nonwithheld' individual tax payments (reflecting capital gains, among other things) are up 20%. Because of the tax cuts, the still highly progressive U.S. tax code is soaking the rich. Since when do liberals object to a windfall for the government?... As for the 2003 tax cuts, the current revenue boom is one more argument for making them permanent. They are now set to expire in 2010, and, even if they are extended, federal revenues will continue to climb as a share of GDP as more taxpayers earn higher incomes and move into higher tax brackets. If liberal Democrats are really determined to soak the rich—and we don't doubt it for a second—they'll also vote to make the tax cuts permanent." —The Wall Street Journal