Thursday, May 11, 2006

Tax cuts accomplishing their goal?

Who knew?? Oh, yeah...those of us with a basic grasp of economics knew! From Breitbart/AP:
A flood of income tax payments pushed up government receipts to the second-highest level in history in April, giving the country a sizable surplus for the month.

In its monthly accounting of the government's books, the Treasury Department said Wednesday that revenue for the month totaled $315.1 billion as Americans filed their tax returns by the April deadline. The gusher of tax revenue pushed total receipts up by 13.4 percent from April 2005.

It marked the largest one-month receipt total since the government collected $332 billion in revenue in April 2001, reflecting a boom in capital gains from stock investors lucky enough to cash out their investments before the bursting of the stock market bubble in early 2000.
Now, if we could only convince Congress to stop pissing away all of the extra money (and then some), we'd be in much better fiscal condition!

Face it, folks: it's worked every time it's been tried! Tax cuts put money back into taxpayers' pockets. Yes, even the "evil rich" taxpayers get some money back. That money gets spent on anything from consumer purchases to expanding businesses to whatever else. This money, in return, results in even MORE productivity...which inevitably results in extra taxable income. Translation: more tax revenues going into the federal coffers. To that end, tax cuts work.

However, if Congress fails to take advantage of the situation (and this always seems to be the case), then the benefits realized from the tax cuts are blunted, if not nullified. By spending all of the extra money and then some on demonstrably failed or new (and thus yet to fail) programs, Congress does a poor fiduciary job.

Here's an analogy I used before, so please indulge me if you've seen this already:

Let's say your boss gives you a $10,000 Christmas bonus. Wow! Let's say that instead of putting the $10,000 towards your mortgage or retirement or consumer debt, you go down to your local Mercedes dealership and buy a $50,000 car, and you pay the $10,000 as a down payment.

Your $10,000 gain just turned into a $40,000 deficit! If you're a liberal, you blame your deficit on the $10,000 bonus instead of the poor decision you made on what to do with the extra money.

In short: tax cuts work, Congress doesn't!