Another liberal meme busted wide open
This week has been full of them. From the Saddam WMD/al Qaeda connections, to the NSA "wiretapping" (see the posts at Powerline for details) liberal memes have been falling rapidly by the wayside. Today's meme is an oldie, but a goodie...the meme that tax cuts cause tax revenues to drop.
Last week, the Wall Street Journal reported (article is subscription only) that tax revenues for the first 5 months of fiscal 2006 is up 10.3%. This article in Townhall (by Herman Cain) explains why this is not a fluke.
"Presidents Warren Harding and Calvin Coolidge significantly cut tax rates in the 1920s, which caused both the national economy and federal revenues to grow. Harding repealed the World War I excess profits tax, dropped the top tax rate on individuals from 73 to 58 percent and set the capital gains tax rate at 12.5 percent. Coolidge further reduced individual tax rates and inheritance taxes. The Harding and Coolidge tax rate cuts caused income tax revenues to rise 61 percent from 1921 to 1929. At the same time, the economy grew by 59 percent. Additionally, the share of taxes paid by the wealthiest Americans grew from just over 44 percent in 1921 to over 78 percent by 1928. "
Closer to home, the state of Minnesota went from a $4.2 billion deficit to a $337 million surplus thanks to the economic growth spurred by tax cuts on the state and federal level!
Tax cuts work - it has been proven historically time after time after time. What we now need to reign in is the out of control state and federal spending.
"The other lie liberals perpetually tell is that low tax rates cause budget deficits. History proves just the opposite – that cuts in income, capital gains and dividends tax rates increase the amount of federal revenues available for Congress to spend. The only thing that can cause a budget deficit is when Congress spends in excess of available revenues, and the president at the time signs off on that spending. Members of Congress who blame tax cuts for causing deficits might as well argue that gun manufacturers cause homicides, fast food restaurants cause obesity and cigarette makers cause lung cancer. Surely no one would agree with that flawed logic."
There I might argue with the author. I know too many people here in Minnesota who think that houses cause crime and SUVs cause accidents and guns cause murders. Such is the thought process of todays liberal Democrat.