*Squawk!* "Tax cuts for the rich, tax cuts
for the rich!" *squawk!* It's one of the libtards favorite lies to
run around screeching. That's what they do after all... they
screech. One of their favorites has been the lies about the Bush
tax cuts. I gotta' wonder where it is these fools get their
information. Or rather- their lack of information.
10 Myths About Those Tax Cuts:
WASHINGTON, FEB. 28, 2007—The left pretty
well demonized the tax cuts of the past few years. Demagogued as
"tax cuts for the rich," they've been blamed for everything from
"runaway" deficits to "drastic" cuts in anti-poverty programs.
Fortunately, virtually all of the progressive conventional wisdom
on this subject is wrong. Here are 10 widely held myths about the
tax cuts -- and the facts that debunk them:
Myth 1. Tax revenues are too low. Fact: The
$2.41 trillion in revenues in 2006 amounted to 18.4 percent of our
gross domestic product (GDP). That's higher than historical
averages going back 20, 40 and 60 years. It's simply not true that
Americans are under-taxed by historical standards.
Myth 2. The tax cuts substantially reduced
revenues and expanded the budget deficit. Fact:Revenues in 2006
were a relatively modest $58 billion below the amount projected
before the tax cuts proposed by President Bush and approved by
Congress. Yet Washington spent $514 billion more in '06 than had
been projected, turning a budget surplus into a deficit.
Myth 3. Supply-side economics assumes all
tax cuts immediately pay for themselves. Fact: What's assumed is
that some, not necessarily all, lost revenues will be replenished.
Reducing tax rates encourages the taxed behavior, and the increased
economic activity offsets some lost revenues. Whether a tax cut
fully pays for itself depends on how much new activity it
generates.
Myth 4. Cuts in the capital gains tax don't
pay for themselves. Fact: Capital gains revenues doubled after the
2003 capital gains tax cuts, from $50 billion to $103 billion in
'06. Before the cuts, the Congressional Budget Office (CBO)
projected such revenues would rise much less sharply, to $68
billion.
Myth 5. The tax cuts are to blame for
projected budget deficits. Fact: Revenues already are projected to
jump to a record 23 percent of GDP by 2050; repealing the tax cuts
would push revenues a bit higher, to 24 percent. CBO projects the
massive deficits based on unrestrained Social Security, Medicare
and Medicaid costs pushing total spending from 20 percent of GDP to
38 percent or more.
Myth 6. Raising tax rates is the best way to
raise revenue. Fact: Revenues correlate with economic growth, not
tax rates. Since 1952, the highest marginal income tax rate has
dropped from 92 percent to 35 percent. Yet revenues remained
constant at 18 percent of GDP. Thus, a growing economy boosts
revenues.
Myth 7. Reversing upper-income tax cuts
would raise substantial revenues. Fact: Expansion of the popular
child tax credit, marriage penalty relief, the 10 percent bracket
and fix of the Alternative Minimum Tax will combine this year to
lower revenues by $114 billion. The maligned cuts in capital gains,
dividend and estate taxes are projected to reduce revenues by less
than a third of that -- $36 billion -- while producing significant
supply-side advantages.
Myth 8. Tax cuts help by "putting money in
our pockets." Fact: Redistributing money between governments and
taxpayers merely shifts -- and does notincrease -- total spending
power. So government spending does not "inject" new money into the
economy, nor do tax rebates help by "putting money in our pockets."
Rather, low tax rates increase incentives to work, save and invest,
sparking productivity and economic growth.
Myth 9.The tax cuts haven't boosted the
economy. Fact: The 2003 tax cuts lowered rates for income, capital
gains and dividend taxes. Business investment, the stock market,
job numbers and economic growth -- all of which had been stagnant
-- immediately surged.
Myth 10. The tax cuts tilted toward the
rich. Fact: The rich now shoulder even more of the burden. From
2000 to 2004, the share of individual income taxes paid by the
bottom 40 percent of taxpayers dropped from zero to minus 4 percent
-- meaning the average family in this group got a subsidy from the
refundable child credit or earned-income credit. The share of
income taxes paid by the top fifth of taxpayers climbed from 81
percent to 85 percent. Today, the top 40 percent of filers pay a
record 99 percent of all income taxes, and 85 percent of all
combined federal taxes.
America faces real budget challenges. In particular, the impending
retirement of 77 million baby boomers is set to unleash a $39
trillion tsunami of unfunded Social Security and Medicare costs.
Congress should focus on preventing that looming fiscal disaster,
not repealing the tax cuts or letting them expire.
Re-raising taxes to previous levels would not increase revenues
significantly. But it would discourage investors and entrepreneurs,
reduce incentives to work, and slow economic growth.
Lawmakers would do well to remember that America cannot tax itself
to prosperity.
Myths, Lies, and Hypocrisy: It's the liberal way! 
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