| EXAMINER PUBLICATIONS - JAUNUARY 18, 2006 A VIEW FROM THE CHEAP SEATS By Rich Trzupek That Voodoo You Do Remember the Bush tax cuts of 2001, 2002 and 2003? Remember how they were renewed last year? Remember how the critics howled? A columnist by the name of Robert Freeman called the moves "a form of national insanity." "The long-term effects of these policies are profoundly damaging�With the exception of the World Wars, this is the greatest, most rapid destruction of public wealth in the history of the world." "This tax cut is not an economic stimulus-the only thing this tax cut stimulates is more economic inequality in the U.S.," Christ Hartman and David Martin of Fair Economy.org complained. The solution, tax cuts critics assured was, was higher taxes, especially on the wealthy, not another freaking cut. Conservatives demurred, claiming that lower tax rates would create a more robust economy, and a more robust economy wold ultimately generate more tax revenue. "Supply-side hogwash, voodoo economics," the critics howled. Well lookie here at these numbers. The story was buried in your major metropolitan newspaper of course, but tax revenues increased nearly 15 percent in 2005, which will shrink the federal deficit by nearly 25 percent, or almost $100 billion, by the end of the year. Pretty good for voodoo, no? Of course we've seen this all before. When two of Bush's predecessors, John Kennedy and Ronald Reagan, cut taxes as dramatically, tax revenue climbed as spectacularly as well. The critics are sure to forget that little fact, as they seem incapable of performing fifth-grade math. They'll tell you that the nation's deficit grew dramatically under Reagan-as it did-but they can't quite get a handle on why. The reason had nothing to do with tax cuts which generated more-repeat-MORE-income for the government than before. On a similar note, Democrats were so very offended when Republicans dared to compare Bush's tax cuts to JFK's. Teddy Kennedy was particularly upset, although how anyone with a record like Teddy can be offended by anything short of ritual human sacrifice defies the imagination. The comparison, if one looks at the numbers, was quite appropriate. JFK's tax cuts amounted to 1.9 percent of the nation's income at the time, which is the only reasonable basis for comparison. One can't use actual dollars, since inflation means that 2005 dollars are worth far more than 1963 dollars. How much are the sum total of Bush's three tax cuts worth, as a percentage of today's national economy? 2.0 percent, which is pretty Kenndyesque, don't you think? Like JFK, Dubya is also an advocate for a stronger national defense, but that's another column. It's pretty damn clear that cutting taxes is something that everyone should support. If you're a money-grubbing conservative who wants to keep more cash for yourself, cuts makes sense. If you're a bleeding-heart liberal who wants government to get more money to solve problems, they make sense. With 25 years of history to show that lower tax rates raise more revenue, why would any intelligent person still want to argue with the policy? Unless the goal is to bankrupt both the public and private sectors, so that Big Brother will ultimately run everyone's lives, there's no possible reason not to support reasonable tax rates. Unless, of course, you happen to be a Democratic politician who wants so desperately to be elected that you'll twist the facts and ignore mathematics in order to secure the vote of people who just don't know any better. |