[lit-ideas] Re: HUMAN EVENTS ONLINE - Bush's 2003 Tax Cuts: Wildly Successful
- From: Teemu Pyyluoma <teme17@xxxxxxxxx>
- To: lit-ideas@xxxxxxxxxxxxx
- Date: Fri, 28 Jul 2006 16:01:30 -0700 (PDT)
The usually reliable Financial Times (subscription
required) reported:
US budget deficit forecast cut by a third
By Christopher Swann and Krishna Guha in Washington
Published: July 11 2006 16:11 | Last updated: July 11
2006 19:58
The Bush administration on Tuesday cut its forecast
for this year?s budget deficit by almost a third,
following a surge in tax revenues.
The Office of Management and Budget said that the
deficit for 2006 was likely to come in at $296bn
(?232bn) or 2.3 per cent of gross domestic product
rather than the $423bn or 3.2 per cent of GDP
estimated in February. [...]
Tax revenues are forecast to rise by 11 per cent over
the year. This accounts for 90 per cent of the
improvement in the deficit projection. The remaining
10 per cent of the improvement is explained by a $12bn
fall in forecast government spending to $2,696bn.
[...]
The climb in expected tax receipts appears to be
driven by another bumper year for owners of capital
and high earners. Corporate income tax revenues are
forecast to rise by 19 per cent and individual income
tax by 15 per cent.
Standard payroll taxes for social insurance and
retirement, a better gauge of the earnings of middle
and low income groups, rose by a more modest 5 per
cent. Experts said that a large part of the rise in
individual income tax might be due to profits accruing
to small business owners who file tax on profits under
the individual code. [...]
Teemu's comment: Cherry picking a fiscal year estimate
revisal and jumping to conclusions does not a
convincing argument make. And while the FT is too
polite to say it aloud, who in their right mind
expects spending to decrease on an election year? That
there are some cases where lower taxes may lead to
higher revenue is well known, no one serious including
GOP economists believes this is the case with Bush tax
cuts. See
http://delong.typepad.com/sdj/2006/07/nell_henderson_.html
for example
Cheers,
Teemu
Helsinki, Finland
--- Ursula Stange <Ursula@xxxxxxxxxx> wrote:
> Can someone explain to me what the junk economics is
> here.
> I have a hard time believing this good news story
> (even more so considering the Ann Coulter and Robert
> Novak ads).
> But I don't know enough economics to see the spin.
> U.
>
> http://www.humanevents.com/article.php?id=16031
>
>
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