Gdp Up 20 Pct You Gotta Problem With That - Road to the Middle Class

In the past 33 months the size of America's entire economy has increased by 20%--or, as National Review Online's Larry Kudlow put it, "In less than three years, the U.S. economic pie has expanded by $2.2 trillion, an output add-on that is roughly the same size as the total Chinese economy."

You gotta problem with that? A lot of Americans seem to, since a majority of Americans give President Bush low marks for his stewardship of the economy.

Don’t worry. The federal government has shared in the bounty. Revenues are soaring. In fact the revenue increases are obscene.

Federal tax receipts increased by 15%-- $274 billion--last year and 13%-- $206 billion--in the first nine months of this fiscal year, which, as the Journal points out, means the nine-month increases for the past two years represent the highest growth rates in 25 years. Looking ahead to the end of this fiscal year, total inflation-adjusted government receipts will likely be 23% above 2003 when the Bush tax cuts were signed into law.

You would think that the Democrats would at least be pleased about that.

Yes, those Bush tax cuts are really helping the economy surge ahead, and they are even cutting taxes in the states, although not in the Soviet of Washington, of course.

But there is one group of Americans who have not been converted to the virtues of tax cuts. And we mean, as we always do here at the Road to the Middle Class, tax rate cuts. Who is that mean-spirited, negative, reactionary group? Who else, but Congressional Democrats.

Today the Democratic Party is so vehemently opposed to income tax cuts that when President Bush's reached their final vote in May 2003, only 4% of Democratic legislators (2 of 48 senators and 7 of 205 representatives) voted "yes."

Naturally, the New York Times is not to be outdone by their pals on Capitol Hill when it comes to railing against tax rate cuts.

[V]arious New York Times editorials called them "economically unsound," claimed that "they will increase the deficit by hundreds of billions of dollars" and said they were unlikely "to stimulate the wallowing economy."

No doubt the Times editorialist was confusing the national economy with the Old Media economy. As of this writing, there doesn’t seem to be anything that can stimulate that economy.

Let’s finish up with some more numbers. Because the wallowing MSMers certainly won’t talk them up, we will.

Reducing the capital gains tax rate from 20% to 15% increased capital gains tax receipts by 79% from 2000 to 2004. Cutting the dividend tax rate by more than half--from 39.6% to 15%--increased dividend tax receipts by 35% from 2002 to 2004. And corporate tax receipts have nearly tripled since 2003, reaching $250 billion for the past nine months, 26% higher than the same period last year.

With all that money flooding into the federal coffers I’d say that it is time to repeal the Death Tax.

As composer Giuseppe Verdi said to his librettist, Piave: “Cut, cut, and cut again!”

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Christopher Chantrill blogs at www.roadtothemiddleclass.com. His Road to the Middle Class is forthcoming.