Senate Slashes Bush Tax Cut Package

A lot of good having the majority is doing for the GOP if some of them vote along with the DemonRats.

I do have to admit that, because of the stupid way in which the tax reduction proposal has been described, it is very awkward to ask for tax cuts at the same time as more funds are being requested for the Iraq war.  While such a thing seems irresponsible on its face, it really isn't.  However, it is just one more example of the problems of using static analysis to describe the effects of tax law changes.

The tax reduction proposal is constantly being described as costing $726 billion, with the implication that the Federal government will be out of pocket that much money if the law is passed as President Bush is requesting.  That is just not the case.  However, the truth about the effects of tax rate reductions is consistently distorted by the DemonRats and their propagandists in the media, who like to use their class warfare strategy of calling it a tax cut for the evil rich.

While I don't have a crystal ball, I feel very confident in predicting that, if Bush's tax rate cuts and elimination of double corporate taxation are allowed to become real, the results will be the same as after Ronald Reagan's tax rate cuts of the early 1980s.  There will be more economic activity, resulting in more taxable income and overall much higher tax dollars to the Federal government.  It will not cost the government anything, but will stimulate more revenue.  However, that is based on the more realistic dynamic analysis of tax law changes, which is taboo and not allowed to be part of the discussion.  I am certain that Bush, as a fellow MBA, understand this.  However, he is not doing a good job overcoming the left-wing media bias to explain this very well to the American public, who have a terrible understanding of basic economics.

KMK

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 3/25/2003 06:19:00 PM Send this post: