When Tax Cuts Come: Can Job Growth, Wage Gains, Increased Revenues, Be Far Behind?

Speaking of elections, the liberal candidate for Mayor of Indianapolis had all the endorsements.

Republican challenger Greg Ballard won a stunning upset in winning election for mayor of Indianapolis.

Mr. Ballard beat two time Mayor Bart Peterson who almost certainly lost because he increased property taxes.

For much of the race Mr. Ballard's name was not even known to most voters.

The challenger was almost totally unfunded and yet pulled off one of the most stunning upsets in recent memory.

We constantly hear the Mainstream Media and liberals downplay the importance of taxes in elections.

Hong Kong's Flat Tax May Drop to 15 Percent. Competition from Singapore is probably the reason.

Hong Kong may reduce the flat tax rate on both corporate income and labor income down to 15 percent.

Singapore has been steadily cutting corporate taxes over the past few years. Its rate now stands at 18%.

The C.B.O.’s most recent calculations of federal tax rates shows how progressive the system is.

Based on 2004 data, little has changed in the tax code

The poorest fifth of the population, with average annual income of $15,400, pays only 4.5 percent of its income in federal taxes.

The middle fifth, with income of $56,200, pays 13.9 percent. And the top fifth, with income of $207,200, pays 25.1 percent.

The C.B.O. reports very high tax rates at the top. The richest 1 percent has average income of $1,259,700 and forks over 31.1 percent of its income to the federal government.

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As predicted by supply side economists, the 2003 tax cuts have yielded soaring revenues.

In fact, had Congress shown even mild restraint on spending, we would now have a surplus.The C.B.O.’s most recent calculations of federal tax rates show a highly progressive system. (The numbers are based on 2004 data, but the tax code has not changed much since then.) The poorest fifth of the population, with average annual income of $15,400, pays only 4.5 percent of its income in federal taxes. The middle fifth, with income of $56,200, pays 13.9 percent. And the top fifth, with income of $207,200, pays 25.1 percent.

At the very top of the income distribution, the C.B.O. reports even higher tax rates. The richest 1 percent has average income of $1,259,700 and forks over 31.1 percent of its income to the federal government.

Congress's sorry record aside, the deficit, now running at a 2.3% rate, is smaller than most of those of the last 25 years, and smaller than those of most major industrialized nations.

How powerful have the tax cuts been?

In the first nine months of fiscal 2006, Tax revenues have increased by $206 billion, or nearly 13%, the second-highest rate, for a nine-month period in the past 25 years.

Which is the only year that ever topped this number?

The year before. For the full year 2005, revenues were 15% higher than the previous year, in the amount of $274 billion.

As we well knew, when the cuts were debated, liberals talked of skyrocketing deficits. Then as now, they pushed their big government, redistribution, spending schemes, highly resentful of Americans keeping a little more of their own money.

Unfortunately too many Republicans have hitched themselves to the liberal pork and welfare wagon.

Despite inheriting an economy in recession, reckless congressional spending, Katrina, record high oil prices and the Iraq War revenues are pouring in to the federal government.

Oh yes, most states have the same problem!

Tax Cuts To Reaganomics-WSJ Article