We were encouraged — but not surprised — to see this AP story by Marty Crutsinger noting that Federal revenues hit a record $383 billion in April, boosting the years’ total to $1.5 trillion, more than an 11% increase over last year. Why? Because the tax cuts keep working, that’s why. Of course, neither the WaPo or the NY Times understand basic economics. As a result of these soaring revenues, federal deficit predictions have been revised dramatically downward, $100 billion under last year’s level. As we like to point out, had the deficit gone the other way, you can bet it would be front-page news, but other than this blog, you’ll likely not read much about it.
So we were feeling pretty good ’til we read this AP story by Andrew Taylor, saying that the Dems’ budget plan will include a roll back of all these same tax cuts. Remember that under Congressional rules, these tax cuts expire after ten years (something about tax cuts that are just anathema to Congress) so if Congress doesn’t extend them, they expire. This neatly allows them to campaign and say they never voted to increase taxes. Well, that’s technically correct, but by not affirmatively voting to extend the tax cuts, they will effectively raise taxes.
Maybe it’s time for Congress to go back to school to take Economics 101, so they can understand that tax cuts actually power this economy, have led to enormous investment and growth by manufacturers. Or maybe they could just read the blog.
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