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Case Closed
Tax cuts mean growth.

BY FRED THOMPSON
Saturday, April 14, 2007 12:01 a.m. EDT

It's that time again, and I was thinking of the old joke about paying your taxes with a smile. The punch line is that the IRS doesn't accept smiles. They want your money.

So it's not that funny, but there is reason to smile this tax season. The results of the experiment that began when Congress passed a series of tax-rate cuts in 2001 and 2003 are in. Supporters of those cuts said they would stimulate the economy. Opponents predicted ever-increasing budget deficits and national bankruptcy unless tax rates were increased, especially on the wealthy.

In fact, Treasury statistics show that tax revenues have soared and the budget deficit has been shrinking faster than even the optimists projected. Since the first tax cuts were passed, when I was in the Senate, the budget deficit has been cut in half.

Remarkably, this has happened despite the financial trauma of 9/11 and the cost of the War on Terror. The deficit, compared to the entire economy, is well below the average for the last 35 years and, at this rate, the budget will be in surplus by 2010.

Perhaps the most fascinating thing about this success story is where the increased revenues are coming from. Critics claimed that across-the-board tax cuts were some sort of gift to the rich but, on the contrary, the wealthy are paying a greater percentage of the national bill than ever before.

The richest 1% of Americans now pays 35% of all income taxes. The top 10% pay more taxes than the bottom 60%.

The reason for this outcome is that, because of lower rates, money is being invested in our economy instead of being sheltered from the taxman. Greater investment has created overall economic strength. Job growth is robust, overcoming trouble in the housing sector; and the personal incomes of Americans at every income level are higher than they've ever been.





President John F. Kennedy was an astute proponent of tax cuts and the proposition that lower tax rates produce economic growth. Calvin Coolidge and Ronald Reagan also understood the power of lower tax rates and managed to put through cuts that grew the U.S. economy like Kansas corn. Sadly, we just don't seem able to keep that lesson learned.
Now, as before, politicians are itching to fund their pet projects with the short-term revenue increases that come from tax hikes, ignoring the long-term pain they always cause. Unfortunately, the tax cuts that have produced our record-breaking government revenues and personal incomes will expire soon. Because Congress has failed to make them permanent, we are facing the worst tax hike in our history. Already, worried investors are trying to figure out what the financial landscape will look like in 2011 and beyond.

This issue is particularly important now because massive, unfunded entitlements are coming due as the baby-boom generation retires. We simply cannot afford higher taxes if we want an economy able to bear up under the strain of those obligations. And beyond the issue of our annual federal budget is the nearly $9 trillion national debt that we have not even begun to pay off.

To face these challenges, and any others that we might encounter in a hazardous world, we need to maintain economic growth and healthy tax revenues. That is why we need to reject taxes that punish rather than reward success. Those who say they want a "more progressive" tax system should be asked one question:

Are you really interested in tax rates that benefit the economy and raise revenue--or are you interested in redistributing income for political reasons?

Mr. Thompson is a former Republican senator from Tennessee whose commentaries, "The Fred Thompson Report," can be heard on the ABC Radio network.

OST for later distribution.

It baffles me how something so simple can be so misconstrued and misunderstood. My money, my pocket.

Oh boy!  I get to use my pic again!  

im in again for fred. we need some real dirt on him so i can stop thinking he would be a great president in 08, if he runs.

Quoted: It baffles me how something so simple can be so misconstrued and misunderstood. My money, my pocket.

+1

Thats my beef with Reaganomics and the Laffer curve. They believe you cut taxes to maximize government revenues, I believe you cut taxes cause its MY goddamn money.

Quoted: Quoted: It baffles me how something so simple can be so misconstrued and misunderstood. My money, my pocket. +1 Thats my beef with Reaganomics and the Laffer curve. They believe you cut taxes to maximize government revenues, I believe you cut taxes cause its MY goddamn money.

Well, either way, everybody wins.

Quoted: Quoted: Quoted: It baffles me how something so simple can be so misconstrued and misunderstood. My money, my pocket. +1 Thats my beef with Reaganomics and the Laffer curve. They believe you cut taxes to maximize government revenues, I believe you cut taxes cause its MY goddamn money. Well, either way, everybody wins.

not really, the Laffer Curve implies taxes can be "too low" because its not maximizing tax revenues, which in turn would be aiming to maximize the size and role of the government.  Thats not something i'm OK with.

I think I have a man-crush on Fred Thompson.

Quoted: I think I have a man-crush on Fred Thompson.

Eeeeeeewww!!!


ETA: Yeh, okay. Me too.

Quoted: Quoted: It baffles me how something so simple can be so misconstrued and misunderstood. My money, my pocket. +1 Thats my beef with Reaganomics and the Laffer curve. They believe you cut taxes to maximize government revenues, I believe you cut taxes cause its MY goddamn money.

That's one of the things that piss me off when people talk about how wrong it is for companies (OIL companies in particular) to get tax breaks. That is THEIR money, not the government's yet people act like the government is giving them money. No you moron they're just not TAKING as much away from the company.

Quoted: Quoted: Quoted: It baffles me how something so simple can be so misconstrued and misunderstood. My money, my pocket. +1 Thats my beef with Reaganomics and the Laffer curve. They believe you cut taxes to maximize government revenues, I believe you cut taxes cause its MY goddamn money. That's one of the things that piss me off when people talk about how wrong it is for companies (OIL companies in particular) to get tax breaks. That is THEIR money, not the government's yet people act like the government is giving them money. No you moron they're just not TAKING as much away from the company.

It's the same as idiots thinking their rights are granted by the .gov or even the US Constitution.  The government is given its limited powers by the people, not the other way around.

Quoted: Quoted: I think I have a man-crush on Fred Thompson. Eeeeeeewww!!! ETA: Yeh, okay. Me too.

You guys can take your man crushes and stick them up your asses.

... urr... uhh... well, maybe not. You might enjoy that.

Just kidding.

I'll take tax cuts anytime.  I prefer they cut government and spending too though.

Are you really interested in tax rates that benefit the economy and raise revenue--or are you interested in redistributing income for political reasons?

A subtle jab at the Dem/Socialist connection...VERY nice touch!

Quoted: Quoted: Quoted: I think I have a man-crush on Fred Thompson. Eeeeeeewww!!! ETA: Yeh, okay. Me too. You guys can take your man crushes and stick them up your asses. ... urr... uhh... well, maybe not. You might enjoy that. Just kidding.

Only you said anything about butts...!

Quoted: Quoted: Quoted: Quoted: I think I have a man-crush on Fred Thompson. Eeeeeeewww!!! ETA: Yeh, okay. Me too. You guys can take your man crushes and stick them up your asses. ... urr... uhh... well, maybe not. You might enjoy that. Just kidding. Only you said anything about butts...!

Are you saying they wanna give him a hummer?