July 12th, 2006 at 11:04 am
Big Rex,

“Just a note: the cost of the wars in Iraq and Afghanistan are included in these figures…you’re confusing the issue where the budget for the war does not reflect real costs, since supplemental bills are outside the budget for the war.”

Thanks gerry…my bad.

I am not a huge fan of Clinton, but I tire of the right dragging him out as a boogie man every time it suits their needs.

Especially when the people involved in these scandals were notorious for contributions to the Republican Party.

Using Enron as an example, while it is true that Enron’s corporate fraud began as early as 1996, with the creation of off the book entities, and continued through 1997, there was very little anyone could do to catch Fastow, Lay and Skilling because NONE OF WHAT THEY DID APPEARED IN ANY KIND OF PUBLIC WAY. The predominantly REPUBLICAN membership board of directors were the only ones who could have seen the Enron collapse coming and conveniently did nothing (other than enrich themselves). I take that back they did waive conflict of interest rules to ALLOW Enron to accelerate their corrupt deeds in 1999, the first real public clue something was amiss.

It was not until March 2000, when Clinton was on his way out, that the first real act that the government could attack occured when Enron filed fraudulent annual 10-K reports for 1999.

They missed that, and there is no denying it.

The depth of Enron’s greed and corporate wrongdoing did not start becoming obvious until 2001 when the evidence of wrong doing really began piling up, not only with additional fraudulent filings, but also the efforts of VP Sherron Watkins who in february first tried to flag the wrongdoing–and that was when George W. Bush was running the show.

Oh, and who was at the inauguration of George W. Bush? Why it was Enron CEO Kenneth Lay and president Jeffrey Skilling, who each made $100,000 contributions for the event.

I will give credit to this administration for going after Enron, even if it was only because the collapse was so spectacular that it could not be ignored, but please do not lay the crimes of these people on the prior administration–it’s ridiculous to say that it’s the police’s fault for not catching the criminal quickly enough.

Just a note: the cost of the wars in Iraq and Afghanistan are included in these figures…you’re confusing the issue where the budget for the war does not reflect real costs, since supplemental bills are outside the budget for the war.

Blue,

Tax revenue did not decrease–it increased. But you are right, spending increased by more.

The “great numbers” aside, we will not really know the final numbers because some costs will not appear for 6 months to a year when the final budget is known…these numbers are based on what is known now. Things have a way of trickling in.

Either way, it is indisputable that tax revenues increased–did tax cuts do it? It would be difficult to argue they had nothing to do with it. If people have more money, and spend and invest it, tax revenues will increase–enough to offset the loss from the tax cuts? Tough to say.

I suspect in the long run we have seen a tax shift and temporary gains more than anything.

To me, the key issue is has this administration shown the kind of fiscal conservatism that used to be the hallmark of the republican party? The answer is quite clearly no.

This ain’t your father’s Republican party…it is something else, and true conservatives should be outraged.

Again as I noted, parlor trick.

Somehow, a deficit of “only” $300 billion doesn’t impress me.

This is exactly why the news media is losing credibility

Now, as to the debate at hand.

I think it’s great that the tax revenues were the second highest in 25 years. Good news! I do not know how much the tax cuts had to do with it. Maybe some.

But a couple of points: as stated already the growth in tax receipts seems like good news, but after the projections last fall we had low expectations. Bush has for several years now underestimated tax revenues just so they could come out with these announcements each summer.

OK, but that does not mean the tax revenue increase isn’t real…it is.

A huge componant of that are corporate income tax receipts, which I read rose 26 percent (individual income tax receipts climbed 14 percent)

Looking deeper, the strongest growth came from non-withheld taxes (bonuses like stock grants, capital gains on investments and estimated taxes).

The strong rise in corporate income tax was due to exceptionally strong profits as companies have made big gains because of worker productivity gains, lower or static wages, downsized workforces, etc. In other words, good news for companies, not such good news for workers.

Finally, a good chunk can be attributed to a one-year tax break for companies investing abroad that repatriated their earnings. That big gain will not be there next year

Meanwhile, the interest on U.S. debt is the fastest growing category of government spending.

I don’t have an issue with tax cuts—hey, cut my taxes more–as long as they come with a reduction in spending.

The Bush administration has not done that. Sure its great the US is getting more revenues but they are spending more than they are taking in–eventually, that bill is going to come due–when this administration is gone.

There was a time when conservative meant fiscally conservative. This brand of conservatism is fiscally irresponsible

When Bush took office, he predicted budget surpluses — in fact, a $600 billion budget surplus by 2006. Instead, the budget deficit is $296 billion. That’s $900 billion off his plan.

That’s pretty poor management.

Nobody can tell what shape we’d be in if taxes hadn’t been lowered, but lowering taxes was the right, and really the only move for the Republicans to make. They’re going to get the credit for the economy based upon their actions whether they caused it or not, simply because they did the right thing when times were tough.

Is this an endorsement of tax fraud? Otherwise, I believe the author is ignorant of what the word “tax” means.

The whole point of taxation is that it is mandatory – no one can opt-out. Otherwise it would not be a tax – it would be a voluntary contribution.

No, the onus is not on me to disprove that the deficit is a little lower due to Bush’s tax cuts. If he is going to make that claim, he should be the one to prove it to me. The rhetorical trick is to ask me to prove a negative by proving a claim that someone else made is not true.

Look, it is a fact that Clinton left office with us in the black. Bush has spent a bazillion dollars on all sorts of stuff since he has been in office. I also agree with Big Rex that the cause and effect of tax cuts is not that simple and not provable directly related. Everyone always says, (probably not starting with the “trickle-down economics” theory from the Regan years) that tax cuts for the rich will put money back into the economy, and I keep hearing people say that the economy is booming. How do we know that either of these statements are true? Also, I personally don’t care what people say in general about the economy. Ask middle class, working poor and below poverty line people how they are doing. I’m sure the economy is always booming for the wealthy in this country.

How Taxes Work . . .

This is a VERY simple way to understand the tax laws. Read on — it does make you think!!

Let’s put tax cuts in terms everyone can understand. Suppose that every day, ten men go out for dinner. The bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:

The first four men � the poorest � would pay nothing; the fifth would pay $1, the sixth would pay $3, the seventh $7, the eighth $12, the ninth $18, and the tenth man � the richest � would pay $59.

That’s what they decided to do. The ten men ate dinner in the restaurant every day and seemed quite happy with the arrangement â€â€? until one day, the owner threw them a curve (in tax language a tax cut).

“Since you are all such good customers,” he said, “I’m going to reduce the cost of your daily meal by $20.” So now dinner for the ten only cost $80.00.

The group still wanted to pay their bill the way we pay our taxes. So the first four men were unaffected. They would still eat for free. But what about the other six â€â€? the paying customers? How could they divvy up the $20 windfall so that everyone would get his “fair share?”

The six men realized that $20 divided by six is $3.33. But if they subtracted that from everybody’s share, Then the fifth man and the sixth man would end up being PAID to eat their meal. So the restaurant owner suggested that it would be fair to reduce each man’s bill by roughly the same amount, and he proceeded to work out the amounts each should pay.

And so the fifth man paid nothing, the sixth pitched in $2, the seventh paid $5, the eighth paid $9, the ninth paid $12, leaving the tenth man with a bill of $52 instead of his earlier $59. Each of the six was better off than before. And the first four continued to eat for free.

But once outside the restaurant, the men began to compare their savings. “I only got a dollar out of the $20,” declared the sixth man who pointed to the tenth. “But he got $7!”

“Yeah, that’s right,” exclaimed the fifth man, “I only saved a dollar, too . . . It’s unfair that he got seven times more than me!”.

“That’s true!” shouted the seventh man, “why should he get $7 back when I got only $2? The wealthy get all the breaks!”

“Wait a minute,” yelled the first four men in unison, “We didn’t get anything at all. The system exploits the poor!”

The nine men surrounded the tenth and beat him up. The next night he didn’t show up for dinner, so the nine sat down and ate without him. But when it came time to pay the bill, they discovered, a little late what was very important. They were FIFTY-TWO DOLLARS short of paying the bill! Imagine that!

And that, boys and girls, journalists and college instructors, is how the tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up at the table anymore.

Where would that leave the rest? Unfortunately, most taxing authorities anywhere cannot seem to grasp this rather straightforward logic!

In fact, by the same logic, one could argue that low interest rates caused the reduced deficit or by increased borrowing (i.e., national debt).

For those unaware, Supply-Side Economics is in reality is as much a parlor trick now as it was during Reagan’s Tenure.