Doug Ross posted a chart on his site yesterday which needs to become part of the public consciousness.
It’s a graph of federal government revenue from 1994 to 2008, and it explodes the Democrat myth that the Bush tax cuts exploded the federal deficit.
Take a look…
The “Jobs And Growth Tax Reconciliation Act Of 2003” was signed into law at the end of May of that year. 2004 would be the first year the revenue collections from the resulting tax rates would appear in the federal coffers.
You’ll notice that 2004 revenues were greater than 2003 revenues. That’s what’s known as an economic stimulus. And those revenues kept going up until the recession started in 2008 – but when the air came out of the government’s intake there was still some $800 billion more coming in than in 2003.
We ran deficits in those years because government spending grew too fast, not because revenues weren’t rising. If we ever practiced real fiscal discipline and got serious about having low taxes – as in, instituting a competitive flat tax and stopped trying to use the tax code as a method for redistributing wealth – we could balance the budget.
But the first step in solving the problem is understanding it.
Cutting taxes grows the economy. Remember when Reagan did it? In 1983, federal revenues were $600 billion. By 1989, they were $991 billion. Remember when JFK did it? Federal revenues went from $94 billion in 1961 to 153 billion by 1968. Nobody remembers when Warren Harding did it, but according to the Heritage Foundation the federal receipts from income taxes (which at the time were a much smaller percentage of overall federal revenue than they are now)…
Revenues rose from $719 million in 1921 to $1164 million in 1928, an increase of more than 61 percent.
The Treasury Secretary at the time Andrew Mellon, who ended up the subject of a politically-motivated tax prosecution by the FDR administration, offered the advice we proffer now…
The history of taxation shows that taxes which are inherently excessive are not paid. The high rates inevitably put pressure upon the taxpayer to withdraw his capital from productive business and invest it in tax-exempt securities or to find other lawful methods of avoiding the realization of taxable income. The result is that the sources of taxation are drying up; wealth is failing to carry its share of the tax burden; and capital is being diverted into channels which yield neither revenue to the Government nor profit to the people.
Three major tax cuts, three major increases in revenue. Facts are facts.