Democrats have only two arguments left against extending the Bush tax cuts, but recent data affirm that neither is valid. Sadly, though, Democrats will never abandon their claims because they fit so well into their class warfare template.
Even Democrats can't reasonably deny we've experienced sustained economic growth following the Bush tax cuts. Instead, they've resurrected the canard they used to discredit the phenomenal growth of the supply-side Reagan years: Our economic growth has come at the expense of federal solvency.
The growth, they say, is illusory, because it has led to record federal deficits, which means that greedy capitalist Republicans are getting richer on the backs of future generations.
Democrats have added another argument to discourage Americans from believing their lying eyes about the growth spurred by the Bush tax cuts, which also plays into their class warfare methodology. Without refuting that traditional economic indicators reveal strong and steady economic growth, they race to point out that these gains have not been equitably distributed among income groups. The rich are getting richer while the poor are getting poorer.
Let's see how both claims -- exploding deficits and income inequalities -- stack up against the facts.
Contrary to liberal propaganda, the Reagan tax cuts led to dramatic increases in federal revenues even after adjusting for inflation. Increases in the deficit were due to the spending side, some of the blame for which admittedly should be shared by Republicans.
Since Bush's tax cuts took effect, Democrats have been condemning them because of their alleged responsibility for soaring deficits. Pro-growth conservatives have countered that deficit increases have been due to spending -- not just on Iraq and elsewhere in the War on Terror, but domestic discretionary and entitlement spending.
Recent reports definitively confirm the Republicans' position. Not only are federal revenues increasing; the deficits are decreasing, just as in the Reagan out years.
The Heritage Foundation reports that the Office of Management and Budget's Mid-Session Review -- an update of its budget projections from February -- shows the 2003 tax cuts have boosted economic activity by increasing incentives to work, save and invest. The deficit will decrease from $248 billion last year to $205 billion this year. "One hundred percent of the budget deficit's decline is caused by revenue increases, and none by spending cuts. Lawmakers have not cut one dollar from the budget."
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