A little lesson in Economics 101: Tax cuts stimulate the economy and result in increased revenues to our Treasury. And guess what? They are beneficial to others beside the rich.
Read from the American Thinker:
Lying About Bush's Tax Cuts
By Andrew Foy and Brenton Stransky
"The majority of the taxpayers in our country believe it a foregone conclusion that taxes will rise substantially in the near future and that the Bush tax cuts will soon be no more than a footnote of political history. You don't need to be a genius to see that the government will have to raise more revenue to pay for seemingly infinite spending, but before we resign ourselves to higher taxes, we should consider defending the Bush tax cuts against the left.
Two of the most oft-cited objections to the Bush tax cuts by the left are that it helped only the rich and it was largely responsible for the federal deficit at the end of the Bush presidency. Instead, it is true that if the current administration allows any or all of the Bush tax cuts to expire, economic growth will be slowed and tax revenue could actually decrease, perpetuating our deficit dilemma.
The Economic Growth and Tax Relief Reconciliation Act of 2001 and the Jobs and Growth Tax Relief Reconciliation Act of 2003 broadly lowered income, capital gains, dividends, and estate taxes. Fanning the lie that only the rich benefited, liberal economists Peter Orszag and William Gale described the Bush tax cuts as reverse-government redistribution of wealth, '[shifting] the burden of taxation away from upper-income, capital-owning households and toward the wage-earning households of the lower and middle classes.' This criticism stuck so well that it is difficult to find a liberal today who doesn't believe that these tax relief measures were anything more than 'tax cuts for the rich.'
But the data does not support this conclusion. According to the non-partisan Congressional Budget Office (CBO), the Bush tax cuts actually shifted the total tax burden farther toward the rich so that in 2000-2004, total income tax paid by the top 40% of income-earners grew by 4.6% to 99.1% of the total.
This shift may have occurred because as the wealthy (who are arguably the most industrious and productive citizens) are better-incentivized to be industrious and productive through lower taxes, they create higher incomes for themselves and end up paying more taxes. The Bush tax cuts did shift the tax burden, but not in the direction most liberals think.
The second major misconception spread by the left about the Bush tax cuts is that the lower tax rates caused the federal deficit woes we face today. Keeping with the party line of blaming the previous administration for all of today's problems, Speaker Nancy Pelosi (D-CA) quipped in a news conference on January 8 of this year: 'Let me just say that the tax cuts at the high end ... have been the biggest contributor to the budget deficit.' Of course, the Speaker would have us believe that overspending has nothing to do with our deficit.
In fact, the Bush tax cuts actually increased government revenue. According to economist Brian Reidl of the Heritage Foundation, The Laffer Curve (upon which much of the supply-side theory is based) merely formalizes the common sense observations that
•1. Tax revenues depend on the tax base as well as the tax rate,
•2. Raising tax rates discourages the taxed behavior and therefore shrinks the tax base, offsetting some of the revenue gains, and
•3. Lowering tax rates encourages the taxed behavior and expands the tax base, offsetting some of the revenue loss."
Read it all.