Problem is Spending, Not Tax Cuts-The real budget problem lies with politicians who can’t stop spending

article top

When Congress extended the Bush tax cuts on dividend income and capital gains recently, critics cried foul, blaming these policies for our nation’s budget deficit. It’s a convenient explanation: Lower tax rates, and watch revenue drop, resulting in huge deficits. The problem is that the explanation isn’t true.

The federal government is in the midst of a tax revenue bonanza. Revenue in the first eight months of the fiscal year, October through May, was $1.545 trillion. That’s a 12.9 percent increase from the previous year. The budget gap is closing, too. The eight-month deficit was $227 billion, down 16.7 percent from the previous year, which itself was a pretty good year. Federal revenue in fiscal 2005 reached $2.15 trillion