Politics & Policy

Many Happy Returns

What the IRS is telling us about the economy.

By Jerry Bowyer

Recent polls have indicated that Americans, by an almost two-to-one margin, think the economy is doing poorly. However, Frank Newport from the Gallup polling firm tells BuzzCharts that by a wide margin Americans simultaneously hold the opinion that they’re personally doing well. In other words, the typical American thinks that the typical American is doing poorly, even though he himself is doing well.

BuzzCharts has never trusted opinion polls, especially on economic issues. Those polled can take the questions lightly, or they may fail to understand the topic about which they’re being queried. Much better than surveys, to us, are tax returns. Lie to a pollster — no problem. Lie to the IRS — you go to jail.

Last Friday’s Treasury budget tells us that, in addition to a dramatic increase in tax receipts across the board (Art Laffer, time to collect your Nobel Prize), individual income-tax receipts have been exploding. Why? Let’s go back to Laffer and his famous curve: Tax something more, get less of it; tax something less, get more of it. The tax-payment turnaround began with the Bush tax cuts of 2003.

Those who claim that we’re in the midst of a “jobless recovery” depend on a couple of polls to make their argument. But Friday’s Treasury report is based on signed tax returns accompanied by signed checks. The report tells us that individual income-tax receipts are up 20 percent. It’s pretty hard to square claims of a jobless recovery and stagnant wages with $103 billion so far this year in additional income-tax revenues. BuzzCharts says: Don’t believe the doomsayers, believe the American people themselves — not when they talk to statisticians, but when they put their cash and their signatures on the line.

– Jerry Bowyer is the author of The Bush Boom and an economic advisor to Blue Vase Capital Management. He can be reached through www.BowyerMedia.com.

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