…here. A few points from the analysis:
- The tax cuts are working exactly as intended. Lower tax rates increased the incentives to work, save, and invest, and as a result the economy has grown faster. Tax revenues have always correlated more with economic growth rates than with tax rates.
- Following the 2003 tax cuts, the Congressional Budget Office (CBO) lowered its 2006 revenue projections from $2,370 billion to $2,276 billion. Now, 2006 tax revenues are projected at $2,400 billion. In other words, tax revenues are now above their pre-tax cut baseline.
- This year’s nine percent spending hike is the largest since 1990. This is occurring even though the economy is healthy. Lawmakers should not assume they can continue increasing spending at this rate and be bailed out by equally fast revenue growth.