Tax Cuts
Reduce Taxes & Spending To Increase Earnings

The Pie Got Bigger

INVESTOR'S BUSINESS DAILY

Tuesday, August 26, 2008 4:20 PM PT

Economy: Average U.S. income fell when George Bush took office in 2001. Naturally, Democrats and the media unfairly blamed him for it. But now Americans are better off than when Bill Clinton was president.

-John F. Kennedy

Full article Investor's Business Daily

Excerpts:

According to the latest data from the Internal Revenue Service, average adjusted gross income in 2006 hit $58,029 in 2006 dollars. It was the first time that average income had exceeded the peak year of 2000, the year before incomes began to decline. The average income in 2006 was 1.2%, or $739, higher than in 2000, when incomes were swollen by capital gains from a roaring market, and $1,369 over the 2005 average.

We've heard a lot about how Bush has mismanaged the economy, but there's no evidence of this. In fact, incomes began growing in 2003 after falling in 2001 and 2002 and have trended upward every year since. The small bump in 2003 was followed by gains of $2,291 in 2004 and $2,210 in 2005.

Meanwhile, there's been only one quarter of negative GDP growth, the fourth quarter of last year, which was preceded by two quarters of 4.8% gains.

Dec. 1962

Americans For Prosperity AFP

North Dakota Tax Cut

Americans For Prosperity

Latest Information on The North Dakota Tax Cut

March 12, 2008

It has been six months since Ed Schafer signed our petition to cut state income taxes. The good news is we are nearing the end and I hope to have our goal of 14,000 signatures completed this month.

There has been an outpouring of support for this effort, and rightfully so. We have an opportunity to change a tax policy that has done little to retain North Dakotans, both young and old. Not only does everyone deserve to keep more of their own money, but with nearly a Billion Dollar surplus of taxpayer money sitting here in Bismarck the urge for elected leaders to spend is proving to be overwhelming.

You may have heard about new government spending programs, and new requests from the multitude of special interest lobbyists, in the past few months. We can not let them win, and squander this opportunity for taxpayers to not only have a better standard of living but also allow government to grow and be even more intrusive in our lives.

Hong Kong has had the most successful economic conditions, in the world, over the last 50 years.

Why?

It,s as if they have stolen the Constitution of The United States, before we adopted the Income Tax in 1913, which started all the mischief and confiscation of the daily labor of "net taxpayers" in the United States.

After ending communism in 1947, an agreement under Britain led to Laissez Faire economics

Hong Kong kept the cost of government under 15% for fifty years, compared to our present 34% rate today.

Hong Kong had and has almost non-existent tariffs, kept government bureaucracy and regulations very limited and allocated its resources wisely.

It keeps cutting taxes, which keep increasing revenues.

Hong Kong is also much more free of corruption that practically every nation of the world, including the U.S.

We could and should do what Hong Kong does. Apply our Constitution.

We would have the same results.

To do that we would have to curtail the present, out of control Marxist practice of confiscation from our workers who pay "net taxes" to those who do not.

The Mainstream Media, the Democratic Party, most university professors are and have been silent on Hong Kong for fifty years.

Anyone surprised?

January 18, 2008

National Taxpayers Union (NTU)

NTU Supports the Federal Tax Withholding Act

Dear Representative Foxx:

On behalf of the 362,000 members of the National Taxpayers Union (NTU), I write to endorse your legislation, the Federal Tax Withholding Act.

This bill would repeal the law -- sold to the public as "a temporary wartime measure" 65 years ago -- that requires employers to withhold federal income taxes from employees' wages and salaries.

Through withholding, taxpayers are forced to make annual interest-free loans to the government and then wait for a refund until after the next filing season. This system is detrimental to taxpayers and shouldn't be compulsory.

Arguably, the indirect and direct costs of withholding far exceed the predictable, convenient method of revenue collection the policy was intended to impose.

Indirectly, it hinders pro-growth tax policy. As NTU analyst Mark Schmidt explained in a 2002 NTU policy paper, "the incremental nature of withholding masks the true cost of federal income taxes, which would be much more apparent if individuals had to write monthly, quarterly, or annual checks to Uncle Sam." Clearly, lawmakers interested in bringing tax reform to the legislative arena as well as the public square should oppose mandatory withholding.

Romney’s proposal would change the tax rate on interest, dividends, and capital gains to zero percent, allowing middle class Americans whose combined salary and investment income is $200,000 per year or less to save and invest tax-free.

Fully 95 percent of American households earn less than $200,000 a year.

The Left does not seem capable of coming to grips with the benefits of tax cuts, including reducing the cost of capital to business. One former president, however, understood perfectly.

The individual income tax cuts proposed by JFK took place, after his assassination. While JFK lived, however, and against the advice of many economic advisers, he enacted measures to lower the cost of capital, including an Investment Tax Credit for business, an easing of depreciation costs and an eventual lowering of corporate tax rates, from 52 to 48%.

JFK'S Tax Cuts For Individuals were, and "should be" as he said in a 1962 speech to the New York Economic Club, "across the board, top to bottom." In other words, no class warfare, even though the "reduction in payments" were far more advantageous to the rich under JFK, than those of President Bush.

Between 1952 and 1959, prior to JFK'S cuts, government revenue increased 1.2 percent a year.

From 1962 to 1969, after the cuts, government revenues increased 6.4 percent a year. The deficit fell from a high of $7.1 billion to $1.4 billion.

In 1981, Ronald Reagan inherited one of the worst economies the country has ever seen; an economy that might have been on the verge of collapse.

Reagan's Tax cuts, gave us the longest peacetime expansion in history up to that time.Like JFK'S cuts, there were no great secrets to President Reagan's cuts. A 25 percent across the board tax cut, for individuals, measures to reduce the cost of capital for business and under Paul Volcker's strong and steady hand at the Federal Reserve, the money supply was kept in check, bringing runaway inflation under control

During Reagan's presidency, real growth averaged 3.2%, a very strong eight year figure, when factoring in a serious recession of the early 80's. Real median family income increased by $4000.

Census Bureau data reveals Blacks and Hispanics made huge strides, the former moving 1/3 of families into the middle class.

IRS tax returns show that of those taxpayers, that started out in the lowest 20% at the beginning of the Reagan era, over half were in the top 20% at the end. The percentage of income taxes paid by the top 1% was 17.58% in President Reagan's first full year in office. In his last full year in office, the top 1% paid 27.58%. So lower tax rates worked to "soak the rich".

Still these gains did not thwart the leftist class warfare media and leftist agenda from creative accounting to turn the Reagan-Era positives into negatives. During the Reagan years, it was common to see shopping center businesses with signs everywhere that read Help Wanted, No Experience Necessary, Immediate Benefits and yet the media then and some still, use the moronic statement, that Ronald Reagan "nearly destroyed the middle class."

Now under George Bush, revenues have broken records for two successive years, 7 million new jobs have been created, unemployment is lower than the average of the last 30 years, the deficit has been cut in half, despite 9-11, the Iraq War and Hurricane Katrina.

Wages, even though they lagged temporarily, have had solid gains for the last two years. Incidentally a lag in wage gains is the norm. The average wage increase for non-supervisory employees in the last year is 2.8%. Adjusted for inflation that is almost $1200 per typical household and follows a 1.2% increase of the previous year.

Once again the lower rates are "soaking the rich."Latest IRS data shows that in 2002, before the final tax cuts, the share of the total income tax burden paid by the top 1 % was 33.71%. In 2004 the top 1% paid 36.89%.

Unfortunately, the benefits of tax cuts are always overwhelmed by excessive spending.

If you want your earnings to be much higher than they are for doing exactly what you are now doing, lower taxes and less government spending will get you there.

Tax Cuts To Editorials

http://www.taxfoundation.org/research/show/250.html See IRS Data For Higher Taxes Paid By The Rich Since Tax Cuts