Monday, June 11, 2007

Fiscal Surprises

More "amazing" results of the Bush tax cuts:

State lawmakers across the country, their coffers unexpectedly full of cash, have been handing out tax cuts, spending money on fixing roads, schools and public buildings, and socking something away for less fruitful years.

Budget surpluses have largely stemmed from higher than expected tax collections — corporate tax revenues alone were 11 percent higher than budget estimates — and booming local economies. There has also been some relief in Medicaid spending, which fell from an 11 percent annual growth rate to something closer to 7 percent in the past few years.

More than 40 states have found themselves with more money than they planned as they wound down their regular sessions. (Emphasis all mine).
Its like the government had some windfall profits and its a tribute to their ineptitude that no one (seemingly) understands where its all coming from. I think the thing to note here, and something that is often overlooked in tax debates, is that the Bush tax cuts affected not only personal entities but also corporate taxes. Tax cuts for businesses bolster the economy, allow the free market to work its magic. That boom is passed on to new growth, which adds money to everybody's pocket -- homebuilders, grocers, department stores, etc. all benefit from new business growth.

Look for all of this to end if we get a Socialist president in charge of a Socialist congress.