Tax Cuts Don't Cause Deficits, Spending Does - (Proof Provided!)

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Radical Leftists claim that the Bush tax cuts all but created the current debt crisis. Sane rational people maintain that tax cuts alone don't cause deficits - it's the combination of tax cuts and continued (or increased) spending that causes deficits. Actually, it's always spending that causes a deficit - correction - it's always over-spending incoming revenue that causes a deficit. It's impossible to have a deficit without spending.That's the definition of a deficit - over spending incoming revenue.

But, surely, you say, tax cuts must some how contribute to deficit spending, no? Well, actually, no. They only contribute to deficit spending when you don't account for the lower revenue they produce and continue to spend at the same rate you spent before you cut taxes. To prove this, let's take a quick trip to Fantasy-Land - a land where everything is milk and honey and the streets are paved with gold.

In Fantasy-Land, the following holds true:

1) the government collects taxes but does not spend them - that is, annual outlays are zero. All government functions are carried out by non-unionized citizen-volunteers.

2) All citizens pay a flat 50% income tax

3) The tax base is $1billion thus the government collects $500 million per year in (unused) taxes.

All is well, until the citizens of Fantasy-Land elect far right conservative Jorge Push. President Push decides that the tax rate should be lowered to 25%. The far left radicals decry such a position as a threat to the nation's economic well being. Surely the sky will fall and the deficit (of zero) will rise immeasurably, if taxes are lowered! Push gets his 50% tax cut. The government revenue stream drops to $250 million per year (see, say the leftist radicals, income does drop when you cut taxes!!) and YET the deficit remains at ZERO!

So, therefore, lowering taxes in of themselves does NOT produce a deficit. Why is the radical Left so opposed to cutting taxes? Only they can tell you that - I haven't got a clue on that one. But one thing is sure - simply cutting taxes does not produce a deficit. Overspending incoming revenue produces a deficit - and over spending incoming revenue happens with high tax rates or low tax rates. So stop the pandering to your base and "man up". Leave taxes alone and CUT SPENDING!

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