January 13, 2005

Supply Side Cuts Work

While media pick through the Treasury Report for bad news, Larry Kudlow finds some news he predicts "you won't find in tomorrow's front pages"

The really big budget story is the explosion in tax revenues prompted by tax-cut led economic growth over the past eighteen months. Under 50% cash bonus expensing for the purchase of plant and equipment, productivity-driven corporate profits ranging around 20% generated a 45% rise in business taxes. At lower income tax-rates, employment gains of roughly 2.5 million are throwing off over 6% in payroll tax receipts. Personal tax revenues are rising at a near 9% pace.

Kudlow says W is off to a roaring start on his second term even before inauguration day. I hold with him and his (very-Democratic) partner James Kramer that we are on the threshold of a Bull market that will raise all boats and help pass an ambitious agenda.

UPDATE: If you can handle more acronyms, percent signs and dollar signs, read Noel Sheppard's piece in TCS. He says "Frankly, with depressions like these, who needs expansions?"

Posted by jk at January 13, 2005 11:57 AM
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