The next time some Washington potentate moans about the budget deficit, tell him not to blame the taxpayers. They're already doing their part to reduce it, as the latest Treasury figures on booming federal tax revenue show.
In the first five months of Fiscal 2006, through February, overall revenue continued to surge, growing at an overall rate of 10.3%, or an $81 billion increase from the year ago period, to $871 billion. That builds on the astonishing 15%, or $274 billion, revenue increase for all of 2005, which various fiscal wisemen assured us would fall off dramatically. Apparently not.
This year's double-digit increase is roughly triple the rate of inflation, reflecting strong gains in business profits and individual wages and bonuses -- both signs of a vibrant underlying economy. Corporate income taxes are up 30% so far this year, while individual income tax payments have climbed by 10.3% through February....
As for taxes, the revenue data are further proof of the success of the Bush tax cuts of 2003. The fastest way to stop this revenue windfall, and blow an even larger hole in the deficit, would be to fail to extend the 15% tax rate on capital gains and dividends through 2010, thus assuring a huge tax increase after 2008. The fear of such a tax hike is already weighing on investors and stock-market valuations. So what are GOP House-Senate tax conferees waiting for?