Skip to comments.The 2003 Tax Cut on Capital Gains Entirely Paid for Itself
Posted on 06/22/2006 9:24:09 AM PDT by Mikey_1962
On Thursday the Congressional Budget Office released its annual Budget and Economic Outlook, and buried in one of its nearly impenetrable tables of numbers is a remarkable story that has gone entirely unreported by the mainstream media: The 2003 tax cut on capital gains has entirely paid for itself. More than paid for itself. Way more.
To appreciate this story, we have to go back in time to January 2003, before the tax cut was enacted. Table 3-5 on page 60 in CBOs Budget and Economic Outlook published in 2003 estimated that capital-gains tax liabilities would be $60 billion in 2004 and $65 billion in 2005, for a two-year total of $125 billion.
Now lets move forward a year, to January 2004, after the capital-gains tax cut had been enacted. Table 4-4 on page 82 in CBOs Budget and Economic Outlook of that year shows that the estimates for capital-gains tax liabilities had been lowered to $46 billion in 2004 and $52 billion in 2005, for a two-year total of $98 billion. Compare the original $125 billion total to the new $98 billion total, and we can infer that CBO was forecasting that the tax cut would cost the government $27 billion in revenues.
Those are the estimates. Now lets see how things really turned out. Take a look at Table 4-4 on page 92 of the Budget and Economic Outlook released this week. Youll see that actual liabilities from capital-gains taxes were $71 billion in 2004, and $80 billion in 2005, for a two-year total of $151 billion. So lets do the math one more time: Subtract the originally estimated two-year liability of $125 billion from the actual liability of $151 billion, and you get a $26 billion upside surprise for the government.
(Excerpt) Read more at nationalreview.com ...
I think we should repost it every month or so, and send it to the DUmmies as well.
Seems to have worked that way EVERY time it's been tried.
I'll bet that it would even be better if we eliminated it altogether!
I'll bet that it would even be better if we eliminated it altogether
Indeed, I can be argued into supporting that!! ;O)
A Taxreform ping for you all.
If anyone would like to be added to this ping list let me know.
John Linder in the House(HR25) & Saxby Chambliss Senate(S25) offer a comprehensive bill to kill all federal income, SS/Medicare payroll, and gift/estate taxes outright replacing them with with a national retail sales tax administered by the states.
A bill to promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national retail sales tax to be administered primarily by the States.
Refer for additional information:
I'll bet you're right ... and we now have a total of 60 in Congress (both bills) who agree; growing all the time!!
It didn't get much play in the MSM, that's for certain. A few mentions. After all, the other side insists that federal revenues would have been higher if only we hadn't cut the rates. Or else we could have just waited long enough for people to sell and recognize gains, even if it takes years more. Those people, including Robert Rubin (that great icon of economic knowledge), will never agree that cuts in marginal tax rates are better for the economy and better for the government at the same time.
Thanks for the report.
I worry my mind is getting feeble when I see a story like that and can't recall it.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.