Just last week, the Democrats beat back the repeal of the death tax by claiming that we needed the revenue. They like to tell us that the economy is weak – and that the weakness is due to GOP policies.

If that is true, explain these statistics.

The CBO forecast in May that the 2006 deficit could fall as low as $300 billion. Michael Englund, chief economist of Action Economics, has long expected a deficit of about $270 billion this year. Now he thinks there's a chance the "remarkable strength in receipts" will push the deficit even lower.

With the economy topping $13 trillion this year, a $270 billion deficit would equal less than 2.1% of GDP, easily beating the president's 2.25% goal. Bush made his vow when the White House had a dour 2004 deficit forecast of 4.5% of GDP, or $521 billion. The actual '04 deficit came in at $412 billion, or 3.5% of GDP, before falling to $318 billion, or 2.6% of GDP, in 2005.

A CBO analysis last week noted that withheld individual income and payroll taxes are up 7.6% from a year ago, with the gains picking up in recent months.

Not only that, but the richest Americans are paying an ever-increasing share of taxes.

Those making over $200,000 now pay 46.6% of total income taxes, presidential adviser Karl Rove recently said. That's up from 40.5% — despite Bush's tax cuts.

The result is that President Bush may meet the goal of reducing the post-9/11 budget deficit to $150 billion this year – ahead of his promised FY 2009 target.

Posted by: Greg at 09:09 AM | Comments (3) | Add Comment
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