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Message: <blockquote data-quote="MenInBrown" data-source="post: 1039806">Maybe this will help you understand the problem.MYTH: We can only cut taxes if we cut spending by the same amount; otherwise, tax cuts will reduce revenue and cause deficits. FACT: <a href="http://www.mtgriffith.com/web_documents/taxcutfacts.htm" target="_blank">Historically tax cuts have always paid for themselves</a>.  Federal revenue increased after the JFK tax cuts, after the Reagan tax cuts, after the Clinton tax cuts, and after the Bush tax cuts.  The problem has not been taxes.  The problem has been runaway spending.  Total federal spending has not dropped once in over 40 years—not once: ·      Under LBJ revenue grew by 25%, but spending grew by 24%.  ·      Under Nixon revenue grew by 17%, but spending grew by 21%.·      Under Ford revenue grew by 11%, but spending grew by 22%.·      Under Carter revenue grew by 20%, but spending grew by 13%.·      Under Reagan revenue grew by 15%, but spending grew by 25%.·      Under Bush Sr. revenue grew by 17%, but spending grew by 18%.·      Under Clinton revenue grew by 35%, but spending grew by 9%.·      Under Bush Jr. revenue grew by 10%, but spending grew by 25%. If we would just stop spending so much money, we would have a surplus, taxes could be even lower than they are now, and we could start paying off the national debt.  The problem isn’t that we aren’t being taxed enough.  The problem is that the government is spending too much money.  MYTH: Raising taxes in the 1990s caused the boom years of that decade.  This proves that raising taxes leads to economic growth. FACT: Tax cuts, not tax hikes, caused the boom years of the 1990s.  The economy grew modestly after Clinton raised taxes in 1993, but the economy grew even more after Clinton signed the tax cuts that were passed by the Republican-controlled Congress under Newt Gingrich’s leadership in 1997.  Dr. J. D. Foster:  Following the [Clinton] tax hike, the economy performed reasonably well, but not as well as one would expect given the conditions at the time. The real economic boom came later in the decade, just when the economy should have slowed as it made the transition from a period of recovery to normal expansion. Further, this acceleration coincided to a remarkable degree with the 1997 tax cut. . . .  In 1997, the Republican-led Congress passed a tax-relief and deficit-reduction bill that was resisted but ultimately signed by President Clinton. The 1997 bill:  * Lowered the top capital gains tax rate from 28 percent to 20 percent; * Created a new $500 child tax credit; * Established the new Hope and Lifetime Learning tax credits to reduce the after-tax costs of higher education; * Extended the air transportation excise taxes; * Phased in an increase in the estate tax exemption from $600,000 to $1 million; * Established Roth IRAs and increased the income limits for deductible IRAs; * Established education IRAs; * Conformed AMT depreciation lives to regular tax lives; and * Phased in a 15 cent-per-pack increase in the cigarette tax. . . .  In 1995, the first year for which these data are available, just over $8 billion in venture capital was invested. Venture capital is especially critical to a vibrant economy because high-risk/high-return investment permits promising new businesses to blossom, rapidly spreading new technologies and new ideas into the marketplace and across the economy. Such investments, when successful, generate returns to investors that are subject primarily to the tax on capital gains.  By 1998, the first full year in which the lower capital gains rates were in effect, venture capital activity reached almost $28 billion, more than a three-fold increase over 1995 levels, and by 1999, it had doubled yet again. (<a href="http://www.heritage.org/Research/Taxes/wm1835.cfm" target="_blank">Tax Cuts, Not the Clinton Tax Hike, Produced the 1990s Boom</a>)  MYTH: JFK’s tax cuts were more responsible than Reagan’s or Bush’s.  They were aimed at the middle class and didn’t help the rich. FACT: JFK cut taxes more than Reagan did.  JFK’s tax cut was larger than the Reagan tax cuts and any single Bush tax cut compared with national income, and it was larger than all three Bush tax cuts combined in relation to the federal budget.  In addition, JFK gave a huge tax cut to the rich.  The Tax Foundation:  Contrasting the size of the tax cuts with national income shows that the Kennedy tax cut, representing 1.9 percent of income, was the single largest first-year tax-cut of the post-WW II era. The Reagan tax cuts represented 1.4 percent of income while none of the Bush tax cut even breaks 1 percent of income. The Kennedy tax cuts would only have been surpassed in size by combining all three Bush tax cuts into a single package.  Comparing the size of these tax cuts with the federal budget shows that the Kennedy’s tax cuts represented 8.8 percent of the budget. In 1981, Reagan’s tax cuts represented 5.3 percent of the budget. Each of Bush’s tax cuts are smaller than Reagan’s—EGTRRA (3.8 percent), JCWA (2.5 percent) and the 2003 Tax Cut (1.8 percent). When the Bush tax cuts are combined (8.1 percent), they would be larger than Reagan’s tax cut, yet smaller than Kennedy’s tax cut. ("Fiscal Facts," Tax Foundation, <a href="http://www.taxfoundation.org/news/show/323.html" target="_blank">http://www.taxfoundation.org/news/show/323.html</a>)  Jeff Jacoby:  By any rational yardstick, the Kennedy tax cut was enormous, and it was a boon to the rich. It cut the top marginal rate a whopping 21 percentage points, from 91 to 70. Bush's plan lowers rates at the top by only 6.6 percentage points. For those in the lowest bracket, JFK cut the tax rate to 14 percent. . . . (<a href="http://www.jewishworldreview.com/jeff/jacoby031601.asp" target="_blank">http://www.jewishworldreview.com/jeff/jacoby031601.asp)</a>  MYTH: Lower tax rates don’t cause economic growth. FACT: Even JFK understood that lower tax rates produce economic growth and even higher tax revenue.  According to President Kennedy:</blockquote>

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