TAX INCREASES UNNECESSARY

REVENUE WILL INCREASE THROUGH LONG TERM ECONOMIC GROWTH Curtis Dubay, Heritage Foundation. (2011) Tax Hikes Not Needed to Balan e Budget. !etrie"ed De e#ber 11, 2012, $ro# %%%.&eritage.org'resear &' o##entary'2011'0('tax)&ikes)not) needed)to)balan e)budget To get $ederal $inan es in order, on"entional %isdo# says %e #ust bot& ut s*ending and +en&an e re"enues, (i.e., in rease taxes). But on"entional %isdo# is dead %rong. T&e Congressional Budget -$$i e says so. .ast %eek, t&e CB- re*orted t&at i$ Congress si#*ly le$t taxes as t&ey are today, tax re"enues %ould return to nor#al le"els )1/ *er ent o$ t&e gross do#esti *rodu t ) in 0ust six years 1 and kee* gro%ing a$ter t&at. 2"entually %e %ould need to cut taxes to kee* t&e# $ro# rea &ing an all)ti#e &ig&. 3Note4 5n t&is s enario, tax rates stay t&e sa#e $or all tax*ayers, #iddle)in o#e $a#ilies ontinue to es a*e t&e lut &es o$ t&e alternati"e #ini#u# tax, and ot&er tax)redu ing *ro"isions no% set to ex*ire re#ain in e$$e t.6 Ho% is t&is *ossible7 T&roug& rene%ed e ono#i gro%t&. -n e it takes &old, tax*ayers earn #ore and #o"e into &ig&er tax bra kets. 8t t&e sa#e ti#e, 0ob reation rebounds, reating #ore tax*ayers t&an be$ore. 8nd t&at o#bines to *our #ore and #ore #oney into t&e $ederal o$$ers. OUR REVENUE PROBLEM COMES FROM ECONOMIC STAGNATION, NOT LOW TAXES Curtis Dubay, Heritage Foundation. (2011) Tax Hikes Not Needed to Balan e Budget. !etrie"ed De e#ber 11, 2012, $ro# %%%.&eritage.org'resear &' o##entary'2011'0('tax)&ikes)not) needed)to)balan e)budget .iberals are 9ui k to say t&at taxes are at t&eir lo%est le"els sin e 1:;0. T&ey i#*ly t&at *ast tax uts &a"e dri"en re ei*ts to ne% lo%s. But t&ese are t&e sa#e tax rates t&at, by 200(, %ere *ouring re"enues %ell abo"e +nor#al, into t&e Treasury. <&at *ut t&e s9uee=e on re"enues %as t&e global $inan ial #eltdo%n, not +lo%, tax rates. TAX INCREASES RARELY USED TO DECREASE THE DEFICIT Curtis Dubay, Heritage Foundation. (2011) Tax Hikes Not Needed to Balan e Budget. !etrie"ed De e#ber 11, 2012, $ro# %%%.&eritage.org'resear &' o##entary'2011'0('tax)&ikes)not) needed)to)balan e)budget Today, a terrible recession and a worse-than-anemic recovery have repressed incomes and driven millions to the unemployment lines. With the American people clamoring for government to live within its means, proponents of Big Government are trying to convince them that its impossible to lower the deficit with spending cuts alone, that some tax increases are necessary in any reasonableplan. But as the CBO report makes clear, higher taxes are a choice, not a mathematical necessity. And history shows that Congress rarely if ever uses revenue from tax increases to lower the deficit. Rather, it spends every new penny on new or expanded big-government programs.