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Trivia Tidbit of the Day: Part 535 -- 2003 Tax Relief Results.

The Psychology Of Tax Cuts-

In 2003, a few months after Republicans gained marginal control over the United States Senate, they passed the first significant pro-growth tax relief of the Bush administration. Not surprisingly, the economy flourished:

In the 13 quarters that followed the 2003 tax relief package, more than 5.3 million jobs were created. Stimulus is tax relief.

The central problem with the Bush tax relief of 2003 was that there were too few conservatives in Congress, so the tax relief was set to expire automatically a year or so after Bush left office. That day of reckoning is now rapidly approaching. Impending tax hikes cause a lot of uncertainty for individuals and businesses alike. That very uncertainty is the root of a lot of our economic problems today.

Add on the perceived value of what we'll receive from the stimulus versus what we will pay for the stimulus, and most people are looking at big tax hikes over the next few years:

The fundamental problem that a growing government imposes upon an economy is the growth of uncertainty. Every two years, there's another election. Every four or eight years, we may have a new President. Because government is such an increasingly central player in the economy, and because our government is so subject to populist whims and bad idea jeans, the growth of government not only does not smooth out the ups and downs, as many Keynesians and socialists argue, it causes and amplifies them.

Moreover, "tax rebates" (checks mailed or direct deposits wired) are not the same as tax rate cuts, so let's please stop blurring those lines.

To paraphrase Ronald Reagan, freedom is always only one election away from extinction. When government is limited by statute, as our Founders intended, there is less corruption and more robust growth over the long run.

Previous Trivia Tidbit: Socialized Medicine.

Posted by Will Franklin · 17 February 2009 11:02 AM

Comments

Posted by: ZsaZsa at February 18, 2009 04:10 AM