July 11, 2006 | By Nathaniel Ward

Taxes are down, revenue is up

A recent increase in tax revenues is due in large part to “a big spike in corporate tax receipts, which have nearly tripled since 2003, as well as what appears to be a big increase in individual taxes on stock market profits and executive bonuses,” The New York Times reported over the weekend. In a stunning insight into the liberal mindset, the Times called this a “surprise windfall,” and grudgingly noted that economists predicted exactly this result.

“The supply-side tax cuts of 2003 are working exactly as we would have expected,” Heritage’s Dan Mitchell told The Washington Post. “Lower taxes on work, saving and investment leads to more work, saving and investment. It’s not exactly rocket science.”

The Times also complained that the government collects a smaller share of the overall economy today than it did in 2000, suggesting that revenues would be higher without the 2003 tax cuts. But that’s misleading. In fact, the Congressional Budget Office projected in early 2003, before the tax cuts, that government revenues for 2006 would weigh in at $2,370 billion. As explained in a forthcoming Heritage paper, new projections for this year suggest that tax revenues will total $2,400 billion—$30 billion more than we would have had without the tax cuts. This should put to a rest another liberal myth about tax cuts.

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Time to cut spending

The growth in tax revenues should by no means be an excuse to spend more money. The government is still spending considerably more money than it takes in; while tax revenues are growing, spending is growing faster still.

Heritage’s Brian Riedl explained as much to the Times: “Spending has not been restrained…One hundred percent of the reduced deficit is because taxpayers are sending more money to Washington.”

Respect for institutions

President Bush is “so mindful of proper attire that he demands a coat and tie in the Oval Office even on weekends,” The New York Times reported last week. Like President Reagan before him, the current Commander-in-Chief seems to have a genuine respect for the office he holds and for the hallowed halls where so many great men have performed their duties. Even when the President is traveling, White House staffers follow his lead and dress presentably.

Can the same respect be found on Capitol Hill? During a recent Congressional recess (when members were frantically campaigning for reelection) many staffers were spotted wearing shorts and flip-flops around the office.

Summer reading

If you’re looking for a good read, look no further than Manhunt, a new book from Heritage legal scholar James Swanson which recounts in gripping fashion the hunt for John Wilkes Booth, Abraham Lincoln's assassin. While remaining true to history, the book is written like a thriller—in fact, it will shortly be made into a feature film starring Harrison Ford. I picked up a copy of the book last Friday and could barely put it down; it really is a story of drama, intrigue and fantastic chases. You can purchase a copy of this New York Times bestseller from Amazon.com or your local bookstore.

Heritage President Ed Feulner also has some summer reading recommendations, which he published last week in The Chicago Sun-Times. Here are his recommendations (besides Manhunt , which he also recommended):

• America: The Last Best Hope, by William Bennett
• A Great Improvisation: Franklin, France, and the Birth of America, by Stacy Schiff

Finally, if you haven’t read it yet, I recommend you sit down with Feulner’s Getting America Right. The book, which lays out common-sense reforms based on traditional American values, inspired talk show host Paul Harvey to write the following:

Most books I enjoy a chapter at a time at bedtime; Getting America Right I consumed in one inspiring weekend.

If your American Republic which has cost so many so much survives, it may well be this book which made the difference.

Order your copy of Getting America Right from the Heritage Bookstore.

In other news

• A series of explosions rocked Bombay’s commuter train system this afternoon, killing nearly 150 people. Initial reports suggested the method of attack is similar to that used by Kashmiri terrorists.
• Tomorrow is Cost of Government Day, “the day in the calendar year when Americans have paid their share of the federal, state and local tax and regulatory burdens.” You can read more from Americans for Tax Reform (link in PDF).
• A Massachusetts court has ruled that citizens can vote on an amendment to the state’s constitution that would define marriage as between a man and a woman. Backers of same-sex marriage had sought to block the referendum.
• All terrorists detained as part of the war on terror are subject to the protections of the Geneva Conventions, the Bush administration announced today. The administration had previously argued that terrorists caught on the battlefield are not subject to the Conventions because they are not prisoners of war.
• Shamil Basayev, leader of a Chechen terrorist group, was killed yesterday in an explosion. Basayev has been implicated in a series of brutal attacks, including the 2002 Moscow theater siege and the 2004 Beslan school massacre.
• Colorado’s legislature passed a series of immigration measures on Monday that would curb benefits for illegal aliens

Coming up at Heritage

To attend these or any other Heritage Foundation events, RSVP at Heritage’s events website. Or you can watch these events live online at Heritage.org. All times are Eastern.

• On Thursday, July 13 at 11 am, Heritage’s Edwin Meese and Todd Gaziano will moderate a series of panel discussions on the Supreme Court’s 2005-2006 term. Topics include the role of the two new Justices, the impact of the Hamdan decision and more.
• On Friday, July 14 at 11 am, Assistant Secretary of Defense for Homeland Defense Paul McHale presents his vision of a robust strategy for defending America.

Nathaniel Ward is the Editor of MyHeritage.org—a website for members and supporters of The Heritage Foundation.

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