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May 11, 2007

A traditional small-government argument for tax cuts is that it will "starve the beast" -- that is, a lack of revenue will constrain government growth.

It's not working.

From the AP, as quoted by the TaxProf:

Federal revenue collections hit an all-time high in April, contributing to a further improvement in the budget deficit for the year. Releasing its monthly budget report, the Treasury Department said Thursday that through the first seven months of this budget year, the deficit totals $80.8 billion, significantly below the $184.1 billion imbalance run up during the first seven months of the 2006 budget year. So far this year, tax revenues total $1.505 trillion, an increase of 11.2% over the same period last year. That figure includes $383.6 billion collected in April, the largest monthly tax collection on record. Tax collections swell in April every year as individuals file their tax returns by the deadline. For the first seven months of this budget year, which began Oct. 1, revenue collections and government spending are at all-time highs. (emphasis added).

Curse those Bush tax cuts!

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