2003 is Remembered Quite Well

Jim Spence

We were reading a column by Larry Kudlow today and he reminded us that tax rates were lowered across-the-board in mid-2003. I remember that time well because I wrote the following passage in a monthly newsletter:
The proposal (to cut tax rates) should do more to help restore investor confidence and the vitality of American businesses than any other proposal we have seen in many decades. 
Sure enough, economics 101 worked like a charm. The improved incentives immediately propelled the U.S. economy forward. Over the following fifty-four months more than 8.2 million jobs were created in this country. And during that time frame U.S. non-farm payroll headcounts increased from just under 130 million to just over 138 million.

Oddly, President Obama would give away his golf club set for this kind of job creation right now. So, the question is this: Will he learn from history and cut businesses a break? It won't happen. Based on what we saw at his press conference today, just the opposite is in store if the president gets his way.
You see, the president doesn't care as much about how jobs are created as he does about how much income he can redirect away from job creators. And today he re-iterated his view that the only way out of an economic downturn (like the one we were facing in 2003 and again now) is to tax our way out of it. It seems that he is content to remain woefully uninformed on how the basic laws of economics work. It is going to cost all of us (including him).

Sadly for the president, he steadfastly refuses to concede that in the wake of the adjustment in tax rates that occurred in 2003, as a share of our GDP, tax revenues actually rose from 16.2 percent to 18.5 percent. Someone should explain these economic facts to the current White House economic team. Today it was made clear that they will be asking those who already pay 87% of all federal income taxes to take on more of the burden. The president's plan to tax our way to prosperity won't work any better than his vaunted stimulus did two years ago. And even if it feels good to his aides to simply blame job creators for high unemployment. Their plan of attack is destroying President Obama's political career.