I Love That Voodoo

Good fiscal news here. And how about those tax cuts?

Behind this really big budget story is the even-bigger story: The explosion in tax revenues has been prompted by the tax-cut-led economic growth of the last 18 months.

With 50 percent cash-bonus expensing for buying plant and equipment, productivity-driven corporate profits ranging around 20 percent have generated a 45 percent rise in business taxes. At lower income-tax rates, employment gains of roughly 2½ million are throwing off more than 6 percent in payroll-tax receipts. Personal tax revenues are rising by nearly 9 percent.

Meanwhile, in the wake of strong stock market advances over the last two years, non-withheld revenues from individuals — including investor dividends and capital gains now taxed at only 15 percent — have jumped more than 14 percent.