Lawrence A. Hunter

In 1997, Congress forfeited a golden opportunity to begin returning large budget surpluses to the taxpayers in the form of tax cuts. Part of the failing was political will, but faulty budget projections by the Congressional Budget Office (CBO) were a major part of the failure. In this policy report, economist Larry Hunter explains the forecasting errors of CBO and the political failures of the Republican-controlled Congress, and warns that the budget surplus is a "self-negating proposition," in that Congress will spend the money before it accumulates. The only way to prevent government from simply spending the money is to cut taxes first. Hunter repeats Jack Kemp's call for large, Reaganesque tax cuts before it is too late.

Articles include "Will Taxpayers be Last in Line for Budget Surpluses?", The Alternative Minimum Tax (AMT): A Ticking Time Bomb Aimed at the Middle Class," "The Golden Rules for Making a Million," and "Getting Hit from Both Sides: Adjusting CPI Downward Cuts Entitlements and Raises Taxes."

Among the most persistent of political myths is the assumption that the 1981 Reagan tax rate reductions caused the massive and persistent federal budget deficits of the 1980s. In reality, out-of-control deficits were created when Congress dramatically increased government spending after the 1981 tax cuts. The entire deficit by 1985 was a product of drastically increased spending. Based on this myth that the 1981 tax cuts were responsible for large persistent federal deficits, more than 500 economists signed their name to a statement opposing 1996 Republican Presidential challenger Robert Dole's proposed 15 percent across-the-board tax rate reductions. They were all wrong.