George W. Bush, deficit hawk

The joy of tax cuts:

[T]ax revenues are set to grow by $262 billion, or 14% this year. They will increase as a share of GDP for the first time under this tax-cutting president.

Income taxes withheld from pay cheques account for some of the new revenues, but many of the gains are in more exotic areas. The government's take from such things as capital gains, payouts from pension funds, and “sole proprietorships” (one-man companies) should increase by 28% this year, the CBO reckons. Corporations are also making a strikingly handsome contribution to the state's coffers, paying $80 billion (or fully 42%) more than the year before. A third of this bounty seems to be due to the demise of a corporate tax break, which allowed firms to deduct up to half their investment costs from their taxable profits last year. But some $53 billion of it caught the CBO unawares, and remains unexplained.

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