Did anybody see the ceremony when President Clinton and selected congressional leaders signed the budget and tax cut bill?

They nearly broke their arms patting themselves on the back.

Now don't get me wrong. I am all in favor of lower taxes and balanced budgets.

But I can't help but being skeptical. Especially when you consider the track the budget is on. Consider that the budget for the current year is around $1.62 trillion. In 1998, according to the latest, greatest plan, the budget will be $1.69 trillion. In 1999, $1.75 trillion. In 2000, $1.81 trillion. In 2001, $1.86 trillion. And in 2002, $1.89 trillion.

Now consider that these are wildly optimistic assumptions of budget numbers - not real budget numbers.

And consider that the aforementioned budget numbers assume that the economy will continue to steamroll right along as it is today, generating the revenue necessary to fund the growing budgets.

Finally, consider that most of the "savings" that politicians like to ramble on about don't occur until after they've left office and probably will never be realized.

That's a lot to consider. And that's a lot the politicians don't want you to consider.

It's interesting to me that at the same time politicians talk about balancing the budget and cutting taxes, they are talking about lots of fresh new programs to bestow upon us.

Why don't we declare a moratorium on fresh, new government programs for a while?

I like to listen to what politicians say about taxes, too.

I especially like to hear what some of them say about tax cuts. Anytime the words "tax" and "cut" get into close proximity in Washington, there are a contingent of lawmakers who say that tax cuts are only a sop to the rich.

There are lots of myths about income taxes in the U.S. I checked out the Heritage Foundation web site the other day and came across a piece by David J. Mitchell. He is a McKenna Senior Fellow in political economy. That's short for he really knows a lot about taxes and the federal budget.

He explodes some of those myths and I thought it might be interesting to pass along this information.

The myth: Lower tax rates mean the rich pay less.

The facts: In the 1920s the top tax rate fell from 73 percent to 25 percent, yet the rich in those days (those making $50,000 per year and up) went from paying 44.2 percent of the tax burden to paying more than 78 percent. In the 1960s President Kennedy slashed the top tax rate from 91 percent to 70 percent. In the ensuing three years, those making more than $50,000 annually saw their tax payments rise by 57 percent and their share of the tax burden climbed from 11.6 percent to 15.1 percent.

In the 1980s (the evil decade of greed under Ronald Reagan), the top rate fell from 70 percent in 1980 to 28 percent in 1988. The top 1 percent of earners went from coughing up 17.6 percent of the income tax burden in 1981 to paying 27.5 percent of the total in 1988.

Why?

Because when marginal rates above 30 percent are lowered, there is less incentive to hide, shelter or underreport your income. Extrapolated across all the wage earners in this great land, that's a.lot of money.

The myth: Lower taxes mean the rich get richer and the poor get poorer.

The facts: Census bureau data historically shows that earnings for all classes of wage earners tend to rise and fall in unison. That means generally that economic policy either has a positive effect on earnings or a negative effect. The high tax policies of the 1970s are associated with weak economic performance, while the lower tax rates of the 1980s are associated with rising incomes for all wage earners.

The myth: The rich don't pay their fair share.

The facts: According to the IRS, the top 1 percent of income earners pay nearly 29 percent of the income tax burden. The top 10 percent pay more than 59 percent. The top 20 percent pay more than 74 percent. The lowest 50 percent of income earners pay less than 5 percent of income taxes collected by the government each year.

When politicians start talking about tax cuts being a sop to the rich, it means only one thing. They want to keep more of our money in Washington. They want the government to redistribute our wealth.

History has proven time and again that when the government cuts taxes, the economy improves.

I'm glad we got a tax cut in this most recent budget. I just hope future congresses can come up with the necessary spending cuts to keep more of our money where it belongs - in our pockets. [[In-content Ad]]