Remember how Democrats said the "Bush tax cuts for the rich" were going to wreck the budget and the economy? Well, as we know, the economy is doing just fine, thank you, with low unemployment and strong economic growth. And, as it turns out, revenue is flowing to the Treasury at a rate that far surpasses projections and is, therefore, shrinking the deficit even faster than President Bush has pledged. Bloomberg reports:

President George W. Bush's administration will report this week that surging tax revenue is shrinking this year's budget deficit from the record 2004 level, possibly by as much as $90 billion, giving him a shot at fulfilling his deficit reduction promise three years early.

Once again, tax revenue is best optimized by increasing the tax base, not by increasing tax rates. President Bush did this with his first-term tax cuts that Congress needs to make permanent.

That doesn't mean that the deficit will disappear. But it should put a stake in the heart of liberal assertions that the deficit is caused by insufficient taxation. Washington's deficit problem is not a tax problem, but a spending problem.

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