Guess Who Really Pays the Taxes — The American, A Magazine of Ideas snip........... Since the Reagan tax cuts, the United States has created some 40 million new jobsmore than all of Europe and Japan combined. 7. Are lower tax rates responsi*ble for the big budget deficits of recent decades? There is no correlation between tax rates and deficits in recent U.S. history. The spike in the federal deficit in the 1980s was caused by massive spending increases. The Congressional Budget Office reports that, since the 2003 tax cuts, federal revenues have grown by $745 billionthe largest real increase in history over such a short time period. Individual and corporate income tax receipts have jumped by 30 percent in the two years since the tax cuts. snip........... 9. Have gains by the rich come at the expense of a declining living standard for the middle class? No. If Bill Gates suddenly took his tens of billions of dollars and moved to France, income distribution in America would temporarily appear more equitable, even though no one would be better off. Median family income in America between 1980 and 2004 grew by 17 percent. The middle class (defined as those between the 40th and the 60th percentiles of income) isnt falling behind or disappearing. It is getting richer. The lower income bound for the middle class has risen by about $12,000 (after inflation) since 1967. The upper income bound for the middle class is now roughly $68,000some $23,000 higher than in 1967. Thus, a family in the 60th percentile has 50 percent more buying power than 30 years ago. To paraphrase John F. Kennedy, this has been a rising tide expansion, with most (though not all) boats lifted.