In my post two years ago about shrinking government I wrote that although cutting tax rates can increase tax revenue, growing revenue shouldn't be conceded as beneficial. In the wake of some much-needed tax cuts, I think conservatives need to make the point that in order to limit the power of government we need to limit the resources available to the government.
"By cutting taxes, you grow the economy, and you generate an enhanced flow of revenues to the Treasury," said Rep. David Dreier (R-Calif.), chairman of the House Rules Committee.
Although the federal tax revenue has grown since the passage of the 2003 tax cuts -- from $1.9 trillion in 2004 to $2.1 trillion in 2005 -- the tax revenue measured against the size of the economy remains below the 2002 level and well below the level of 2001, when the first of Bush's five tax cuts was passed. "The argument that tax cuts will grow the economy and pay for themselves is very attractive, but it's just not true," MacGuineas said.
Revenue grew after Reagan's tax cuts, but ultimately the goal of conservatives should be to convince people that cutting government revenue is good. Of course, to be credible Republicans will have to also be willing to cut spending.