Wednesday, May 10, 2006

Just What the Doctor Ordered

Looks like Congress finally got its act together over the Easter break.

The final version of the pro-growth tax bill, which ought to be passed by both the House today and Senate tomorrow, extends the 15-percent tax rate on cap gains and dividends from the end of 2008 through 2010. President Bush will sign the bill later this week.

This is very good news. Had me jumping for joy last night when I heard it.

The tax bill also extends the AMT patch by raising exemptions, thereby protecting millions of middle-income taxpayers who would have been hit had Congress failed to act.

Very good news all the way around.

Good for stocks. Good for the economy. Good for capital formation.

Oh, and by the way, good for a lower budget deficit as the Laffer Curve revenue surge from the expanding economy will once again confound all the revenue forecasting geniuses at the Congressional Budget Office and the Joint Tax Committee.