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Houses and taxes

Published Monday, August 01, 2005

The Federal deficit is declining at a faster rate than had been expected and the reasons are rather complex. While some analysts attribute the decline to the tax cuts put in place early in President Bush's first term, others point to an increase in capital gains (and thus tax revenues) on housing sales. Both camps are correct. Let's start with the impact of the tax cuts. I have suggested that tax cuts that resulted in an increase in consumer consumption would help stimulate the economy. Sure enough, people spent nearly every dollar they saved in taxes in ways ...

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