The only question Mr. Mallaby leaves open is here.

The Republicans' only argument is that tax receipts have boomed in the years since the 2003 tax cut. But the question is whether tax receipts increased because the tax cuts worked some kind of magic or because the economy was headed up anyway after the recession, thanks maybe to low interest rates resulting from the Asian savings glut.

Actually, we know that answer. 

Leonard Burman, a former Treasury official and now an economist at the Urban Institute, suspects the April-May revenue jump reflects a surge in nonwithheld personal taxes - big bonuses, for instance, paid by Wall Street firms to their executives and other top employees, or handsome capital gains from stock sales in the resurgent stock markets.

Another factor: The well-to-do have been getting richer, and they still face higher tax rates than average taxpayers or the poor, despite the Bush tax cuts.

Thanks to a rise in corporate profits last year, corporate tax payments have also risen 47 percent. Moreover, a special tax break, a bonus depreciation on investments in plant and equipment, expired at the end of 2004.  

The article is excellent, though so he is totally forgiven. By me. By Republicans, um, not so much. 

The Return Of Voodoo Economics
Republicans Ignore Their Experts on The Cost of Tax Cuts
By Sebastian Mallaby
Monday, May 15, 2006; A17

Nobody serious believes that tax cuts pay for themselves, as I noted last week. But most senior Republicans flunk this test of seriousness.

...Okay, so let's review this issue with the help of some experts. I'd like to cite Richard Kogan of the Center on Budget and Policy Priorities, because his work inspired this column. But to win over reasonable conservatives, I'm going to choose N. Gregory Mankiw of Harvard, a proponent of tax cuts who chaired the Council of Economic Advisers in the Bush White House. Mankiw is a top-notch economist hired by Bush and Cheney to advise them. And last year he published a paper on how far tax cuts pay for themselves, reporting enthusiastically that this self-financing effect is "surprisingly large."

How large, exactly? Mankiw reckons that over the long run (the long run being generous to his argument), cuts on capital taxes generate enough extra growth to pay for half of the lost revenue. Hello, Mr. President, that means that the other half of the lost revenue translates into bigger deficits. Mankiw also calculates that the comparable figure for cuts in taxes on wages is 17 percent. Yes, Mr. President, that means every $1 trillion in tax cuts is going to add $830 billion to the national debt.

Let's engage in what Bush might call the soft bigotry of low expectations and cut Republicans some slack. Hey, maybe they just overlooked that Mankiw paper? Or maybe, despite hiring Mankiw to head the Council of Economic Advisers, they later acquired reasons to doubt his judgment? In that case they should at least have listened to Douglas Holtz-Eakin, another conservative economist who worked in the Bush White House and who went on to run the Congressional Budget Office.

In a study published under Holtz-Eakin's direction last December, the CBO estimated the extent to which a 10 percent reduction in personal taxes might pay for itself. The conclusions confirm that the free-lunch mantra is just plain wrong. On the most optimistic assumptions it could muster, the CBO found that tax cuts would stimulate enough economic growth to replace 22 percent of lost revenue in the first five years and 32 percent in the second five. On pessimistic assumptions, the growth effects of tax cuts did nothing to offset revenue loss.

So Mankiw isn't with them. Holtz-Eakin isn't with them. Which raises a question: When top Republicans go around claiming that tax cuts pay for themselves, which economic authorities are they relying on? None, is the answer. These people's approach to government is to make economics up.