From the Wall Street Journal:

he myth persists in some media circles that the federal budget deficit is “surging” or ballooning or something terrible—all of which is served up as ammunition for those in Congress who want a tax increase. At the risk of being drummed out of the guild, we thought you’d rather have the real story.

The deficit has in fact declined by some $165 billion over the past two fiscal years, and according to the most recent data has continued to fall in the first quarter of fiscal 2007. The latest Treasury estimates for January show that tax receipts in December were $18 billion higher than a year earlier, helping to boost the budget surplus for the month to $40 billion, up from $11 billion a year ago. December is typically a good month for revenues due to year-end tax payments.

Meanwhile, for the first three months of fiscal 2007 through December, revenues climbed 8.1%, building on double-digit revenue increases in the previous two years. Corporate income taxes were up a remarkable 22.2% in the first fiscal quarter, showing that the government continues to grab a nice chunk of the rising business profits that so many of our politicians like to deplore. Individual income taxes rose 8.8%, thanks to strong wage and salary growth. Much of this revenue comes from “the rich,” believe it or not. . . .

All in all, despite huge outlays for wars in Iraq and Afghanistan, the nation’s fiscal picture is brightening. We hate to ruin the press corps’s day with such cheerful news, but there it is.

There it is, indeed.

This was my favorite part of the article:

Meanwhile, for the first three months of fiscal 2007 through December, revenues climbed 8.1%, building on double-digit revenue increases in the previous two years. Corporate income taxes were up a remarkable 22.2% in the first fiscal quarter, showing that the government continues to grab a nice chunk of the rising business profits that so many of our politicians like to deplore. Individual income taxes rose 8.8%, thanks to strong wage and salary growth. Much of this revenue comes from “the rich,” believe it or not.

Even spending is down!

But don’t expect that to last long as Democrats take control.  Already they’re on track to give us a big, fat tax hike.  Why, you ask, when revenue is clearly still on the rise due to increased economic activity even without tax hikes?

Probably because the Democrats plan even more spending, and with their Paygo rules in place they can’t recognize increased revenue from tax rate cuts.  All new spending must be matched with a corresponding tax hike.  So get ready to feel the pinch, Americans.

Democrats are coming for your wallets.