Effects of Bush Tax Cuts - a summary
The Center on Budget and Policy Priorities has a report summarizing the effects of Bush's Tax Cuts.
1. Data from a new Congressional Budget Office report indicate that the tax cuts will exacerbate income inequality.
Change in after
lowest 20% 1.5%
middle 20% 2.0%
top 1% 5.3%
2. A new study by Mark Zandi, chief economist at the independent research firm Economy.com, finds the tax cuts were poorly designed as economic stimulus.
$1 dollar of tax cuts yielded 74 cents of added economic demand. Why? Tax cuts skewed toward the richest who are more likely to save it rather than purchasing items
3. The Economic Policy Institute reports that 2.6 million fewer jobs have been created since passage of the 2003 tax cut than the Administration had predicted.
The economy has produced 1.4 million jobs rather than the 4 million estimated by the administration
4. New Administration data show that the tax cuts have played a larger role than all other legislation enacted since the start of 2001 in creating the budget deficit.
tax cuts have contributed more to the worsening fiscal situation than all other new government policies combined, including all new costs related to Iraq and the war on terrorism and all domestic spending increases
5. A recent report by CBPP and the Urban Institute-Brookings Institution Tax Policy Center finds the tax cuts ultimately are likely to make most households worse off.
this assumes that the deficits have to be paid off in the future. How do you pay them off: cut spending or raise taxes. This is like getting 5 credit cards in the mail and going on a spending spree. Then the bills come in!!!