PDA

View Full Version : The Facts About the Bush Tax Cuts



ndpruitt03
7/27/2010, 05:31 PM
http://www.redstate.com/erick/2010/07/27/the-facts-about-the-bush-tax-cuts/



The 2001 Economic Growth and Recovery Tax Act was George Bush’s version of Barack Obama’s stimulus plan. However, instead of creating a bunch of temporary government jobs and subsidizing the expansion of government, it cut tax rates, increased the child tax credit, increased the standard deduction for married couples, and increasing contribution caps for a variety of savings programs. The result? The recession ended in November of 2001.

But, September 11, 2001, happened as the economy was recovering and throughout 2002, the economy grew at an anemic rate. The Jobs and Growth Tax Relief Reconciliation Act of 2003 revved up the 2001 tax cut package and cut taxes again on dividends and capital gains.

The result?

Under George W. Bush’s “tax cuts for the rich” the rich paid more in taxes in 2005 than any time in the prior 20 years. In fact, as the Wall Street Journal noted, thanks to George W. Bush’s tax cuts for the rich, the richest one percent went from paying 25% of all income taxes in 1990 to 39% in 2005. The richest 5% went from paying 44% of all income taxes in 1990 to paying 60% of all income taxes in 2005.

In 1980, when the top income tax rate was 70%, the richest 1% paid only 19% of all income taxes; now, with a top rate of 35%, they pay more than double that share.

More crucially, after the 2001 initial tax cuts, the annual growth rate went from 0.3% in 2001 to 2.5% in 2002. By 2004, GDP growth was the highest in 20 years. (Source)

Likewise, after the 2003 tax cuts, the unemployment rate fell to the lowest level since World War II. Let me repeat that: the Bush economic program created the lowest unemployment level ever. In fact, economists liken it to full employment given the demographic composition of those who were left on the unemployment line.



Why then the collapse? There are lots of reasons for the collapse. For one thing, contrary to what economists would have you believe, they are not scientists and the economy is not a science. There have been upturns and downturns in the economy since economies first developed several millennia ago. But also, massive new regulations in Sarbanes-Oxley and the continuing incursion of the government via Fannie and Freddie into private lending markets forcing private lenders to launch even riskier ventures to stay profitable led to a lot of schemes collapsing in on themselves and taking the economy out too.

That has nothing to do with the Bush tax cuts. The Bush tax cuts, objectively, helped the economy both recovery from the 2000-2001 recession and spur some of the greatest economic activity the nation has ever seen.

Honestly I don't care about cutting taxes. Although I believe this is one of the few good things Bush did his 8 years in office. But the big thing to me is cutting spending. Anyone saying the Bush tax cuts were bad for the US or that they caused this recession are just using liberal talking points and not looking at the actual facts. If we didn't go to Iraq, or pass the patriot act or the Medical prescription act, Bush looks a lot better. But that's like saying Obama looks a lot better if we didn't have all this government spending.

Frozen Sooner
7/27/2010, 05:37 PM
Anyone saying the Bush tax cuts were bad for the US or that they caused this recession are just using liberal talking points and not looking at the actual facts.

You just called other people out for using "liberal talking points" while posting a link from redstate.com to try to bolster your view.

You're a goddamn trainwreck, man.

ndpruitt03
7/27/2010, 05:40 PM
Except that on that link they posted facts not all opinions. Everything that is coming from the left is speculation based off of fear. And they don't want to actually solve the problem by cutting spending.

Frozen Sooner
7/27/2010, 05:43 PM
Republican Talking Point.

Mix in some analysis at some point in your life. It'd do you a world of good.

ndpruitt03
7/27/2010, 05:48 PM
You won't even read the links on that site that really explain further why the Bush Tax cuts worked. But I don't really disagree much with ending them and in effect raising taxes. That would be fine for me if the spending wasn't so high. Raising taxes while you are spending so much money will not work.

ndpruitt03
7/27/2010, 05:56 PM
BTW an example of where raising taxes worked is under Clinton but the Republicans made spending manageable and we eventually ended up with a surplus. So I can see raising taxes working if the spending isn't so high. But this is the most spending we've ever seen at any short period.

Ike
7/27/2010, 09:56 PM
A few things:

A) I haven't heard anyone anywhere, not even Paul Krugman, claim that Bush's tax cuts caused the recession.

B) I HAVE heard some claim that Bush's tax cuts have done more to increase the size of the long term federal debt than Obamas policies. Add on to that Bush's Medicare Part D legislation, and it's even more.

C) I also HAVE heard the claim that Bush's tax cuts, coupled with his big spending policies, did disrupt the desired counter-cyclical fiscal policy that a lot of economists think governments should follow (i.e. Tax and save during the good times, and borrow and spend in the bad). As the 2000s were nominally good times, with a couple of small recessions, the cuts maybe weren't the most prudent thing to do (according to these flavor of economists).

C) the "growth of GDP growth" after the Bush tax cuts probably had more to do with the economy getting over the dotcom bubble than tax policy...I'm not saying tax policy did nothing for it, just that there are way too many things particular to that particular time to ascribe it just to taxes.

D) As to spurring "some of the greatest economic activity the nation has ever seen"...I'd reckon that tax policy had less to do with it than a) the Fed keeping interest rates low, so that borrowing was cheap and b) runaway housing bubble. The fact that we had such a crash when home prices could no longer sustain their out-of-control growth very much supports the idea that easy access to money prompted a lot of spending that shouldn't have been happening.

badger
7/27/2010, 11:49 PM
In the first election that I was old enough to vote for president in, 2004, I voted for W.

Reason? In my minimum wage job the summer of 02, before the tax cuts hit me, I paid a lot of my measly paycheck back in taxes. The next summer, with the tax cuts, I kept more of what I earned.

There was no denying it, as I was earning very little money so I could tell the difference. You would think that a minimum wager would get a huge tax refund, but no, mixups in forms prevented that, so what the government took out in 02, the government kept.

More take-home pay without waiting till April to potentially (or not) get a return... If it made a difference during a summer temp job for a teen, I could only imagine what it would do for the people stuck in those jobs year round.

And so, I voted for W.

If you hate me for it, it was my first time voting for president. I was new at it :P

ndpruitt03
7/28/2010, 01:00 AM
A few things:

A) I haven't heard anyone anywhere, not even Paul Krugman, claim that Bush's tax cuts caused the recession.

B) I HAVE heard some claim that Bush's tax cuts have done more to increase the size of the long term federal debt than Obamas policies. Add on to that Bush's Medicare Part D legislation, and it's even more.


The debt didn't start going up till after Obama came into office. When the 03 cuts took effect the debt went from about 7 trillion to almost 10 trillion in 5 years. We've gone from 10 trillion to 13 trillion in less than 2 years under Obama. Most of the debt has just come from spending by the government.

olevetonahill
7/28/2010, 01:25 AM
In the first election that I was old enough to vote for president in, 2004, I voted for W.

Reason? In my minimum wage job the summer of 02, before the tax cuts hit me, I paid a lot of my measly paycheck back in taxes. The next summer, with the tax cuts, I kept more of what I earned.

There was no denying it, as I was earning very little money so I could tell the difference. You would think that a minimum wager would get a huge tax refund, but no, mixups in forms prevented that, so what the government took out in 02, the government kept.

More take-home pay without waiting till April to potentially (or not) get a return... If it made a difference during a summer temp job for a teen, I could only imagine what it would do for the people stuck in those jobs year round.

And so, I voted for W.

If you hate me for it, it was my first time voting for president. I was new at it :P

I think ya done good Hon

Im wondering just How W would have been perceived if the 9-11 attacks had NOT happened.If Slick Willie had Handled those ****ers when they got started in 93.

We will never know

Bush was forced into his actions ( I know the Left will say we invaded a country that was no threat to us , But ya know what ? the Lefties Voted for the invasion ), If Ws programs had had a chance to Mature and evolve how would things be now ?

Obama was NOT forced into anything . His liberal agenda is gonna bury us fer quite some time
jes sayin

Ike
7/28/2010, 06:57 AM
The debt didn't start going up till after Obama came into office. When the 03 cuts took effect the debt went from about 7 trillion to almost 10 trillion in 5 years. We've gone from 10 trillion to 13 trillion in less than 2 years under Obama. Most of the debt has just come from spending by the government.

I'll take that as true, however, most of that (Obama's spending) does not add as much to the long term debt picture as the bulk of the spending is one-time-only, or intended to be short term spending. (And the major long term spending, healthcare, is actually scored by the CBO as debt-reducing, assuming we stick to whats there...We may not, but going beyond whats there takes us into wild speculation land). Whereas certainly the Medicare part D is continuing into the future, and it's unclear whether the tax cuts will be allowed to lapse or not. Many say letting them lapse will greatly improve the long term debt picture.

SoonerFrog
7/28/2010, 09:34 AM
http://farm5.static.flickr.com/4097/4790752362_4d2c1fb445.jpg

As we can see, without two unnecessary wars and the Bush tax cuts, there'd be a very acceptable annual deficit..

85Sooner
7/28/2010, 09:46 AM
For all those who believe the Bush tax cuts were not good. Just send in your money. That Simple and there is no law against it.

85Sooner
7/28/2010, 09:47 AM
Fact is, the economy had recovered pretty well until 2006.

Position Limit
7/28/2010, 10:03 AM
Fact is, the economy had recovered pretty well until 2006.

cash and carry is a hell of a trade. until it's not.....

Frozen Sooner
7/28/2010, 10:07 AM
Fact is, the economy had recovered pretty well until 2006.

Up until the third act, the Lincolns were enjoying the **** out of the play.

royalfan5
7/28/2010, 10:55 AM
Up until the third act, the Lincolns were enjoying the **** out of the play.

Until a Second left in the Big XII Championship, Nebraska was having a hell of a game.

badger
7/28/2010, 11:16 AM
Until a Second left in the Big XII Championship, Nebraska was having a hell of a game.

Field goals do funny things to your eyes
http://seattletimes.nwsource.com/ABPub/2008/04/14/2004349000.jpg

ndpruitt03
7/28/2010, 11:19 AM
Until the refs gave Texas the win in the Big XII Championship, Nebraska was having a hell of a game.

FIFY

Ike
7/28/2010, 11:37 AM
Some more good arguments about the BTC:

http://www.ritholtz.com/blog/2010/07/some-thoughts-on-the-bush-tax-cuts-expiry/



I am winging my way home from Canada, flying over Minnesota into Wisconsin. I am catching up with some reading, but I had to comment on all the Sturm und Drang about the expiration of the Bush Tax “cuts.”

A few thoughts:

• Temporary Stimulus: These tax cuts were passed as temporary tax cuts to stimulate an economy coming out of a recession. (At least, that was the sales pitch). As I have noted in these pages, that is appropriate government recession policy: Stimulate now, reduce deficit later. Of course, if these were really geared towards that purpose, they should have expired after 3 years or so.

• Inherent Gimmick: When a sunset provision is used to obscure how much tax cuts actually cost, you have a marketing gimmick Now, because of that precise gimmick, they are about to go away. Lesson to future administrations: If you really want permanent tax cuts, well, then you should pass, um, permanent tax cuts. And if you cannot sell an expensive tax cut to the public, perhaps that might be telling you something…

• Unfunded Tax Cuts: You will note that the I have the word “Cuts” in quotes. Why? To quote Milton Friedman, “When is a tax cut not a tax cut? When the so-called tax cut is accompanied by a larger rise in government spending than in prices.” In other words, all unfunded tax cuts — including these — are actually future tax increases on the next generation.

• Offsetting Spending: Of course, if the tax argument wasn’t a debate between cowards on one side and liars on the other, we would actually be discussing, as per Friedman, what spending to cut: Entitlements, Military, Education, etc. Don’t hold your breath waiting for that healthy debate to take place.

ndpruitt03
7/28/2010, 11:42 AM
I think people are talking about these taxes being not paid for because of all the spending we are doing right now. You know what spending really is? Taxes on our future. We wouldn't have to be worrying about how we didn't pay for the Bush tax cuts if we haven't been spending so much. Also if we don't have so much government spending our taxes would in turn never be that high.

ndpruitt03
7/28/2010, 01:01 PM
(And the major long term spending, healthcare, is actually scored by the CBO as debt-reducing, assuming we stick to whats there...We may not, but going beyond whats there takes us into wild speculation land).

This was put out there before it was passed with some of the information. But that wasn't based off of all of the information.

http://fixhealthcarepolicy.com/in-the-news/cbo-obamacare-unlikely-to-reduce-spending-on-health-care/

Curly Bill
7/28/2010, 01:05 PM
Are some peeps really arguing that we're not already giving the government enough of our money?

Oldnslo
7/28/2010, 01:12 PM
http://farm5.static.flickr.com/4097/4790752362_4d2c1fb445.jpg

As we can see, without two unnecessary wars and the Bush tax cuts, there'd be a very acceptable annual deficit..

what kind of assumptions are they making in order to chart this graph?

I mean, it's a pretty graph, and all. But standing by itself, it's just someone's opinions in color.

soonerscuba
7/28/2010, 01:15 PM
Are some peeps really arguing that we're not already giving the government enough of our money?I don't think so, I think people (IMO, rightly) have some reservations as to the sustainability of our current outlays vs revenue. Tax cuts aren't sprinkled with fairy dust and magic that turn any economy into rainbows and puppies, there is a time and place for everything. I actually think right now is actually a good time for corporate rate cuts, and the mid decade was a good time for increases, but the right thing is always apparent the rearview mirror. Right now, I think you focus on what is producing, which is estate and capital gains, guess what isn't going to be touched with a ten foot poll?

PDXsooner
7/28/2010, 01:18 PM
The older I get the more I realize people don't know ****. The best policy is the one that we aren't using, because we can pretend that if we used it everything would magically work.

Curly Bill
7/28/2010, 01:22 PM
I got an idea! Lets quit spending so much damn money!

YWIA

Harry Beanbag
7/28/2010, 01:44 PM
I got an idea! Lets quit spending so much damn money!

YWIA


That isn't an option. Any other bright ideas?

ndpruitt03
7/28/2010, 01:51 PM
I got an idea! Lets quit spending so much damn money!

YWIA

That's really what it comes down to. I remember posting a month or two ago in reply to someone here that it would be impossible to cut all this spending because it's all entitlements. And I cam up with a long reply cutting all of those down. But the fact is that entitlement spending is going to take over all of our spending before long and things like highways, schools will have to get cut from spending.