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Analysts: Bush tax cuts are swelling deficit

May 20, 2006

Insightful analysis of the real effect of Bush’s tax cuts.

….he [President bush] suggested that his tax cuts are behind a surge of new revenue into the Treasury, and he implied that it’s enough to offset the revenue lost by these reductions.

At a ceremony on the White House lawn, Bush said his tax cuts had helped the economy grow, “which means more tax revenue for the federal Treasury.”

That’s just not true. A host of studies, some written by economists who served in the Bush administration, concluded that tax cuts mean less money for the Treasury.
The cuts Bush extended Wednesday will cost the Treasury $70 billion over five years. They may help spur economic growth, but they still lose more revenue than they generate. And unless they’re matched by lower federal spending, they worsen federal budget deficits.
Asked by Knight Ridder whether the tax reductions paid for themselves, Treasury Secretary John Snow acknowledged that they don’t. He also acknowledged that economic growth and stock market gains were strong in the late 1990s, when the capital-gains tax stood at 20 percent and dividend income was taxed at rates as high as 38.6 percent.

Bush and Congress cut both to 15 percent in 2003; the legislation that the president signed Wednesday extended that rate through 2010.

Reagan taught us that there is no trickle down theory, with giving tax cuts to the rich. They don’t spend it. And don’t forget Denny Hastert thinks if you make less than $40,000 you don’t pay taxes. Which just shows how clueless the ‘leadership’ is. When you have no extra money every little bit contributes to the economy and perhaps helps people sleep, cause they don’t have as many bills to pay.
Analysts: Bush tax cuts are swelling deficit
[h/t David Sirota for the link]


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