Should Congress make the Bush Tax Cuts Permanent?
Back in April, the Joint Economic Committee put out a press release and report on the Bush Tax cuts. We are now a few months closer to the election, and seeing increasing pressure from Republicans in Congress to make the Bush tax cuts permanent. It’s worth reviewing some of the information so that people attempting to evaluate these issues can understand what it means.
Here are a few pieces of information that are worth remembering:
The federal government has borrowed $1.6 trillion from 2001-2008 to pay for the tax cuts
Consequence: all Americans will have to pay for this tax-cut-related debt, reducing their after-tax income.
One third of the benefits of the cuts go to the top 1 percent of households; one fifth of the benefits of the revenue reductions went to the top 0.3% of households that earn more than $1 million per year
Consequence: inequality in America is increasing, with the top 1% grabbing more of the anemic growth AND the benefits of the Bush revenue reductions; meanwhile, the bottom is stagnating
investment and economic growth haven’t equalled other growth periods
Consequence: with anemic growth and other policies that favor the wealthy, the vast majoriy have been hurt, not helped, by the tax cuts
making the cuts permanent would cost $3.4 trillion just over the next decade, including borrowing costs–three times what is needed to close the Social Security funding gap!