Dealing with the Sunset of the Bush Tax Cuts (Part I)

by Linda Beale

Excerpts from Linda’s post

Dealing with the Sunset of the Bush Tax Cuts (Part I) at Ataxingmatter:

As the fall rolls in, Congress is expected to focus its attention on the fact that the huge tax cuts enacted under Bush (mostly in the 2001 and 2003 bills, but also in other bills during the Bush regime) were set up with sunsetting provisions.

This is a topic that is starting to heat up and is getting lots of media attention. Not surprisingly, there are also lots of groups busy trying to spin the discussion to suit their socio-political objectives, whether or not the spin informs voters accurately about the issues. Therefore, it seems that this is a good time to attempt to cover the debate from various perspectives through a series of articles. I expect to pick up various releases and “reports” from think tanks and groups and dissect them. Are they using more rhetoric than analysis? Are they using language that will tend to bias the reader rather than providing a firm foundation in information? What can we really expect if Congress enacts new tax cuts to “extend” the Bush tax cuts? What can we really expect if Congress does not enact new tax cuts but instead allows the current law to operate as intended?

Let’s look at an example of the kind of rhetoric that is flying through the blogosphere these days. I received a missive from “Melissa Kay” at a PR firm (Market Builders PR) that has pushed out various press releases about right-wing speakers to me in recent months. It is pushing Alan Olsen, the managing partner at Greenstein Rogoff Olsen & Co. LLP, CPAs and his views of what will happen “if Bush Tax Cuts Are Eliminated”. The piece (no link provided) is called “Enjoy Them While They Last: End of Bush Tax cuts Could Throw U.S. into Deeper Recession.”

the initial heading is misleading (“Alan’s Predictions if Bush Tax Cuts Are Eliminated”)–the Bush tax cuts were set up to be temporary and expire by operation of law. Nobody has to do anything to “eliminate” the tax cuts.
The first paragraph is misleading.
here’s what it says: “Almost every tax cut implemented by Bush will disappear in 2011. Clinton raised taxes to 39%, Bush dropped the top tax rate to 36%. Obama will take it back to slightly more than 39%.”

here’s why it is misleading: Bush didn’t just drop the top tax rate. Bush dropped the top tax rate to 36% and then also raised the top tax rate up to 39% with an effective date of January 1, 2011.

The first bullet point is misleading.
Here’s what it says: “What we have now is a war of free enterprise. The end of the Bush tax cuts in 2010 could throw us into a deeper recession.”

Here’s why it is misleading.

First, there is no “war of free enterprise.”…

Second, there’s really very little evidence to support the speculation that the slated expiration of the Bush tax cuts will “throw us into a deeper recession.” In fact, the flow of funds to the federal government and use of those funds for unemployment compensation and other state aid as well as public infrastructure projects could save us from entering into a depression. We are a very lightly taxed nation…