Studies: Tax cuts don't pay their way

[lavenderdiva]

From Houston Chronicle article, link: http://www.chron.com/disp/story.mpl/nation/3871414.html

Economists say numbers disprove Bush's claim as he extends reductions

WASHINGTON - When President Bush signed legislation Wednesday to extend lower tax rates for capital gains and dividend income through 2010, he suggested that his tax cuts are behind a surge of new revenue into the Treasury, and 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 not true. A host of studies, some of them by economists who served in the Bush administration, have concluded that tax reductions mean less money for the Treasury.

The cuts Bush extended Wednesday will cost the Treasury an estimated $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.

snip: Treasury Secretary John Snow conceded Tuesday that the much-touted tax cuts for capital gains and dividend income don't drive today's strong economy. Asked by Knight Ridder if the tax reductions paid for themselves, Snow acknowledged that they don't.

In addition, in this article, Douglas Holtz-Eakin, the chief economist for Bush's Council of Economic Advisers in 2001 and 2002, and then the director of the nonpartisan Congressional Budget Office until late last year, does state that the tax cuts have not generated enough revenue to pay for themselves.

[The_Casual_Observer]

1. A study really isn't necessary, one need only review the results

of the reagan era.

[SammyWinstonJack]

3. Common sense should be all we need.

:yoiks:

[creeksneakers2]

2. Thanks for posting this

I was looking for some stats on the subject.