U.S. tax cuts

U.S. tax cuts by the Bush administration are major contributing factors to the current state of the U.S. economy and burgeoning U.S. budget deficit. The impact was a significant matter of discussion in U.S. presidential election, 2004, and promises to be one for U.S. congressional elections in 2006 and U.S. presidential election, 2008, as well.

Inflation = Tax Hike
"You don't have to pass a tax bill in Congress to raise people's taxes, and George W. Bush isn't going to ask for one. Instead, he's raising taxes in the cruelest way--through inflation," Nicholas Von Hoffman wrote in the June 3, 2003, New York Observer.

"As of the end of March, inflation was running at almost 4 percent per year. From every indication at the supermarket or the gas pump, the rate of inflation has accelerated since then. Where and when it will stop is anybody's guess. Nor is 4 percent a small figure when you recall that this is a compounding percentage. During the last 10 years, a period when inflation has been 'tamed' or 'under control' or 'negligible,' the cost of what you could have bought for $100 in 1993 has risen to $130.10.

"Except for C.E.O.'s and other forms of the egregious rich, most people will need raises of about 5 percent this year to break even. Maybe the labor-supply situation will tighten up enough so that employers will decide that, shipping jobs off to India or not (see outsourcing), they will have to put more money in their people's paychecks. So far that hasn't happened, and even if it should, experience with past inflation teaches that salaried and hourly workers get small raises and get them later than the big-money people, if they get them at all."

Bush Tax Cut Data

 * "The Bush Tax Cuts So Far, 2001-2010," Citizens for Tax Justice, July 2005.


 * Information regarding the impact of Bush's tax cuts: Isaac Shapiro and Joel Friedman, "Tax Returns. A Comprehensive Assessment of the Bush Administration's Record on Cutting Taxes," Center on Budget and Policy Priorities, April 14, 2004. In summation, "The early returns on the effects of the tax cuts have not been good."

Reports

 * "A Dynamic Analysis of Permanent Extension of the President’s Tax Relief," Office of Tax Analysis, U.S. Department of the Treasury, July 25, 2006.

Related SourceWatch articles

 * Bush/Republican Initiatives
 * Rebuilding the Gulf Coast in the wake of Hurricane Katrina: domestic policy initiatives
 * State of the Union 2004
 * State of the Union 2005
 * U.S. budget deficit
 * U.S. unemployment

External articles

 * Nicholas Von Hoffman, "Here Comes Inflation, The Cruelest Tax of All", New York Observer, June 3, 2003.
 * Paul Krugman, Jobs, Jobs, Jobs, New York Times Op-Ed, February 10, 2004: "'We expect politicians to place a positive spin on economic news, but to insist that things are going great when many people have personal experience to the contrary seems foolish. Mr. Bush's father lost the 1992 election in large part because he was perceived as being out of touch with the difficulties faced by ordinary Americans. Why is Mr. Bush -- whose poll numbers are a bit worse than his father's were at this point in 1992 -- running the risk of repeating his experience? ... The answer, I think, is that the younger Mr. Bush has no choice. He has literally gone for broke, with repeated tax cuts that have fed a $500 billion deficit. To justify policies that more and more people call irresponsible, he must claim that wonderful things are happening as a result.'"
 * Nell Henderson, "Tax Cuts May Come At a Price, Study Says. Treasury: Financing Must Be Found," Washington Post, July 26, 2006.
 * Jason Furman, "Treasury Dynamic Scoring Analysis Refutes Claims by Supporters of the Tax Cuts," Center on Budget and Policy Priorities, July 27, 2006.
 * John Aravosis, "GOP tax cuts equal the amount of the current deficit," AMERICAblog, June 26, 2007.