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Bush Tax Cuts Were Bad Medicine

Bush Announcing Tax Cuts    Bush Tax Cuts Cost Americans $6.6 Trillion

A recent report by Pulitzer prize-winning journalist David Cay Johnston shows that since 2001 American households have suffered a loss of $48,000 per tax payer due to falling personal incomes and the report points to the Bush tax cuts as the primary cause. Johnston calculated these losses by comparing average incomes in U.S. tax returns from 2000 tax returns to every year through 2012.

The total income loss for Americans is $6.6 trillion from 2001, when the tax cuts first took effect, through 2012, according to Johnston.

What could we do with $6.6 trillion? Johnston says we could pay off all student loan debt ($1.26 trillion), all automobile loans ($892 billion) and all of our credit card debt ($827 billion), and after paying all that debt and paying our taxes we would have more than $2.4 trillion left for savings, investments or spending.

George W. Bush inherited a budget surplus in 2000 and wasted no time trashing the budget and the U.S. economy, bringing on the biggest economic recession since the great depression. Bush promised that his tax cuts would bring prosperity and wealth but they pushed us in the opposite direction. Johnston says that happened because we quit investing in America. He says that growth in personal wealth only happens when we invest in the “Common Wealth”. The reduction in corporate and personal tax rates combined with the reduction in capital gains tax rates also motivated corporations to take out profits as dividends rather than investing in equipment or staff expansion. Higher corporate tax rates provide an incentive for corporations to invest in more tax deductible technology, equipment and people as a way to minimize their taxes.

Tax increases can actually boost the economy according to Johnston. He sites California as an example, where tax increases are helping to produce job growth at a rate that is about 50% faster than the rest of the U.S.

Learn more about this important report by checking these references:




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