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REPORT: Expiration Of High-End Bush Tax Cuts Would Have Little Effect On Economic Growth

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United States is approaching the so-called “fiscal cliff” at the end of 2012, when a set of policies enacted by the debt deal reached in August 2011 will go into effect. In addition to massive spending cuts, several tax provisions will expire, including the full Bush tax cuts.

Though both the GOP and Democrats agree that the low-end Bush tax cuts, those that give everyone a tax cut but primarily affect the middle class, need to be extended, Republicans have blocked that in order to leverage an extension of the upper-income tax cuts. The logic, Republicans argue, is that not doing so will raise taxes on “job creators” at a time when the economy can least afford it.

An analysis of the fiscal cliff policies by the Economic Policy Institute, however, found that the cost of the Bush tax cuts —and particularly those for high-income earners —far outweigh the benefits:

EPI’s analysis found that letting the entire Bush tax cuts package expire would cause “just over one-third” of the damage of letting the stimulus measures (primarily made up of the payroll tax cut and other middle class tax cuts) expire and less than half the damage of the spending cuts. The high-end Bush tax cuts, as the chart shows, account for 7.3 percent of the cost of the fiscal cliff policies but just 2.3 percent of the economic benefit, meaning their expiration would save a substantial sum of money with a negligible effect on economic growth.

The findings are similar to an earlier report from the Congressional Budget Office that found the expiration of the high-income Bush tax cuts, once multipliers are added, would cause far less economic damage than spending cuts to the discretionary budget favored by Republicans.
http://www.epi.org/publication/ib338-fiscal-cliff-obstacle-course/

Posted on CafeMom Mobile
by on Sep. 24, 2012 at 8:50 AM
Replies (21-30):
Carpy
by Platinum Member on Sep. 24, 2012 at 7:39 PM
1 mom liked this

It isn't at all like saying that. Every dollar taken by the government is one taken out of the economy.  Every dollar I lose by quitting my job would be money someone else will earn. 

Quoting annelauer:


Quoting Carpy:

Tax cuts do not cost money.  To think so, assumes all money belongs to the government and they just allow you to have what they deem you deserve.  Government does not live within its means.  That is not the fault of the workers who earn their money.

That is like saying quitting your job does not cost money.  Technically, that is true.  It is also ridiculous and short-sighted.  It will create a situation where you don't have revenue.  Please start looking past the end of your nose.


Carpy
by Platinum Member on Sep. 24, 2012 at 7:41 PM
2 moms liked this

I have come to the conclusion that those who do not have a clue how the economy functions should not be allowed to vote.  We see all these stupid opinions from people who have NO clue what it takes to run a business.

7SportsMom7
by Bronze Member on Sep. 24, 2012 at 7:53 PM
1 mom liked this

There was no "surplus" in the Clinton years.  There was social security that skewed numbers to make the deficit look smaller but it actually never even got to zero.  There are several articles about this out there (I'm including one). It doesn't really pertain to this topic but I thought I'd point it out.

http://finance.townhall.com/columnists/craigsteiner/2011/08/22/the_clinton_surplus_myth/page/full/

Quoting mommom2000:

Is that true of the Clinton years? Higher taxes plus surplus.  Obama and the democrats were willing to put spending cuts on the table,the other side says no revenue.  You need both to fix this problem, spending cuts and revenue.  They were willing to do that.

Quoting ambertreas76:

Tax cuts do not cost the government money.  High taxation does.  When the taxes are elevated, so is government spending.  In 2013 our taxes will be increased by 2 billion at least which will result in 8 billion or more government spending.  All of the policies that take effect which raise taxes, raise government spending.  Once that starts to happen, tax increase is needed again, increasing spending even more.  Look into the pillars of Reaganomics for some facts on what happens with increased taxation.  

Also, higher taxes do result in more administration kickbacks... ie more money in the admistration pocket and less in ours.



one_on_the_way
by on Sep. 24, 2012 at 8:59 PM
1 mom liked this

Nope.  They didn't.  If they did, then why are we still talking about lack of jobs?


Quoting Carpy:

Actually yes, the tax cuts worked. What did not work was the out of control spending. progressives should love Bush.

Quoting mommom2000:



Quoting Carpy:


Tax cuts do not cost money.  To think so, assumes all money belongs to the government and they just allow you to have what they deem you deserve.  Government does not live within its means.  That is not the fault of the workers who earn their money.


LOL Of course they do,where do you think the government receives it's revenue. Saying taxes don't matter is one of the more crazier right wing talking points. Bush cut the taxes and did it spur all this growth like he said.  Trickle trickle it's a myth.


Carpy
by Platinum Member on Sep. 24, 2012 at 9:28 PM
1 mom liked this

Ummm, read the part in RED

Quoting one_on_the_way:

Nope.  They didn't.  If they did, then why are we still talking about lack of jobs?


Quoting Carpy:

Actually yes, the tax cuts worked. What did not work was the out of control spending. progressives should love Bush.

Quoting mommom2000:



Quoting Carpy:


Tax cuts do not cost money.  To think so, assumes all money belongs to the government and they just allow you to have what they deem you deserve.  Government does not live within its means.  That is not the fault of the workers who earn their money.


LOL Of course they do,where do you think the government receives it's revenue. Saying taxes don't matter is one of the more crazier right wing talking points. Bush cut the taxes and did it spur all this growth like he said.  Trickle trickle it's a myth.



annelauer
by on Sep. 25, 2012 at 1:39 AM
1 mom liked this


Quoting Carpy:

I have come to the conclusion that those who do not have a clue how the economy functions should not be allowed to vote.  We see all these stupid opinions from people who have NO clue what it takes to run a business.

Oh, like you?  Where did you get your economics degree?  I've never heard you make one intelligent comment regarding our national economy.

annelauer
by on Sep. 25, 2012 at 1:42 AM
1 mom liked this


Quoting Carpy:

It isn't at all like saying that. Every dollar taken by the government is one taken out of the economy.  Every dollar I lose by quitting my job would be money someone else will earn. 

Quoting annelauer:


Quoting Carpy:

Tax cuts do not cost money.  To think so, assumes all money belongs to the government and they just allow you to have what they deem you deserve.  Government does not live within its means.  That is not the fault of the workers who earn their money.

That is like saying quitting your job does not cost money.  Technically, that is true.  It is also ridiculous and short-sighted.  It will create a situation where you don't have revenue.  Please start looking past the end of your nose.


Money paid to the government is not money taken out of the economy.  What a ridiculous thing to say.  Out of one side of your mouth you are complaining about government SPENDING and out of the other you are saying that they do not make financial contributions to our economy.  Seriously, trying to reason with people with absolutely zero logic skills is getting tiring. 

annelauer
by on Sep. 25, 2012 at 1:43 AM


Quoting Carpy:

Ummm, read the part in RED

Quoting one_on_the_way:

Nope.  They didn't.  If they did, then why are we still talking about lack of jobs?


Quoting Carpy:

Actually yes, the tax cuts worked. What did not work was the out of control spending. progressives should love Bush.

Quoting mommom2000:



Quoting Carpy:


Tax cuts do not cost money.  To think so, assumes all money belongs to the government and they just allow you to have what they deem you deserve.  Government does not live within its means.  That is not the fault of the workers who earn their money.


LOL Of course they do,where do you think the government receives it's revenue. Saying taxes don't matter is one of the more crazier right wing talking points. Bush cut the taxes and did it spur all this growth like he said.  Trickle trickle it's a myth.



What does this have to do with jobs?

Xlandria
by Bronze Member on Sep. 25, 2012 at 2:27 AM
1 mom liked this

According to some Myths with regards to the Bush Tax Cuts:

1) Tax Revenues have remained low. Fact: Tax Revenues are above historical average, even AFTER the tax cuts.

2) Bush tax cuts substantially reduced 2006 revenues & expanded the budget deficit. Fact: Nearly all of the 2006 budget deficit resulted from additional spending above the baseline.

3) Raising tax rates are the best way to raise revenue. Fact: Tax revenues correlate with economic growth not tax rates.

I know this is only 3 but they seemed like the ones most talked about here. There are actually 10 all together. The bottom line is that spending is going to have to be cut, (this time I suggest starting nearer the top) and Government is going to have to get smaller. We cannot afford one quite this large and I'm sure some of the positions aren't necessary in big picture. I agree that there needs to be restructuring of the tax codes but lower taxes in some areas actually encourage consumer spending which increases revenue & higher taxes discourage spending which decreases revenue. I have a suspicion that one reason Obama is so hell bent on raising taxes is that they are now going to have to find a way to replace the $716 Billion taken from Medicare to fund Obamacare and it needs to be hush hush because they told us it wasn't true about taking away from the Medicare Trust Fund. (It's not nice to lie like that, they always get discovered at some point). 

Carpy
by Platinum Member on Sep. 25, 2012 at 7:39 AM

You don't pay attention or have no clue what an intelligent comment is.  Or both.

Quoting annelauer:


Quoting Carpy:

I have come to the conclusion that those who do not have a clue how the economy functions should not be allowed to vote.  We see all these stupid opinions from people who have NO clue what it takes to run a business.

Oh, like you?  Where did you get your economics degree?  I've never heard you make one intelligent comment regarding our national economy.


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